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My First MillionFrameworks to Become a Billionaire with HubSpot Co-Founder Dharmesh Shah | My First Million #197
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100 min read · 20,236 words- 0:00 – 8:41
Intro
- DSDharmesh Shah
Here's what I'd say.
- SPSam Parr
Yeah.
- DSDharmesh Shah
Here's what... I even have a seven-figure domain name picked out for you.
- SPSam Parr
Okay.
- DSDharmesh Shah
I will write the $5 million check for you to go do it as far as a seed round, uh, or up to five million if you wanna let other people in.
- SPSam Parr
Oh, shit.
- DSDharmesh Shah
That's amazing.
- SPSam Parr
This just got spicy. Okay.
- DSDharmesh Shah
Yeah.
- SPSam Parr
Oh, my God. What's the domain name that you have?
- DSDharmesh Shah
I am, I am dead serious.
- SPSpeaker
Yeah. I feel like I could rule the world. I know I could be what I want to. Uh. I put my all in it like no days off. On the road less traveled never looking back.
- SPSam Parr
All right. We just got done, like 30 seconds ago, talking to the guy who we're gonna introduce you to now. Uh, that was amazing. He's ama- he- that guy's a- Dharmesh is amazing.
- SPShaan Puri
He's very cool.
- SPSam Parr
Um, so we have Dharmesh. I don't even know his la- what is Dharmesh's last name? Dharmesh Shah?
- SPShaan Puri
I think Shah.
- SPSam Parr
I just know him as Dharmesh. Um, he's the co-founder of, like-
- SPShaan Puri
He's like Beyoncé, you know. They just go with the one name at a certain point.
- SPSam Parr
Yeah.
- SPShaan Puri
Ron Ronaldo, Beyoncé, Dharmesh. That's, that's it.
- SPSam Parr
So Dharmesh, um, is the co-founder of HubSpot. He's the largest shareholder. I mean, we, we got pretty, uh, like, into it right away. We're like, "Just tell, like, i- tell us what, what's it like to be a billionaire?" It's like-
- SPShaan Puri
And like, "So I just Googled your net worth, and it appears you're worth a billion dollars." [laughs]
- SPSam Parr
Yeah. So we asked-
- SPShaan Puri
"So how does, how does that feel?" And he's like, "Uh..." [laughs]
- SPSam Parr
No, I told him I was gonna talk to him about that. So we talked to him about just, like, wealth, which was-
- SPShaan Puri
Well, let, let's rattle off some of the dope things he's done. So started HubSpot. HubSpot's like a, whatever, $25 billion company or something like that. But he's done some other cool things. Early investor in...
- SPSam Parr
Coinbase, Dropbox, and loads of different stuff.
- SPShaan Puri
Right. And then also just has kind of, like... He's like us. He's got that itch, that entrepreneurial itch. So he, like, we talk a little bit about, he's got, like, 20 domain names, some domain names that are worth, like, you know, millions of dollars and others that are, you know, just simple ideas.
- SPSam Parr
I've already got-
- SPShaan Puri
Everybody has an idea
- 8:41 – 13:31
The inside scoop on why HubSpot bought The Hustle
- SPSam Parr
Shaan, what do you think?
- SPShaan Puri
Well, I would've asked him... Okay, so here's my question. My question's actually not about, uh, Dharmesh. It's actually about, uh, Sam. So, uh, so you, so I've always wondered this. So you acquired The Hustle. And I hope you can be as, uh, as transparent as you want here. I think Sam will, will, will not care. Um, so I would say DNA-wise, The Hustle's kind of a unique company. Sam's a pretty unique, uh, dude that you kind of brought into your company. Different DNA probably than the vast majority of employees there. Uh, give me kind of like, I don't know-
- SPSam Parr
Well, and you too. You're, you're part of the deal too, Shaan, so you're in the book.
- SPShaan Puri
Well, sure, he doesn't have to deal with me on a day-to-day basis. So, so doing that deal and bringing these guys in, I guess, like, I don't know, are there any inter- interesting observations, any entertaining little stories about either pre-acquisition or post that had to do with, you know, Sam and The Hustle? I'm just curious, kind of like what's your view on that side of the table, because I've only been on the same side that Sam's on.
- DSDharmesh Shah
Yeah, and we haven't, HubSpot has not done a lot of acquisitions, uh, in the past. We've done a handful of them. Uh, pretty much most of them have gone well. The one thing that made this different, I think as you, as you observed, is, um, the DNA of The Hustle is different, uh, than HubSpot. And, um, and that's both a good thing and a bad thing. So the thing that I was worried about is, um, and, and I, until now, I don't think Sam and I have act- ever had a one-on-one chat, so-
- SPShaan Puri
Well, this is, this is my therapy session for you guys. [laughs]
- DSDharmesh Shah
Yeah, this is, uh, like group therapy for, uh, two people, Shaan. You can-
- SPSam Parr
Dharmesh and I talk a lot on Slack
- DSDharmesh Shah
... yeah, on Slack, yeah
- SPSam Parr
... he's, uh, we're like buddies on Slack.
- DSDharmesh Shah
We actually talk. But the thing I was worried about is that, um, you know, s- so Sam is a kind of what I would think of as a kind of type A personality. Um, just, like he's out there, he's hustling, that's hence the, uh, name of the company. Um, which is fine, but it's just not, uh, most of the makeup of HubSpot is not that. We're a very, we're a, I don't know what the right... It's gonna overly stereotype us, but we're not type A. We're like a kinder, gentler, humble, just quieter kind of company.
- SPShaan Puri
Yeah.
- DSDharmesh Shah
Um, so that's the one thing I was-
- SPSam Parr
So, so here, let me explain it this way. So today-
- SPShaan Puri
So Sam would be described as brash. I don't think anybody would ever describe HubSpot as brash.
- DSDharmesh Shah
No.
- SPSam Parr
Well, t- today, Kieran, the guy I work with, technically my boss, he was like, "Uh, you should probably hire someone outside of HubSpot for this role for your growth." And I was like, "Well, why?" He goes, "I think you're too direct for anyone who works at HubSpot."
- SPShaan Puri
[laughs]
- SPSam Parr
It's like that, that's an example.
- DSDharmesh Shah
I think that was good advice. But, um, but it's worked out, it's worked out well. So the, there have been, um, like the one kind of minor story I can recall, there was a, like a Twitter back and forth that I think Sam had with, uh, Rand Fishkin. I, I don't know if you recall this, Sam. That there was something that was said about VCs or investment or something. Um, and Rand's been a good friend. It's like, and, and, uh, but I was like, oh, okay, well.
- SPShaan Puri
[laughs]
- DSDharmesh Shah
It, it's fine. I'm like, okay. You know, this is like
- SPShaan Puri
[laughs]
- DSDharmesh Shah
... the right people. It's like it, and not like either party was right, wrong, or indifferent, but I know them, you know, at least now a little bit, uh, both. But anyway, so it's, but it's been fine.
- SPShaan Puri
[laughs]
- SPSam Parr
Well, in, in, in my defense, I, I hope, and even our podcast defense, our goal is we will disagree with people, but I hope that it never comes from a place of like disrespect or-
- DSDharmesh Shah
No, it didn't. No, no
- SPSam Parr
... or trying to like hurt your feelings.
- DSDharmesh Shah
Nope. But I just-
- SPShaan Puri
What I will say, I do put entertainment first sometimes. So sometimes I will poke the bear for the entertainment value of it when, you know, the kinder, nicer, simpler thing to do would be to do, to do nothing or just back away. Uh-
- 13:31 – 18:25
What it's like to be a billionaire
- SPShaan Puri
some ideas.
- SPSam Parr
Wait, no, wait. I wanna talk about one thing really quick. Can we... Let's talk about money stuff.
- SPShaan Puri
Okay. [laughs]
- SPSam Parr
'Cause I told Dharmesh I was gonna ask him this. So first of all, is it weird that I know what your net worth is today because it's like public information?
- DSDharmesh Shah
Um, it's not weird for me, honestly. Like, I'm a, um, I'm generally like transparent. I believe in kind of the openness, um, of the web. It's, um... And I'm a, in a sense it's a publicly traded company, like it's, you know, would I want my like bank accounts and all my accounts kind of published on the web? No. But the fact that I'm an executive in a publicly traded company and most of my net worth is in the form of shares, which you can take the number of shares which is on the public record and multiply it by the current price and get, which is probably roughly 85, 90% of my overall net worth because that's where all my money is, um, is in HubSpot shares. Um, I, I don't find that weird. Uh, it's, you know.
- SPSam Parr
Has your life changed as this, as this has like accumulated and, and things got didn't, different or has it basically... So you, you had another company before this. How much did you sell that for?
- DSDharmesh Shah
Uh, 10 or 15, in that range based on how you count it.
- SPSam Parr
And has your life changed since that moment significantly? 'Cause that's a, that's a significant number in itself, right?
