The following was originally written as a post on the internal HubSpot wiki a couple of years ago. At the request of several fellow entrepreneurs (hi, Wade from Zapier!) I've mentioned this to, I'm sharing it publicly for the first time. Hope you find it useful. -Dharmesh
For easy reference, you can access this page using FlashTags.org (it redirects here).
From HubSpot Wiki, July 19, 2017
One of the things I struggle with is clearly conveying to someone how strongly I feel about something. This is sometimes referred to as "Hill Dying Status" (i.e. do I feel so strongly about this that it's a hill I'm willing to die on). By the way, not sure who originally used that phrase but I think it was Brian Halligan or maybe JD Sherman. Doesn't matter.
Situations like the following happen for me multiple times a day (chances are, they happen to you too):
I come across an interesting article or video (sometimes about a competitor) and send it along to someone at HubSpot. Without context, they might think that I'm saying we should be doing that or adding that feature or somehow reacting to that news. But, most of the time, it's just something that I thought was "interesting".
Someone asks me a question or opinion on something. Turns out, I have opinions on everything. Sometimes, those opinions are even well informed. So, I share my opinion. Might be a hallway conversation or an email or whatever. Now, based on my history with that person, they may think: "Well, Dharmesh thinks I should do X so I'm going to do that, even though I was going to do Y." This is a problem because I almost always have much less information/data than the person asking the question – and I haven't really dug into the issue like they have. They're overvaluing my opinion.
Every now and then I feel super strongly about something. (Often, these are SFTC related). I "express" my feelings in a response to a long email thread. It gets buried in there, and then "dies". Nobody does anything. Not even a response. That makes me sad – but it's my fault. The person I had expected to at least respond had no idea that I felt strongly or wanted a response.
So, I now share with you my not-so-secret hack to quickly communicate important context (either in a conversation or in an email thread). I've been using this for a while, and thought you mind find it useful as well.
How To Use A #FlashTag To Quickly Communicate Hill Dying Status
It's even easier than Sunday morning (which I've always found to be a poor benchmark): All you have to do is include one of the flashtags below in an email, Slack or even in a conversation. That's it.
The tags are in ascending order of escalation (starting with the “I don’t feel strongly at all” to the “I really, really feel strongly").
#fyi -- Had this thought/idea/article/video/whatever pass through my brain. I haven't spent a lot of time thinking about it. You can read it or not. Act on it or not. No response needed or expected.
Hill Dying Status (am I willing to die on this hill): I don't even see a hill.
#suggestion -- Here's something I would do if I were you. But, I'm not you -- and you own this, so your call. Just consider it and weigh it against other things you're considering. I won't be offended if you go another way. A quick reaction/response would be appreciated (so I can learn what kinds of suggestions are useful/valuable), but is not necessary.
Hill Dying Status: I saw the hill, but didn't feel strongly enough to commit the calories to climb it.
#recommendation (or #strongrecommendation)-- I've thought about this a lot. It's kept me up at night. I dug in. I think I understand the tradeoffs. You can choose not to take the recommendation, and go your own way, but please do it for good reasons. Please dig in a bit yourself and have a well-reasoned rationale for why you don’t want to take the recommendation. Please don’t ignore or dismiss it out of hand. A response (either way) is politely requested. If it's a #strongrecommendation then a response explaining why you're not taking it is probably a good idea.
Hill Dying Status: I climbed the hill. I breathed deeply I contemplated my life. I walked back down.
#plea -- We don't like issuing edicts or directives at HubSpot. But...please, please, please just do this. Trust works both ways, and I need you to trust me on this. If you still feel compelled to resist, something’s not right, let's chat. Maybe even in (gasp!) person.
Hill Dying Status: Dying on a hill is not on my bucket list, but if it were this would be a really good candidate. --- That's it. With just a few extra characters in that email or Slack, you can quickly convey how strongly you feel about something. Use it if you find it useful. It's just a #suggestion.
p.s. Why did I call it a #FlashTag? Because it's about communicating something in a flash (and flash rhymes with hash). And yes, I asked GrowthBot for "words that rhyme with hash".
Oh, and in case you need to find this article again or tell somebody about it, just use FlashTags.org (it redirects to this page).
Today the State of Remote Work 2017 report revealed that 63% of people in product and engineering roles work remotely at least once per week, which is 21% more than the average.
Along with key findings on how remote work is changing the workplace, the report also revealed that startup environments may be a particularly strong match for remote work. Why might that be?
When breaking down remote work by company size, the report found that smaller companies are 2X more likely to hire remote workers than larger companies.
Considering stage, sense of innovation, hiring needs and nimble state, startups have the upperhand when adapting to this cultural shift toward flexible work. In fact, I believe that startups are uniquely positioned to transition to remote work much more fluidly than other companies, and thus are likely to get far more benefit.
1. Remote work expands the startup talent pool. As a leader of a startup, recruiting the best possible team is arguably one of the most important parts of the job and could make or break your long-term success. Finding the right person also can be incredibly difficult, especially if you are limited by your own network and local community.
One of the most effective ways to maximize your talent pool is to remove all geographic limitations. Think about it ... perhaps your perfect VP of Engineering isn’t a reasonable commute away.
Companies who are open to growing their team by hiring remotely are much more likely to find the unique skillsets needed for the job. In fact, the State of Remote Work found that fully-distributed (or fully remote) companies hire 33% faster than other organizations. Use it to your advantage.
