How to be a CEO when AI breaks all the old playbooks | Sequoia CEO Coach Brian Halligan

Brian Halligan (00:00:00): The thing about being a founder/CEO is there is no one there to rescue you. Your parents aren’t going to rescue you, your VC is not going to rescue you, that kind of hits you when you hit your first crisis.

Lenny Rachitsky (00:00:08): Starting a company has never been easier, scaling one into a durable high impact organization has never been harder.

Brian Halligan (00:00:13): The number of companies formed is going to much fewer over the next 10 years relative to the last 10 years, it’s just going to be hard to stand out and really accelerate.

Lenny Rachitsky (00:00:21): What’s most different about what it was like to be a CEO maybe 10, 20 years ago versus today?

Brian Halligan (00:00:25): There’s a massive tax in optionality when you can move this fast and try a lot of things. It puts pressure on the CEOs to be faster and better decision makers.

Lenny Rachitsky (00:00:35): A lot of people in the world want to be founders, they want to be CEOs.

Brian Halligan (00:00:38): I don’t think anyone can do it. People talk about 9-9-6, it’s way more than that. Founders are seven days a week, they’re always on, [inaudible 00:00:44] Sunday nights, it’s full contact.

Lenny Rachitsky (00:00:46): Do you feel like there are specific profiles or traits to be successful?

Brian Halligan (00:00:50): I look for four things, I call it my lock algorithm.

Lenny Rachitsky (00:00:56): Today, my guest is Brian Halligan, co-founder and longtime CEO of HubSpot. I asked Brian to come on this podcast because he is, more than anyone I’ve met, a student of the job of a CEO. After leaving HubSpot last year, he became the in-house CEO coach at Sequoia, where he brings together dozens of top CEOs to learn from each other, he does one-on-one coaching with some of the world’s top CEOs, he also hosts a popular podcast, called Long Strange Trip, where he interviews some of the world’s most successful CEOs. In this conversation, we unpack what it takes to be a successful CEO in today’s era.

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(00:03:42): Datadog is more than engineering metrics, it’s where great product teams learn faster, fix smarter, and ship with confidence. Request a demo at datadoghq.com/lenny, that’s datadoghq.com/lenny. Brian, thank you so much for being here, and welcome to the podcast.

Brian Halligan (00:04:02): Thanks for having me, Lenny.

Lenny Rachitsky (00:04:04): It’s my pleasure. I want to start with something that I’ve heard your board members, the way they described you, is someone with a perpetual state of constructive dissatisfaction. Do you think this is a core foundational trait of successful CEOs, successful leaders?

Brian Halligan (00:04:21): By the way, I like that description, when she did, a woman named Lorrie Norrington, who [inaudible 00:04:26] said that. I like it, I took it as kind of a compliment, and I liked it. So, I spend most of my time these days coaching very fast-growth CEOs. They all are kind of like that. They’re all in kind of a state of perpetual dissatisfaction, but in a positive way. One of the things, by the way, I like about the current crop of CEOs, they don’t really take stock of what they’ve done and feel it, they’re always a little bit dissatisfied with where they are, and very focused on the end state. And I’ve been surprised at how humble this generation is of CEOs. And I think of my generation of CEOs as being, I don’t know, humble wasn’t the first word that would come out of your mouth when you describe my generation. But this generation I feel like is different, and I’ve been impressed with it.

Lenny Rachitsky (00:05:25): Okay, I have a bunch of questions along these lines, because one, you’ve been a CEO of an incredibly successful company for a long time, for about 20 years, before you moved on to this new chapter, now you work with a bunch of CEOs, you’re Sequoia’s in-house CEO coach, there’s a few things that I’ve heard you do. One is you gather groups of CEOs, and what I’ve read is that you have kind of two tables. You have the kids table and the adults table. The kids table is CEOs that are companies that are about under 100 employees, the adult table is over 100 employees. So, let me ask you just, when you look at CEOs that move from the kids table to the adult table, other than just they scale and grow, what is it that these CEOs that graduate from kids to adults table do differently?

Brian Halligan (00:06:11): The adults are really focused on, all they really want to talk about is their exec team. Their direct reports, how do you build our exec team, that next level down, org design… You would be surprised how much they think about that. And on average, I would say the adults are spending half their time just recruiting and interviewing. It’s pretty all consuming. And I remember that from that phase in HubSpot’s growth. And it surprises people like, wow, my job is really just to interview and hire, I didn’t know that was going to be the case. So, that is one that they are making that transition, and I would just say in general, people are very bad at this, and HubSpot was too.

(00:06:57): I think CEOs and everyone dramatically overrates their ability to interview, and overrates their gut feeling, and underrates a really high quality blind reference. And I interviewed Dave, the CEO from MongoDB the other day, and he had an interesting [inaudible 00:07:22]. On average over his 10-year lifespan as a CEO of Mongo, there were two C-levels turned over per year. That’s a lot of turnover at the top, and I didn’t keep track of it like Dave, but I think HubSpot was kind of similar. And all of these startups are kind of similar too. And so, people are working on that, and struggling with it, is one thing in common with all of them.

Lenny Rachitsky (00:07:49): What do you do when you coach someone on that? When you’re like, okay, you think you’re amazing at interviewing, you think you know who’s going to work out, what advice do you give them to help them develop that skill?

Brian Halligan (00:07:59): I think even me, I’ve been doing this for 150 years, I still think I overrate my ability to interview someone, and really know if they’re a good fit. I give a couple pieces of advice. Parker Conrad has a good hack that I liked. Before he’s got a C-level interview, CFO, chief product officer, whatever, he has some sign an NDA, and sends them the last board deck, or the board memo, or some important doc, and he schedules a half hour interview with them, and he just has a chat about the decks. And if they’re just very complimentary, and it’s so great, and you’re doing this amazing thing, it’s a major red flag to him because he wants someone that will challenge him and not a yes person. And I thought that was a pretty good hack to get inside someone’s head and how they think and how they’ll interact with you.

(00:08:53): Getting on a whiteboard and working through a problem I think is always a good thing. I think the standard interview of walking through your background, I don’t think is all that valuable. And I coach people to do blind references, find someone you know that work with them… VCs are good at this by the way. And I get a lot of these, and you can tell some of them are like, we’ve already decided we’re checking the box, versus they’re asking me hard questions about this person. And one of my favorite questions people ask is, would you enthusiastically rehire this person for that role? Which I think is a really good question. On a scale of one to 10, how likely is it that you’ll try to rehire this person back from me down the road?

(00:09:37): I think those types of questions are good, so not mailing an in on those blind references I think is really good. My other piece of advice, and no one listens to me on this, is hire slow and fire fast. People hire fast and fire slow. If I had to guess, Lenny, with 18 months after you hire a C-level exec, at least 50% of the time they’re gone. High mortality rate on them, it’s harder than people think.

Lenny Rachitsky (00:10:10): And so, what you’re saying here is there’s only so much you can actually do to increase those odds.

Brian Halligan (00:10:15): I think you can, I think the blind references are key, I think doing real interactive, working on a project together is key. I’ll tell you one of the things we learned at HubSpot about this. We would have a candidate come in, let’s say a head of engineering, and we’d have eight people interview them. And our scale’s one to four. And let’s say four people were four out of four, and four people were two out of four. So, that’s candidate A. And then the next candidate comes in, eight people interview them, and everyone’s a three out of four. Almost every time we hired the three out of four, the person with the least amount of weaknesses. And we changed it, and we went with the spikier people, we went with people with weaknesses, we with people who would challenge stuff, and that has worked out quite well.

(00:11:04): Our hit rate at HubSpot’s improved. We also have shrunk the pool of people on that interview panel from eight to four. We just hired a head of product, and there were just four of us that interviewed them. I think that worked too. So, I think there’s things you can do to get better at it, for sure.

Lenny Rachitsky (00:11:21): Okay. This is incredibly tactical and useful. On the references piece, the toughest part is getting people to be honest because there’s very little upside to them to say negative things about people. Is there anything that you’ve learned to help get real honest answers from folks you call for references?

Brian Halligan (00:11:38): Well, I can just say I don’t do this a lot anymore, but when people call me, I can tell if they’ve already decided, and when they’re really just looking for… When they ask me for the strengths and weaknesses I’m like, oh, they’ve already decided. When they ask me something hard, like on a scale of one to 10, how likely you’re to hire them again? Stuff like that, that kind of gets at the core. Or were they the top 1% of your employees? That’s a good question. Oh, were they top 10? Oh. That type of question is pretty good. So, when I’m on the other side of it, I like when those types of questions come up.

