Author: Drew Neisser

A Wine Lovers Guide to Entrepreneurial Success

Posted on by Drew Neisser

Plato’s words, “No thing more excellent nor more valuable than wine was ever granted mankind by God,” would find no argument from Snooth co-founder Philip James, who turned a 30-page business plan into a profitable media business in under four years. Just before handing the reigns over to a new CEO, James spent an hour with me, reflecting on his company’s growth to-date and providing, with a little help from other illustrious oenophiles, a wine lovers guide to entrepreneurial success.

Life is too short to drink bad wine–Anonymous

As is often the case with successful start-ups, the original idea may not be the big idea, so entrepreneurs must be prepared to pivot. Explained James, “Snooth was originally going to be an installed kiosk company,” that provided detailed information on wine in understaffed grocery stores. Having built the database and a demo site to support the kiosks, James and his partner, “fumbled around as every-start up does looking for a revenue model.” Fortunately they quickly eschewed the hardware business for a software-driven alternative made possible by the well-timed rise of smart phones. Noted James, “we realized people are just going to use it on the phone, they don’t need it in the store.” Thus Snooth.com, the ultimate wine lovers resource, became their focus and mobile iterations became essential.

Wine gladdens a man’s heart–Psalms

Once you build your product or service, it is essential that you really understand what business you are in. Having grown Snooth.com into the world’s largest wine database with over 5 million unique searches per month, the Snooth team does not see themselves as educators. Explained James, “it is not our job to make you an expert in Burgundy, it is actually our job to entertain you and give you what you want, otherwise you just don’t come back.” Recognizing the importance of entertainment to the Snooth.com experience, the editorial team covers a wide range of products and topics from expensive Bordeaux’s to cheap chardonnays, from baby backs to box wines. If consumers respond well to a particular topic, more posts along a similar vine follow thus enhancing engagement.

I like best the wine drunk at the cost of others–Diogenes the Cynic

An essential ingredient to rapid growth is the ability to find new customers on someone else’s dime. With site traffic up 60%, page views up 100% and time spent on the site up 15%, Snooth is expecting triple-digit revenue growth in 2010. A large part of this growth can be attributed to numerous partnership deals on sites like Epicurious, Yahoo! And MyRecipes.com on which Snooth powers wine pairings with recipes. Explained James, “we reach about 10 million people per month through these partnerships which are branded and link back to Snooth.com.” Because these are revenue sharing deals, “there are benefits for both parties, they get unique content and it helps recipe sites tap new ad verticals,” enthused James. It also means that Snooth can avoid investing in what James calls, “paid marketing.”

Wine is the most healthful and most hygienic of beverages—Louis Pasteur

When it comes to the health of a start-up, it is important to have multiple means of customer engagement, staying top-of-mind and encouraging word-of-mouth. Adding over 1000 registered users a day, Snooth.com has done an especially good job with its newsletter, which “goes to a quarter of a million people and is Tweeted, ‘Liked’ on Facebook and shared really extensively,” offered James. In addition to pushing out content, consumers are encouraged to participate on the site itself. Explained James, “users used to come just to read about wine and look up prices and over time that has expanded into an active forum.” This rapidly expanding community has multiple tiers, with the most engaged considering Snooth’s headquarters a home away from home. Noted James, “the top 1% have my cellphone number, email me and come by the office unannounced, so we know what they are thinking!”

Wine is a puzzle yearning to be solved–Aaron B. Sherman

Web-based businesses like Snooth.com capture a tremendous amount of data, data that can be used to increase customer satisfaction AND to create new revenue streams. Currently, Snooth “serves over 41 million food and wine matches per month and we expose some of the data to wineries, and that is really helpful to them,” explained James. Snooth also encourages wineries to certify their content which 2,700 wineries have done thus far increasing the accuracy of the data and improving the ranking of those wineries. Each winery can also access their own data through a merchant interface, so they can see in real time, “which area in the country or the world have the most interest in their products right now,” reported James. Though this information is very helpful to the wineries, James admits that when it comes to data mining, “we could do a much better job.”