- DSDharmesh Shah
Yeah. So I, here, here's the thing. It's, um... And I'd like to say, no, I, you know, I wasn't focused on money or am not focused on... At, at the time when I was younger, I was very, very focused on money and I had a very kind of modest upbringing and I was like, okay, well... It, and it wasn't like the money and the accumulation of it, it was the freedom. You know, ever since I was little, I, I always want to kind of configure the universe to my liking, so to speak, because I have got my quirks. So like these are things, the way I like to do things. Um, and having to kind of work in a normal kind of classic job doesn't give you a whole lot of control over your, your part of the universe. You don't get to control who you work with all that much or who you hire. You don't have, um, a lot of degrees of freedom. Um, so, you know, I'd been thinking back and then I had, you know, I had kind of thought about money. Um, and like the first, I'll say 5 million or so, um, has a dramatic impact, had a dramatic impact on my life, right? Because that buys you an inordinate amount of freedom, right? You don't have to work again. Um, you can invest in things. You can do pretty... As long as you're not out, you know, buying small islands and overtaking countries, I mean, that's a, a decent amount of money for, for folks, right? Um, and then after that and there are other kind of, I don't know exactly what the demarcations are, where, you know, more money adds on a marginal basis, uh, a little bit more freedom. You can do more things. Um, but, you know, like the kinds of things I do, like I enjoy food in restaurants, there's only so much you can actually spend as a reasonable human being. Um, even if you like the, the finer things, it's like, okay, well, unless you're trying to make a statement and spend 100 times what the average of a whatever X is, it's kind of hard to, you know-
- SPShaan Puri
Spend money
- DSDharmesh Shah
... particularly well, even if you have kind of high-end tastes, honestly. Yeah.
- SPShaan Puri
The most common thing I've heard, I don't know if you would agree or disagree, is like there's these levels. So it's like first, uh, in debt, in, when you're in debt to no debt, that's like the first jump where, oh, freedom, got this b- weight off my shoulders.
- DSDharmesh Shah
Yep.
- SPShaan Puri
Then there's kind of like, you know, um, uh, what I'll call the, the zero to 1 million, where it's like, oh my God, you know, mentally I'm a millionaire. That's kind of just like a mentally freeing concept, an int- interesting concept. That's why we named the pod what we did. Uh, but also, you know, that'll, that'll afford you a certain type of lifestyle. And then the next jump I've heard is like at 10 or s- 10 or 10-ish-
- DSDharmesh Shah
Yeah
- SPShaan Puri
... where it's sort of like, okay, at 10-ish you sort of, um, you don't have to work. Like at a million you still gotta work. At 10 you don't have to work. You can kind of like have a couple pl- places to live. You could do whatever you want. You don't really need to check the prices when you go do things.
- DSDharmesh Shah
Yep.
- SPShaan Puri
And then there's sort of like 100 or more, which is sort of like, you know, the, uh, e- ego gets involved. It's like, okay, now I'm keeping score against, you know, in the, in the business Olympics against, against these other folks. And also, you know, I could do some like, you know, like I can, I can, I can buy an island. I can buy a piece of an NBA team. I can, I can go do these different things that are like, kind of like bucket list. And, and the joy, what I've heard is sort of like, you know, for most people is sort of like the joy actually like deescalates from the, from the beginning there. Like-
- DSDharmesh Shah
Yeah
- SPShaan Puri
... getting out of debt is sort of like the most relief, most joy, and then sort of like it starts to diminish sort of step by step as you go. Like the 10-
- DSDharmesh Shah
Yeah
- SPShaan Puri
... to 100 feels a lot less impactful and less sort of changes your, your joy and your mood than the, uh, like going from zero to 10.
- DSDharmesh Shah
Yep. Uh, just, uh, two threads I wanna pull on as long as we're talking about money. Um, so one is one thing that's kind of helped me reconcile it, um, in terms of, um, you know, having to be in the, in the net worth now is, you know, the plan, my wife and I have talked about this, the plan is to donate 90 plus percent of it, right? Like w- we, we have one child, we're not gonna spoil him, so it's not like we're trying to build a multi-generational dynasty.
- SPShaan Puri
Right.
- DSDharmesh Shah
That is not the goal. Um, and so then like, you know, if I make a really good return on a startup or something like that, it's like, okay, well I'm-
- SPShaan Puri
Discount 90%.
- DSDharmesh Shah
I think for my wife's foundation, that's essentially what it comes down to, right?
- SPShaan Puri
Right.
- DSDharmesh Shah
So if most 90% of whatever it is, uh, I mean, I don't, I think it'll end up being higher because I just don't think we're capable of actually spending the, spending the money. Um, but yeah,
- 18:25 – 24:21
A framework on the relationship between time & money
- DSDharmesh Shah
so that makes me feel better. But just kind of taking it back to the early days, one kind of, uh, lesson that I learned, um, early, early on, and this is useful, um, beginning part of my career, is the kind of the relationship between time and money. Um, and one thing is that we spend the better part of kind of the first half of our lives converting time into money, right? And you're looking for the hours, you're looking for... Like, yeah, you wanna get that, you know, rate up as, as you can. And then the latter half of you desperately trying to buy time back with the money however best you can, right? So that's, um, and it varies a little bit as to kind of when that kind of turn happens. But the thing that I kind of learned, this was... I, I, I thought about it probably a few years after that. Um, so I was making $3 and 65 cents, uh, in my first job when I came over, um, as an immigrant. And I was, and I worked all the way through school. It took me seven degrees to get my four... Uh, seven years to get my four-year degree. I was working full-time the whole way through. Um, and that wasn't a lot of money. And as it turns out, um, I had to do pretty much everything. Nothing was delegatable. But then once I got to the point where I was making 10, 20, $50 an hour, it's like, okay, well, now, and like all of my time, I can make as much billable as I want to, as much as I'm humanly possible willing to work, there was someone willing to pay me for that time. I was an engineer. Like, that's how things worked back then. It was... And, uh, and the, the pivotal point for me is I, I got this, uh, you know, this was in my early 20s, I got this bump to, like, $125 an hour. I was working as an engineer, and that was an ungodly amount of money. I was in Birmingham, Alabama. This is, you know, the, the '90s. Uh, that was like real money, right? And I was working a lot, so I was making a fair amount. So then I made the decision that if there was anything I've been doing with my time that could be done by spending less than $125 an hour, I'm being an idiot by actually doing it, right? And if I enjoy it, that's a different story, but if I'm not, it's just stupid. And so I've carried that kind of i- idea. It's like, okay, so what value would I place on my time?
- SPShaan Puri
Right.
- DSDharmesh Shah
What is occupying my time that I can kind of delegate? Or even if I'm paying a premium, it's like, okay, I could, I could pay $75 an hour to so- for someone to pa- you know, to mow my lawn. A, I hate it, but it's still profitable, right? Like you-
- SPShaan Puri
Right
- DSDharmesh Shah
... like why would you do that? It's like, I would do that every day of the week. Um, so the one thing that's changed for me, um, so now, like I went back and did the math because I knew I was gonna be on this podcast and you like, you folks like numbers. If I... I, let's say I work on average 60 hours a week, and I've done that for about 30 years, give or take, um, this is my kind of professional career. My average hourly rate across the 30 years would be like $10,000 an hour, right? And now it's backloaded.
- SPShaan Puri
Right.
- DSDharmesh Shah
That's effectively my hourly rate. And so now it's like, okay, well, if there's anything... And, and I would actually pay a premium right now, right? Above that, right? It's like, so I would not spend my time, even an hour, on anything that wasn't worth at least that. It's like, okay, well, like the future me would buy it for 50, $100,000 if there's some option value on that time. Anyway, the, the short message is, uh, most people don't value their time enough and don't think about it objectively enough.
- SPShaan Puri
Right.
- DSDharmesh Shah
And it, like anything else, is a resource, but it's finite. Uh, but put a number on it, and then ask yourself like, "What are the things that I'm doing with my time that are not worth that?" Um-
- SPShaan Puri
Right
- DSDharmesh Shah
... and, you know.
- SPShaan Puri
So N- Naval has this, uh, phrase w- in, in his, like, kind of how to get rich, uh, podcast or whatever, How to Get Rich Without Getting Lucky. He says, um, he, he goes, you know, put a, put a, uh, put a, um... I don't know what he calls it, like an outrageously out- or outrageous hourly rate for yourself.
- SPSam Parr
And, like, an ambit- a super ambitious rate.
- SPShaan Puri
A super ambitious one, one that's way beyond wherever you're at. He's like, you know, "Ever since I was young, this is like one of the smart things I did. I just said $5,000 an hour," some, like, really aspirational hourly rate. He's like, "And my friends used to laugh and joke like, 'Dude, you bought this blender, you're not even using it. Go return it.'" And he's like, "No, I'm not gonna go return it. I don't, I don't enjoy it, and it's gonna get me back $30 for the hour round trip, you know, going and returning this thing at Target."