(00:12:16): I tell you the other mistake everyone makes, and all the CEOs we’re making now, is you’re hiring for that whatever, head of engineering, and you’re blown away by the resume. Like you’re 50 employees and you’re hiring this person, who’s been at Microsoft the last 10 years, and has a fancy title, and is a fancy division in Microsoft, and you hire them, there’s just a massive impedance mismatch when you hire them on what their expectations are, and what your expectations are, in the extent that you get your shit together. It’s just you don’t. You definitely don’t, if you’re 50 or 500 employees. And they expect you to have your act together. So, that is another… Avoid the big company hire. We hired so many people from Salesforce, and Google, and Microsoft, like 100% attrition rate on all those folks.

Lenny Rachitsky (00:13:11): Something that I’ve seen that a lot of companies is there’s phases of like, okay, now it’s the McKinsey, a cohort comes in, and we think that’s going to be the answer, and then it’s the Apple group, and then that didn’t work out, then the Amazon group.

Brian Halligan (00:13:22): The McKinsey one never works. It never works. It never works. By definition, they would fail on my spectrum of… Most founders are like me, they are skeptical of dimensional wisdom, they’re unhappy with the world works in some way, and so they’re kind of far on that spectrum of rethinking dimensional wisdom. And almost by definition somebody who goes to work for McKinsey is very conservative in their outlook. And so, I think that almost always fails.

Lenny Rachitsky (00:13:50): We’re on this s hiring thread, so let me keep following this conversation. I read somewhere that you recommend building your team like the 2004 Red Sox. What does this mean?

Brian Halligan (00:14:03): Well, I’m a big sports fan, a big Boston Red… And the Boston Red Sox hadn’t won, Lenny, a World Series in 86 years, since they traded Babe Ruth.

Lenny Rachitsky (00:14:12): I remember that.

Brian Halligan (00:14:13): And they finally broke, and they finally won it in 2004. And the way they won it was they had a team of a bunch homegrown, really high quality, inexpensive talent that they drafted and came through the farm system. And then they got a few free agents, like David Ortiz, that a lot of people have heard of, that they paid a fair amount of money to. Peter Martinez and Curt Schilling were kind of the canonical older been there, done that, bigger company folks. And they mixed really nicely, the culture really worked. And I think that’s the key. I think people underrate their homegrown talent, almost across the board they underrate it. And I think you want that mix. You don’t want to hire a whole bunch of been there, done that, and you don’t want to hire [inaudible 00:14:57].

Lenny Rachitsky (00:14:57): I imagine this is public, but you’re now part owner of the Red Sox, is that right?

Brian Halligan (00:15:00): I am a part owner of the Red Sox, yes.

Lenny Rachitsky (00:15:02): Okay, I have questions for you along those lines.

Brian Halligan (00:15:04): Okay.

Lenny Rachitsky (00:15:06): Okay, that’s amazing advice. Kind of what I’m taking away here is people see all these fancy logos, amazing person, VP, this, that at Salesforce, Amazon, Google, whatever, and what you’re saying here is don’t underestimate the power of someone internal, rising to the occasion.

Brian Halligan (00:15:22): Yeah. If you look at HubSpot, half the management team are folks who had been there for approximately 150 years, which I like. And same with, you look at Apple, a lot of those people are homegrown.

Lenny Rachitsky (00:15:32): And so, is there any tips here for doing this well, is it just give people a chance?

Brian Halligan (00:15:36): I tend to give people a chance. It’s like, if you’re interviewing someone that’s homegrown, and they’re VP for that C-level job, versus hiring someone from the outside. I hire someone from the outside, they’re very good at interviewing, from a big company, they look fancy, they’re shiny, you haven’t seen their warts, hard to figure out their warts unless you’re very good at line referencing, and so you tend to overrate them and underrate your homegrown. So, if it’s pretty close, I think you give your homegrown a shot at it.

(00:16:03): What’s interesting to me, Lenny, is Brian Chesky sort of rethought a lot of this stuff, and he’s like everyone’s over-rotating to the homegrown to the experienced talent and management teams and delegation, I think he’s mostly right about that. People haven’t really followed that. People are, they’re hiring people from the outside quite a bit. That’s kind of the standard part of the playbook that all of them are following now. It’s a little different, it’s actually quite different than what Brian [inaudible 00:16:32].

Lenny Rachitsky (00:16:32): Going back to the conversation around CEOs, a lot of people listening to this podcast, just a lot of people in the world want to be founders, they want to be CEOs. At the same time, you look at Elon, you look at Jensen, you look at Steve Jobs, you look at you, a lot of people are like, I can’t. I’m not this person, I’m not going to be as good as them. There’s no world where I’m this good. Do you feel like there are specific profiles or just traits that you have to be born with to be a successful CEO, or do you think it’s earnable, anybody can be successful if they really work hard?

Brian Halligan (00:17:02): Go ahead and meet all these CEOs coming in, and I have a little algorithm in my head, and I look for four things. I call it my LOCK algorithm. L is for lovable, and Steve Jobs you would say is kind of rough and maybe not lovable, but he would inspire followership. You would want to follow him. And so, could I envision a 28-year-old me, graduating from business school, going to work for this person? Would I crawl across broken glass? That’s question one. Two is just obsession. Are they deeply obsessed with this problem? I’m a little negative on people who came up with this problem to solve six months ago and started a company, I like people with deep founder market fit, who’ve been thinking about it for a long time, and have evidence in their lives of going deep down, obsessively down a rabbit hole because that’s kind of what it takes to be a founder/CEO.

(00:18:02): The C is something I wouldn’t have thought of, but this is a Sequoia thing, like chip on the shoulder. Pretty much all of them have a boulder on their shoulder, and I have a bit of a chip on my shoulder too. And the K is just for deeply knowledgeable about the domain. And so, I look for that. If I were to stick an S on it, I would say student. I look at Winston Weinberg from Harvey, or James from Profound, or Gabe from Rogo, some of these new very fast growing companies, they’re students of the game. They’re not just learn it alls, they’re deep, deep, deep students of the game. And they’re like LLMs, they’re constantly, constantly learning, and it’s not just learning stuff for me and their peers, but they go way back in time, and have a lot of history on stuff. So, those are some of the, kind of my little criteria I use when I’m evaluating CEOs. What do you look for, by the way, you’ve interviewed a ton of folks like me, what do you think is in common?

Lenny Rachitsky (00:19:11): Of what successful founders? Oh my god. I wish I had the… My succinct answer, I would go to Lennybot.com, and be like, what is the common pattern across these folks? One that you didn’t mention that I think is interesting, I did some research on this recently, with Terence Rohan, one is just extremely ambitious. Just trying to do something really wild that most people are like, that’s crazy. You’re not going to get a subscription service for all music in the world, that’s just… What are you doing? [inaudible 00:19:38]-

Brian Halligan (00:19:40): [inaudible 00:19:40]. Is it learnable? I notice some of, a lot of the CEOs struggling with a couple of things. Like let’s say you’re Winston, you’re late 20s, you’ve never managed a team, you’re probably never even captain of a sports team before, and in order to scale, you have to give people feedback constantly. It’s very unnatural. It’s like, I’m going to give this VP I hired a bunch of feedback, positive and negative. And if you don’t get good at that, you really pay the price later. That’s something I think they have to learn. They all have to learn to get a good bullshit detector. They’re constantly being spun, everyone’s trying to sell to them, the org is always trying to sell to them. So, that’s sort of something they have to develop over time.

(00:20:29): They have to all get good at the inspiration thing over time. Like, you’re Winston, you’ve never had to inspire anyone in your entire life. You went to school, and you’re a lawyer for a few years, and you started this thing… Inspiration wasn’t your thing. So, there’s certain things you have to learn on that startup to scale up path, and the best ones learn it very fast.

Lenny Rachitsky (00:20:50): This is extremely interesting and useful. So, LOCK, with an S at the end, just to kind of mirror back what you’re sharing. And when you were saying you evaluate CEOs, is this for investing as a-

Brian Halligan (00:21:00): Yes. Yes.