“Wine is inspiring and adds greatly to the joy of living” Napoleon

While most entrepreneurs can inspire the launch team, there comes a point when they need to ask themselves if they are the person to bring long-term joy to investors. When I asked James if he was the guy that could get Snooth to $20 million in sales and beyond, his response made the announcement of his successor as CEO one week later only a modest surprise. James spoke to the need of any entrepreneur, “to hire really smart people, way smarter than [he is] and to give them responsibility.” “I think people like me are really good at vision, creativity, hiring and inspiring the team,” explained James. James went on to tout his soon to be successor, Rich Tomko, as “an operations guy who knows how to make it from $5 million to $20 million.”

Final note: As a long-time member of the Snooth community and a wine lover from way back, I must ultimately side with Alexander Fleming who said,”Penicillin cures, but wine makes people happy.” And it would really make me happy if Verizon had the iPhone so I could use Snooth’s mobile app in NYC liquor stores to find my faves at even better prices!  This article first appeared on FastCompany.com.

What Conference Organizers Can Learn from the Texas Rangers

Posted on by Drew Neisser

When the mighty Alex Rodriguez watched the final strike whiz by him it was a fitting end to a pathetic performance by the most successful franchise in the history of professional sports.  The unheralded Texas Rangers had not just beaten the Yankees, they had demolished them on every front, a fact that made me exceedingly cranky while attending several recent social media conferences.

Stewing in defeat as a sub-par speaker droned on, my mind drifted back to the Rangers, wondering how this particular collection of players managed to out-hit, out-steal, out-field, out-pitch and even out-fun the nearly immortal Yanks.  It didn’t take long to conclude once again that payroll alone does not determine outcome, that coaching, chemistry and clutch performances by both stars and unheralded newbies carry the day whether you’re on the field or at the podium.

Conference Organizers Must Coach the Presenters

In their series against the Yanks, the Rangers manager played “small ball” to perfection, stealing and bunting runners into scoring position at every opportunity.  This was undoubtedly the result of careful coaching long before the big games.  Conference organizers take note.  If you aren’t holding highly structured advanced calls with your panelists and speakers, the quality of the output will suffer dramatically.

Speakers need to be coached, given tight limits on the quantity of slides and told in advance the kinds of questions they might be asked by the moderator. Importantly, there needs to be a moderator, who can cut off the windbags before they ruin it for the rest, keeping the conversation moving and summarizing the results at the end of the panel.  Without these things the audience will drift away, checking email or worse yet complaining to others via their Twitter feeds.

Chemistry Matters

In their victorious 2009 season, the Yanks were all giggles, with AJ Burnett using whipped cream to douse the daily hero.  This year it was the Rangers who had all the fun, making a goofy antler sign with two fingers after each of their nine stolen bases.  Their chemistry was particularly apparent in the dugout during the games and in their on-field victory celebration, when they sprayed each other with ginger ale not champagne out of respect for Josh Hamilton and his past struggles with alcoholism.

Some of the panel discussions I saw recently struck out, challenging drying paint as a major league soporific.  The panelists seemed completely content to agree with each other and the overall energy was just plain foul. And while an enthusiastic moderator can liven things up, the organizers really needed to think through the topics of discussion, seeking opposing views as well as differing personality types to keep everyone including the audience on their toes.

Clutch Performances Carry the Day

In the recent American League Championship Series, the Texas Rangers out-hit the Yankees on all measures, scoring twice as many runs with a team batting average that was 103 points higher than vaunted Bronx Bombers.  As expected superstar center fielder Josh Hamilton came through in the clutch as did many of his lesser-known teammates, including a rookie shortstop named Elvis who managed to get a hit in all six games.

At the recent Pivot Conference in New York City, clutch performances by a range of presenters from the always stunning Arianna Huffington to the erudite Doug Rushkoff, from the scholarly Kit Yarrow to a rookie named Alexa Scordato, carried the event over the top, distinguishing it from a host of also-rans.  These presenters commanded your attention with both style and substance that entertained and enlightened, making one’s decision to leave the office a clear victory for all concerned.

Final note: Despite losing to the Giants in the World Series, they Rangers have left a mark on baseball, playing the roll of David to the Yankee Goliath.  Bitter as I was, I couldn’t help be touched when the series MVB Josh Hamilton admitted shedding a tear of pure joy after the final out. To push this analogy just one step further, I only wish all conference organizers had this kind of heart, striving for the extraordinary even in the face of limited resources, doubling up on prep time long before the game’s afoot, insuring all attendees head home happy.