- DSDharmesh Shah
Yeah.
- SPShaan Puri
"So, like, I will throw it away. I will give it away. What I will not do is I will not give my time back into that, uh, because the hourly rate just doesn't make sense."
- DSDharmesh Shah
I, I love that. I love that.
- SPShaan Puri
And so-
- DSDharmesh Shah
That's, that's-
- SPShaan Puri
And I've, I've done a similar thing, and it's kind of funny to, like, pick that hourly mark, um, because it sounds crazy. Like I... My mom will get mad at me. She'll come to my house, and then she'll see the way I'm living, and she's like, "Oh my God, like this, y- this bill is late. They're gonna f- there's a $75 fee if you don't do it."
- DSDharmesh Shah
Yeah.
- SPShaan Puri
And I'm like, "I'm not calling them, and they can charge me the $75 fee. They could charge it to me 10 times. Like, I am not gonna use this hour." Like, and I'll tell her, like, "Look, literally my hourly rate is X, right?"
- DSDharmesh Shah
Yeah.
- SPShaan Puri
"It's X thousands of dollars. So, so are you... That's my hourly rate, so I'm not gonna trade that hour to go do this thing I don't enjoy." Um, 'cause her other argument is, "Well, you go watch TV." And I'm like, "Well, that I enjoy, so that, that I'm, I'm actually spending the money."
- DSDharmesh Shah
Yeah.
- SPShaan Puri
Um, but Sam, I know you're a little bit different. Like, when I went to go visit Sam in Austin, he had, like, CVS receipts that he had been saving in his, like, glove compartment of his super fancy car. Uh, like he's a dichotomy, right? He's got, he's got the money-
- SPSam Parr
Well-
- SPShaan Puri
... he likes to spend some things, but he's also enjoys being frugal. It's like a fun hobby.
- SPSam Parr
That, that makes me... Yeah, that makes me feel good about myself.
- SPShaan Puri
Right.
- 24:21 – 27:55
Rich guy questions
- SPSam Parr
hate it
- SPShaan Puri
And, uh, d- so Dharmesh, a couple more, uh, rich guy questions.
- DSDharmesh Shah
[laughs]
- SPShaan Puri
And we like these because honestly, um, n- you never get to ask these. Even if we were just hanging out personally, I could never ask you this. But for the, for some reason with the podcast, it's like sort of okay for me to just like ask you random-
- DSDharmesh Shah
And-
- SPShaan Puri
... ass questions like this
- DSDharmesh Shah
... and I told him, I, when he wanted to come on, or I, we, I asked him to come on, I go, "W- I'm gonna ask you this stuff." And I, and we gave him an easy out. I said, "If you don't wanna answer anything, just say you don't wanna answer it." But-
- SPShaan Puri
Yeah. And, and I'm sort of projecting here where, um, you know, uh, I guess like I, I think I put myself in your shoes. What if I had more money than I could ever spend? What would I do? And so my question to you is, um, what, whether you did it or didn't or you just considered it, what's a sort of outlandish use of funds that you've either considered or done? Like, so for example, you know, some people are like, yeah, you know, like some people like jets. That's not my... I'm not buying a private jet. I'm, but what I really care about is I love this sock, so I bought like every... I love Jordans sneakers, so I bought every pair of Jordans. And I have this closet in my house just full of these things, and I always wanted it when I was a kid, right? Or if they overspend in some area and they, they're just happy to have done it.
- DSDharmesh Shah
Yeah.
- SPShaan Puri
Or like, um, it could be like philanthropic. Like, I think if I had a billion dollars, um, I think like two days a year I would just wire somebody like a million dollars.
- DSDharmesh Shah
Yeah.
- SPShaan Puri
[laughs] I would literally just wire a random person a million dollars and I would just see how that plays out and I think it would bring me like tons of joy and entertainment-
- DSDharmesh Shah
God
- SPShaan Puri
... to do that and see how they react and what happens and what do they, what do they do with it. Like maybe some kid who's working on something interesting, I would just be like, "Look, here. W- check your account. It's there." Um, s- you know, s- so give me something that ha- is there anything that's sort of non-standard that you either have done or considered doing?
- DSDharmesh Shah
Yeah, the thing that I, I do is I like those kind of, um, kind of micro acts of kind of spontaneity that says, oh, like someone is, wants to go to this event or something like that and can't afford it or whatever. It's like, I'll be a sponsor. Like, if you can find people that wanna do this, uh, they'll do this. Um, and I'll do that relatively regularly. Um, I've taken [laughs] this sound, um, so I've taken my average tip amount up, um, to between 50 and 100%, um, um, everywhere I go. And this is partly because I wanna make up for all the time when I was younger that [laughs] my family did not tip well.
- SPShaan Puri
Right. [laughs]
- DSDharmesh Shah
So I'm trying to kinda average it out and that's, uh, as long as I can do it without like drawing too much attention because I don't wanna be that weirdo guy. It's like okay, that was like-
- SPShaan Puri
Right
- DSDharmesh Shah
... sends sometimes the wrong signals. I wanna do it, um-
- SPShaan Puri
I do that by the way
- DSDharmesh Shah
... with modesty. Um, it's like a, it's just, uh-
- SPShaan Puri
I typically tip 50%. It makes me feel good.
- DSDharmesh Shah
Yeah. Um, it's, it's, yeah. Um, and I've worked in the service industry before. I know that, you know, those kinds of things matter. Um, so-
- SPShaan Puri
I'm a cheap bastard so I'll stay silent here
- DSDharmesh Shah
... but in terms of like, you know, large things, so philanthropically I, the, the running joke inside the house is, uh, my wife and I, and so she's not from the tech world at all but, uh, so I'm really... So I want to like own the world and she wants to save it, right? Like she, so, uh, I will make the money. Yeah, that's something I've, uh, been relatively good at and she will be able to channel it to good causes and, and the philanthropic effort so she'll be able to do that. Um, so I don't have any like particular specific things. Um, I will say like I am a... So I'm the guy that's like jacked with a matrix. So if, if there was a, a world like, oh, it's like this is, um, you know, like I, I live a virtual world so there's no, not a lot of physical things, uh, that I crave or desire other than a piano which I've wanted for a while now. Now a piano. Uh, but it, it doesn't excite me all that much, right? It's like it's, well, and because atoms, there's a maintenance to atoms, right? Like atoms versus bits. Like if you have it, whether it's a yacht or whatever it is, a plane, like that takes calories. Like it take-- I don't care how much you delegate or whatever, that's something in your life that's kinda attached to you somehow and I, I just don't like that. I don't like that idea. It feels more weighty to me than, uh, kind of joyful. But
- 27:55 – 35:34
Dharmesh on the beginnings of HubSpot
- DSDharmesh Shah
so-
- SPShaan Puri
S- so speaking of time, we, um, so HubSpot 15 years old. I, I don't know how many people are here, 2,500, 3,000, whatever. Um, it seems like you guys like grew pretty fast early on but has it always felt like a grind? Or I mean like when I, when I see you I'm like, "Well, you don't have to do this. Um, like you could delegate this. You don't have to work here. You're set. You're good. Why are you still doing this and does it still feel like a grind and when has it stopped feeling like a grind?" One of the reasons why I wanted to sell to you, um, I was like if I don't sell like in this cycle I'll probably have to wait another five years.
- DSDharmesh Shah
Mm-hmm.
- SPShaan Puri
Am I, do I wanna put that work in or do I wanna sell now? Like what, like that's a hard challenge. Did you face that? And just walk me through that.
