Had Dharmesh Sharma He kept his promise to his wife. HubSpot It is possible that it never came to pass. “I had sold a couple of startups and joined the grad program at MIT Sloan to figure out my next move,” he says. He assured his wife after a decade-long journey of founder sacrifices and long hours, that he had finally finished his venture. Just a few months later, he was able to meet Brian Halligan at MIT.
While there wasn’t a direct path to any particular idea for a company, Shah and Halligan shared a common passion for tech, startup, and small business. “We came together as co-founders before forming the idea, and I convinced my wife that I had one more startup at-bat left,” says Shah.
The final at-bat was a great success and turned into the grand slam that all players long for. 15 years later, the company is worth more than $1B annually and has 100,000 paying customers. The duo stuck together through the rocketship growth, with Shah in the CTO’s chair and Halligan as CEO (until he recently stepped down in 2021).
For a repeat founder with such zeal for the “starting something new” days, you might not expect that, as Shah puts it, he’s having a better time at HubSpot now — 15 years in, with 5,000 employees. “Those early years can be fun — you’re super nimble and can execute quickly. But there’s something to be said for having scaled and being at the grownups’ table. You have the money, the people and the talent that you can put up against an idea, in a way that you couldn’t as a 10-person scrappy startup,” says Shah.
In this exclusive interview, Shah traces back the 15-year journey building HubSpot and highlights five company-building cornerstones that founders face and shares his advice — from choosing a co-founder, architecting your role and bringing aboard the early team, to getting feedback as the company grows and crafting a culture that will scale. Let’s dive in.
When it comes to choosing a co-founder, Shah points to what seems like an obvious misstep — but it’s one he sees founding teams make over and over again. “People assess the idea, and they’ll maybe go have a beer together, but you have to really interrogate whether you enjoy spending time with this person,” he says.
The future HubSpot founders at MIT were meticulous about determining their co-founder match. “After we met, Brian and I knew we might want to start a company together someday, so every class in our grad program that had a project, we intentionally put ourselves on the same team,” says Shah. “To take it even one step further, we made sure every project could tie back to this startup that we called HubSpot. It wasn’t a company at a time — it was just an idea that was constantly shifting. The goal was to simulate what it would be like to work with this person for eight hours at a time.”
In our personal relationships, you’ll often date for a long time before you make a lifelong commitment. But when it comes to co-founders, people aren’t as deliberate about getting to know potential partners.
Shah points out that the academic community is one way to learn about potential co-founders. However, Shah also suggests some other avenues. “Take an online class or find a short-term project to work on together — something small that helps you understand what makes each other tick,” he says.
You should look for a Venn Diagram, and not two overlapped circles.
The common tripwire: Look for your cofounder clone. “We gravitate to the people who are most like us, but it’s critical that you have different skill-sets. Brian’s background was in sales and marketing, while I grew up in the product and engineering orgs,” says Shah. Nevertheless, shared values and common working habits are important.
A passion for learning “To this day, we will send each other emails at 1 or 2 AM with a new book recommendation (and we’re both night owls — I’m not sure if the relationship would have thrived otherwise). We know what’s on each other’s reading list, we discuss talks we watched. This extended to our early employees, who were similarly academically-oriented,” says Shah.
A healthy discussion is powerful: “In the early days, we could pick anyone on the management team and say, ‘We’ve got this issue to work through, argue this side of the debate,’ even if they didn’t necessarily agree with that particular side. That process of learning together and pushing each other, even if we disagreed, helped keep the relationship productive,” says Shah. One of the earliest crossroads that stirred up debate in HubSpot’s company history was about determining the target market. “With our first products being a marketing suite of applications, we could either focus on professional marketers, which we called Marketing Mary, or we could focus on business owners and entrepreneurs, which we called Owner Ollie. There were trade-offs on both sides of the debate — there were much more Owner Ollies, but Marketing Mary understood the product better and had a more burning need for what HubSpot was offering.” That same debate is now a required case study for every HBS grad.