2. Expands diversity of thought. Here's another key benefit when hiring outside your bubble. When you remove geographic barriers, you will most likely find people from different parts of the country (or world) with varied perspectives -- and these individuals can bring strong diversity of thought.
Harvard Business Review examined the impact of diversity on business. The article cited a study by the London Annual Business Survey, which found a strong correlation between diversity and effective innovation. The report discovered that, "businesses with culturally diverse leadership teams were more likely to develop new products than those with homogeneous leadership."
Lean into this opportunity. Hiring a remote team can be an effective forcing function to find candidates and employees who bring experience much different than yours.
3. Remote work builds trust. When leaders work with remote employees for the first time, it’s common to be concerned about productivity. Will the remote person use her time effectively? How will you know if you can’t see her working at her desk?
Pause right there. What’s the real issue here? Is the problem that the person’s desk is 1,000 miles away? No. The issue is an absence of trust. In this case, the manager needs to back away from the compulsion to “monitor work.” That’s a cultural poison, and it also doesn’t scale.
Dr. Peter Hirst of MIT Sloan’s Executive Education Department spoke to the growth in trust after piloting a remote work program for his team: “We went from a culture of assuming people were working because you could see them working to having a clearer understanding of what outcomes we’re trying to achieve and trusting everyone to be a professional. …The [employee] engagement that we got from that change of management relationship was really tremendous.”
Building a culture of trust early will be especially impactful as the company scales. Startups don’t have time to babysit. Let your teammates results speak for themselves.
4. Drives flexibility. Employees at an early stage startup most likely have the propensity to work long and odd hours -- and most likely from anywhere. The State of Remote Work report found that 51% of remote workers choose to work remotely to support their work-life balance. Work-life balance is a challenge in any startup. (Let’s be real, our startup is our life.) However, supporting remote work to add flexibility to one’s life does make it easier to balance personal goals with professional. And happier employees will work even harder.
5. Develops culture. The larger an organization gets, the more difficult it becomes to make substantial cultural changes. If a later stage company wants to transition to a remote or flexible work environment for the first time, while possible, it will take significant planning and communication across the full employee base to make it work.
Remote work is also a forcing function that makes startups scale communication early. Think about it. When you have a small startup collocated in the same space, you can rely on your close proximity to communicate well.
If your organization is distributed, you need to learn how to communicate effectively across multiple locations, time zones, and technologies. These skills will prepare you to communicate effectively when your company is 10X its current size.
6. Lowers office costs. As a startup, every penny counts. Leaders need to make smart investments and keep a close look on the impact of their investments. While saving money shouldn’t be the primary advantage of supporting a remote work culture, it certainly can be a perk.
For example, in Boston (where I’m located), the average yearly cost to rent office space per employee is $6,080. In San Francisco it’s $13,032. While of course you should financially support your remote employees' work-from-home office setups, the costs will be substantially lower.
7. Retains employees. The most striking data point in the State of Remote Work was that companies that support remote work see 25% lower employee turnover than companies that don’t.
Considering the points earlier, perhaps you aren’t so surprised. As we discussed, companies that support remote work are more diverse, flexible, and practice trust. If you build your startup with those building blocks in your DNA, you’re off to a great start.
This was a guest post by Rebecca Corliss of Owl Labs. She and I had the pleasure of working together for eight years at HubSpot, and she’s since rejoined the startup ecosystem.
If you're as passionate about remote work as she is and want to learn more about the data cited in this post, check out Owl Labs' State or Remote Work 2017 report.
I've been working in the software industry for over 25 years. Pretty much my entire professional career (if you don't count that stint as a night clerk at Red Roof Inn).
Back in the late 1900s, when you sold software, you sold software. What your company produced was a large set of properly aligned bits (software). You then got those bits to your customers somehow (floppy disk, DVD, FTP, whatever). And, then those customers installed those bits on a computer of their choosing and if all went well, they'd get some value out of it. But, that wouldn't always happen. Often, they'd fail to ever install it and get it working. Or fail to learn it. Or fail to use it properly. Basically fail to get the value expected -- or the value promised, or sometimes any value. Ironically, the higher the purchase price was, the lower the chances of seeing success. History is replete with multi-million dollar software purchases that never saw the light of day. As an entrepreneur, this pains me. Most start software companies to make money, they start companies to solve problems.
Now, fast-forward to today. It's 2017. Many software companies are now Software as a Service (SaaS) companies. What they produce is the same as before: A large set of properly aligned bits (software). Only now, instead of shipping those bits off to the customer somehow, they "host" those bits on the customers behalf and off the benefit of that software as a service.
Makes sense, right?
Now, naive folks that are new to SaaS often make the mistake of thinking they're still selling software. They're not. Because...
SaaS = Success as a Service
If you're in the SaaS business, the only way to survive in the long-term is not to just deliver software. It's to deliver success. You have to actually deliver the benefit that the software is promised to provide. And, if the customer fails to get that benefit then you have failed. Do not pass GO, do not collect $200.
The reason for this new bar is relatively straight-forward. Back in the old days, you got paid for your software upfront and though you wanted your customer to succeed, and maybe even labored to help them succeed, if they didn't succeed, well, such was life and you moved on. Today, if the customer doesn't succeed, they cancel. In a month, in a quarter, in a year -- but eventually, they cancel. And, more likely than not, if they cancel, you've lost money. The math won't work.