- DSDharmesh Shah
Yeah. So a couple things. Um, it's not widely known but, um, so Brian and I as co-founders we had, um, a kinda heart-to-heart co-founder chat which I, uh, encourage all founders to have and we had this list of questions we're gonna go through and I've published this on my, um, on, on my own startups blog. But one of the things was around, um, who's gonna be CEO and we decided he's gonna be CEO because I suck at being CEO. I, I, you know, I did that with my first startup for 10 years. I'm just not that good at it. So that was kind of decision one. But decision two which is much, um, much more unconventional is that I have, uh, no direct reports. So what my agreement with Brian was I'm not going to have any management responsibilities in this company. I'm going to be in it 100%, but I'm not a good manager. Now I'm reasonably smart guy. If I spent a bunch of time I could probably with some coaching get passably okay at management. Like I, I think I could get there. I don't wanna spend 10, 20, 30 years of my life getting passably good at something. I'm a big believer in take your strengths whatever they are and put like all your energy into kind of amplifying those strengths and getting really, really good at that thing and don't worry about your weaknesses all that much. So I don't wanna, wanna worry about my weakness managing people. And so we have over 4,000 people at HubSpot. I have zero direct reports. I've never had direct reports in the 15 years. Uh, and that is partly what makes it much... I, I, I don't think of it as a grind as, at all. Uh, like I, it's completely discretionary and optional for me. Uh, obviously I have a lot of, uh, kind of vested interest in the company but in terms of the work that I do and I've sort of whittled down my life at HubSpot, um, this has been the w- this way for better part of a decade, um, is, is like I get it down to like three things I'm gonna work on and that I will change those every few years. Um, so, uh, for a long time it was like brand, uh, culture and what I call boldness which is, is the organization taking on enough risk because the temptation's always like once you start having customers and revenues are growing, things like that is just to kinda What we call drag the spreadsheets. Like, oh, like here are the numbers, this is how it's growing, we're just gonna drag the spreadsheets, and the numbers will flow basically, um, is to push the organization so we don't do that. Um, so what I do is I will maniacally focus on whatever those three things are and say no to pretty much everything else. And, and things will swap in and out, so I've had, you know, product, uh, in there, I've had platform in there. Um, but on that thing, whatever it is I'm working on, so when I had culture on my list, it's like I spent 300 hours, you know, on the, on the culture code deck at HubSpot. Like just I'm going to, uh, do everything I can to learn everything I can to try and get culture to be a, a thing at HubSpot. Um, and yeah, so it's, I, I find it enjoyable. I get to kind of pick the thing, so my three things are different, um, you know, from year to year. Uh, I like to dig into the details. I don't like kind of floating at 50,000 feet in lofty ivory towers. I like to like, if I'm gonna work on brand, I'm in there with the marketing team like reviewing copy and, uh, going through the... And this is why I'm taking Shaan's, uh, copywriting course. Like I, I obsess over details. Um, so anyway, yeah.
- SPSam Parr
Did you see, Shaan, that he's in your power writing course?
- SPShaan Puri
Yeah, I saw that. I was like, how does this guy have time to do this? This is amazing. I, I don't know.
- SPSam Parr
Well, he-
- SPShaan Puri
Have you attended? How's it been so far?
- SPSam Parr
He talks to me all the time. That's why I'm like, "What do you do all day?" [laughs]
- DSDharmesh Shah
Um, I, I found it very useful, I'll say that. It's, um... And I think copywriting overall is one of the most underrated skills, uh, in entrepreneurship generally. Like, uh, people do not realize the amount of leverage you get by just spending 10, 20, 50 hours, and you can learn a lot of what you need just by like reading the top three books on it and just practicing the craft, right? It's, uh, and it's a doable thing. And the nice thing about it, and one of the things I love about it, it's like measurable. You can objectively measure whether you got better at copywriting or not. You can look at your conversion rates or whatever numbers you're trying to, to move as a result of your words. Uh, and it's a, it's a learnable skill, um, that's... Yeah.
- SPSam Parr
One more question and, and we can move on. But when... And the reason why you were able to do those no direct reports is I think that you were the first investor in... So like, was this, was HubSpot your idea, or was it Brian's idea? But I think you invested like half a million dollars of your own money to like get it started.
- DSDharmesh Shah
Yep.
- SPSam Parr
And aren't, aren't you the largest shareholder of the company?
- DSDharmesh Shah
I am. Um, and so, so the idea of HubSpot is, is that you have to decouple the two things. Um, so HubSpot was not supposed to happen, and here's what I mean by that. When I sold my last company, you know, I'd been running it for 10 hours, uh, 10 years, and working the proverbial entrepreneurial hours as, as one would expect, right? It was self-funded, uh, bootstrapped. And I promised my wife, um, that I would not do another startup. I was like, okay, well, you know, the one I'm doing, I'm in. I can't not be in. Uh, the analogy, um, you know, I use is it's a little bit like being at, um, like a, a gaming table in Las Vegas, right? And it's like, and you don't know the rules of the game. This is how startup entrepreneurship works, uh, if you're, if you're self-funded. It's like you're at the table, and the only real feedback you get is like sometimes the chips go down, sometimes they go up. You're playing, you're trying to figure out the rules as you go. You don't know. But there's one like cardinal rule is that if you leave the table, whatever chips you have on the table, they're gone. Every now and then, the house will come up to you and say, "Hey, would you like to cash in your chips? They're worth X dollars." And this is the position you were in. So I was like, okay, would you like to sell your company? Here's what someone's willing to pay for it. And if you miss that opportunity, you have no idea when the next opportunity to cash out your chips. And again, so you keep playing, right? It's like, and so the thing I told my wife was like, "I have to keep playing." I did, like if, if I chose to get off the table, it's like I had a lot of investments. 100% of our net worth was invested in this. Um, and so then eventually when I sold, um, that was the decision. It's like, okay, I'm, I'm, I'm leaving the table, cashing in my chips. I don't have to do this anymore. So that's why I went to grad school, and my plan was go to grad school. Um, so I didn't really get a chance to, um, enjoy undergrad because I was working the whole time through it. I'm gonna like actually go to grad school, be a real student, apply myself, and not go do anything. I'm gonna do grad-
- SPSam Parr
How, how old were you?
- DSDharmesh Shah
I was 35, 36, somewhere in that range. Um, yep, so-
- SPSam Parr
So a thir- like a 36-year-old college kid living the dream.
- DSDharmesh Shah
Yeah, I did. I had a great time. It was awesome. Uh, one of the best things I did, um, is, is go back to grad school for a variety of reasons. But anyway, so I had not planned on it. So my, my plan was go to grad school, then maybe get like a PhD and then go teach. That was my kind of path, uh, my kind of chosen path. Uh, and then I met Brian in grad school, and we both have this kind of shared passion for SMB. We both come from tech, different backgrounds. And so the first decision we made, uh, before we even decided what HubSpot was going to be, was that the two of us should do a company together. And if like Brian was not going to do a company, there would be no HubSpot, right? It's like I... So I had registered the domain name, I had kind of nood- noodled on kind of a variety of things, but then we kind of came together and said, "Let's do this." And by the way, all through grad school, um, we were noodling on ideas, right? We're like, "Okay, well, we'll do this." And we had HubSpot, we went to the, the business plan competition, wrote a business plan for early versions of HubSpot, which is fun to look at. Um, but the idea came after. Like we had kind of narrowed it down to two companies, uh, two paths. One was in marketing, which is what we ended up doing. The other one was like a Oracle for small business, like an ERP, uh, similar to Nextiva, which you folks were talking
- 35:34 – 43:59
Idea: A blockchain version of LinkedIn
- DSDharmesh Shah
about in the last episode.
- SPShaan Puri
Uh, all right, so let's do some ideas, 'cause I think, you know, one of the cool things, uh, what I love about any technically minded person, uh, who has business success is typically when, when people who are non-technical get into business, they go in one of two paths. They, um, they sort of become a financier. They're like, "Great. Still love business, but I don't wanna sweat anymore, so I'll invest." And, uh, and lots of people invest, but they make investing the main thing. And, um, what I found is that a lot of people who are technical that end up being successful, um, they never stop loving kind of what's new, what, where technology's going, how behaviors are changing, that sort of thing. And whether they start a new company or not, um, they sort of live as a user at the edge.
- DSDharmesh Shah
Yeah.
- SPShaan Puri
And so, um, so tell me like, I guess, what's, what's maybe one or two kind of technologies or ideas right now, spaces that are most exciting to you at the moment?
- DSDharmesh Shah
Uh, two. One is around kind of broadly defined cryptocurrency. Um, and we haven't talked about BitClout yet, but I'll bring that out, is a- Cryptocurrencies as applied to other kind of mainstream things. So the, the, I, if I... We're not doing HubSpot, and which I have no plans of doing anything else, but, um, this is the idea. I'll, I'll, I'm gonna, I'm gonna give you my pitch, Shaan.
- SPShaan Puri
Yeah.
- DSDharmesh Shah
What you should do, since now you're out of Twitch-
- SPShaan Puri
[laughs]
- DSDharmesh Shah
... um, is you should do a professional network, um, that's powered by the blockchain that, and I'm gonna say this as kindly as... That, uh, people love, um, because the people don't love the incumbent right now.
- SPShaan Puri
S- can I, can I, can I say my opinion, Dharmesh?
- DSDharmesh Shah
Sure.
- SPShaan Puri
You know, you know my opinion. Can, are you cool if I say it?
- DSDharmesh Shah
Yeah, yeah, yeah. Go ahead.
- SPShaan Puri
LinkedIn sucks.
- DSDharmesh Shah
[laughs]
- SPShaan Puri
Uh, a l- or how about this? A lot of people say LinkedIn sucks.
- DSDharmesh Shah
Yeah. [laughs]
- SPShaan Puri
And, um, you're suggesting build, building a, a different one, um, on the blockchain.
- DSDharmesh Shah
Okay. So, see, I'll-
- SPShaan Puri
Let's sketch it out, so-
- DSDharmesh Shah
Yeah.
- SPShaan Puri
So-
- DSDharmesh Shah
Okay. So here, here's what I'm saying.
- SPShaan Puri
Yeah.