Lenny Rachitsky (00:21:01): Okay, so when you’re helping Sequoia decide should we invest in this company, what you look for is, LOCK… I like the S, I’m going to include it there. So, are they lovable? Are they inspiring? O, are they obsessed with this problem they’re going after? Do they have a chip on their shoulder? Are they extremely knowledgeable about the problem they’re going after? And it sounds like not just the problem but just the studying company’s business strategy, things like that. And then, S was a student. I guess that’s what S is, student is studying, being a founder, being a CEO. Okay. So, I guess going back just to the question, do you think, just to put it very simply, do you think CEOs are born, or do you think they’re made? Can anyone turn into an amazing CEO?

Brian Halligan (00:21:44): I don’t think anyone can do it, I don’t think it’s just anyone. I will say, I’ve noticed… So, another little rubric I have, and I don’t see a lot of these, but Brett Taylor’s one, there’s a few out there that are in Sequoia’s portfolio. I call them back to the baseball thing, a five tool player. In baseball when you rank a player it’s, can they hit? Can they hit with power? Can they run? Can they catch a ball? Can they throw the ball? And they rate them one to 10 at each. And it’s very rare that you have a five tool player, extremely rare. And the thing that’s kind of new now, are there are five tools CEOs, like Brett Taylor’s one.

(00:22:24): You can code, you have taste, you have vision, you can sell the product, you can convince employees. This kind super CEO. And there’s a bunch of them now. And I don’t know, I didn’t see a lot of those. That certainly wasn’t Steve Jobs, he wasn’t programming. It wasn’t Jeff Bezos. I think there’s kind of a new breed that’s quite impressive.

Lenny Rachitsky (00:22:49): These folks you mentioned were this good before AI became a thing, I imagine AI helps more CEOs fill the gaps that they have.

Brian Halligan (00:22:58): I think AI is, it’s hard to fill the gap of this guy’s a developer, he’s genius level, obsessive, but can he sell? Can he convince an investor to give him a lot of money and a high valuation? Can he convince brilliant employees to leave OpenAI and join him? Can he convince some big skeptical Fortune 500 enterprise to buy his product? Being able to do that, and have taste, and be able to code really well at next levels, I think is rare. I actually think it might be the other way though, where mere mortals like me, who can kind of code, all of a sudden we’re going to be able to build stuff. I think it kind of goes the other way.

Lenny Rachitsky (00:23:42): I love this list you shared of things that you find CEOs most have to learn. BS detection, inspiring people, giving hard feedback. Maybe the one thing that most often people that become CEOs/founders have to work on, is there a most common thread of, here’s the thing you probably need to work on most?

Brian Halligan (00:24:00): It’s that feedback thing. All of the CEOs are building their teams, and so many are like, I have a co-founder that runs product and engineering, but I need that co-founder to step aside and be the CTO, and the thinker, and the labs person, and I need to hire somebody who can actually run the engineering machine. So many of the CEOs are going through that right now. That’s a tricky transition. So many of the CEOs are layering folks, like you hired that early head of sales, he hired 10 people, but just can’t quite figure out the sales profile, can’t quite unpack the sales process, can’t quite forecast accurately. We need to layer the person.

(00:24:46): Those types of conversations are very tricky and quite unnatural for homo sapiens to have if you’re 25 and you’ve never done anything like that before. So, I see the best ones getting really good at that and studying it, and it’s super uncomfortable, but they have to suck it up and get good at it.

Lenny Rachitsky (00:25:05): What do you find most helps them build these skills, get better at this? Is there some tidbits of advice you give them? Is it something that they study to improve?

Brian Halligan (00:25:13): I think misery loves company on this. So, what I do, the table is 15 CEOs of companies under 100 employees and the adults’ table are CEOs of companies over 100 employees, about 15 of them. They talk about this with each other, it’s kind of a safe space, and I can weigh in, but it’s actually much more effective when their peers weigh in. I think misery really does like company on stuff like this. They learn from each other.

Lenny Rachitsky (00:25:41): So, essentially it’s find peers to talk to and share and be vulnerable and open.

Brian Halligan (00:25:44): [inaudible 00:25:45]. And the reason I break it out is the problems with the kids’ table are very different than the problems of the adult table. And they all rhyme, they rhyme a lot.

Lenny Rachitsky (00:25:54): So, you teach a course at MIT around scaling startups, and it’s specifically around scaling, not startups, not starting the company. And you have this quote in your syllabus, “Starting a company has never been easier, scaling one into a durable high impact organization has never been harder.” Why is that the case?

Brian Halligan (00:26:12): Has it ever been easier to start a company? It’s so easy-

Lenny Rachitsky (00:26:15): That’s absolutely true.

Brian Halligan (00:26:18): And the flip side of that is, how many companies… The number of companies formed is going to mushroom over the next 10 years relative to the last 10 years, and the last 10 years compared to the previous 10 years is mushroomed. I just think in my life, I’m old, and when I was a kid I’d walked into CVS corner drug store and I wanted to buy a toothbrush, there are four or five there, you pick one. And in the 90s or 2000s you go to Amazon, there are four or 5,000 toothbrushes. Four or 5,000 companies bringing us toothbrushes. It got much, much easier to make stuff.

(00:26:58): And even technology. AWS just made it easier to start a software company. So, it’s like a huge jump, back then when we started HubSpot in 2006, but now it’s going to be an even bigger jump. So, it’s easier to start. Now, there’s so much noise and competition, it’s just going to be hard to stand out and really accelerate and scale. So, that’s why I say it’s never been easier to start, there’s never been more competition, it’s never been harder to scale.

Lenny Rachitsky (00:27:22): And a big part of this is distribution, essentially, breaking through the noise is what I’m hearing?

Brian Halligan (00:27:26): Yeah. And it’s hard to learn that. You didn’t grow up doing distribution, you don’t know. So, they’re all learning it, and the ones that learn fast… It’s like a learning game, the faster you learn, the better you do.

Lenny Rachitsky (00:27:38): Along these lines, I saw you tweet this recently, where people talk about which jobs AI is going to replace, and you said that sales is maybe the last job AI will replace. Why do you think that’s the case?

Brian Halligan (00:27:53): Well, if you look inside a typical enterprise, where’s AI really working? Let’s say inside of HubSpot. Software development is working incredibly well. Customer support, incredibly well. Legal starting to work incredibly well. But there really aren’t apps in the rest of the org that have really changed things a lot. And in the go-to-market side has been kind of slow, really just support. There isn’t a canonical marketing, or sales, or… Maybe the BDR is the first one. But I think ye old enterprise sales, where there’s actual trust built up between two carbon-based life forms, I think will be very, very, very late to go in the white collar world.

(00:28:42): I think a lot about the go-to-market. I think the go-to-market is going to get turned on its head. When we started HubSpot, if I think of the way the funnel worked, you want to get found in Google, someone clicks on a blue link, they land on your website, they go down the rabbit hole, they clicked on contact sales, they wait until that sales rep’s ready, go down that rabbit hole, and I think it’s going to get turned on its head, where people are evaluating a product, they start in Gemini or they start in Anthropic, or they start in ChatGPT,

(00:29:12): And for example, ChatGPT knows everything on your website, everything beyond that, knows all your competitors. So, they will stay in there and do lots more research, and be incredibly well-educated. So, your website’s a lot less important. And then they go to your site, I think sites will change where you’re going to have a really high quality avatar that knows everything about your products, knows everything about your company, and your pricing, and packaging, and you can have a high quality conversation with that person. That person that will get stored in your CRM, and will get scored.

(00:29:46): Is this is good quality conversation? And then the sales rep will follow up. But that sales rep will bring an avatar with them on every sales call. You won’t have to wait for their SC, they’ll have their own SC that’s all knowing, that will follow them through the process. So, go-to-market hasn’t changed much yet, but I think over time it’s going to change a lot.

Lenny Rachitsky (00:30:03): This avatar, just so I understand. So, this is the buyer has their own little agent that comes with them? Or on HubSpot you have this avatar that walks you through the sales process?

Brian Halligan (00:30:15): I think both. I think me as a knowledge worker, what I really want as a homo sapien is I have a Delphi clone that I really like.

Lenny Rachitsky (00:30:26): Same.

Brian Halligan (00:30:26): It’s actually quite good.

Lenny Rachitsky (00:30:28): Yeah. [inaudible 00:30:28].

Brian Halligan (00:30:28): Yeah.