So, to survive and thrive in the long-term, you can't sell software, or even access to software, you have to sell -- and deliver -- success.
Let me give you a concrete example and some lessons learned from my company, HubSpot, which provides marketing/sales software. HubSpot is a textbook SaaS company. We're about 10 years old, and we're now public [NYSE:HUBS].
Here's what we invest in (because it works):
1. Onboarding. If you help customers get started with your product, they are more likely to do so. Ideally, your software is so simple and intuitive and easy that customers just get up and running and succeed on their own. But, if you have a relatively broad or sophisticated product, customers will often need help. In those cases, onboarding works.
2. Education. HubSpot has HubSpot Academy, which is a team that helps educate people on inbound marketing. Interestingly, they don't just invest in HubSpot customers, they educate the broader marketing industry.
3. Community. HubSpot hosts inbound.org, an online community built for marketers. It allows them to find the best content (curated by the community itself), discuss topics of interest, post jobs and find jobs. It acts as the premier professional network for marketers. The community has over 200,000 members now.
So, why does HubSpot spend millions of dollars educating and supporting marketers? It's simple. because we've realized that our success depends on the success of our customers.
We've learned and accepted that we're building a "Success as a Service" company.
Confession: For the past several months I've been furiously coding away on a new project as part of HubSpot Labs. It's called GrowthBot. It's a chatbot for marketing and sales people -- and anyone looking to grow a company (like startup folks).
The launch has gone well, and my bot is currently happily handling thousands of messages. Things like "show me companies in california that use HubSpot" and "who are the top influencers about landing pages". GrowthBot can answer most of these, and thousands of others. So, overall, it's been a good day.
But, anytime bots come up in conversation (no pun intended), especially with media folks, people seem to frequently wander into the "are bots going to replace humans?" arena. Some wonder "will this bot cause people to lose their jobs?" I can't speak for all bots, but for GrowthBot, the short answer is no.
I'll explain with a visual:
The way I like to think about it is not, Human vs. Bot, but Human + Bot. The bot amplifies what you can do. The bot is an exponent.
It's not smart enough to write a blog post -- but it can tell you what posts about a particular topic people are sharing. You just ask: "what are the top posts this week on product marketing?"
It's not smart enough to automatically run a campaign to drive traffic to your website -- but it can answer questions about how your website traffic is doing. "How was organic traffic to the site last month?" And the bot also tells you how that compares to the prior month. You can compare results year-over-year (Yes, June is a slow month, but is this June slower than usual?)
It's not savvy enough to close a deal for you, but it can help you find potential customers by asking: "show me law firms in Boston that use Google Apps". (Assuming you're trying to sell SaaS software to law firms and are looking to find firms that are modern enough to use Google Apps).
So, you're still doing the creative, meaningful work. GrowthBot is just making you better, stronger, faster. It gives you access to information you may not have had access to before. It can surface insights that you may not have come up with on your own.
By the way, it's completely free and easy-peasy to try out. Nothing to download. Nothing to install. No forms to fill out. No credit card required.
Just head over to http://growthbot.org and say hello. I'm not saying it is guaranteed to get you a promotion, but you never know. It may just put that small spring in your step and data in your head.
Late last year, I combed through the Montclare SaaS 250 — a directory of the biggest SaaS companies in the world — to find common trends in what I thought would be a significant dataset. As it turned out, 80% of the 250 biggest SaaS companies didn’t have a pricing page at all.
Expecting to find a set of data more representative of what I’m used to seeing around (essentially startups), I turned to a bigger sample, scraping information from the first 400 startups in AngelList’s ‘Trending’ category. Of the remaining 386 which hadn’t shut down, I found that startups are around twice as likely to show their pricing than their enterprise SaaS big brothers. In fact, 39% of the 389 startups I analysed had pricing clearly available.
As I looked at in that previous article, there’s often good reason behind hidden pricing, and, for the top 250 SaaS firms, that reasoning was mostly that they are selling to enterprise customers who thinking pricing is just a formality.
And, besides, enterprise SaaS is a more complex beast than self-service, or SaaS aimed at SMBs.
So, equipped with wider range of data to analyse, I set about to answer the question: How do the top 386 trending AngelList SaaS startups compare to the Montclare SaaS 250?
The study’s highlights
Here’s a quick overview of the main findings for my set of data from 386 AngelList trending startups:
39% have pricing publicly available
The average number of packages is 3.5
44% sell the benefits on-page
84% organize prices low to high
9% organize prices high to low
59% list their enterprise package’s price as ‘Contact us’
49% highlight a package with a contrasting CTA color
The most common CTA is ‘Start free trial’
63% offer a free trial
11% offer pricing on a sliding scale
85% of packages are named (‘Growth’, ‘Pro’, etc.)
6% offer a money-back guarantee
30% operate on a freemium model
The average number of packages is 3.5
In both the Montclare 250 and AngelList Trending data sets, the results are exactly the same: most SaaS companies offer between 3 and 4 packages.
In a recent article from Price Intelligently’s Patrick Campbell, he says that over-complicating and over-simplifying pricing is an equally terrible mistake. This is because complicated pricing can give buyers analysis paralysis, yet simple sliding scale structure built on a single value metric can stunt the company’s growth and kill any opportunities for upsells.