- DSDharmesh Shah
Here's what... I even have a seven-figure domain name picked out for you.
- SPShaan Puri
Okay.
- DSDharmesh Shah
I will write the $5 million check for you to go do it, as far as a seed round. Uh, or up to five million if you wanna let other people in.
- SPShaan Puri
Oh, shit.
- DSDharmesh Shah
That's the main thing.
- SPShaan Puri
This just got spicy. Okay.
- 43:59 – 48:46
Dharmesh on BitClout
- DSDharmesh Shah
Yeah.
- SPShaan Puri
So I think that's exciting, and then a whole bunch of people were like, "I can't believe you're endorsing this scam project," and blah, blah, blah, blah, and is this, is this gonna make me rich or is this not gonna make me rich? And I was sort of like, well, it's besides the point. It might, but, uh, it's besides the point. Um, it's more like this is what the, the next Twitter, LinkedIn, Facebooks are gonna look like-
- DSDharmesh Shah
Yeah
- SPShaan Puri
... um, in either 1 or 10 years, I'm not sure. And if BitClout or the next thing, I'm not sure, but I'm gonna play with this one and I'm gonna like give it a ride so that when-
- DSDharmesh Shah
Yeah
- SPShaan Puri
... the right one does arrive, whether it's this one or the next one, I've, I've know, I know what I'm looking at. I know what's real and what's not, and I, that's why I recommended people go play with it just to see.
- DSDharmesh Shah
Yeah.
- SPShaan Puri
Um, just, just to be on the forefront of it. You-
- DSDharmesh Shah
Something like it needs to exist, right? Whether it'll be the one or not, I don't know, and so I've been spending a fair amount of calories trying to kind of understand the mechanics, uh, of BitClout itself. Um, and I'm now-
- SPShaan Puri
How much money did you-
- DSDharmesh Shah
... apparently number three on the, uh, top creators, uh, list. I've been kind of moving up the, up the curve, so to speak.
- SPShaan Puri
I love it.
- DSDharmesh Shah
Yeah.
- SPShaan Puri
Dude, the thing about... How much have you put into BitClout?
- DSDharmesh Shah
Uh, it's gotta be a million dollars, give or take.
- SPShaan Puri
Over a million dollars, yeah. I... Man, the thing that pissed me off about BitClout was I got into this, like I had a, I didn't get into it 'cause I had to, I, I knew I was gonna get into this thing I'm about to say, but I, I was getting into, I wanted to get into a pissing match real fast about building clout, and because there was money on the line. And yeah, I just, I was thinking, "Ugh, I, I don't wanna actually wanna get in this race."
- DSDharmesh Shah
Yep.
- SPShaan Puri
Um, I don't wanna play that game.
- DSDharmesh Shah
[laughs]
- SPShaan Puri
And, uh, that, so that, I, I kinda had a little... Like I, one part of me is I actually fundamentally agree with most everything you're saying. On the other part I'm like, "Oh, if this exists, I'm gonna be getting in a lot of like pissing matches or whatever, and I'm gonna be playing more games," and that kind of freaks me out a little bit.
- DSDharmesh Shah
Yeah. I, and, and, and this is one of the issues with BitClout right now, right? You have a bunch of like founder rewards games and things like that, and this is, this is what happens. This is why we can't have nice things, uh, Parker, right?
- SPShaan Puri
[laughs]
- DSDharmesh Shah
It's like anytime something new comes along, there will be people that are trying to game the system, whatever. So even back in the early days of Google, it's like the internet wasn't a scam and Google wasn't a scam, but there were a bunch of people trying to scam Google to kind of show up in the results and doing kinda spammy SEO kinda stuff. You see the same thing on BitClout, right? And you have to sorta, kinda separate that from the platform. It's like, okay, fundamentally the idea does not feel like a scam to me. Yes, they needed to open it up and have it listed on exchange so you could actually take money out, you know, minor details, but, um, it, but they're fixing those.
- SPShaan Puri
Yeah.
- DSDharmesh Shah
And I talked to the, uh, to the founder, like in, like one of the few calls I, I've had in the last 12 months, 'cause I don't do phone calls. Um, but it feels legit to me. And, and that's not to say it's going to succeed, but it's, I'm relatively confident it's not a scam.
- SPShaan Puri
Mm-hmm.
- DSDharmesh Shah
That it, that its reason for being is not a scam.
- SPShaan Puri
So one of the things that happens with like a Google or a Facebook is, you know, uh, like you said, there's a big honeypot either of users or money on the line, and so then you get good people excited about it, you get technology excited about, but you also get these sort of scammers, and not even scammers, but I'll call them schemers. People who are not doing anything illegal, but they're thinking, "Oh, this is a game. How do I play it so that I get the highest score?" And the score is either money-
- DSDharmesh Shah
Yeah
- SPShaan Puri
... or followers or whatever they're trying to game.
- 48:46 – 51:46
Idea: NLP, the future of software
- SPSam Parr
curious-
- SPShaan Puri
Very interesting
- SPSam Parr
... to hear what the, what, what this is gonna be.
- SPShaan Puri
You, you had said two spaces. So one, one is the crypto s- crypto social network.
- DSDharmesh Shah
Yeah.
- SPShaan Puri
Uh, what was the other space you're excited about?
- DSDharmesh Shah
The other one, uh, is so broadly defined, uh, natural language processing, uh, in terms of... Okay, so let me... I'll do a, try to keep this a, a quick rant. So every software company that ever was has always said, "Our product is intuitive and easy to use." Like, okay, well... And the reality is every one of them lies, because here's what happens in order for a human to use software. It's like, here's the thing I wanna do, and I have some amount of training and things, whatever, and I'm gonna translate the thing, my intent, I'm gonna translate into a series of drags and clicks and swipes and touches to make the software do the thing that I intended to do, right? Now imagine, uh, if, you know, if I were Elon, I'd be like, "Okay, well, you should just be able to think the thought." But let's put that aside for now. Let's just say you were like, you're in Photoshop. It's like, I wanna remove the background. You should just be able to say, "Well, I wanna remove the background." If you're in HubSpot, you should... I want... You should... It's like, you know, how many new people signed up for our Service Hub product in the last 90 days? You should just be able to type that question in, 'cause that's your intent. Not like, oh, go to HubSpot's reporting tool, build this dashboard, pull the, here are the three columns you want or whatever, and get to the thing you want. You should just be able to say the thing you want, express the thing you want, a better way to state it, and the software should figure it out. Like, we have the technology now on the language side to be able to understand natural language, human, eng- English, um, and other languages, and all we really need is a translation layer. And so this is a broad-based, in my mind, um, a mega trend to be, which is, in my mind, bigger than mobile. So mobile was a, oh, we're gonna... The, the thing that mobile added for us, which is like, oh, well, the thing that you used to do on your desktop, now you can do it from anywhere and enabled a bunch of different use cases. This thing is like, okay, well, the thing that now you've been trying to learn and you're trying to use this software or whatever that you never really got good at, you never had the time, now s- like a billion people can use that piece of software that wasn't even possible before because they don't have to learn the clicks and drags and things. They can express the thing they want and the software can do it. And then what I would do if I were an enterprising VC is I'd say, "Okay, like, so pick the categories where this thing will have the biggest impact." Uh, like, you know, business intelligence, reporting kind of stuff. B- B2B software is a natural fit, uh, but I think can go elsewhere. Yeah. And, uh, and we've seen the beginnings of this on the consumer side with things like Alexa, but like the B2B world I think is open for just make the software actually intuitive. Um, make it do what I want.
- SPShaan Puri
Right. Have, have you seen anyone besides... I was gonna say, besides Alexa, have you seen any hints of what I call a magic trick? It's when you see somebody build a piece of software, and then they're like, "Yeah, so you just do X, Y, Z, and boom, it's done." And you're like, "Holy shit." You got that... You know, y- you just wove your magic wand and got that. And it's like, when you see a magic trick, you, it's very hard to unsee, and you kind of can't look at the old software the same way anymore. It's like Instagram filters or something like that. It's like, "Oh, wait, your photo looks like that? Oh, shit. Okay. Well, now all my photos in my camera roll look like shit in comparison. Like, I can't even look at these anymore." Um, so have you seen any cool magic tricks with conversational, uh, or, or natural language processing?
- 51:46 – 57:51
Growth Bot & website graders
- DSDharmesh Shah
Closest I've, closest I've gotten, so I, I built something myself called Growth Bot, uh, a few years ago. That was a-
- SPSam Parr
Ah, I remember that. I remember Growth Bot.
- DSDharmesh Shah
And basically you could type... And it was for, it was built for marketers to be able to get marketing data out, both of your kind of marketing system, something like a HubSpot or a MailChimp, but also just other data sources. Like, oh, what are the top three keywords that Uber buys on PPC? Like, that data's out there, right?
- SPShaan Puri
Right.
