Today we’re super excited to announce that HubSpot has been named the second fastest growing software company on the Inc. 500 list and the 33 rd fastest growing company overall. We especially want to thank our 5,000+ customers – this award is actually for you. We just make the software, but you all bring it to life and are responsible for all the awesome results. If you want to read more about the announcement, click on over to the HubSpot Inc. 500 press release .
The purpose of this article is to share with all the marketing professionals and business executives who read this blog what we think are some of the keys to building a hyper-growth company that has potential to make it onto the Inc. 500 list.
#1 - Find a Huge Market Where a Big Disruption Is Happening
Of course you want to find a market where there are billions of dollars (or Euros, etc.) spent every year. However, just a big market isn't enough; you need a market that is going through or will go through a big disruption. Without this disruption, the established players will have too much of an advantage. Some examples of companies who have successfully leveraged disruption include Apple's capitalization on disruption in the market for music (originally driven by the creation of digital music formats and services like Napster) or Amazon's ability to take advantage of the disruption in retail or commerce (made possible by the rise of the world wide web). For HubSpot, billions of dollars are spent on marketing every year, so the market we chose qualifies as big. But there is also a huge disruption happening that is driven by search engines, social media , the DVR, YouTube, mobile devices and more – all of which put the customer back in charge of the sales and marketing relationship. This disruption has given rise to an opportunity for all the companies that sell tools and services for inbound marketing, like HubSpot.
#2 - Create a Blue Ocean by Entering That Market With a Unique Solution
The third article ever published on this blog was about Blue Ocean Strategy (published in September 2006, it is one of the top 20 most popular posts of all time and has generated over 800 inbound links). Read that article to learn more, but the basic concept is that you want to have a different product or service offering than everyone else so you don’t compete directly with other companies in the market. A classic example is how Southwest Airlines entered the market with much lower prices but also far fewer frills and only served secondary airports. The company's differentiation may not better in every possible way, but it is different in a couple of important ways that appeal to an important set of customers. For HubSpot, there are lots of companies that offer tools for components of inbound marketing (for instance, a blogging tool, a social media marketing tool, an analytics tool, and email marketing tool), but we built a complete inbound marketing software platform that brings everything together into an all-in-one system .
#3 - Build a Scalable Marketing Machine
If you start by growing your company using outbound marketing to purchase leads, perhaps you pay $50 per lead. When you are buying 100 or 1,000 leads per month, that isn’t so bad. But if you need to generate 40,000+ leads per month like HubSpot does today, you’d be spending in excess of $2 million per month on marketing. Ouch! For hyper growth, you need to build a marketing program that allows you to attract more and more potential customers at lower costs. Inbound marketing is critical for that – breaking the cycle of paying for each and every lead and building marketing as an asset that generates new leads at zero marginal cost. We’ve done that at HubSpot, and are spending far, far less than $2 million per month on our marketing while still generating well over 40,000 new leads per month to feed our growth.
#4 - Assemble a Great Team
It may be cliché to say, but the team does matter. Since I joined HubSpot in early 2007 (when the team was 5 people) through to today (we’re almost 300 now), I have always been impressed by the people. They are the smartest and most driven group of people I have ever worked with. We try to have a very thorough interview process; people usually sit through 6-8 interviews before they get hired, and I think we ask some really tough questions during that process. We also have created an atmosphere that attracts a lot of candidates to us , making it easier to find top-notch people.
#5 - Have a Purpose or Mission
Just “trying to build a big company” or “making a lot of profit” is not actually something that most people can get excited about. The reason why folks work on the weekend to build a new feature for our software or stay late at night to help a customer with a problem is not because the company will make more money. The passion behind the team that helps drive the success of the company is around our mission. HubSpot wants to help millions of businesses grow by enabling them to transform their marketing. This is a purpose or mission much nobler than just making money – and while we hope to make some money along the way, what drives us each and every day is seeing thousands of customers using our software and getting great results .
Want more details? Did this article make you interested in a deeper dive into this topic? I will be hosting a free webinar about Insider Secrets on How to Make the Inc. 500 List in a couple weeks. Sign up for that, and I will dive deeper into the topic and take live Q&A from those in attendance. And please let me know what other tips I might be missing in terms of building a hyper-growth company in the comments below.