Additionally, research shows that 7 ± 2 is the maximum amount of objects an average human can hold in working memory. Because of this, it makes sense to limit your price points to just 3 or 4 significant choices -- unless the buyer makes a choice right then and there, they could easily forget some key details later on down the line.
This said, package count on the extreme end of the scale (Twitmusic’s 9 packages, for example), is often linked to a single value metric like number of Twitter followers, not a complex array of features.
53% Highlighted a package
Highlighting a package as popular or best value or simply putting it in a different color to the others is a technique SaaS companies can use to make the buyer’s decision easier, promote their most profitable package, or even to draw attention first to a higher priced package to make the others look cheap (more on that later).
However, just over half of the 386 analyzed startups chose to use this tactic. Why is that?
On Episode 271 of Startups For The Rest Of Us, where the hosts talk through my original 250 pricing pages analysis, Mike Taber has an answer for that. He says it could be because by listing 3 packages (the mode of packages offered), the price is naturally anchored in a low/medium/high setting, and there’s no need to highlight anything and sway the potential buyer away from a potentially more profitable plan.
Here’s an example of a pricing page where a package is highlighted:
44% Sell the benefits
One of the most striking things about looking at pricing pages in a vacuum (as in, without sometimes even knowing what the company does), is how disconnected from the rest of the site the page tends to be. While the landing page is often very benefit and social proof driven, it’s rare that the pricing page will list anything other than the features.
Surely it wouldn’t hurt to reiterate the reason the potential buyer is here in the first place. And, not to mention the fact that a common search query for SaaS companies is [company name] + [pricing]. Reiterating the benefits or employing any kind of copywriting tactics at all on the pricing page seems like an obvious, often-overlooked choice.
Here’s a great example from Rainforest, re-selling the benefits to reassure buyers once they find out the price is $10,000/month:
84% Organised packages low to high
Heatmaps show that visitors spend twice as much time looking at the left side of the page as they do the right.
With this in mind, 84% of SaaS pricing pages could be using one of these tactics:
The principle of least surprise: a UX axiom which says that the last thing a user wants to happen is for them to be confused. Since we’re used to reading left to right, and seeing a low-to-high structure, sticking to it can ease user discomfort.
Price anchoring: A deliberately feature-light package on the left side could make package 2 or 3 look like an amazing deal compared to the price difference. For a non-SaaS reference, this is like when The Economist offered its print subscription as a decoy package:
In the experiment, salespeople offered potential buyers of billiard tables two choices: a $329 model and a $3,000 model. The usual tactics are to offer the lower priced model in hope that the customer isn’t scared away by hearing big numbers, but one week, instead of starting with the low-priced table and try to sell up, the salespeople changed their tactics to offer the $3,000 model first. What happened? An 81% increase in revenue from billiard tables.
The idea that it’s easier to “sell down” than it is to “sell up” (meaning that it’s a more effective strategy to start high and the reduce), is a strategy employed by only 9% of the analyzed SaaS companies and is a tactic that comes with high recommendations from SaaS pricing expert Lincoln Murphy.
Going back to the previous point about low-high pricing, however, the tactic of offering something first which seems inadequate could be equally as powerful.
Here’s an example of a high-low pricing page layout from Unbounce, a company which knows a thing or two about conversion optimization:
59% list one or more package’s price as ‘Contact Us’
By far the most common 4+ package layout is 3 priced packages and an enterprise package with the CTA of ‘Contact Us’.
For the minority of SaaS companies which show their pricing, the complexity of enterprise deals forces more than half of SaaS firms to leave their enterprise package pricing undisclosed.
As discussed in my previous article, there are plenty of good reasons to keep price hidden for enterprise deals, including:
Deals are too complex to price without fully understanding the needs of the customer
Rigid pricing could blow the deal for companies used to getting discounts
You don’t want to push $700k customers down the same track as $100k customers. By getting them on the phone, a suitably concierge approach can be taken
Enterprise customers don’t care about the price anyway, just about the solution.
Like how fancy restaurants don’t have pricing, hidden prices are an aesthetic that gives the aura of exclusivity. Enterprises are used to having to call for pricing, so the Principle of Least Surprise returns here again.
49% use a contrasting color for the CTA
You don’t want your CTA to be subtle. After all, it’s the only place you want visitors to click when they’re on your pricing page.
According to Unbounce, a rule of thumb for CTA color is to “look for the dominant hue of your page and pick its contrasting color for your call to action”.
There’s evidence to support this from the famous red/green A/B test carried out by Performable, which showed a 21% higher CTR on the red button which contrasted with the otherwise green page.
Here’s an example of a clear, contrasting CTA button on Nitro’s pricing page:
As you can see, the orange CTA sticks out because it's the top-of-the-funnel package they expect to get leads from. While the Premium package is highlighted, the efforts in the copy above the buttons are focused on getting visitors to test the free package.
The most common CTA is ‘Start free trial’
Unlike the SaaS 250 where the most common CTA copy was ‘Buy Now’, AngelList trending startups made references to ‘buy’ in their CTA copy less than 2% of the time.
As you’ll see, unlike the enterprise-focused SaaS 250, startups seem to be pushing self-service free trials instead of demos with sales staff.