- DSDharmesh Shah
Like, we know to kind of ask that. And so, uh... Or like, when was this domain registered? Or like just a bunch of... And I, I would go through every night and look at all the questions people asked of this thing, 'cause it was a blank canvas. They had no idea what the thing was capable of. And then I could go back and it's like, okay, well, here are the repeating patterns. Wouldn't it be nice if I could go update the software to kind of do that thing? So that's... It came close. It was, I think, a little early. I think we're further along now. People are more used to that notion-
- SPShaan Puri
Right
- DSDharmesh Shah
... um, of being able to express it, uh-
- SPSam Parr
Dude, that's so funny that you do this. I'm, I'm looking at the Growth- I, I remember Growth Bot. Uh, like people were sharing it. And I just... You just made this. Did you... So you just whipped up this landing page and, and you made this?
- DSDharmesh Shah
I made the whole thing, yeah. Like, I spent a bunch of, like, time just learning about what's possible, coded the whole thing myself. Um-
- SPSam Parr
God, that's so funny. Can you, um... Gosh, this is so funny. Uh, you see that, Shaan?
- SPShaan Puri
Yeah, yeah, I'm on it.
- SPSam Parr
It's great, right? Like, it, it, it's just cool that you do this stuff. And, and you have, uh, within... Like, everything you do is kind of related to HubSpot, right? It's all in the same world. Do you also, like... Well, you're, you are... It seems like you're really into website graders. Is that right? That business of web... So I was talking to, uh, Hiten Shah the other day. Hiten Shah-
- DSDharmesh Shah
Yeah
- SPSam Parr
... um, um, started-
- SPShaan Puri
Kissmetrics and-
- SPSam Parr
He did everything
- SPShaan Puri
... he's got a new startup, Nira.
- SPSam Parr
Yeah. Uh, Nira. He's got, uh, which I've, uh-
- SPShaan Puri
Crazy Egg, Kissmetrics.
- SPSam Parr
Crazy Egg. Uh, Quick Sprout. All types of shit. I mean, he's like you. He just fucking has his hands in everything. But he, uh, and his partner Neil have neilpatel.com/ubersuggest, and then they also had neilpatel.com/ like rateyourwebsite or something like that.
- DSDharmesh Shah
Yep.
- SPSam Parr
Why are you so into these website rating businesses and products? What, what the hell is going on with that?
- DSDharmesh Shah
Well, I'm, I'm into... So the original thing was called Website Grader. Um, it was actually a, a funny story. So back when we first started HubSpot, uh, it was just Brian, my co-founder, and I, and we would go look at people's websites and to see if they would be a good fit for HubSpot the software or not, right? And so we would go and I would look at their H- like, I'd do a view source in Chrome and then look at their source codes. Like, okay, do these, they, do they have the right meta tags? Do they seem clueless, right? You can... There's a bunch of signals you can look at. Look Alexa ranking. Stuff that you do, you folks do all day long right now when you research companies. Um-
- SPSam Parr
Like a, like a SimilarWeb type of thing.
- DSDharmesh Shah
Yeah, yeah. And this is, you know, 15 years ago. And so we... So I, I was like, okay, well, and we were all doing it, we were doing it manually. There were no tools. So it's like, okay, so I built something. S- that's what I do. It's like, oh, I'm gonna write this tool that does this automatically, goes, looks and pings the APIs. We'll bring down the source code for the HTML and see if there, the tags are right, and kind of give it a, um, for us, give it a score- And then I had this, uh, had not planned it this way, was, you know, built as a tool for just the two of us, um, and it's like, "Oh, I'm gonna put this on the web because I think this is useful." And so like, "Okay, well what name can I give it? Well, it grades website, I'm gonna call it websitegrader.com, the domain was available."
- SPSam Parr
[laughs]
- DSDharmesh Shah
This was, you know, 15 years ago. Um, and so I, I put that out there and it, like it was on fire. Like that, like all the early leads, like tens of thousands of people, right? Would... And, and then we like, so they had a desire to kind of grade their website. And so for your list- for the listening audience, one thing I will say is, um, the power of building a diagnostic tool for your industry is immense, right? This is the thing that... So Website Grader was not the solution, so it's not like a freemium thing. It's like, "Oh, we're giving you a lightweight version of HubSpot." It was a thing that made you realize you needed HubSpot, and that was super valuable. And that can be done in any industry, whether you're in software or not. It's like, "Okay, I'm gonna help you determine whether you have a problem or not," because the natural thing when we do a website grade, it's like, "Oh, I got a 23 out of 100. That sucks."
- SPSam Parr
Right.
- DSDharmesh Shah
"HubSpot can help, like, here's what we do." Um, or even just like, "Read these blog posts." I mean, "Here, watch these videos." Uh, and it's, so it's, it's worked. So I'm obsessed with kind of grading an, an assessment. Um, and you folks, you guys had a, an episode, uh, probably 10, 20 episodes ago, um, around like quizzes and things like that. So one thing people are-
- SPSam Parr
Yeah
- 57:51 – 1:01:20
Dharmesh on GPT-3
- DSDharmesh Shah
fixed that, uh, but-
- SPShaan Puri
So I like that, and then also for this, uh, conversational thing, I think what you just said, like we ki- it's kind of like sometimes guests on this podcast say something in passing that I'm like, "Whoa, whoa, whoa, that's actually a really big idea." Uh, and I think you actually said two, I think the, the crypto, uh, LinkedIn one is a big idea, and I think the second one is this idea that if you think about one of the biggest, and what pe- some people say is the best business they've ever seen is Google, right? People come in there and it's just a, a search box. It's magic genie, and you go ask a question and it tries to give you some answers.
- DSDharmesh Shah
Yeah.
- SPShaan Puri
And, um, the way I view this is if somebody could actually do this, this is sort of like next level Google, where, uh, I ask it any question and it, and it, it doesn't just give me like a list of pages where the answer might be. It's like it actually gives me the answer. And so, [laughs] um, this might be, you know, in the business context, it might be like a business Google, but there, there's many versions of this. Uh, I, I don't know if you've seen this. Have you ever seen, uh, Dbuild? Have you ever checked out this website?
- DSDharmesh Shah
Mm-mm.
- SPSam Parr
Yeah. We talked about Dbuild, didn't we?
- SPShaan Puri
So my friend Sharif, uh, this is a perfect example of a magic trick thing. He, um, was messing around with GPT-3. So GPT-3, new technology comes out, he gets access right away.
- SPSam Parr
Mm.
- SPShaan Puri
Drops his whole startup, starts-
- DSDharmesh Shah
Yeah
- SPShaan Puri
... just hacking on this thing at night, right? And, uh, he throws up this, he has this idea of like, dude, uh, you know, Squarespace, Wix, these website builders have been around forever. Um, great, everybody wants to be able to code without having to code, but like even now it's still so complicated, even after Webflow, after all this stuff. And, um, so he's like, "Why can't you just describe like, you know, I want a website that's got like kinda like two columns and on the left I want pictures of like places you can stay, and on the right I want the price of the, of the thing."
- DSDharmesh Shah
Right.
- SPShaan Puri
And you could literally just type that in and it'll build you a website that looks like Airbnb. It'll like, it'll build you a website-
- DSDharmesh Shah
Well, he-
- SPShaan Puri
... that does that.
- DSDharmesh Shah
Yeah.
- SPShaan Puri
And he posted on Twitter a GIF.
- SPSam Parr
Mm-hmm.
- SPShaan Puri
He's like, "You know, I'm messing around with GPT-3 and watch this," like, um, you know, build a website with a photo and then add a PayPal button, but then make it where the PayPal button can only take $5, uh, max, and like that's it, and then send, send the payments to this. And then it like spit out a website that was, that did that, like the HTML and the CSS that did that.
- DSDharmesh Shah
Yep.
- SPShaan Puri
And, uh, he posted that GIF, and I think off basically one tweet with one GIF, he raised like $2 million instantly from like really smart people when that tweet went viral 'cause they were like, "Oh, you just showed me a magic trick," and, uh, I don't know what the company is here, and I think he still-
- DSDharmesh Shah
Sure
- SPShaan Puri
... doesn't know what the company is, but, um, go, go down this path and, uh, see what you can find.
- SPSam Parr
It, it was pretty amazing. I, I remember when that tweet went live, I mean, I, I, it, it, it went viral right away.
- DSDharmesh Shah
Yeah.
- SPShaan Puri
Right.