How HopStop is Giving Google the Run Around

Posted on by Drew Neisser

Like the sling-wielding David of old, Joe Meyer, the CEO of HopStop, fears not the battle before him. Instead, he welcomes it, having already faced off against Google twice in his career. “For some companies, it’s intimidating and scary,” explained Meyer, but “Google leaves a lot of crumbs on the table,” crumbs that have helped HopStop achieve profitability, positive cash-flow and extraordinary growth over the last 18 months. How Meyer and his small band of compatriots at HopStop have stayed out of harm’s way while building a loyal army of fans is an enlightening tale of entrepreneurial chutzpah and dead-eye focus, all inspired by The Boss.

Born to Run: Product above all

When Joe Meyer arrived at HopStop 18 months ago, the pedestrian navigation service already had an avid group of followers, having been the first in the market in 2005. What attracted Meyer to HopStop, in addition to the fact that Google’s entry into the space validated the market, was the utilitarian nature of the product and “the fact that the technology was very difficult to replicate—you can’t build it in a weekend.” That said, Meyer put all his energy and that of his team into “enhancing the user experience.” Explained Meyer, “people come to our site to get directions and we have to nail that experience and [though it’s very good], it can get even better.” “Unless you have a frictionless user experience, it’s tough to justify doing nice-to-have’s versus must-have’s,” offered the relentlessly focused Meyer.

Streets of Philadelphia: Expand from the core

In early 2008, HopStop was in six markets and by the end of 2010, Meyer expects they will be in 26 markets. This remarkable growth required a technology overhaul and again, a singular focus on their core product offering. Explained Meyer, “We spent almost a year re-writing our entire routing engine to make it more scalable,” so pedestrians can route themselves not only within these cities but from one city to another. Explained Meyer, “When I go to Philadelphia [from New York], I never go to the airport–we’re all about alternative forms of transportation and pedestrian navigation.” With his newly engineered routing engine, Meyer expects to “scale to hundreds of markets” in the next year or two, a fact that will bring cheers from Carnegie Hall to Independence Hall and then some.

My Hometown: Don’t forget your first fans

The way I found my way to Meyer’s office was rather unusual. As I regular user of HopStop, I was one of several hundred thousand MyHopStop users who received a personal email from him in which he explained some recent changes they’d been making to the service. I responded to his note and he quickly responded back, something I wasn’t really expecting. Meyer had, in fact, sent out the message to HopStop’s most avid fans from his own email address which he admitted was kind of scary. “We need to communicate directly with our users and if we are doing something that might screw things up or if there are opportunities for us to improve, then we need to give our users the forum to voice their thoughts to us,” explained a contrite Meyer. Having dropped the borough boxes from the NYC navigation page early this year, Meyer and his team quickly learned the error of their ways resolving the issue with refreshing honesty and measured haste.

Hungry Heart: Have your fans do the marketing

After I noted that HopStop’s website last posted press release was from back in February, Meyer admitted, “we’re kind of anti-marketing, anti-PR.” Meyer explained that “in Silicon Valley, every startup is trying to get buzz, issuing press releases every week and I think its just noise.” Instead, Meyer devotes all available resources to engineering, believing that satisfied users will wave the triumphant flag, which indeed is exactly what happens. While this approach might not work for every company, HopStop users repeatedly tell Meyer, “Wow, you’ve really made my life easier,” inspiring a “pay it forward mentality” among his customers. After telling me several personal encounters with customers who expressed their love for HopStop, Meyer noted, “no marketing in the world can replicate the power of word-of-mouth and a positive personal referral.”