Here is a rundown of the top 5 CTAs ordered by frequency:
Start free trial (25%)
Sign up (14%)
Try for free (14%)
Get started (13%)
Request a demo (6%)
And the top 5 words by frequency throughout the set:
Another couple of data points about CTA copy: conforming to the true definition of a CTA, 95% of samples start with an imperative, like ‘try’, ‘start’ or ‘get’.
39% of samples are in title case, with the first letter of each word capitalized, while 38% are written in all caps.
While writing in all caps is frowned on (even amongst conversion-hungry copywriters), pricing pages are essentially a call-to-action in themselves, so drawing attention to where the visitor should go next is essential.
63% Offer a free trial
63% of both Montclare’s SaaS 250 and the 383 AngelList trending startups offer a free trial on their pricing pages, many as the only option to ease into the product.
When looking at the psychology of free stuff and risk reduction, it’s obvious why SaaS companies use this powerful tool as a way to get customers. And, as I’ll look at later, a probable reason behind why only 6% of the sample companies offer a money back guarantee.
Here’s what Accountable’s free trial offering looks like on their pricing page:
11% Present pricing on a sliding scale
For SaaS companies with a single value metric, like OnFleet’s tasks (a task being a single delivery or pickup of goods), presenting pricing on a sliding scale can remove the confusion that comes with showing visitors a formula like:
0–100 tasks: $X/task
100–200 tasks: $Y/task
In fact, to reduce friction, OnFleet’s pricing page shows both the formula and the slider, as well as anchors the price by showing tasks reducing in price tenfold with just a comparatively small increase in monthly task allowance.
For comparison, almost 3 times as many AngelList trending startups offer pricing on a sliding scale than the Montclare 250.
Here’s sliding-scale pricing done masterfully:
85% have named packages
While some SaaS companies choose to name their packages in relation to their price (with names like ‘Basic’, ‘Premium’, etc.), some grab the opportunity to target segments of their visitors and name the packages by who they’re for. Free packages are sometimes named ‘Hacker’, like in the case of Algolia. Enterprise packages are almost ALWAYS called Enterprise.
When looking at the brackets in between, however, it’s common to get packages targeted at businesses at specific stages of growth, for example, the pricing for AppView which includes plans for different office sizes:
6% Offer a money back guarantee
Since most SaaS startups offer customers a free trial, there’s not much need for a money-back guarantee which explains why so few companies list it.
“[Money back guarantees are] so overused and average that unless your product is extremely valuable (like a car) or easy to return (commodity products, such as retail goods), then you’re going to have an incredibly difficult time overcoming an objection with this guarantee alone.”
Among the rare few which use it is Close.io — a company that’s no stranger to sales techniques. They even use it in conjunction with a 30-day free trial:
30% have a free package alongside paid packages
That’s right, only 30% of the 386 AngelList trending startups analyzed operate on a freemium model, with the vast majority of the rest relying on free trials. That said, that means that at 93% of the sample pages have some kind of free element, whether it’s a free package or a free trial.
According to Weekly Growth, early stage SaaS startups are best off with a freemium model because it is more likely to attract early adopters. Later on, however, with a larger customer base, the huge amount of free-only users can put a massive strain on your support staff, and may end up negatively impacting your business overall.
Here’s an example of Envoy’s pricing page with a free package on offer:
What are the differences, then, between enterprise and startup SaaS pricing pages?
The most striking difference is that a SaaS startup is almost twice as likely to show its pricing than an enterprise SaaS company.
For enterprise SaaS serving a larger amount of influential customers, it's probable that a lot of business comes from referrals and deals are done over the phone without a pricing page being necessary. This would explain why 80% of the SaaS 250 didn't have a pricing page.
As well as this, a comparison between the two data sets shows that enterprise SaaS reiterates the benefits on their pricing page 25% more often. Just like we saw Rainforest's pricing page earlier, it could be that enterprise SaaS's high-ticket products need to be justified to buyers because choosing one provider over another is a huge investment.
And finally, the last major difference is that startups are 19% more likely to have a mixture of priced and 'contact us' packages. Just because a SaaS company is a startup doesn't mean it can't serve enterprises and startups. So, by having both transparent pricing for smaller companies and a 'contact us' package, they appeal to both markets.
Well, it's been an eye-splitting three days spent inside spreadsheets and on pricing pages, so I hope you find this data interesting and it gives you an insight into the typical SaaS startup pricing pages.
This was a guest post from Benjamin Brandall. Ben is a content creator at Process Street. Find him on Twitter here.
Would love for you to sign-up early, because I'm insecure, egotistical and I want to impress Ryan Hoover. Would love for a decent number of people to sign-up. Or an indecent number would be even better. 350 have signed up already (before this blog post was published). Here's the link again.
As the name implies, folks are allowed to pretty much ask me anything, and short of something that will land me in jail (do not pass GO, do not collect $200) or harm someone else, I'm going to do my best to answer everything.
Here are the questions I'm hoping I won't get asked...
1. How does it feel, personally, to have the HubSpot stock price drop so much in the past several weeks?
2. How much weight have you gained in the past 2 years? Does it have anything to do with HubSpot being public?
3. What do you think about competitor [X] -- aren't they just awful?
4. Is there a diabolical, grand master plan behind inbound.org? Why is HubSpot investing millions of dollars in this?
5. What do you and your wife talk about at the dinner table?
6. Should I buy HubSpot stock right now? Would you buy stock if you were me?
7. Do you secretly covet Rand Fishkin's lovely beard/fashion-sense/wife?
8. How many actual computers are in your house right now?
9. What did you think of the latest Star Wars movie?
10. What's the super-secret thing you're working on at HubSpot right now that most people at HubSpot don't even know about?