- DSDharmesh Shah
I, I played with the GPT-3, um, played with it for a while across multiple things. It's, it's like the closest thing to like magic that in, in ter- It, it's weird because it's, it's kind of a different vector, right? Because it originally is like a, a text generation mechanism to be able to write, you know, prose based on because it's got this corpus of, of data behind the scenes, um, and it's... And I, and I talked to, you know, Sam Altman, the CEO of OpenAI, had a, he was gracious enough to give us some time to, it's like, okay, well, like where is this headed? What's going on to see the kind of impacts on HubSpot, um, in the world in general? And it's like that's one of those things that I, right now I don't think- Quite there to be able to, like, implement, like, practical use cases to actually do the thing that, uh, people are trying to do. And I've played with it, uh, on kind of multiple fronts. But it's one of those that it's gonna go from a, as Peter... Like, from a zero to a one very, very quickly. It's like all of a sudden that wasn't really possible and didn't really quite work en- well enough, and then it's gonna be like, holy crap, then there's like the-
- SPShaan Puri
Right
- DSDharmesh Shah
... uh, kind of post-GPT-3 world where you-
- SPShaan Puri
What, what's that phrase where it's like, you know, slowly, slowly, then all of a sudden or something like that?
- 1:01:20 – 1:05:21
Idea: A community for remote work
- SPShaan Puri
be that. Uh, Sam, you said you liked some of the ideas on this list or some of the topics. Let's just go rapid fire a little bit.
- SPSam Parr
You know, I'd like, like, we, we, we just talked about something huge. That was a huge idea. Let's talk about something small but still cool. So it looks like... Did you buy remoteculture.com?
- DSDharmesh Shah
I did.
- SPSam Parr
Okay. So th- that, that's a no-brainer. There's a business that will make a million dollars a year. Remote Culture, online community for those building remote cultures. Easy, right?
- DSDharmesh Shah
Yeah.
- SPSam Parr
That's a no-brainer. What would you do there?
- DSDharmesh Shah
I, I would start a community, uh, for remoteculture.com. This is, okay, I'm gonna do a blog, I'm gonna do a paid community, and it's gonna be targeted at people ops and HR people around the world that need to kind of figure out the new kind of new world order, right? We're not gonna try and sell them software, we're not gonna... We're just gonna connect them to each other. And you've... And I'm a big, big believer in these kind of communities and network-based businesses, um, because they're efficient in terms of doesn't take that much. Y- you gotta get to critical mass, that's fine, but, um, I think this one would work. It's, it's, uh, it's a community that's necessary at this moment in time that hasn't existed because it hasn't needed to.
- SPShaan Puri
Right.
- DSDharmesh Shah
Now it does. Um, and I'm sure there's people out there doing it, but-
- SPShaan Puri
So there-
- DSDharmesh Shah
... brand new help, money helps, you can actually build something. Yeah.
- SPShaan Puri
There's one on here that I really like, uh, speed round.
- DSDharmesh Shah
Yeah.
- SPShaan Puri
So, uh, so, uh, by the way, these are, these are what? These are domains that, like, you don't have a idea for?
- DSDharmesh Shah
So here, here's a hack, by the way. When I have, like, a, an idea that's enough in my head that it's like, "Okay, well, this is kind of cool," I don't, like, write it down in a notebook, I go find a related domain. Um-
- SPShaan Puri
[laughs]
- DSDharmesh Shah
... it's like it costs $15 if it hasn't been taken yet or-
- SPShaan Puri
Right
- DSDharmesh Shah
... or maybe I'll spend more if it's, you know, um, something really kind of strikes my fancy.
- SPSam Parr
What's, what's the most expensive-
- DSDharmesh Shah
It's a way of putting inventory on ideas, um.
- SPSam Parr
What's the most expensive domain you own?
- DSDharmesh Shah
Whoa, um, I haven't had them valued. I don't really sell domains. Uh, I own birminghamalabama.com, because I live there.
- SPSam Parr
[laughs]
- DSDharmesh Shah
I think that's probably a six, seven-figure, uh, domain. Just bought humanism.com and humanism.org from my-
- SPSam Parr
You also bought, bought one for me.
- DSDharmesh Shah
Bought one for you. I bought thehustle.com for you as a, as a gift-
- SPSam Parr
Oh, wow
- DSDharmesh Shah
... that I was gonna give to you on the podcast. Uh-
- SPSam Parr
So, so like-
- 1:05:21 – 1:12:21
A framework to evaluate startup ideas
- SPShaan Puri
I don't think. One-
- DSDharmesh Shah
One thing I'd like, I'm gonna pull a analogy here as, uh, I'm gonna push that conversation on the stack, but one thing I wanna make sure I can get out there, uh, 'cause on the list of things, just, you know, talking about ideas, um, it's like how do you assess ideas? How do you think about ideas? I know, Shaan, you love frameworks. Uh, you do too, Sam. Um, here, here's a simple one, um, in terms of, like, assessing, uh, whether you're doing it for yourself or you're investing, whatever it is, and, and I'll tell you the common mistake. Um, so the three things I look at are, uh, like, profit potential. Like, if this thing went exactly as planned, as, as the founders envisioned, what could it be? Like, let's just assume all things, like all the stars align, everything works the way you expect it to, and, and it goes, what could it be? What's the overall potential for the project? Uh, what kind of, like, passion do you have around it? It's like, okay, are you excited about it or not excited about it? Um, and the third one is, uh, around, uh, probability of, of that success that you, that you want, right? And I, I'm a quant-based guy, so I'll take each of those factors-
- SPShaan Puri
Score
- DSDharmesh Shah
... uh, up to a zero to 10 score and multiply them together and I'll get a score out of 1,000, right? And you can put the weighting differently. It's like, oh, I care more about passion than, you know, uh, the profit potential or something else. But the common mistake people make is that they will look at the probability of success first and almost exclusively as a f- high-order bit filter. It's like, "Oh, I had this idea, but the likelihood is like 0.01% that that's actually going to work, and so I'm not even gonna think about what the potential could've been or, or how passionate I may or may not be about it," and then they just kind of discard the idea. I think that is statistically unwise and a impractical move, and here's why, is that the way you should be looking at ideas is you kind of take the profit potential, like here's the possible outcome, multiply this, uh, it's, it's the EV, the expected value statistically of this thing. It's like, oh, I have a 1% chance At a billion dollars, the expected value is 1% of a billion dollars. That's the value of that particular thing. Um, and so you shouldn't discard something just because the probability is low because it may have a disproportionately high potential that makes it more interesting than it would otherwise. Um, so that's the, like be a little bit more structured about how you, um, assess things. Uh, people throw things away too easily because, uh... And, and the second note I'll put in, uh, hard won lessons, good ideas are dangerous, and they're dangerous because what you want to find are the great ideas. Uh, right? That's the thing you can kind of get behind. You don't have to find them before you start the company. We can talk about that. Um, so bad ideas are easy to spot, like that's just a bad idea. Good ideas masquerade as great ideas, and it's hard to tell them apart, and they're the ones that end up kind of spinning a bunch of cycles for you and it's like, okay, well, it ended up being good, but just it's, um, yeah, uh, failure's not a problem, like mediocrity is the thing everybody should be fearful of, is like just get it out there, try it and see what happens. But, uh, anyway. But you-
- SPShaan Puri
And mediocre- mediocrity is the, the big problem because it wastes the most valuable resource. It wastes time, right?
- DSDharmesh Shah
That's it.
- SPShaan Puri
'Cause it's not gonna die quickly, nor is it gonna take off, so it is a slow, long burn, uh, at a mediocre level, and so you're sort of locking in over a period of time a mediocre outcome, and that's when-
- DSDharmesh Shah
Yeah, no
- SPShaan Puri
... mediocrity is the biggest risk.
- DSDharmesh Shah
And, and for that, I think the hardest about bootstrap companies, especially, uh, tech companies that have a low kind of capital need, is they can actually live forever and not go anywhere, right? Because it doesn't take that much to have, it's like, okay, you've got an AWS instance somewhere that's costing you 50, you know, it's like it doesn't really cost that much, um, and you don't have investors pushing on you to say, "Oh, we need some sort of outcome." And so you can run that company indefinitely and waste a bunch of your time when the next idea that you could have done was sitting right behind it, right? Like I have, I've talked to hundreds of entrepreneurs by this point. I have never, ever in my entire life met an entrepreneur that had just one idea. It's like, oh, you will have more, dude. It's like, okay-
- SPShaan Puri
Right
- DSDharmesh Shah
... and, you know, try the thing. If you can sell the thing, sell the thing. If you're not that excited about it or, or you just wanna cash out, take some chips off the table, there's, uh, no harm and no shame. Uh, but yeah.
- SPShaan Puri
Did you, did you, but you guys didn't raise a significant amount at HubSpot, did you?
- DSDharmesh Shah
Uh, 105 million-
- SPShaan Puri
Oh
- DSDharmesh Shah
... private money before we went public. Yeah.
- SPShaan Puri
Oh.
- DSDharmesh Shah
It's, HubSpot's a classic-
- SPShaan Puri
Venture
- DSDharmesh Shah
... venture-backed playbook company. It's like there's, uh, and, and intentionally so. It's, um-
- SPShaan Puri
But that seems interesting to me because you don't seem, you seem like a guy who likes freedom and, um, knows that he's, knows what he is and knows that he's a little-
- SPSam Parr
He seems like he might have been a bootstrapper is what he's trying to say.