Write it down Shah feels that these late-night email exchanges point to another behavior that helped them iron out their differences. “I never answer the phone — I probably have three or four calls a year. Prior to Slack all communication was done over email. Both Brian and I prefer to process information through writing,” he says. A bonus: “We have 15 years’ worth of musings and you can go through the annals of HubSpot history. If you bring in someone new to a long-running business challenge, you can pull snippets of email threads and bring them up to speed.”
Don’t start a company without answering these questions.
Shah and Halligan began to talk more deeply about the possibility of forming a business together as they started getting serious about collaborating. “It’s mind-boggling to me how many co-founders have not talked through some fundamental questions,” says Shah. In simple words: What are the goals of both sides?
“Both Brian and I had some kind of success in our professional careers. I had startups before that had been a base hit — the only reason I was doing HubSpot is that I hadn’t quite hit a home run. Brian was in a similar position,” says Shah. “One of the early decisions we made was that we were trying to build something sustainable that our future kids and grandkids would be proud of.” It sounds simple enough, but that one conversation made many future decisions clearer.
Each time we crossed a fork, we asked ourselves: Which route maximizes our chances of building the company we envisioned?
The conservative route was often the most popular. Shah gives some examples. “When we were out raising capital, we didn’t worry about dilution — we worried about whether it improved our odds of building a generational company. We wanted fair deals, but we didn’t get distracted by negotiating the best possible terms — we were focused on building a great board. We didn’t get distracted by acquisition offers. We weren’t reluctant to go public,” he says.
He suggests that co-founders start by asking a handful of essential questions. (To dig deeper, you can bookmark this Review favorite article, which has 50 questions you could ask potential co-founders).
How does success feel to you?
What happens when someone offers $100M for the acquisition of your company in a year?
What happens if in three years one of us is feeling disengaged and doesn’t want to be a part of the company anymore?
What happens when we disagree with each other?
“These questions are super pivotal, but a lot of folks take a ‘We’ll cross that bridge when we get to it approach.’ It’s much better to get those issues out on the table as early in the process as you can,” says Shah. “And if you’re not comfortable having those conversations early on, that’s as big of a red flag as there can be.”
Shah warns people not to become too involved in the selling side of nabbing their co-founder. “All co-founding relationships involve some element of sales, but it can get too one-sided. If you’re pAssionate about this idea and you happen to come across a brilliant engineer, that love has to be reciprocated,” he says. “They don’t have to be as You can be passionate about your idea and mission but the relationship must go beyond zero. Otherwise, the relationship won’t last.”
With the co-founder duo in lockstep, aligned on their values and with some projects at MIT under their belt, the next step on HubSpot’s path was figuring out where both fit into the executive team. “One of the things we talked about in the early set of founder meetings was about who would be CEO. It turned out to be really easy because Brian hadn’t been CEO before and really wanted to do it, and I had been CEO at my two prior startups and I sucked at it,” says Shah.
Sounds simple enough — Halligan would serve as CEO, with Shah as CTO. Shah took the idea one step further, a rare feat for a co-founder of a startup. “I realized I didn’t want any direct reports. I had run my prior startup for 10+ years as founder/CEO and I learned that I’m really bad at management in the classic, textbook way,” he says.
The napkin math proved that his intuitions were correct. “I’m a reasonably smart person. With some training and coaching, it would probably take me 3-5 more years to master the skills. But I didn’t want to spend five years and a bunch of calories getting passively okay — nor would that hugely benefit the company,” he says.
So early on, when it was just the two co-founders, it was decided that Shah would be an individual contributor, 100% focused on the business — rather than taking on the engineering org. To this day, zero of HubSpot’s thousands of employees report to Shah. “Early on, I chose to concentrate on my strengths and not on managing my weaknesses. Had HubSpot not made that call, I don’t think I would have lasted long at the company,” he says.
With the co-founder title, Shah realized he’s in a unique position to maintain influence, without hundreds of employees in his org. “Founders have a special kind of designation within the company just by virtue of being founders. Their opinion carries weight, regardless of whether they have managerial responsibility,” he says.