Lenny Rachitsky (00:30:30): Where do people find yours?

Brian Halligan (00:30:32): They find it on my footer, they can find it on Delphi-

Lenny Rachitsky (00:30:34): Okay. We’ll link to it.

Brian Halligan (00:30:38): Yeah. And what I want is connect that thing to my email, into my Granola, into my plot, and it knows everything about me. And then, when I go to a meeting, Lenny, I want to invite that thing to my meeting. So, it’s sitting there in the Zoom meeting, it’s not just taking notes like Granola, it’s a participant. So, if I forgot something, I ask it a question, if somebody else forgot… I think every knowledge worker will have one of these in 3, 4, 5 years. But mine was more on the go-to-market side, where I think every website will change and there’ll be an all-knowing avatar on that homepage. And if it’s a considered purchase, I think it gets handed off to a sales rep, and that sales rep has a conversation, but when that sales rep’s on Zoom, they have their SE avatar that’s kind of all-knowing. And so, I think this stuff all changes a lot in the next few years, but it hasn’t really unlocked yet.

Lenny Rachitsky (00:31:28): What are we going to be doing in this world, these two bots chatting with each other?

Brian Halligan (00:31:33): It’s going to be great, Lenny. You and I are going to be sitting on-

Lenny Rachitsky (00:31:37): We’re into podcasts.

Brian Halligan (00:31:37): We’re in Turks and Caicos, relaxing, on a month-long vacation, sending our avatars to all the meetings.

Lenny Rachitsky (00:31:42): Go buy me some HubSpot seats please. I think this is why ClawdBot was so popular. I think this is essentially what they’re building, is this idea. Which is now called Moltbot, which might be changing again. It’s just this personal agent that can go do stuff for you.

Brian Halligan (00:31:56): Totally.

Lenny Rachitsky (00:31:58): So, you’re talking about the future of go-to-market is this world where there’s these little bots and agents that are doing things for you on both sides. When you look at companies today that you work with, that are doing well, that are especially AI-driven companies, what are they doing differently in terms of go-to-market that is working really well?

Brian Halligan (00:32:15): Honestly, the only thing that’s different today, it’s exactly the same as it’s been for 100 years, except they call their SCs or their system consultants for deployed engineers. The rest of it is the same. I thought it would be totally different in AI, and working with all these companies, they’re hiring all the same folks, running the same enterprise sales processes. So, it hasn’t changed that much, at least on the enterprise side. Actually, I spent the first 10 years of my career at a company called PTC, which is like an enterprise sales machine. Enterprise sales hasn’t changed that much since the 1990s.

Lenny Rachitsky (00:32:49): And so, forward deployed engineer, a very hot term, the idea there is they come work with the customer and help them implement this thing. And that’s come up a lot on this podcast just with AI tools, rarely are they just plug and play, you can’t just set up some agent that figures everything out. Takes a lot of onboarding and integration. Is it actually a different thing at all versus sales engineering in the past, things like that, or-

Brian Halligan (00:33:12): I think it’s a solutions consultant sales engineer.

Lenny Rachitsky (00:33:14): Okay.

Brian Halligan (00:33:14): They’re technical, and they help you implement it, they connect all your systems, they customize it. It’s different. You’re training it in a different way, but… Well, anyway, I think the term is fine. I’m sort of being light on it because, boy, it looks similar except that role has a different name to it.

Lenny Rachitsky (00:33:31): Got it. So, if anything, the device I’m hearing here is just lean into this, continue to lean into this idea of having your employees help the customer on board, be successful, integrate all that stuff.

Brian Halligan (00:33:43): I think the thing that will change first is the top of the funnel around getting found inside Google, you got to get found in these…

Lenny Rachitsky (00:33:51): Yeah, AEO.

Brian Halligan (00:33:52): Yeah, that’s going to be really important. And the way you build your website is very different for that to optimize for it. And then, I think your homepage is totally different. I think you land on an avatar and have a conversation with them, versus you’re going through all the pages on your site. I think the top of the funnel is about changed a lot.

Lenny Rachitsky (00:34:09): Has anyone doing this well yet, this idea of this avatar or is this just kind of in the future-

Brian Halligan (00:34:13): There’s a few startup programs. HubSpot does it, we built one, it’s working.

Lenny Rachitsky (00:34:17): Oh. Okay. Okay. Let me ask one more question around CEO stuff, and then I want to move on to Halliganisms.

Brian Halligan (00:34:24): All right.

Lenny Rachitsky (00:34:26): How is just being a CEO different than it was? So, you’ve been doing this for 20-ish years, what’s most different about what it was like to be a CEO maybe 10, 20 years ago versus today?

Brian Halligan (00:34:39): One of my… It was actually Winston from Harvey, said this a year ago, and I was like, that’s bullshit, but I actually think he was right. He, he’s like, “You can just do a lot more.” You’ve got AI agents doing stuff, everyone’s more productive, the software developers are more productive. Something that used to take you a year takes two months now. And so, the amount of projects and the amount of stuff you can do is much, much more, I think he’s right. I think that’s a little dangerous. Let’s say you found your beachhead market, and that beachhead market is really good, and it’s very deep, there’s a lot of work to do, I think what’s dangerous for companies is they hop to that second act too quickly, and they lose focus on that first act.

(00:35:21): And this isn’t a completely perfect analogy, but you think of OpenAI and ChatGPT, and its consumer app is doing incredible, and they’re doing lots and lots and lots and lots of other things, and then Gemini comes out and they’ve kind of focused back on the core. I think there’s a lot of competition, everything is moving fast. I do think people get more done, and I think that impacts everything. The planning cycles used to be a year, I think the planning cycles now are three months long. Yeah, that’s a big change. I think it puts pressure on the CEOs to be faster and better decision makers.

(00:36:01): I just think of times in HubSpot when things slowed down and there was churn, it was usually my fault. It was because there were some hard one-way door type decisions on my desk, and maybe every year I would sit down and I’d open that one-way door or close it, and it just freed everyone up and we just started moving so much faster. I think people need to be making those decisions and walking through those doors much more quickly than they used to. I think that’s new and different. I was someone who always valued optionality, I think there’s a massive tax in optionality when you can move this fast and try a lot of things. So, I do think the job’s changing a lot.

Lenny Rachitsky (00:36:45): Yeah. And there’s so many reasons this is happening. One is just technology is just every week there’s a new shift in what is possible.

Brian Halligan (00:36:53): Yeah.

Lenny Rachitsky (00:36:54): So, if you’re spending all these months thinking and planning, just what a waste of time it ends up being because so much is changing.

Brian Halligan (00:36:59): I know. Yeah, it’s hard to keep up.

Lenny Rachitsky (00:37:03): [inaudible 00:37:04]. Luckily we got some sweet podcasts to check out, to keep up to date with what’s happening. We’ll link to yours, of course.

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(00:38:10): Let’s talk Halliganisms. Essentially these are nuggets of wisdom and advice that you find yourself sharing often, you’ve written about a bunch of these online, and so let me just go through them and then just share the synopsis of the advice and the lesson around this Halliganism. The first is, “When you have to eat a shit sandwich, don’t nibble.”

Brian Halligan (00:38:30): Okay. Completely stole this from Ruth Porat, the CFO of Google. I saw her quote somewhere, I’m like, that’s it, she’s put a perfect thing on it. And I’ll give you an example where I think this will play out over the next couple of years. I think within the next couple of years there’ll be a real retrenchment in valuations, and some will live up to valuations a lot [inaudible 00:38:54]. Like, if I look at the public markets, they’re very tight right now, it’s like the anti-bubble. And I look at private valuations, it’s like a real bubble. I think there’s a reckoning somewhere down the road. And a lot of companies are going to have to do layoffs. A lot. It’s never fun, it’s usually the worst thing in the history of your life, and the temptation is to do, well, just do a little one now and we’ll grow into it, and then they do another one in six months, and then another one.

(00:39:20): I think with everything, including this type of thing, it’s just rip the darn Band-Aid off, tell everyone the bad news, they’re adults, they can handle it, and get it done. And I think people avoid that. I think that’s good advice Ruth Porat is giving. Because you’re going to have bad news to deliver, bad shit is going to happen to your company, even though it looks like it’s going amazing right now, weird stuff’s going to happen. And you’re going to have to deal with it. And we had a lot of weird stuff happen at HubSpot. There’s a basketball coach named Mike Krzyzewski, he’s Duke’s basketball coach. All time winningest college basketball coach ever. If you go to a Duke basketball game, you can hear him yelling from the sidelines, “Let’s play, let’s play.”