Dancin’ in the Dark: Let partners extend your reach and your revenue

While Meyer is thrilled with all the positive word of mouth HopStop receives, he by no means relies on it exclusively to spread the word. In addition to a massive SEO program that treats each direction search on HopStop as “taggable” content, HopStop also licenses its API. “We power directions on thousands upon thousands of sites throughout the edges of the Internet, both large and small,” noted Meyer. A large percentage of these are co-branded, with ad revenue being split between the host site and HopStop. “This gives the publisher a service they aren’t going to build for themselves and a value-add for their users, which also generates incremental revenue for both companies [thereby creating a win-win-win situation]”, enthused Meyer. And in the process, millions of more users have come to know and appreciate HopStop powered-directions from sites like The Wall Street Journal, TimeOutNewYork, NewYorkMag.com and many others.

Glory Days: Don’t get stuck in the past–go mobile or go home

Starting as an online utility, HopStop was quick to realize the importance of a mobile offering to their service. Among the first to offer Web-to-SMS and SMS-to-SMS routing functionality, HopStop has embraced mobile in a number of other ways. In addition to having a top ten iPhone app within the iTunes navigation category, HopStop also has a widely popular mobile site and a Blackberry launcher. Meyer noted that mobile usage of HopStop is growing “several hundred percent per year,” outpacing the growth of an already healthy web-based service. Recognizing the need to go beyond the iPhone and mobile web, and an in continued effort to be multi-platform, Meyer explained that, “Our users are telling us they want an Android App, so we’ll have an Android App launched by the end of the year.” An added benefit of going mobile is that customers are able to provide feedback on the spot, keeping Meyer and his team on their toes 24/7.

Final Note: Before we parted, Meyer told me of his admiration for Bruce Springsteen and “how The Boss resisted the temptation to do too much too soon,” after emerging from a three-year legal battle in his early days. As the leader of of his own band at HopStop and much like his favorite musician, Meyer is staying focused and setting the stage for record growth, without countin’ on a miracle. For the greatest hits of my interview with Meyer, click here.  This article first appeared on FastCompany.com.

13 Things Every Entrepreneur Can Learn

Posted on by Drew Neisser

Here are the highlights from my interview with Joe Meyer, CEO of HopStop, one of my favorite online utilities.  I got in touch with Joe after he sent an email to me and thousands of NYC-based users apologizing for a recent change to the site that ended up needing to be adjusted after user feedback.  (A shorter post will appear on FastCompany.com at some point soon).

1. Sometimes the founder needs help

“I’m actually not the founder; I’m the CEO who took over for the founder [18 months ago]. Often times in successful startups, the founder steps aside after a certain point and the company matures and grows to a certain level where you need a different type of leader or CEO to take the company to the next level and beyond. I came from Silicon Valley where I spent around a decade working for highly successful companies such as eBay, ,  and as a result I’ve seen this play out many times before. HopStop is no different.  I’m personally responsible for taking a very good service, a very strong brand, a good vision and putting a business around it and making the company more successful and the user experience even better.“

2. Having a large competitor is a good thing

“One of the things among many that intrigued me about HopStop when I was first approached with the opportunity was the fact that we compete directly with Google, and as a result Google is our only true competitor in terms of offering  an analogous service and that’s a nice place to be in. For some companies, it’s intimidating and scary. But I’ve seen this play out before; Google not only validates markets but it leaves a lot of crumbs on the table. If you can focus in on those vertical areas that Google pays attention to and spends resources on (but doesn’t focus all its business on) and if you focus on it much more than they do and you create a better user experience, then that leads to opportunities.”

3. Stay focused

“We were the original pedestrian navigation service and we still consider ourselves to be the best.  Navigation is all we do. We come to work every day with one ambition and that’s to provide the best user experience possible. We’ve identified many ways to  further impress our users, but we’ve resisted the temptation to build them because we’re still trying to accomplish the core objective of having the best routing experience possible.  Without that, none of those other opportunities will matter.  Our primary job is to get someone from point A to point B in the most efficient way possible. Once we’re able to do this better than anyone else, then we’ll look at additional bells-and-whistles but  you need people using your core service en-masse to do those other things.”

4. Be a “must-have” service versus a “nice-to-have” service

“People need to know how to get to-and-from where they need to go. It’s part of your everyday life when you’re going to interviews and meetings and social gatherings and visiting relatives and friends. If you screw that experience up, then people get mad. But if you get it right, then you have a loyal user. Often times we get compared to companies like Foursquare because they are another location-based service and as great of a service as they offer, I don’t consider that a must-have. It’s kind of nice to have. You know, do I check in when I get to the bank or not – maybe, but first tell me how to get to-and-from the bank. That’s useful.”