11. Are you and Ryan Hoover (founder/CEO of Product Hunt) actually twins? If not, why does it seem that way?
On the other hand, there are a few questions that I think would be fun/relevant/legal:
1. I hear you really like the Amazon Echo. What's the strangest thing you use it for on a regular basis?
2. Are you going to write another book -- if so, what's it going to be about?
3. How many domain names do you personally own? What do you do with them? What are your favorites?
4. Is it true that you had lunch with Seth Godin and asked him what he thought about the term "inbound marketing"?
5. Were you and Scott Brinker (of Marketing Tech Landscape fame) classmates at MIT? What's he like?
6. How many marketing strategists does it take to change a light bulb?
A quick note on the "Tools are bought, transformations are sold." This is one of the more important lessons I've learned through my professional career. When you are improving things by offering a tool (which may or not be something that exists -- perhaps yours is just better), it is possible to put up a website, have people try out the tool, and start paying you if they like it or want to upgrade.
But, if you're doing something radically new and trying to
transform how people do things, it's unlikely that this approach will work. Even some brilliantly written blog posts or videos are probably not going to get people to think: "You know, she's right, I'm just going to start doing things the right way, and here's a platform to do it -- where do I sign up?". It will likely require some "selling". You'll need people to explain what's wrong with the world, how your company solves it, address objections, answer questions, and generally help people get over the hump. Even
then it is hard. But if you try to transform the world with nothing but a website and a credit card form, chances are low that you'll succeed. It happens -- just not that often.
Would love to hear any comments or feedback you have.
Working on a startup? Have a 800 pound gorilla you're trying to disrupt? That's awesome. But here's a tip: Don't talk about disrupting them.
The first rule of disruption is: You do not talk about disruption.
Why is this so important? Why shouldn't you declare to the world (and the tech press) that you're going after the big kahuna? Doesn't the media love a great David and Goliath story?
There are my reasons. I'm going to keep this simple:
1. In just about all cases, to successfully disrupt a large incumbent, your best case scenario is that they completely ignore you and what you're doing. This allows you to (quietly) build the thing you need to build without too much intervention.
Here's the script: "Don't mind us, we're just over here working on something tiny. We're not worth your time. You're much better off focusing on your best customers and driving your profit margins up." (This is pretty much the story that plays out in Clayton Christensen's "Innovator's Dilemma", which if you haven't read, stop what you're doing and do that right now).
2. You want the incumbent to act "rationally", because an emotionally fired-up incumbent will come try to crush you simply out of spite and ego. They may not succeed in crushing you -- but in the process, they can certainly cause a lot of pain. And, responding to their actions will distract you from that whole disrupting thing you're trying to do.
3. One of the keys to disruption -- which usually happens from below is that your product/offering has to be inferior in some critical way. The fact that what you have doesn't meet the needs of the existing customer-base is what makes it easier for the incumbent to ignore you. If you start talking about how you're going to disrupt -- you're probably going to wind up trying to convince the world why your product is not really inferior but even better for customers than the existing, leading alternative. That sounds like a good thing -- but it's not, because you shouldn't, in the beginning, be trying to create something that's "better" than what exists. Chances are, if you do that, you'll do something incremental and you take the incumbent on, on their home turf. Turns out, they're really good at playing that game (there's a good chance they invented the game). You should be working on something dramatically simpler, cheaper or lighter.
Don't start out trying to build something better for the entrenched company's existing customers. That's not your goal -- your goal is to create something "good enough" for customers the incumbent doesn't care that much about. If their best customers wouldn't laugh at the ludicrous lack of capability in what you're building -- you're probably doing disruption wrong. Go back and read Innovator's Dilemma (again).
OK, so when should you talk about this awesome disrupting you're doing?
Ideally, in the past tense: Think: "We've disrupted...", not "we are disrupting". Next best choice? When the path is clear and the outcome is more or less inevitable.
Until then, be heads-down and quietly just do the work.
I'm going to tell you a secret. I have a very simple, 4-word strategic plan (devised it a few years ago).
Here it is...
Do fewer things, better.
This has made my life -- and my work, dramatically better.
Here's how I execute on my strategic plan:
1. Decide on what matters the most.
2. Say no to everything else.
3. When something falls in the gray area, re-read #2.
Of course, that's easier to say than do. I fail at it all the time -- but I'm getting better. Here are some tips learned from years of practice:
1. When making your list, start with a low-level of abstraction. Resist the temptation to make your list really "high-level". As an extreme example, one of the things on your priority list shouldn't be "Be successful". That's so broad, that you'd be able to rationalize almost every activity under the sun. Try to be specific enough that the number of things that "fit" is a manageable number. If you find yourself taking on too much (which you probably do), refine your filters and move to a lower-level of abstraction. I've written an article on this that you might find useful: "The Power of Focus and The Peril of Myopia".
2. Forgive yourself for having to say "no" to things not on your "fewer things" list. Years ago, I wrote a blog post asking public forgiveness , you can see it here at http://MustSayNo.com. Of all the articles I've ever written, that one has had the most positive impact on my life.