(00:40:13): And what’s going on there is when a college basketball player is playing in the game and takes a shot and clanks it off the rim and misses it, they have a strong tendency to go play overly aggressively on defense in the back court, and many times compound their error by making a foul or something like that. And what he wants to do is people to make their error, forget about it, and move back down the other side of the court and run the play. And so, actually there were times in HubSpot’s history where we had the Mike Krzyzewski’s face on a huge slide in front of the company meeting, saying, “Next play,” because there was an unforced error, and we need to deal with it and move on.

Lenny Rachitsky (00:40:54): Is there a story of that that comes to mind that is interesting and worth getting into?

Brian Halligan (00:40:58): There was a lot of them. But I remember in 2000, it was the last day of March in 2019, and we had a really bad outage all day. And we never really had one of those, and it was bad. Customers were unhappy, a lot of customers canceled. I had a lot of customers yelling at me. And I remember that company meeting, I cried in front of the whole company, they couldn’t believe it happened to us. And I remember using the Next Play slide on that one. Yeah, we made a lot of mistakes at HubSpot, a lot of bad things happen to companies, and most of them are self-inflicted. And a lot of them are the old saw-like, companies are far more likely to die of overeating than indigestion. Usually it was when we were trying to do too much.

Lenny Rachitsky (00:41:54): I haven’t heard that version, I’ve always heard most companies die have suicide versus homicide. Though indigestion-

Brian Halligan (00:41:59): That’s true too, by the way.

Lenny Rachitsky (00:42:02): Oh man. Okay, so next Halliganism, “Never waste a good crisis.” That’s something that people hear, I’m curious just what’s the lesson here, and then is there an example of this where you learned this lesson?

Brian Halligan (00:42:16): I’ll just follow on to, most of the good things that happened in HubSpot came out of a crisis because we would take pretty drastic measures to fix it and make sure we didn’t do the same thing again. And so, in this particular case, we really rethought how we deployed software, how we thought about making software in a way that was incredibly healthy. And we haven’t had a serious outage since. The quality is much better. And kind of an interesting thing with HubSpot is we started as a marketing software company, and we pivoted, had Salesforce came into our market, we pivoted into CRM. And one thing that… If your marketing software goes down, if your workflow, if there’s a bug in the workflows or something like that, it’s bad, but you survive it, you wait a little bit.

(00:43:06): If your CRM goes down, particularly on the last day of the quarter, you’re really impacting your customer’s ability to do business. So, that was a mindset shift that we hadn’t quite come to terms with of how important we were to our customers. And so, we made a lot of changes based on that crisis. Usually very good things came out of crises.

Lenny Rachitsky (00:43:26): So, there’s the lesson there, something’s going wrong, is it just like over-correct? Use this as a way to-

Brian Halligan (00:43:31): Yes. We always over-corrected. Yeah, we almost, we purposely swung the pendulum hard the other way.

Lenny Rachitsky (00:43:38): Which connects to the first Halliganism of, “If you’re eating a shit sandwich, don’t nibble.” It’s almost like go all the way, go even further.

Brian Halligan (00:43:46): Yes. Make it really obvious to everyone what’s going on.

Lenny Rachitsky (00:43:50): Okay, another Halliganism, “If you want to kill a plant, have two people water it.”

Brian Halligan (00:43:55): I love this one, it’s very true. Let’s say, Lenny, you bought a new beautiful plant for your office, and then you went away for a month to Turks and Caicos because your AI agent’s doing your podcast, and you asked two of your friends, “Hey, would you mind watering my plant?” And there’s one of two outcomes what happens to the plant. The plant would either be over-watered and die, or not watered at all and die. And every CEO in the adults’ table has gone through this, and they are religious about the DRI. Everyone talks about DRI in the kids’ table, but once it gets to the adults’ table, people get deep religion on it.

(00:44:32): And I think it makes sense. When you’re small, and you’re in startup mode, everyone’s in the room, everyone knows exactly what’s going on. So, let’s say you’re running a pilot project with a big account. You’re running that pilot project, everyone’s on the same page, the sales person, the service person, developer, everyone’s on the same page, and you go out and do it and you execute well. When you get it scale, you’ve get a sales organization, you’ve get your [inaudible 00:44:56] deployed engineer organization, you’ve got your product management organization, you’ve got some developers working on it.

(00:45:00): Everyone’s kind of separate, no one knows really what’s going on in the other departments. And so, let’s say you want to really have a good pilot process, you want to rethink it because you’re scaling. Everything important happens cross-functionally inside a company at scale, and you need someone powerful to own it. So, let’s say it’s a sales person, they need the power to tell people in other divisions what to do, even if they don’t own it. So, almost every CEO I deal with is like a zealot on the DRI idea, and it doesn’t bite you until you get to some sort of scale.

Lenny Rachitsky (00:45:34): To be super clear about that advice here, it’s one person is responsible for a goal, a metric, some outcome you want, versus it may feel like, okay, we have two people on this, it’ll be awesome, they’ll work together.

Brian Halligan (00:45:45): Yes.

Lenny Rachitsky (00:45:45): Your advice here is that doesn’t work?

Brian Halligan (00:45:47): Communities never work. Yes.

Lenny Rachitsky (00:45:48): Yeah.

Brian Halligan (00:45:49): Yes. And DRI is directly responsible individual.

Lenny Rachitsky (00:45:53): The way I always thought about this is just having someone’s ass on the line for something makes them so motivated to get it done, versus spreading the responsibility and the upside and the downside, it just doesn’t work.

Brian Halligan (00:46:06): I totally agree with you.

Lenny Rachitsky (00:46:08): Awesome. Okay, another Halliganism, I don’t know if you put it this way, the way I think about it is this idea of, “There’s no such thing as a silver bullet, it just takes a lot of lead bullets to get something done.” I think the way you wrote about it is it’s always one step forward, two steps back. Talk about your advice there.

Brian Halligan (00:46:24): Yeah, I always thought, incorrectly, that we would have one hire or one investor or one event or one product release that would… I was wrong about this, but it’d be a silver bullet. And the reality inside the HubSpot machine, the way it felt to me, it looks from the outside, over a long time up into the right, and smooth, but inside it was two steps forward, one step back, two steps forward, one step back, two steps forward, one step back. And a lot of times it was a crisis that caused that step back. So, we just didn’t have that.

(00:47:02): The thing about being a founder/CEO is no one, especially when you’re in your 20s, there’s no one there to rescue you. Your parents aren’t going to rescue you, your VC is not going to rescue you, your teacher, your thesis advisor, you’re on your own and you got to figure it out. And that hits you when you hit your first crisis, it’s on you. You can get some help, but it’s on you.

Lenny Rachitsky (00:47:23): Sometimes they have you in their corner, if they’re lucky at Sequoia. Plug, plug.

Brian Halligan (00:47:27): Yep. I can’t solve it oftentimes, I can be the shoulder they cry on, and I can give them advice, but it’s still on them.

Lenny Rachitsky (00:47:33): Do you feel like too many people start companies just like… When someone comes to you like, hey Brian, should I start a company? I have this idea. Do you often just like, no. You have no idea what you’re getting into, this is going to be much more painful?

Brian Halligan (00:47:44): Yes. Yes. I heard Jensen Huang say that. “I wouldn’t have start started Nvidia if I had it to do over.” If someone asked me that question, I would start HubSpot over. It was very hard, there were a lot of sacrifices, it wasn’t glamorous at all. But in the end of the day, I’m incredibly proud of it. And on my deathbed, I can look back and really enjoy it. And the Dalai Lama’s got a good expression like, “Live a good life so you can live it again on your deathbed.” And I’m really glad I did it. But I do talk a lot of founders out of it. The obsession is real, you have to be deeply obsessed. And all these founders and CEOs I talk to, people talk about 9-9-6, it’s way more than that. The founders are seven days a week, they’re always on, I [inaudible 00:48:40] on Sunday nights, it’s full contact.