As the founders continued to build out HubSpot, it’s a lesson they’ve applied throughout the company. “Some people are great managers — they should manage. Some people are great at building teams — they should do that. Others are great at creating amazing products.
Don’t force people into management in order to progress at the company, just because conventional wisdom says your value is a function of how many people report to you on the org chart.
It is not surprising, perhaps, that HubSpot’s founder, MIT Sloan, was also a fellow MIT Sloan alum. “This made the company way too homogenous, and I wouldn’t do it this way if I were to do it again,” says Shah.
He points out a few of the key connections that helped to bring together early HubSpot teams. “Having taken many of the same classes, learned the same business cases, and read the same books, we had a shared vocabulary and brought that academic orientation into the halls of HubSpot,” he says.
He is also keen to debunk a few MBA hiring myths. “There’s a running joke in startup circles that your probability of success goes down exponentially based on the number of MBAs on the early team. I obviously don’t buy into that philosophy,” says Shah. “We can debate the timing of when you should bring those people on board, but I don’t subscribe to the notion that you should just outright dismiss MBAs as being not useful for early-stage startups.”
Here’s why: “MBAs are very analytical — they want to dig into problems and understand the mechanics of how they work, and articulate their solution or analysis. They then have to translate those thoughts into a coherent format that other humans can understand — which is awfully useful for startups,” says Shah.
Whether it’s analyzing pricing, go-to-market or tradeoffs on tech platforms, having someone on the team who’s off-the-charts analytical brings a necessary skill-set to the table. “There are technology geeks who want to dive deep into the tech side. Business geeks are just as dedicated to their craft and tech geeks. Great MBAs have an engineer’s mindset that is applied to other aspects of the business,” he says.
Many of the most successful tech companies were unsuccessful because they did not have a unique IP. It’s typically traced back to the business model and go-to-market. What are the best ways to get customers? What are the best ways to drive product-driven growth? These aren’t lines of code.
He offered one final tip for early hiring. Avoid the “press release hires.” “We didn’t want someone who worked at company X that was super successful for 7 years just because they’ve done the particular role before. We looked for people who had a propensity for doing things, with an inclination to test theories or get into a room and debate an issue,” says Shah.
Dharmesh Sharma, co-founder and CTO of HubSpot
To scale your leadership alongside the company, you’ve got to arm yourself with a steady stream of feedback. But as a co-founder without a boss, you’ve got to look for other avenues rather than a traditional performance review. Folks won’t exactly walk up to the founders and offer up their unvarnished takes, and you need signals other than pushback from the board or executive turnover to tell you how you’re doing. That’s why from the early days of HubSpot, Halligan and Shah wrote each other’s annual reviews.
Here’s how the process works: “Whoever is doing the review picks 15-20 people who they think will give more color and context to how things are going. It’s the review writer’s responsibility to then synthesize all the feedback that they heard, add their own feedback, and then write a 10-15 page review,” says Shah.
Shah, an engineer and product guy, treats it like a bug report. “People will be asked directly., ‘I’m writing a product review of Brian. Are there any features that aren’t working? What features would you like to fix and let’s rank the severity,’” he says. This is his number one tip. Keep it vague. “Don’t say: ‘I want to collect feedback on how Brian interacts with the engineering team. Sometimes people have useful feedback outside of their immediate role,” says Shah.
After presenting feedback, the next step is to give the recipient the opportunity to reply in writing.
Here’s what I heard from the feedback
Here are the things that I’m going to tackle over the course of the next year.
Here are the things I’m not tackling.
That final piece of the response may not be expected, but it’s a critical piece of the puzzle. “Pre-pandemic, I often received bugs that folks said they didn’t see enough of me at the office. This works according to plan. I understand the value of in-person interaction, but the cost of fixing that particular bug is exceptionally high for me emotionally, which means it’s exceptionally high for HubSpot. As a super-introvert, that two hours of in-person time will zap my energy for the rest of my day,” he says. “If you choose not to tackle a particular bug, it’s important to explain why.”