 

5. It’s not just about the size of your budget

“Probably the most impressive thing is that HopStop had built a strong brand, a strong following, a great user experience, competing against  great companies all on a shoestring budget. We’ve raised very little outside capital to date and I was very impressed with how much the company could accomplish so much with so little in terms of outside funding. We’re very judicious with our time and money, and we spend both very wisely.?

6. Revel in direct user feedback and admit your mistakes

“Sometimes we don’t get it right, but I think that’s another thing that differentiates HopStop versus the Goliaths that are out there. We highly value user feedback. Speaking of, you saw my note to HopStop users. That was a note that I sent to hundreds of thousands of users and needless to say, you aren’t the only person that replied. I’m replying to every single one of those emails and we invite and encourage this sort of feedback. The users tell us what they like, what they dislike, what’s working, what’s not. They find bugs for us that we fix and prioritize and, you know, we use that feedback (of the people using our service everyday) to improve our service, because  there’s not enough of us here at HopStop to identify these issues. Millions of users have to bang away at it 24/7 and tell us if we’re doing a good job or not.”

7. Think about providing a genuine service, not marketing hype

“We’re kind of anti-marketing, anti-PR. Some of it is intentional; some of it is unintentional. Unintentional because whatever resources we have we devote to the core business and to engineering, and intentionally because, again, I came from Silicon Valley where every start up is trying to differentiate themselves and trying to get buzz and send out press releases every week and most of the time I think it’s just noise. I mean if people find you interesting enough to write about, they’ll write about you, and they’ll come find you. You’re a user right? And you find it interesting what we do, and therefore that will make for a much better story than it would if it were being written off of a press release. I realized this dynamic when I was a GM at eBay. Many of the best stories that were ever written about eBay were those written by avid eBay users who just so happened to be professional writers as well. HopStop is no different.”

8. Leverage partnerships to create a win, win, win

“We forged a very strategic, integrated partnership with Connect by Hertz, which is the largest competitor to Zipcar, almost a year ago. It’s a multi-prong partnership where if HopStop users realize they don’t want to take a trip via mass transit, they can rent a car for an hour or two or three. We brought-in the reservation functionality from Hertz directly into our user experience and then HopStop brought its direction/routing functionality directly into Connect by Hertz’s site so that we can route you to any one of their parking lots (based on where you’re coming from). It’s a very interesting, value-added partnership for both companies, but most importantly,  it directly benefits the users of each service.”

9. Being mobile means more than just having an iPhone App

“We have a top ten iPhone app within the navigation category of iTunes, which is the most popular app category on iTunes so we’re right there against AT&T Navigator, MapQuest, among others. That’s very impressive for a small company like ours. As a result, we’ve seen tremendous growth in our iPhone app usage and downloads. We also have a very popular and widely utilized mobile site, which is m.HopStop.com (or HopStop.mobi). We’ll also have an Android app launched by the end of the year, and again our users are telling us what they want. We also have very advanced text messaging capabilities  and can power direction via SMS. So if you’re a MyHopStop user and you text us a message in which you list a starting address and a destination address, we’re fire-off a route to your cell phone within seconds. So mobile is a very large opportunity for us. Our growth on the mobile side is several hundred percent year-over-year. “

10. You know you’re in a good spot, when you’re brand becomes a verb

“Our founder was recently speaking with a news editor from The Wall Street Journal and she was talking about her first time using HopStop and someone in her social circle said, ‘You should HopStop it.’  While HopStop is not quite like Kleenex, our users do use the word HopStop as a verb – ‘You should HopStop it.’  Considering that HopStop is still a start-up, the use of HopStop as a verb is quite amazing and very complimentary, and it goes to show how we were the first-mover in this market and how people equate pedestrian navigation with us. You can’t buy that endorsement. No marketing in the world can replicate that power of word-of-mouth and a positive personal referral. At the end of the day, it’s still a job for us, but it’s certainly nice to know the service you’re providing and improving is helping millions upon millions of people.