(00:48:43): And I think what’s going on there, particularly now, is people just see this massive platform change, massive opportunity, they don’t want to waste the opportunity. So, I think that mindset’s right. But people today are much, much more hardcore than they were in my year. I worked hard, and I was probably, I was 60 to 70 week hours a week the entire time, never really turned it off. But that’s kind of how I thought about it. It’s different now. People are much more focused, and I think Elon’s inspired people.

Lenny Rachitsky (00:49:09): I had a start back in the day, nowhere near as successful as HubSpot, but the way I thought about it is, let me just give it everything I have and see what I can do. This is the shot, this is my chance, let me just give it all. Forget balance, just go for it. Seven days a week for a while. And then you scale back. And it’s just such an empowering thing to do for a while, just like, let me just try. This won’t be forever.

Brian Halligan (00:49:33): Yep.

Lenny Rachitsky (00:49:35): And I know you’ve written about this, just like balance for CEO is not, you should not have work-life balance if you want to be incredibly successful. I don’t know if that’s always true, but just… I don’t know, how do you talk about that to founders?

Brian Halligan (00:49:48): I don’t know any of the founders I work with that have work-life balance. By the way, this is not something I recommend. I didn’t have it, I don’t think my co-founder, Dharmesh had it. The only CEO I know, and he’s unusual in this way, is Kareem from Clay. He’s like, “Nope, you need balance, take the weekends…” He’s got a different mindset. I’m going to have him on my pod to talk about his mindset. But he’s sort of the outlier, everyone else is really, really obsessed, and they really don’t have much of a life.

Lenny Rachitsky (00:50:21): It did take them a long time to find product market fit [inaudible 00:50:25]-

Brian Halligan (00:50:24): [inaudible 00:50:25] definitely pre-AI. It did them a long…

Lenny Rachitsky (00:50:28): I wonder if there’s a correlation, but it did work out.

Brian Halligan (00:50:31): Worked out great.

Lenny Rachitsky (00:50:33): So, it is a good lesson. Okay, a few more here. One is, it’s a math formula. “EV is greater than TV is greater than MEV.” What is that?

Brian Halligan (00:50:44): Okay, EV is enterprise value, TV is your team’s value, MEV is your value. And as HubSpot was scaling, and we had a lot of people who were VPs in different roles, and they started to get good-sized organizations, where they would fall down was they didn’t solve for MEV, but they’d solve for TV over EV. They’d solve for their own team. So, let’s say they ran sales, and say, I just want bookings to be as high as possible because I get paid on bookings, and the service team can handle all the downstream problems I created. Marketing to sales… Between every department that’s happened. And the kind of immature managers who didn’t scale, really solved for themselves, and as they solved for themselves kind of sub-optimize for their peers. And their employees would notice it and complain about it, it would be fine in the short term, but it would show up.

(00:51:44): And the place it would show up, Lenny, was, we did, and I think a lot of companies do this now, but we did a quarterly employee net promoter. We did a quarterly customer net promoter survey and a quarterly employee one. And we would have people rate it by the department they’re in. And one interesting thing about that, so it’s like sales and service and engineering, all the different departments, and we had an overall net promoter score, and then each department had a net promoter score. And let’s just take sales. Sales net promoter score was like, 65, 62, 68, 30. Ooh, that’s a big drop. And then you read the comments and it was not good, a lot of complaints about the leader of that. And a lot of the complaints were a little bit of this TV thing.

(00:52:34): And then, we give feedback to that VP, would help them, we give them all the comments, be like, you got this. And then a quarter later from 30 to -5. And they almost never actually recovered. When you lose, your team can’t… It’s hard to get them back. And that’s why I say hire slow, fire fast. And this doesn’t show up in the first 100, 150 employees, everyone’s solving for EV, but as it gets bigger, and the CEO doesn’t know anyone, and there’s a couple layers between you and the employees, they tend to solve for TV. So, we always put on the wall, “Solve for EV over TV over MEV,” and then we added CV in front of EV, solve for the customers first, then for HubSpot, then the employee, then yourself. That was be very helpful to us.

Lenny Rachitsky (00:53:22): Yeah, I imagine everybody listening, working at a big company understands this. Where you have goals, you get your KPIs, and your performance reviews based on what impact you drive, if you hit your goals. And so, the incentives are focused on my goals and drive those, and I don’t care about other people’s goals, the company’s goals-

Brian Halligan (00:53:41): Steve Jobs had an interesting line, he says, “You don’t work for your boss, you work for Apple.” I thought that was pretty good. And I heard that after I was CEO of HubSpot, but that kind of captures the sentiment. And that’s how I felt about HubSpot. You work for HubSpot first and then you work for your boss.

Lenny Rachitsky (00:53:56): This is hard because people’s performance reviews are based on their goals, KPIs, it’s always like, here’s what I got to drive. Other than putting posters on the wall, and this is our, just HubSpot growth above all is what matters, or our customers, I guess in your case. Is there anything tactically that was useful in helping people prioritize enterprise value?

Brian Halligan (00:54:14): This was explicitly called out in the form for the employee when you got your review, this was part of it. And so, they get a score of one to, I forget, 10 on that. I would talk about it constantly. And when we first started HubSpot, I ran it a little bit like Jensen runs NVIDIA, where I didn’t do one-on-ones, and I gave a lot of good and bad feedback publicly in large management team meetings, and I definitely would go out of my way to criticize people if I felt like they were solving for TV over EV. And people got a sense for that. And then, every quarter we did a really well-produced company meeting, we spent a lot of time on it, and at the end of the company meeting, we gave out, we called them the Champaigner Awards, it was a bottle of Veuve, that my co-founder and I signed. And we’d read something nice about them and give it to them, and usually there was an EV team in that. And so, we did different things to kind of beat that into people’s heads.

Lenny Rachitsky (00:55:11): Amazing. So, here is just celebrate people that focus on this, and also included in their valuation performance reviews.

Brian Halligan (00:55:19): Yep.

Lenny Rachitsky (00:55:19): Okay. That’s a good segue to another Halliganism where you talk about how companies are either customer-centric or investor-centric, and it’s really important to know which you are. And you guys actually shifted there. What’s your insight there?

Brian Halligan (00:55:35): Okay. We were very employee-centric, more than customer-centric in the first several years of HubSpot. So much so that the company was number one on Glassdoor’s best place to work, I was the number one CEO on Glassdoor, and as I look back at that, I’m not sure that’s a good thing. Wanting to be liked I don’t think is a good feature of a CEO, and wanting to be the best place to work probably isn’t the right way to go. If you look at Toby from Shopify, his scores aren’t that good, but that company is doing really, really well. And so, we over-indexed on it, and part of the reason we over-indexed on it is my co-founder was really strong in this, and we had an incredibly powerful head of HR, named Katie Burke, and we just worked on it. We spent a lot of time on it. And when we’d have a management team meeting, and let’s say it’s four hours long, two of the four hours would be on employee stuff.

(00:56:28): And at some point I was like, why are we spending so much time on employee net promoter scores? Let’s say our employee net promoter score was 60, and our customer net promoter score is 25, I was like, we need to take… I would give up 10 points of employee net promoter score to get 10 points of customer net promoter score. And so, over some time we shifted the center of gravity to customers, and we still of course, worried about employees, but the center of gravity from HubSpot moves very much to customers. And we did that in a few ways. Every time we had a management team meeting… We had our management team meetings once a month, not once a week, and we would have a customer panel come on, and that customer panel, I would run the panel, and ask very tricky questions to the customers, and pull out the bad news from that.

(00:57:22): And then, we still do this, we have a customer panel at our board meetings. Our whole board can ask questions. And my favorite question is, what do you love about HubSpot? And then… And then, what do you hate about HubSpot? And they kind of look at their shoes. And you’re like, come on. And it’s a great way… So, the employee’s voice is here, those company meetings, we have the customers at the company meetings. We changed the comp plan, so the management team got paid not on revenue but on retention and net promoter score. And so we worked very hard and swung the pendulum to customer-centric. But I do think companies have one center of gravity or another.

Lenny Rachitsky (00:58:00): There’s a really interesting thread throughout this conversation of just, when do you want to change how you operate you have to go really far to a whole other… And to almost over-correct to… Yeah, it’s a really interesting of just how much work it takes to change culture, to change your norms.