3. Remember that every time you say "no" to something you might have said "yes" to, it frees up time to focus on the things that matter. And the more time you spend on the things that matter, the better you get at them. Let me give you an example: Let's say you say "no" to some project/request/idea that would have "only" taken a few hours a month, because it didn't make the "few things that matter" list. And, let's say that one of the things that matter to you is being able to better communicate your message to the world -- via public speaking. Those few hours you "saved" can be spent on getting your message out. More speaking gigs, more people influenced. But wait! That's not all! Not only are you able to do some more public speaking, because you're going to spend more time on it, you're going to get better at it. And, because you get better at it, you're going to get more frequent speaking invites. With larger audiences. And have more influence once you're on stage. You're building leverage by getting better and better at the thing that matters. And, it's amazing how much better you will get, once you decide on only a few things to get better at.
By the way, the reverse of this is true to: Everytime you say "yes" to something, you're saying "no" to something else. Often, you're saying "no" to something more important.
4. Fight the FOMO (Fear Of Missing Out) emotion. It's a killer. We all have it to varying degrees. This fear that if we don't say "yes" to something, we're going to miss out on some big opportunity, small joy or new connection. Yes, sometimes you will miss out, but that's OK. Life goes on. On average, you will be better off skipping some things, instead of trying to do too much.
More people fail from a gluttony of good activities than from being starved of them.
5.Be super-careful with recurring commitments. If you are going to occasionally say "yes" to things that are not on your "things that matter most" list, be super-careful that they're not a recurring commitment. A one-time commitment of 4 hours is much less dangerous than a monthly hourly committment. The way I think about this: When I say "yes" to a recurring committment, I'm effectively saying "yes' multiple times (for as long as I think I'm going to be in that committment). Which brings me to the next point...
6.As painful as it is, prune your prior committments. If you are like me (and apologies if you are), you've said yes to a few things that you now sort of regret. Get yourself out of those. Be respectful, be, understanding and be fair -- but be disciplined and true to yourself. And just because you committed to something last year with no real "expiration date" doesn't mean you have to keep doing it forever. Things change. On a related note: For things that don't have an expiration date, remember that it's going to be just as painful to prune later as it is now -- why not give yourself the gift of some time back sooner?
7.Try to solve for outcome, not activity. Figure out what you want to happen (whether it be a commercial interest or a philanthropic one), and figure out how to best create impact. Usually, optimal outcomes are not achieved by saying "yes" to a bunch of "good" activities (however well-intentioned).
On the point of philanthropy, you might be wondering: "What about doing good, and giving back?"
Warning: My opinion here may be controversial for some and feel beknighted and self-serving to others. Sorry.
First off, if you have the ability to give back, you should do so. No doubt. But the question is, how do you optimimize for outcome?
Let me explain with a personal example. I'm an entrepreneur. Have been for most of my professional career. I LOVE STARTUPS. THEY BRING ME GREAT JOY. I'm one of the co-founders of HubSpot (NYSE:HUBS). I'm also a big fan of Boston and want to see the Boston startup ecosystem grow and thrive.
But a few years ago, I decided to dramatically limit the time I spend directly helping entrepreneurs and the Boston ecosystem.
Why would I do this? Isn't that selfish? Yes, I guess it is.
I'm a big, big believer in leverage and scale. I like to spend my calories in ways that deliver the greatest impact and the best outcomes. I'm actually quite geeked out on that idea.
The reason I made this decision was that I felt the best way for me to help the startup ecosystem -- was to use my time to help make HubSpot a super-successful company. The by-product of that success will be much greater than what I'd get if I were just directly trying to help a handful of startups.
So far, HubSpot has had some modest success. We are a publicly traded now and have 1,000+ people working at the company. We have many that have "graduated" HubSpot and gone off to start their own companies or join other teams. We've also made a bunch of people money (several of whom are channeling some of that back into to the ecosystem by way of angel investing). We've improved Boston's "brand" as being a place where big tech companies can still be built (which helps pull in more capital, talent and interest). All in, I'd say we're a net positive.
But, fact remains that instead of being a mentor/advisor/mensch -- I've sort of been a schmuck when it comes to where I spend my time. My money is a different matter -- I've made 60+ angel investments. But, I've been fiercely protecting of my time and I've said "no" to just about everything. And remember, I LOVE STARTUPS. I love helping them. I love the thrill, joy and fulfillment. But, I said "no" anyways. And, I may be rationalizing here -- but I think I've likely done more for the ecosystem than if I had simply gone to more events, tried to pick a handful of startups to be an advisor/mentor for, etc.
This section got much longer than I planned for it to be. I have a whole other article in draft-mode titled "The Surgeon In The Soup Kitchen". I'll give you the abridged message of that post:
Don't favor what feels the most good. Favor what does the most good.
Thankfully, blogging is a high-leverage activity. And, since I'm using HubSpot to write/promote/track this article, it helps HubSpot too. So, I can rationalize this into my "fewer things" list.
The following is a guest post by William Griggs. William is the Founder of Startup Slingshot, the resource for battle-tested startup strategies. Access the audio interviews of today’s featured growth practitioners, the full 43 page guide, and tons of resources here (free for now).
“A startup is a company designed to grow fast.”