11. Look for the hidden goldmines

“I think where an opportunity lies for us is we’re sitting on a ton of data. We’re sitting on a ton of transit data, which makes our routing possible, but also we know where millions upon millions of people are traveling to and from everyday.  We currently utilize that information from a geo-targeting ad-serving perspective (to help us monetize our traffic and bring-in dollars to pay for employees and pay for engineers), but I think there’s a realistic opportunity for us to highlight and promote the trends that are bubbling up from those millions upon millions of searches.”

12. Find your unique SEO opportunities

“We get a good amount of our traffic from SEO. We do SEO a little bit differently than other digital media companies. We don’t have traditional content? We’re not putting out articles. The directions are our articles, are our content. We SEO those to the hilt.”

13. You can be a social brand without expending resources on social media

“We’re not a social media platform. We don’t have the big “wow” that social media sites like Facebook and Twitter have. That said, we have incredibly passionate users and they’re users that voice their opinions and use our service as if we were a social media platform. Very passionate, very vocal, very engaged, very willing to share their opinions about good and bad. People are using HopStop to do inherently social things. People are using HopStop to go meet other people. They’re using HopStop to go figure out how to get to that restaurant, to go to that business meeting, to go out to the Hamptons or come back from the shore, or to meet their friends in the park, or to go to the summer concert series, or go to that rooftop bar. They’re doing it to be social in the real world, not behind a computer.  As a result, HopStop is a means to an end in that we help enable people to get to those popular locations at which they plan to interact and be social with one another.”

“That said, there are definitely distinct opportunities for us to become more social within our core user experience, to engage with our community more on the site itself and to infuse social media elements into our experience, whether it be Facebook Connect or the Facebook Like button or Twitter Places or potentially Foursquare check-ins. So we will likely do that, but we need to be very smart about it because, again, people come to our site to get directions and we have to nail that user experience and we’re still   in the process of perfecting that.”

Paul Revere, JFK, Aerosmith and Halligan?

Posted on by Drew Neisser

How Brian Halligan, CEO of HubSpot, Hopes his Fast-Growing Company Can Help Shift “Modern Marketing” to Beantown

Brian Halligan is nothing if not a dreamer. In his dream, the Redsox win the pennant every year, hundreds of thousands of small businesses use HubSpot and Boston becomes the epicenter for “modern marketing” that eschews traditional media in favor of his highly digital, “Inbound” approach. And while Halligan can’t keep his beloved Sox off the Disabled List, he is well on his way to realizing at least part of his dream, building a company that has taken small business marketing to a new, more cost-effective place.

How Halligan and his compatriots at HubSpot have gotten this far is a potent reminder of the need to think big while minding the store, blending a Puritanical work ethic with an Aerosmithian will to “Dream On.” Whether or not HubSpot and Halligan can transform Boston into the Silicon Valley of marketing, which will require an entire community of like-minded marketing services providers to take a ride north on the Metroliner, my interview yielded several location-neutral insights for any entrepreneur.

The future is coming, the future is coming

With Paul Revere-like clarity, Halligan is quick to warn of the impending doom of traditional marketing. Noted Halligan, “My whole thesis in life is that the way people market their products is broken, that TV/radio/print and interrupting people with spam messages and cold calls [doesn’t work].” “I actually think that Madison Avenue is going to crash because no one is watching those ads they’re making anymore and I want Boston to be the next generation Madison Avenue,” explained Halligan, who helped to organize Future M, a conference in early October that focused on “modern marketing,” and featured 50 or so Beantown marketing innovators.

The company on a hill

When John Winthrop famously declared Boston the “city on a hill,” he certainly anticipated the fervent city-centric loyalty of Brian Halligan. “I’m from Boston and I’m a little pissed of that Silicon Valley has out-innovated us in the PC revolution and then the internet,” exclaimed Halligan. Sharing Winthrop’s evangelistic bent, Halligan noted his desire to “revive the area in terms of the internet and around marketing,” building as big a company has he can that maintains its New England roots. Even though Halligan aspires to a West coast-style company like Google or Amazon, he makes it clear he has no interest in selling out to one of these giants and seeing the company leave town.

