Interview with Mike Volpe, Chief Marketing Officer at HubSpot
What's new at HubSpot?
In the fall we launched our CRM as well as our Sidekick for Sales product. [Sidekick is a set of integrated email tools, which allows users to view contact profiles from their inboxes and track email opens and clicks, with email scheduling capabilities coming soon}. In May, we announced eleven integrations with all sorts of cool software solutions including Slideshare, HelloSign (contract e-signature), Infer (lead scoring), data hero (business intelligence/analytics) and a whole bunch more.
The other thing we launched was our Sidekick for Business product, which is a higher-end product for individual sales reps. It has tools to help reps with email templates, communication tracking, presentations, tracking of usage of those presentations, call logging, call reporting, etc. So we’ve done a lot more on the sales line of things, too.
The last time we talked, you had just launched your CRM product—could you give us an update on that?Our CRM strategy is two-fold. We have a strong partnership and integration with Salesforce. Just a couple of weeks ago we announced an extension of our agreement until the year 2020. It’s something we’re very serious about, and we’re super psyched to be working with them. If you need a full-fledged CRM with a lot of capabilities, for a mid-sized to larger sales team, then Salesforce is definitely the right thing. We think the right sort of growth stack is HubSpot, Salesforce and Sidekick for business, in that case.
But there’s a huge portion of our customer base that don’t have a CRM. They tried something else and had trouble getting it to work for them, or maybe they know they need one but haven’t gotten around to it because of cost. It’s really those companies that we’re targeting with the HubSpot CRM. Our CRM serves smaller companies. If they don’t have IT departments, they really need something that’s easy to use, easy to adopt, easy to implement, and frankly, doesn’t have the functionality of a full-fledged CRM like Salesforce.
You mentioned an integration to Infer, a predictive analytics/ lead scoring tool. Are your SMB customers ready for that type of technology?
For 2/3 of them, not yet. I think what mid-market customers are ready for and interested in is something that makes lead scoring simpler, not necessarily something that adds a bunch of whiz-bang technology behind the scenes. We see interest in that more advanced predictive lead scoring with maybe the top third of our customer base. For those folks, we have the partnership with Infer, which is a great solution.
But there is a lot of buzz and a lot of chatter about it. To be honest, it’s still less about company size and more about whether they’re a technology company with venture capital financing or not. And if you’re a tech company with VC backing, then you’re probably interested in it, and you should be. But I’m not sure that stuff has really jumped out of the Silicon Valley bubble very much, yet.
What are some of the trends you’re seeing in marketing that are driving your product roadmap?
One important trend is the integration of sales and marketing, and having better data moving between the two. Another one that’s interesting is mobilization. It’s been hot for a while, but with Google incorporating mobile ranking as an algorithm, we’re seeing more customer traction with people who have used other systems and are now realizing that their landing pages are not mobile-optimized. To get a mobile-optimized landing page with a lot of other Marketing Automation systems is actually quite hard. With them it can require a lot of custom coding, whereas all of our content tools, including email templates, are mobile-optimized from the ground up. Mobile traffic has been growing a lot in B2B, and a lot of people have started to worry about it more, and rightfully so.
What drove you to do so much in the area of integration, and with the particular products that you chose?
Most of it was customer-driven. We had integrations before, but this takes it to another level.
From the integration partners’ standpoint, it’s a much bigger opportunity for them with HubSpot than with a typical Marketing Automation platform. We have 15,000 customers already, plus the customers who are adopting the CRM. We haven’t released that number publicly yet, but we are seeing some really nice traction with the CRM. People are excited about that as a potential.
What is next area of growth for HubSpot, in terms of the customers that you’re focused on?
We’re still focused on companies with 10-2,000 employees. That has not changed. We build a product for the mid-market, we do marketing for the mid-market, we have a sales process that’s tuned to the mid-market, we have customer support tuned to mid-market customers. But in terms of North America, that mid-sized company market is so huge, and we’re just scratching the surface of what’s there. Only around 3-5% of those companies have something that’s related to HubSpot. Around 90% of them don’t have anything yet. It’s a huge growth opportunity there.
Beyond that, international is a big area of growth for us. We opened an office in Dublin a couple of years ago, and we just opened in Sydney 9-10 months ago now. We just announced that we’re going to be opening another office in Q4, in Singapore.
There’s no drive into the enterprise or anything like that for us. Our strategy is to focus on mid-market customers, and offer better and broader solutions for them. Our growth trajectory is really: A) Focus on the market that we’re in; B) Add more products, like sales; and C) International.
From your perspective, how has the competitive landscape shifted in the last year?
If anything, I feel like there used to be a lot more noise a year or two ago. Now, it’s down to a few companies. At the very high end, Eloqua, at the relatively high end, Marketo, then there’s Pardot, and then HubSpot, and then occasionally Act-on.
There’s been a lot of M&A in the space, but we have not seen any of that M&A really affect our sales process. So, we haven’t seen a whole lot of changes because of Pardot being part of Salesforce, or Eloqua being part of Oracle. We still have lots of people signing up for HubSpot that use Salesforce as a CRM, for instance. They really are a platform company, and they want to allow customers to choose the best solution. So we haven’t really seen any of those developments change the landscape a ton.
I feel like it’s relatively clear who the couple of winners are going to be, and customers are gravitating towards those, and away from the folks who kind of weren’t able to make the jump.
So you haven’t found it harder to compete with Pardot in the context of them being part of Salesforce?
The short answer to that is no. Salesforce believes in customer choice and putting the customer first. The Salesforce stuff is going great - we have over 2,500 customers using HubSpot with Salesforce and it’s growing every month. That’s frankly why Salesforce and HubSpot wanted to renew our partnership for the next five years.
Are you seeing increased competition from MA tools focused on ease of use for small businesses?
No. We don’t really focus on the <10 employee segment, and I know there are folks like Infusionsoft who’ve been having success there, but we don’t really see them in our sales process. People are not coming in with, “Oh, I’m looking at these seven different things,” anymore. They’re looking at, like, two.
Is integration of Adtech and Martech something that your customers are looking at, or is that more of an enterprise phenomenon?
The short answer is that we hear a little bit of it, and so far what we have is an integration strategy with Perfect Audience (from Marin Software) for retargeting.
But people usually come to HubSpot because they’re using WordPress for their website, they’re using Constant Contact for their email, they’re using Google Analytics, they’re using Hootsuite for their social media, and they’re using one or two other tools, and they’re pulling their hair out trying to get all that stuff to work together. It’s really the simple all-in-one thing that we put together really well.
Anything else to share?
Our business is going exceptionally well. Our customer base is growing at roughly 30-35% year on year, and revenue is growing nearly 50-60%. We have our inbound conference coming up in September. We had 10,000 people last year, and we will probably go over that number this year.
Vinay is an entrepreneur passionate about tackling big problems. Vinay conceived TrustRadius after experiencing challenges when buying enterprise solutions at his last company. In 1999, Vinay founded Convio, the leading Software as a Services platform for nonprofits. In April 2010, Convio became a public company, and was acquired in May 2012 for $325 million. Prior to Convio, Vinay was a Director at Trilogy Software and a Consultant at Bain & Company. He holds an MBA from Harvard Business School where he graduated as a Baker Scholar, an MS Engineering Economic Systems from Stanford University, and a MA Engineering Information Sciences from Cambridge University with First Class Honors. When he’s not working, Vinay loves spending time with his family, playing squash and racing cars.