Growth is what founders and investors alike are constantly searching for. Growth enables startups to quickly create tremendous value in the market. Without growth you’re dead in the water. But accordingly to Paul Graham, there’s a silver lining: “...if you get growth, everything else tends to fall into place.”
“For a company to grow really big, it must (a) make something lots of people want, and (b) reach and serve all those people.”
Unfortunately for most founders, viewing their startup from this altitude isn’t extremely actionable. In this post, we’ll uncover the methodologies and tactics you will need in order to validate your business and systematically reach and serve your target market.
How do you ensure you are making something lots of people want?
Making stuff is the easy part. The key, however, is making something a lot of people want. Market selection and product/market fit are critical here.
This is where a lot of startups end up spinning their wheels. As you build product early on, how do you determine if you’re on the right track or heading towards a dead end? While every business is unique in terms of exactly what it needs to do to achieve product/market fit, the process for quantifying it is consistent.
Assuming you can’t use sales as an indicator of product/market fit, below you will find several ways Brian Balfour, VP Growth at Hubspot suggests quantifying product/market fit for your startup. The further down you go on the list, the more customers are required to receive meaningful insight.
Indicator Surveys -- What do people say about your product?
Created by Sean Ellis, Survey.io is the perfect tool for indicator surveys. To learn how to use Survey.io, read this.
Leading Indicator Data On Engagement -- How are people using your product?
What are you seeing inside the product? How active are your customers?’
Retention Cohort Curve -- Does your retention curve flatten off?
If people consistently use your product over a certain period of time, you’ve reached product/market fit for at least a subset of the market.
Unsure how to get started with cohort analysis? Read this.
Don’t have enough data to do any of these steps? Focus on executing “trickle marketing campaigns.” Sean Ellis, CEO at Qualaroo was right to say that in order to understand what your target market thinks of your solution you have to expose it to them. The trick here is to not spend money and time on a big launch, instead focus on highly targeted marketing campaign that puts your product in the hands of the target market.
Before moving on to the second piece of Paul Graham’s growth equation, it’s important to emphasize that you have to get this right.Without product/market fit you’re wasting time even thinking about growth. As a founder, your startup is like a ticking time bomb says Andy Johns, Director of Growth at Wealthfront. You have a certain amount of time before everything will explode. To extend the time allotted, you need to show growth and the first step is establishing product/market fit.
How do you ensure you reach and serve all those people?
You’ve built something that solves a problem, for at least a part of the market, and now it’s time to get it into their hands.
Three Principles For Driving Quantifiable Growth
Learning how to reach and serve your target marketing isn’t rocket science but it isn’t obvious either. Those that drive quantifiable results do so by following these three principles:
Triage: They work on the highest return on investment activities, suggests Ivan Kirigin, CEO of YesGraph.
Test: They don’t assume they know what’s going to work. Instead, they focus on generating and testing hypotheses, Ivan adds. If you don’t take the time to get your analytics straight, so you can validate assumptions you’re flying blind.
Set Goals: They have a target metric they focus on. Doing so will help you focus your efforts.
Now let’s dig into the specifics.
How To Ensure You Reach Your Target Market
When starting to think about how you are going to really invest in reaching your target market, it’s important to revisit your business model. To start, you will need to formulate your target customer acquisition cost (CAC). Doing so will help guide you in determining which channels to test. To calculate your target CAC, you must estimate the average lifetime value (LTV) of your customer (learn how to calculate LTV) and subtract your profit margin. Hitting this CAC will allow you to profitably acquire customers. While most bootstrapped companies target a CAC that is 30% of their LTV, many VC backed companies that are trying to own their market typically spend to 100% of their LTV.
In this matrix, you will have a list of potential marketing channels on the left and a set of channel attributes at the top. Keep your business model, competition, and target market in mind, and begin to fill out the matrix by rating each channel using the words “low,” “medium,” and “high.”
Review your current constraints (time, money, target audience, legal, etc.) and select the top one or two channels to test for viability. The viability of a channel is determined by its ability to drive predictable returns on the time/money invested. Once you find a channel or two that works, it’s time to double down and to continue to invest in optimizing the channel.
In addition to reaching your target market, you must also focus on optimizing the process with which you use to serve them. In this case, serving them means getting them to your product’s “wow moment.” To get more of your target market to your product’s “wow moment,” Sean Ellis suggests that you focus on increasing desire and decreasing demand.
Increasing Desire: To increase desire you are continually working to test and optimize your messaging and positioning. The thought is, “with enough desire, people will overcome a lot of friction” says Sean Ellis. To execute on this and track your progress, you will need a combination of qualitative and quantitative data. Sean emphasizes that it’s paramount to keep the ultimate product experience in mind, so that you don’t increase desire for a product promise that your product is not designed to deliver on.
Decrease Friction: This step in the process is all about conversion rate optimization. It’s about seeking out and fixing all that’s preventing people from converting, whether that’s a macroconversion, like signing up for your product, or any of the microconversions that lead up to it. To dig in further on this topic, I suggest you read Qualaroo’s, “The Beginner’s Guide to Conversion Rate Optimization.”
In this post, we’ve covered the essential elements to designing a startup for fast growth. If you’re farther along or you just want to dive deeper into growth for early-stage startups, you can access the audio interviews of today’s featured growth practitioners, the full 43 page guide, and tons of resources here (free for now).