Here’s an example of a bug he did take on: “I had heard that folks didn’t really know what I’m working on or what I cared about. It wasn’t because I was hiding anything, but it was because I didn’t want to distract the team with whatever random thoughts were going through my head,” says Shah.
To tackle this bug in a manner that aligned with his introverted nature, he started a series of internal blog posts called “Dharmesh’s Ponderings.” “I cover all sorts of things I wouldn’t talk about publicly. Folks can opt-in to read a blog post about what I think about web3 or why we made a particular decision for the company,” he says.
To hold themselves accountable to their annual reviews, Shah and Halligan share the feedback and their intended solution, along with a timeline, with all of HubSpot’s employees.
Shah explains that the HubSpot team sees the culture as a product. This allows employees to make informed decisions, and helps grow the business. Shah, the Chief Product Officer of HubSpot’s culture product is also responsible. How did an introvert self-described as a megalomaniac become a leader in culture?
“Many years ago, Brian was a part of a CEO group that got together quarterly to talk about CEO issues. Culture was one of the most popular topics. Brian told the group that HubSpot was still in the early stages of building the product and trying to figure out how to scale — culture would have to come later,” says Shah. “As Brian tells it, the rest of the CEO group came down pretty hard on him — culture is the number one thing. If you mess that up, nothing else will matter.”
“As he’s relaying that feedback to me, I say, ‘Well, Brian, that’s awfully good insight from some really smart folks.’ Brian’s next sentence to me was: ‘So why don’t you go figure that out.’ Of all the people in the company to work on culture, you’re going to pick the one who’s the Minimum social and likes being around people the least?’” says Shah.
But in the spirit of being a good co-founder, Shah took on the task of sketching out HubSpot’s early culture. Shah treated the task as an engineering exercise, much like any good technical leader. “Step one was recognizing that we have a culture now. As a company, we make the decisions. So I wanted to figure out what the HubSpot culture already is,” he says.
What is the equivalent of an engineering project to diagnose culture?
Allow Shah a moment to nerd out: “V1 of the project was, if I could write a function to mathematically approximate the probability of success of any given HubSpot person, what would be the coefficients? What are the parameters of that function?” he says. Shah conducted an NPS survey of the employees. The reason you gave that score was simple. Shah summarized the findings and captured the insights in a deck he called the “Culture Code,” a name that still exists today.
Even folks who weren’t originally on board with the culture exercise came around. “People started to say, ‘This is actually very useful because it helps us hire people. It could be even more useful if it told us how we should operate and make decisions,” says Shah. While the original Culture Code slide deck was 16 slides, it eventually expanded to 64 and ultimately 128 — which is where it stands today. “Every time I add a slide now, I take one out,” he says.
Shah, perhaps not surprising, was obsessed by the Netflix culture deck as he built his HubSpot version. “I can cite many parts from memory. You can read the Netflix deck if there is time. You can read both the Netflix deck once and the other twice if you don’t have enough time. It’s not about emulating that specific set of cultural values. It’s about appreciating the clarity with which they express the way Netflix culture works,” he says.
It turned out that the self-described ultra-introvert with no direct reports was the ideal person to guide culture.
Cultural studies are like a scientist studying a grasshopper. I have a lot of motivation to make the right calls, but I have no horse in the race — no team I’m trying to protect. Because of the nature and importance of my job, I am able to see culture objectively.
If you want to get started quickly (without needing to create 128 slides), he recommends that you start with this prompt: Who do we believe we should work with? “These can’t be platitudes that everyone would say yes to. We want to recruit smart people. Because no one wants to hire people who are stupid, intelligence can’t be part of the core culture value. You have to pick things that not everyone would pick, for instance, our transparency value,” he says. “One of our values is humility. Not everyone would pick that because often people associate that with the lack of confidence.”
After V1 has been completed, V2 now focuses on constructing a basic set of heuristics that will help you make better decisions. “I’m not a lawyer, but it’s almost like case law that says, we encountered this particular question or this decision that was not addressed by our culture document. This is the framework we developed. We did not know that there was one at the time. When these kinds of issues come up, this is how we’ll address that bucket of issues,” says Shah.