- SPShaan Puri
Yeah, yeah.
- SPSam Parr
Why don't, why don't you bootstrap? [laughs]
- DSDharmesh Shah
Well, I- I'll, I'll tell you the exact conversation we had. So when Brian and I started this, one of the things we were firmly agreed on is that we didn't want, I'm not a baseball or a sports person, but like we didn't want a single or a double hit, right? Like we wanted to like swing for the fences and either this, we, we do this and we're gon- at every point that we have a decision to make, a fork in the road, we are going to take the one that gives us a higher chance of being the spectacular outcome, even if that means we're possibly gonna go down in crash and burning flames, right? And so this-
- SPShaan Puri
But was, was, was Brian, uh, was he successful like you were, or was he earl-
- DSDharmesh Shah
He, he was successful. Like he didn't like need, he hadn't had like an exit because he was, uh, he hadn't done a startup before. This was his first one. Um, but he also was like, "Okay, this is my last swing at bat," right? "This is not, I'm not, this is it. This is the one that's either gonna do it or not gonna do it." Um, and so that, that was the reason. It's like we weren't worried about diluting it. We negotiate the fairest value we could. We made sure the terms were meaningful and had good investors, but we were not worried about what our percentage stake in the company was and how that moved over time. We're like, "Okay, if this thing does what it needs to do, uh, the valuation and all that and the equity valuation will not matter." Like on the margin, it just, it, it's, it, we want it to be a binary outcome. Either it's gonna be this huge massive thing which, um, will change our lives, uh, and have a massive impact, or it goes down in crash and burning flames, which is highly likely. But, um, we weren't looking to hold onto control. We weren't looking, it's like we wanted to be, we didn't want to be king. We want to be rich, I guess. Uh, we-
- SPShaan Puri
But when, when, when you're doing like ideation and stuff though, you, you either, I think you wrote, you wrote, you wrote it here, you're down with starting s- a project with a bad idea because you're quite confident that you'll, you can figure out, you can make it great as you get into it, right?
- DSDharmesh Shah
Yes. And my, my general advice is, and this is not just, you know, my personal kind of, uh, lived experience as the new folks would say, having talked to entrepreneurs and kind of looking at the history of them, so many of them, the thing that we know them for now is not the, the idea they originally started with. Like, there, there are a handful of cases where, yeah, it went exactly to plan, this is what it was, and, and often the case is that you will not find the great idea until after you start your company, until after you start having, you know, contact with customers and actually try to do the thing. If you sit on the sidelines trying to assess ideas and look at market metrics and things like that, and it's like you're just never gonna get started. That's the kind of wannabe entrepreneurs that will kind of analyze it to death. It's like you wouldn't even know what, what a good idea was. It's hard to tell these things until you actually try something. It's, uh, yeah.
- SPShaan Puri
That's crazy.
- 1:12:21 – 1:17:01
Constructive podcast criticism
- SPShaan Puri
Um, I have one question I wanna wrap, wrap with in this one, uh, which is you seem like a, a, a pretty astute guy, like you've very, very good observations, and I think you, you, you know kind of who we are and what, what we care about and that we would value honesty. So I'm curious-
- DSDharmesh Shah
You're gonna ask me the intro question, aren't you? You're gonna ask me the intro question.
- SPShaan Puri
No, no, not the intro question. That, that, that Sam, Sam's trying to get all the intros, so he can ask you that one. I wanna know, I'm, I'm trying to make the content great. So what would be the most, uh, fair criticism you could give us on the podcast? What's your critique of the podcast, um, for you as a listener?
- DSDharmesh Shah
Oh.
- SPSam Parr
And, and there's like w- you can offend.
- SPShaan Puri
Yeah, exactly.
- DSDharmesh Shah
You can offend.
- SPShaan Puri
That's kind of what I'm teeing you up for. Say whatever it is, whatever you truly feel.
- DSDharmesh Shah
All right. Um, so partly is, yeah, I think you have to recognize that you guys are multi-channel, so you're kind of solving for the audio format. I know you have the YouTube videos and things like that. But the one tactical thing that you should fix like next week or the week after is you should apply the Shaan25 headlines thing- For headlines for every podcast episode. Like, what's the one nugget that's gonna cause people to wanna listen to that episode even if they're not subscribed? When they see it in their YouTube feed, and YouTube recommends it, it's like, oh-
- SPSam Parr
Right
- DSDharmesh Shah
... why this successful entrepreneur never played golf and, and you shouldn't either. Whatever it is.
- SPSam Parr
Yeah.
- DSDharmesh Shah
Right?
- SPSam Parr
Exactly. I'm, I'm gonna, I'm, I'm, I'm taking notes. Keep going.
- DSDharmesh Shah
But if you do that, my, my guess is that the click-through rate goes up-
- SPSam Parr
Yep
- DSDharmesh Shah
... because it can't not. Um-
- SPSam Parr
[laughs]
- DSDharmesh Shah
Right now you just kinda identify the episode number and the, who the guest is, whatever, but there's no real... Oh, maybe the topic area, but-
- SPSam Parr
Right now me and Sam don't even-
- DSDharmesh Shah
We want people to click. That's, uh-
- SPSam Parr
Me and Sam don't even touch the headlines. When Dan does it, I don't even know. I see a notification, it goes out, and I think to m- I judge the headline myself. I'm like, "Uh, that's not gonna get very many clicks," or, "Oh, that's a juicy one. That'll work."
- DSDharmesh Shah
I, I say give, uh, Dan a free pass to the, um, the Shaan copywriting course.
- SPSam Parr
Yeah, I did.
- DSDharmesh Shah
Have it like
- SPSam Parr
I put him in the course yesterday. [laughs] That's awesome. What else?
- SPShaan Puri
Okay, what else you got? Anything else?
- SPSam Parr
Of course you, you have more.
- DSDharmesh Shah
Who, me?
- SPSam Parr
Yeah, yeah. What about, w- more cr- that was a weak criticism.
- 1:17:01 – 1:20:58
Outro
- SPShaan Puri
Okay, that's great. Uh, Sam, you want anything else before we go?
- SPSam Parr
We're gonna follow up with some intros, my man. We got-
- DSDharmesh Shah
Yeah. [laughs]
- SPSam Parr
Dan, Dan, do we have an update? Are we reaching out to guests? Can we, we gotta use Dharmesh. He knows everyone.
- SPShaan Puri
Well, I'm curious, actually. You do know everybody. Who's awesome? Who's, like, particularly awesome that you're just, like, either kind of underrated or you're just like-
- DSDharmesh Shah
So-
- SPShaan Puri
... you know
- DSDharmesh Shah
... thing number one, I don't know as many people as you think. Like, I'm kinda on the internet and I do things, but I, you know, I don't, like, I don't leave my house, right? It's like, it's like you have to, in order to kind of be that person-
- SPSam Parr
[laughs]
- DSDharmesh Shah
... you have to sorta, like, interact with carbon-based life forms in real life, right? Like, I don't do that. That's not a thing I do. So it's hard to kinda build those kinds of relationships, but I would, on your list, I would have, uh... So I'm not gonna be good at intros, but I, like, Naval would be awesome to have on the podcast. Uh, he's like a, like that kind of biology level, uh, thinker. I think he'd be awesome. The audience would, would love him, so that would be great.
- SPShaan Puri
Great. We'll take that intro. Thank you.
- DSDharmesh Shah
Yeah. He doesn't know me. I mean, like, he knows me, like, loosely. I don't really message him.
- SPSam Parr
I'm gonna start calling you, uh, we'll call you Uncle Dharmesh. You gotta pick it up, my man. Come on.
- DSDharmesh Shah
I, I am, I'm willing to try. Don't, don't, don't get me wrong.
- SPSam Parr
[laughs]
- DSDharmesh Shah
I have no, uh, qualms about trying to make the intro. Just don't, uh, just manage your expectations. It's like, wow, I thought, like, Dharmesh actually could like swing things and make shit happen. I, I, I-
- SPSam Parr
[laughs]
- DSDharmesh Shah
... that's the truth.
- SPSam Parr
Anyone else?
- DSDharmesh Shah
Someone I do know that I think would be good on the podcast, uh, Drew from Dropbox I know really well, so that's an intro I could make. Uh-
- SPSam Parr
What's up?
- DSDharmesh Shah
... he's at Dropbox.
- SPSam Parr
Yeah.
- DSDharmesh Shah
That would be a good one.
- SPSam Parr
I heard he's an amazing singer. Is that true?
- DSDharmesh Shah
He's, he's, uh, he, he's a good singer and actor.
- SPSam Parr
[laughs] For a founder. Amazing for a founder is what I mean.
- DSDharmesh Shah
He's legit. He's legit. Um-
- SPSam Parr
Yeah.
- DSDharmesh Shah
He's good.
Episode duration: 1:20:58
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Transcript of episode 5WOzdCZRDnU