Brian Halligan (00:58:15): Yes. And the bigger it is, the more obvious you have to make it. And the other thing about being a CEO, Lenny, is you got to say the same thing over and over and over and over and over again. It just doesn’t sink into people’s heads, you have to just be incredibly repetitive on it before it sinks in. Same thing with marketing, but internally, and that happens. The other weird thing about being a CEO, Lenny, is as it gets bigger… When it’s small, everyone’s giving you shit, and you’re all on the same level. But as it gets bigger, you didn’t interview everyone, you have thousands of employees, you don’t know everyone, and people put you on a pedestal that you don’t deserve.

(00:58:53): And let’s say you’re in the hallway, and you’re just kind of shooting the shit with a bunch of people, and you’re like, ah, it’d be cool if we had a product that did… Somebody inevitably would go home and build that thing, and be like, Brian wants this as a big initiative. So, people really lock in on what you said. And it turns out you have to be very repetitive and you have to be very careful what you say.

Lenny Rachitsky (00:59:12): Dharmesh was on the podcast, your illustrious co-founder, and he developed a whole system to avoid this sort of thing. Flash tags, where it’s like, this is just an FYI.

Brian Halligan (00:59:22): We had a whole system. Because we would say something on an email to the management team, or Slack, and everyone would be like, okay, this is what they want, let’s do it. And sometimes it is like, you need to do this, and sometimes it is like, we should talk about doing this, and sometimes it is, this is just kind of an FYI, we’re thinking about it. And because it got big, we came up with that rubric of, we needed to tag each email with, do you want me to get this done this week, or is this something we should talk about, or is this something that’s just FYI, I’m thinking about?

Lenny Rachitsky (00:59:51): I love that… One of them is plea. Pleading you to do it. I’m not telling you to do this, I’m just pleading that you do what I ask. Oh man. Okay. This all connects. And by the way, you guys were co-founders for 20 years, you shared something before we started recording. So, Dharmesh famously did not ever want direct reports, he’s just like, Brian, I want to start this with you, but I don’t want to ever manage anyone. And you were talking about how you had to take on engineering, which didn’t make any sense.

Brian Halligan (01:00:19): No, I’m an engineer and I can code, but it’s not good. So, when we started the company he’s like, “I was a CEO before, I was terrible at it, I don’t want to do it again, you’re going to be the CEO.” I’m like, “Great.” And he’s like, “And by the way, I’m not going to have any direct reports.” I’m like, “Well, it’s just the two of us so don’t have worry about it.” He’s like, “No, ever, never.” I’m like, “Yeah, yeah, yeah.” And then we get 10, 12 people, we’re starting to hire engineers, and onboard them, and making up big decisions, and I would go to him and be like, “Well, can you manage him?” He is like, “Don’t you remember I told you I don’t want to have any direct reports?” It’s like, “Surely you were kidding when you said that?” He said, “Nope.” And so, Dharmesh Shah has never had a single direct report at HubSpot.

Lenny Rachitsky (01:01:02): Incredible. I don’t, it’s just like a dream, a way to operate, I love that you made it possible for him, and it created all this opportunity for him to tinker and innovate.

Brian Halligan (01:01:14): Yes, yes, it freed him up to really think and be creative.

Lenny Rachitsky (01:01:15): Yeah. I’m excited to get him back on the podcast someday, we’re going to link to that episode. Maybe a last question, I’m curious if there’s anything else you think we missed? As a company grows and scales, the job of a CEO changes. You’ve written a bit about this, of just how different the job is when you’re a starter versus a scale up. What are some of the things that most change where your time goes as a CEO, as the company grows?

Brian Halligan (01:01:38): Well, you clicked on this earlier, but that inspiration thing. I have a little rubric where it’s like, in the startup phase it’s 90% perspiration, 10% inspiration. When you get the scale up phase, it’s 90% inspiration, 10% perspiration. And over time you’re doing every job in a startup, and you still need to be very attached to it, and you still need to talk to customers, you can’t give it up. But man, you have to let go of so much stuff over time in order for the organization to scale, and I have trust issues. I only trusted a small number of people at HubSpot to be a DRI, and to really drive something important. It drove people crazy, that I didn’t have a larger trust surface. Every one of the CEOs I work with has the same problem. And that’s a scaling limit, that was a limit for me. I wasn’t trusting enough.

Lenny Rachitsky (01:02:33): Brian, I feel like I could chat with you for hours, there’s a whole list of Halliganisms I’m going to link to that we didn’t even touch on. But before we get to our very exciting lightning round, is there anything else that you think we should chat about? Anything you want to leave [inaudible 01:02:48] with?

Brian Halligan (01:02:49): Well, I would say if you are a CEO and you’re interested in scaling, I think the Halliganism posts is all the mistakes I made in my 15 years of being CEO, I tried to summarize them there, to help you avoid them. And I have a pod, you should first listen to Lenny’s pod because it’s amazing, but I have a pod just for CEOs, called Long Strange Trip. Where I interview, I interview CEOs about this. So, Lenny’s interviewing me about being a CEO, I get to interview other people about being… I’m kind of a CEO geek these days.

Lenny Rachitsky (01:03:17): And the name of the podcast is a Grateful Dead reference, which-

Brian Halligan (01:03:20): Yes.

Lenny Rachitsky (01:03:20): We haven’t touched on, but you’re a huge Deadhead, as they say.

Brian Halligan (01:03:23): [inaudible 01:03:25].

Lenny Rachitsky (01:03:25): That could be a whole other podcast conversation.

Brian Halligan (01:03:27): I think there sure, actually. Because I wrote a book called Marketing Lessons from the Grateful Dead, and there’s so much… The Grateful Dead were like the ultimate Silicon Valley startup. They started in 1964… Do you know where they started, Lenny?

Lenny Rachitsky (01:03:43): No.

Brian Halligan (01:03:44): Palo Alto. Their early concerts were at Stanford, were all over Silicon Valley. They’re a Silicon Valley company. They were very first principles in their thinking, they created a new category, a new way to distribute their music, they disintermediated the ticketing companies, very innovative. Steve Jobs and Jerry Garcia are very similar in my mind, real craftspeople. So, I think of them as a great Silicon Valley success story.

Lenny Rachitsky (01:04:14): You said you had a whole book about this, what’s the book called just in case people want to dig in?

Brian Halligan (01:04:18): Marketing Lessons From the Grateful Dead.

Lenny Rachitsky (01:04:20): Amazing. And I read that you bought Jerry Garcia’s guitar for a large sum at some point.

Brian Halligan (01:04:26): Yes, I did. And I consider myself the steward of his guitar. It gets played, like Dead and Co played it, and there’s a million Grateful Dead cover bands, I let them play it, but I’m taking care of it for the Deadheads.

Lenny Rachitsky (01:04:41): What’s one nugget of wisdom or lesson that people can take away from the Grateful Dead for startups?

Brian Halligan (01:04:48): Okay, people talk about spiky teams, the Grateful Dead team was interesting. Garcia himself was a bluegrass guy, he was a banjo player. And then Bob Weir, recently passed, was a country crooner, like country music. Then their bass player was a avant-garde jazz trombonist, Phil Lesh. And their keyboard player was a guy named Ron McKernan, Pig Pen, and he was a harmonica guy. And the drummer was a marching band drummer. And so, spikiest of spiky teams came together and made a new genre, they created a new category of music. It wasn’t rock and roll, it wasn’t sort of Rolling Stones, it wasn’t Buddy Holly, it was this new thing. And then they called it a jam band, because they played rock and roll in a bluesy, open, organic kind of jazzy way. And so, spiky teams in creating categories, underrated.

Lenny Rachitsky (01:05:47): Incredible. Are you one of these people that have been to 100 Grateful Deck concerts [inaudible 01:05:51]-

Brian Halligan (01:05:51): Yes. [inaudible 01:05:53].

Lenny Rachitsky (01:05:53): Makes sense. Okay, this could be a whole podcast, but we’re going to move along. Okay. With that, we’ve reached our very exciting lightning round. Brian, are you ready?

Brian Halligan (01:06:06): Yeah.

Lenny Rachitsky (01:06:06): Let’s do this.

Brian Halligan (01:06:07): Fire it up, I’ve watched you do the lightning round so many times.

Lenny Rachitsky (01:06:10): I’m flattered. Unsurprising questions. What are two or three books that you find yourself recommending most to other people?

Brian Halligan (01:06:17): I haven’t read a book in a long time. I listen to podcasts, I’m on X, I talk to a lot of other CEOs. I can’t remember the last time I actually sat down and read a book.