What to do when your business grows.
If culture is like a product, a product is not a static thing — at least, not the successful ones. “I don’t take the approach that we have a culture that we developed in the early years and our job is to preserve it. It is important to maintain the core values, while improving upon them. The needs of the market change and the needs of the customer — in this case, our employees — change,” says Shah.
HubSpot was the first company to have no titles. “We thought titles reflected hierarchy and we wanted it to be more of a meritocracy. We ultimately had to retract that, because customers revolted,” says Shah.
Three options were presented to the company: Keep existing titles or introduce traditional titles such as director, manager, etc. Or give people titles they could create, such as Design Badass. “Ultimately we chose option two because the employee feedback was looking towards life outside of HubSpot. As we go on in our careers, that’s the thing that people look for as indications of progression. That’s what your family understands when you tell them you got promoted from Director to VP. It means something to the outside world, even if it doesn’t mean much at HubSpot,” he says.
However, other cultural traditions have remained, even with 5,000 employees. “Our first office had four desks, even though it was just Brian and me at the time. There were two desks by the windows and two away. Brian and I both took the desks by the window,” says Shah. “When we hired our first engineer, we now had to make a decision around seating. A mini lottery was set up to draw names out of a hat. Whoever’s name got drawn first got to pick the desk they wanted, and so on and so forth. Then, with the next hire, we’d do the lottery again.”
The lottery system survived the move to larger offices. “It worked well because people got to know different people in the company, and if you got a super crappy desk, you would only have that crappy desk until the next hire,” he says. Eventually, once hiring drastically accelerated, they shifted to a quarterly desk swap and made sure to have quieter areas, so an engineer wouldn’t be seated next to a salesperson constantly on the phone.
“I remember the board saying, ‘That’s cute, but you realize this system is not going to scale? You can’t change everyone’s seat every three months.’ But we did it at 100 employees and we keep doing it to this day, with some small tweaks,” says Shah.
It is better to start baking transparency in the oven, than to sprinkle it on later.
Another thread in HubSpot’s cultural fabric that’s stretched from early-stage to today is the commitment to transparency, which Shah and Halligan outlined early on in their founder journey. “Most people think the risk of transparency is so high — even if they’re early-stage,” says Shah.
HubSpot was transparent from the beginning. “We published bank balance, burn rate, valuation of the last round, strike price — everything,” he says. Shah says that while many founders believe transparency is counterproductive, at worst dangerous and risky, Shah is convinced this is mistaken on two fronts.
They are not at as great a risk as they believe. “Once you have that transparent culture in place, you tend to recruit differently. We specifically ask ourselves during the recruiting process if we believe this person can be trusted to keep data confidential, and only hire people we believe are deserving of that transparency.”
Transparency is more valuable than risk. “Transparency allows more people in the company to have the context to make better decisions. Folks might say, ‘Well, the engineering team doesn’t really need to know about AWS expenses,’ but it’s actually helpful for them to have the context of what the margins look like, how it impacts the stock price, etc. We trust people to pull the information that will help them do their jobs and better serve customers.”
While Shah doesn’t recommend founders start out with a 128 slide culture deck, he implores folks to write something down. “Even if it’s just on a napkin, if you haven’t written your culture down, no one really knows what it is. That’s not a message you can get through osmosis — you have to articulate it. That will be one of the hardest and one of the best exercises you do in the early years,” says Shah.
“Yes, it requires an investment. There are many calories involved in debating such issues. This investment in time and effort is high-leverage. The culture’s job is to help you not only attract amazingly-talented people, but then to also have those amazingly-talented people do great work. If I had to do it all over again, I would start on culture even sooner,” he says.
This is an edited summary. Dharmesh Shah’s appearance on our podcast, “In Depth.” If you haven’t listened to our show yet, Make sure you check it out.
Cover image by Getty Images / Ezra Bailey.