Not the same old song and dance

Sometimes referred to as “the Bad Boys of Boston,” the band Aerosmith made its mark by blending elements of pop, heavy metal and R&B to create their own unique sound. So too has Halligan and his team created something new by blending a number of tools “into one simple relatively easy to use package for businesses to take advantage of.” Designed to address “a massive shift in the way modern humans shop and learn,” the HubSpot platform includes software for blogging, social media monitoring, marketing analytics, email and lead nurturing. To prove HubSpot has a hit on their hands, Halligan noted that they have about 3,500 customers today up from 1400 a year ago while revenue has grown to $20 million from $7 million over the same period. And that’s got to music to Halligan’s VC backers if not to the rest of Boston.

Ask not what you can do for your company, ask what your company can do for its customers

JFK’s famous call to action inspired an entire generation to lead by doing. This notion is at the heart of HubSpot’s success, enabling and encouraging businesses “to create remarkable content that becomes like a magnet to pull people in.” Halligan calls this approach Inbound Marketing, an approach he preaches about in a book and on a blog of the same name while practicing it religiously at his own company. Noted Halligan, “we create tons and tons of blog articles, we create eBooks, we create webinars, we create a weekly TV show” all designed to draw people into HubSpot often by way of Google without having to buy keywords. Explained Halligan, “a webinar works for years and years whereas with Google ads, you just throw money at it month after month.”

Good Grade Hunting

Boston boys Damon and Affleck took Hollywood by storm with their Academy Award-winning debut. HubSpot generates good will and great leads with it highly praised “grader” tools. These free tools rate a company’s performance on keyword search, website, blogs, Facebook and even Foursquare. Offered Halligan, “if they get a crappy score, they say, ‘who are those HubSpot guys?’ and they end up in our funnel,” watching a demo, trying the software and ultimately buying. The idea according to Halligan is to “free up as much knowledge and content as you possibly can and use that knowledge to pull people into your business and try to convert them into customers.” Halligan also noted that their customers see meaningful results in 4-6 months, averaging 13% increases in sales leads that compound on a month to month basis.

More than a Feeling for Culture

The band Boston exploded onto the rock scene in the mid-seventies but after two multi-platinum albums, management issues got the best of them. Halligan is keenly aware that rapid growth brings its own set of problems and works diligently to keep the band together while bringing in fresh blood. Explained Halligan, “when you grow this fast, everything breaks—many of the systems you put in place break and you are constantly revolving and reorganizing.” Not wanting to be “just another band out of Boston” that imploded, Halligan and his cohorts put extra effort into clarifying and cultivating their corporate culture and mission. “When we do annual reviews of employees, the culture is part of that review—there are seven points in our culture and we grade them [on each],” noted Halligan. It is little wonder both employees and clients seem to sing the praises of HubSpot.

Final note: With over 80% of advertising still going through traditional media channels and a sizeable percentage of that flowing through New York-based agencies, shifting the epicenter of “modern marketing” to Boston won’t happen overnight, if at all. That doesn’t bother Halligan who has accepted this mission as his “life’s work,” and whose accomplishments to date justify further consideration. As such, I’d encourage you to read more of my interview, as I am in the end a New Yorker, too busy weeping over the Yankees’ demise to belabor this further.  This article first appeared on FastCompany.com

Top Tips From One of the Fastest Growing Small Businesses in the US

Posted on by Drew Neisser

Here are some of the highlights of my interview with Brian Halligan, CEO and co-founder of HubSpot, one of fastest growing small businesses in the US.

Identify an unmet need

“I was a venture capitalist before I was doing HubSpot, and I was trying to get the portfolio companies to use modern marketing to create blogs to pull people in through the search engines, social media sites, and the blogosphere, and I had a hell of a time making that shift. I had to hire a ton of consultants and a ton of IT people and buy 6 different software packages, and it was very hard to pull off. So that was the gap I basically saw in the market and thought, ‘How do we pull all this stuff together into one simple package and then transfer as much knowledge we can from our heads to their heads and get them to shift the way they market?””

Eat your own dog food

“We are the number one user of our own product. I personally use it every day. A key part of our growth is that we are able to use the product. We feel the bugs at just the same time as our customers feel the bugs, so we fix them as quickly as we can. We know what we want in a software. We’re on the cutting edge of all this stuff. Like Dan Zarrella, for example, is one of our employees. He’s a real cutting edge kind of guy. He’s more leading edge than most, so we try to learn as much as we can from him and build it into the software so that mere mortals can use it, not just Dan Zarrella.”