Lenny Rachitsky (01:06:26): Much respect. I had Marc Andreessen on recently, and I don’t know if you’ve heard his whole thing on what he consumes, he talks about he has a very barbell strategy to media. It’s either Twitter or books that are 10 years or older and nothing in between.

Brian Halligan (01:06:40): I’ve heard him say that. Yeah, I kind of stopped reading. I looked at that, I was getting ready for this, Lenny, and I was like, I can’t remember the last book I read.

Lenny Rachitsky (01:06:49): I think this is going to make a lot of people feel better that don’t read books, are like, all right, this is okay. Favorite recent movie or TV show you’ve really enjoyed?

Brian Halligan (01:06:58): I love the new Ken Burns, very long, very good Revolutionary War documentary. He’s a crass person, it’s exceptionally well done. And what I like about it is America’s really a disruptor startup, so many startup lessons from those… They were gutsy. Talked about two steps forward, one step back. They got into the details of how George Washington ran the Army. We were very close to losing that war most of the time, and two steps forward, 10 step back, two step forward, 10 steps back.

Lenny Rachitsky (01:07:36): Lots of lead bullets.

Brian Halligan (01:07:39): And unless we had alliances, we had alliances with the French, we were screwed. I love that, it’s a long one, but it’s really good.

Lenny Rachitsky (01:07:48): How long is this? What are we getting into?

Brian Halligan (01:07:49): Probably 10+ hours.

Lenny Rachitsky (01:07:51): 10+ hours. It’s a lot, but worth it is what I’m hearing.

Brian Halligan (01:07:56): I’m in Boston, it’s Revolutionary War kind of place.

Lenny Rachitsky (01:07:58): Surrounded by history. All right. Favorite product you recently discovered that you really love?

Brian Halligan (01:08:03): I love my Delphi clone, I teach a course called Scaling Entrepreneurial Ventures, and I don’t do office hours, I have Delphi do my office hours. Very happy with that.

Lenny Rachitsky (01:08:17): My favorite feature of Delphi, and again LennyBot.com is my Delphi… I love that we both have little bots. The voice feature is the coolest thing-

Brian Halligan (01:08:24): Great.

Lenny Rachitsky (01:08:25): You just talk to it.

Brian Halligan (01:08:25): Great. Not good, great. I can’t wait… I had video, they get rid of it, they’re going to bring it back. Can’t wait until it has video. My least favorite, my lowest [inaudible 01:08:32] product is my Sonos system. You have Sonos?

Lenny Rachitsky (01:08:35): I do, and I get you.

Brian Halligan (01:08:36): Yes. Painful.

Lenny Rachitsky (01:08:38): Yeah. It’s so good in so many ways and so annoying in so many ways.

Brian Halligan (01:08:42): Annoying.

Lenny Rachitsky (01:08:42): But we still use it, there’s nothing better.

Brian Halligan (01:08:44): There’s not a competitor. You and I should start a Sonos competitor.

Lenny Rachitsky (01:08:46): No, we should not, that’s a bad… I’m not doing this. And just to be clear what these bots are, just so people understand how cool this is. So, my [inaudible 01:08:55] every single podcast, like this one is going to be sucked into it, and every single newsletter, and you just talk to it and ask it, how do I find product market fit and space on everything I’ve ever shared? Here’s your steps.

Brian Halligan (01:09:07): Okay. What’s even better about it is, because you can go to ChatGPT and say, what would Lenny think about this? What it’s added is the ability to put a bunch of documents in there, that aren’t on the internet, like I put my lectures in there, and there’s a new feature where it asks you questions and it interviews you. And so, it’s pretty proprietary, it’s getting better. I like it a lot.

Lenny Rachitsky (01:09:27): Yeah. To that point, I haven’t promoted this feature of it, but it’s trained on all my paid content too. So, even if you’re not a paid subscriber, you get access to all of the things I’ve ever shared. Let’s not tell too many people that, because one day I’m going to pay wallet, and then [inaudible 01:09:45]. Anyway, enough about that. Lennybot.com. Do you have a favorite life motto that you find yourself coming back to in work or in life?

Brian Halligan (01:09:52): This isn’t lightning, but four years ago I had a very bad snowmobile accident, drove a snowmobile off a cliff. The snowmobile smashed into a million pieces at the bottom of the cliff, so did I. and I laid at the bottom of that cliff for a while, I was unconscious for a long time. I woke up. And I didn’t think I had my phone, so I sat there for a long time, like, I’m probably going to die tonight, no one knows where I am, it’s frigid out. It’s in Vermont. And I’m going to freeze to death. And I’m sitting there for a couple hours, I finally was like, oh, I do have my phone, dialed 911. By the way, 911, amazing service. And so, the helicopters came in and took me out, took me to the hospital. And lots of surgeries, and I was kind out of commission for a year. And you can’t see it but I got metal over me, all in me.

(01:10:49): Life’s short. Life’s short. And I made some decisions at the bottom of that cliff… One of the decisions I made at the bottom of that cliff was, I don’t really like being CEO of an 8,000 person company, doesn’t really suit me. My harmonic motion is off. I don’t love the day to day, if I make it out of here alive, I’m out. And so, that’s exactly what happened. The first big thing that happened coming out of that was I gave the job to Yamini, who’s still the CEO, doing a great job. So, life’s short, don’t waste it.

Lenny Rachitsky (01:11:23): I’ve heard this story, but it’s just as powerful hearing it again. Why do you think it takes people, why does it take a moment like that to have someone realize, I need to change or just-

Brian Halligan (01:11:35): I think people think they’re going to live forever and they’re not. As somebody who’s 58, yeah, life’s very short, and I’m much more intentional about the decisions I make, much more intentional about the people I hang out with today than I was before that. And I really try to work on things that bring me joy. Like this pod.

Lenny Rachitsky (01:11:56): Same, I appreciate it.

Brian Halligan (01:11:58): [inaudible 01:11:58].

Lenny Rachitsky (01:11:58): Same. I read that you had 20 broken bones in this accident.

Brian Halligan (01:12:03): A lot of broken bones, a lot of metal. I got 33 screws in me, one loose one up here, Lenny.

Lenny Rachitsky (01:12:12): Same. Okay, last question, we talked a bit about the Red Sox, you’re a part owner of the Boston Red Sox now. What’s something that would surprise people about how a baseball team is run, or just what it’s like on the inside of a team like the Red Sox?

Brian Halligan (01:12:27): It’s not as profitable as people think. People think these rich guys come in and buy these teams, but the way the [inaudible 01:12:34] is set up and the way the economics are set up, it’s not a profitable endeavor. Whereas, other leagues are much, much more profitable. Baseball’s also deeply flawed, it doesn’t have a salary cap. And so, you’ve got the Dodgers, who I take my hat off to, have a $400 million payroll, and then Miami Marlins with a 100 million dollars payroll, and in other leagues that all kind of balances out pretty well, baseball, it’s set up incorrectly. I think it’ll correct in the next couple of years, but it’s a broken model.

Lenny Rachitsky (01:13:13): Intriguing. Stay in AI [inaudible 01:13:17] if you want to make money is what I’m hearing. Vertical SaaS. Brian, this was incredible, covered almost everything I was hoping to cover. Two final questions, where can folks find you online if they want to reach out, where do they find the bot? How do they work with you if they wanted to? Or do I have to be a Sequoia founder? And then how can listeners be useful to you?

Brian Halligan (01:13:35): There’s two things. I would love folks to listen to. Long Strange Trip, my pod, and I get some comments, but not a ton. Lenny, you have more comments than yours, I’m jealous. I’d like just feedback on how I’m doing. It’s very new, and I just started a couple months ago, it seemed like it’s going pretty well, but it’s my family and Sequoia people giving me feedback on. I’d like to see how all of you, what you think about it. So, that would be spectacular.

Lenny Rachitsky (01:14:00): All right, so hop on your YouTube and leave some comments about what they think. The real, honest, feedback.

Brian Halligan (01:14:05): Real unvarnished truth.

Lenny Rachitsky (01:14:07): Okay, here it comes. Brian, thank you so much for doing this.

Brian Halligan (01:14:10): Appreciate you, appreciate you. Thank you.

Lenny Rachitsky (01:14:12): Bye everyone.

(01:14:14): Thank you so much for listening, if you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review, as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at Lenny’sPodcasts.com. See you in the next episode.