Replace messaging with valuable content

“The basic idea behind inbound marketing, this marketing transformation I’m talking about, is you want to create remarkable content that becomes a magnet to pull people in. So we create tons and tons of blog articles and the blog articles I wrote 4 years ago still are like magnets, pulling people in through Google. We write eBooks. We create a weekly TV show, HubSpot TV. And we build these Graders, which are basically little tiny pieces of our product that we break off and we offer for free for people to run their site through, and they get a diagnostic on it and they get a score, and based on that score – it’s 1 to 100 – if they get a crappy score, they say, “Well who are these HubSpot guys?” and they end up in our funnel and we show them a demo, take them through a trial and they end up buying the software. So it’s very much part of our philosophy of ‘How do you free up as much knowledge and content as you possibly can and use that knowledge to pull people into your business and try to convert them into customers?’”

Build a community

“There is definitely a big community forming and we do a couple of things to foster it. We have Inbound Marketing University where you can come and there are 15 online lectures you attend – and there’s a test at the end. If you pass the test, you get a badge and you get Inbound Marketing Certified, and those have been showing up on a lot of people’s LinkedIn profiles and resonate these days– our customers are dying to hire them. The second thing is there is an Inbound Marketing LinkedIn group that is very, very active. I don’t know how many people are in there. I haven’t looked recently, but it’s quite an active group in there that’s cranking away. There is a HubSpot partner group. There are a bunch of splinter inbound marketing communities that keep popping up, and we’re just trying to do our best to keep up with them and help them and foster them, and it’s been a big part of our success.”

Inspire a compelling culture

“Culture turns out to play a huge role. When my co-founder and I started the company…in the first two years of the company we didn’t mention the word culture. It wasn’t something on top of our minds. And then about two years in, we did a survey of our employees – the Net Promoters survey. We asked them two questions. Question number 1 was “How likely are you to refer HubSpot to another friend of yours to join us?” on a scale of 0 to 10. Then the second question was “why?” When we got responses from the ‘why,’ we probably had 60 or 70 employees at this point. The two big reasons people like or loved working at HubSpot was 1 – the culture. The culture? We didn’t know we had a culture. And number 2 was that they loved their fellow employees. So at that point we were like ‘OK, it seems like we got something here.’ Why don’t we try to institutionalize the culture and make sure that that doesn’t break. So we hired one of our old professors from MIT to do a project with us to clarify the culture and clarify the mission. Then we tried to institutionalize it in the company. When we do the annual reviews of our employees, the culture is part of that review. There are 7 points in our culture and we grade them. It has become a great part of who we are. I wrote an article about our culture that has been very popular on the Internet. It is called Start up Culture Lessons from Mad Men.”

Don’t try to do it all yourself

“[If you’re starting a business, the] first thing I would find is a great co-founder. It is lonely at the top. Don’t find just any co-founder. A mistake that so many entrepreneurs make is that they find co-founders just like themselves. When you look at the special stars of the early successful teams, like Jobs and Wozniak, there are usually two people with someone who can actually build something and someone who can actually sell something. So my advice would be to find a great co-founder who would compliment you and, very early on, figure out the equity split and figure out the roles, because so many companies die because of a founder conflict.”

Be open-minded about your idea

“Another piece of advice I would give to a founder is to be very open-minded about your idea.  There is a great book called Founders at Work, written by a journalist on the west coast [Jessica Livingston]. She interviewed about 100 entrepreneurs that were successful and I would say that 90% of the entrepreneurs started out with plan A and ended up making money on plan B or C. It took them a while to meander to the idea, so don’t get too stuck on your original idea. Be very flexible and take a while to meander your way to the right idea. The third piece of advice is not to raise venture capital too early. Make sure, if you are going to do venture capital, that your incentives are in line with the VC and that you really want to swing for the fences. Once you are backed by venture capital you are committed down this path. One you become venture backed, you are committed to trying to hit a home run, and you can’t go back to being conservative.”