Mark Roberge joined Hubspot as its SVP of WW Sales back when it was just 3 people working out of a garage. With an engineering and MIT Sloan background, but no career history in Sales, Mark applied a data driven, quantifiable and scientific approach to produce a Sales formula that helped grow Hubspot from that 3 person team in a garage to $100 million ARR, an IPO and a place in the fabled Unicorn Club.
Now Chief Revenue Officer at Hubspot, Mark took the opportunity to speak with SaaScribe in our new podcast, The SaaS Revolution Show, to discuss his new book, The Sales Acceleration Formula: Using Data, Technology and Inbound Selling to get from $0 to 100 Million.
So why was it that Brian Halligan and Dharmesh Shah, the CEO and CTO of Hubspot, hired an engineer to head up Sales? Was it because you were pals? Or was it much more than that?
It was a combination of a relationship that triggered it and because they’re also MIT guys. I met them there. So it’s a little bit like ‘here’s a smart entrepreneur’. Dharmesh had even backed me in my last company as an initial investor so there’s a relationship there. That was part of it.
Another part was I was helping them a day a week for a year before they offered me the position and that day a week was largely spent selling, and I brought in quite a few customers. So there was a little bit like a known execution risk, that was probably off the table to some degree. To be quite frank, both Brian and Dharmesh, if you look at everything we’ve done from how we positioned our value prop from the beginning to our vacation policy to how we think about culture to even how we’ve gone to market, they really try to challenge the norm. Like doing things the way that it’s traditionally been is like the far backup plan that we occasionally do because it’s probably still relevant. I think this is just another example where they wanted to challenge the norm and felt like today organisations are sitting on much larger mounds of data. This is no longer about having this fancy rolodex, taking people golfing and treating them to good wine and going out in your geo territory to bang on the doors of your prospects. This is about managing a relatively large influx of demand across a large inside sales team with lots of transactions. This is where more software sales is going. And having a more quant-oriented process, scientific mindset could be advantageous to that journey.
It seems challenging the norm has seriously paid off. From that 3-person startup working in a garage, HubSpot has grown to over $100 million in annual recurring revenue, you’ve IPO-d and joined the Unicorn Club! Maybe hiring engineers as SVP of sales is the future?
You know, in a lot of situations especially in the SaaS audience I think people should consider it. With SaaS you have much more leniency towards freemium. Towards B to C to B. More toward the inside sales team at least for a good portion of the sales cycle. And all these contribute toward I think that more data-oriented mindset. If you’re selling jets and you need to close 5 deals a year to make your number, maybe not so much. But in certain sectors especially in the world of software technology, SaaS, I think people are leaning toward that from a leadership standpoint.
Your book is about this Sales formula you implemented at Hubspot. There are four main components of that. Can you elaborate where you’ve got this formula from? And what the main components are?
I was just really trying to frame your own personal mission in this journey. I think as a lot of entrepreneurs can relate especially in the early days, it feels like there’s twenty fires going on and you only have enough water to put out three. And your ability to put out the three, really going to prevent the house from burning down is the key to your execution. So it makes sense to kind of take a step back and do some sense making around your personal journey.
For me, it was predictable, scalable, revenue growth. Sounds kind of obvious but that’s really what we’re trying to do especially on those stages. And there are four tactics that I really want to rally around: (1) Was hiring the same successful salesperson every time, (2) Is training them in a very predictable way, (3) Was providing them with the same quality and quantity of demand every month, and (4) Was holding them accountable to the same predictable sales process against that demand. I figured if I could execute on those four things, it’s like a mini-machine in a way, and that would likely increase my ability to achieve the mission of a predictable scalable revenue growth.
Would you say that world-class hiring is the most important driver of sales success or the most important driver of this formula?
Absolutely. And I think everybody says, yeah, it is. But then it’s really hard on the execution frontline to stay true to that. It’s like if you talk to a head of sales and they’re going into a busy day and they’ve got this team meeting at 9:00 a.m. to like really invigorate the morale of the team and then they have this big customer pitch at 11:00 for that deal that’s going to save the quarter and then they have a final interview with a candidate at 4:00, and you ask them like where they super prepared and where are they trying to cutting corners. Well, it would be great to be super prepared for everything, but like they’re probably going to prioritise the big team meeting and the big pitch and sort of wing the interview.
The interview arguably is the most important decision on the table that day. I mean, that deal is great but what if you found that next rockstar that’s going to be with you for 5 years and be your number 1 rep? Or what if you made a hire in that interview that turned out bad and wasted your time for 6 months? I mean, these are really critical decisions that are easy to be half-ass in the way in the moment and it’s probably the most important thing to do.
When I was kind of faced with these twenty fires going on, when we were three people in the garage, and I looked at, hiring, training, managing, I kind of have a vision on how I can do an A+ job across all three but I can’t do that. It’s literally 150 hours a week. And I’m willing to do 80 but I’m going to have to cut corners here. Where am I going to cut?
I made the conscious decision to cut corners on the training and managing and really try to do an A+ job on hiring. Figuring that if I hire exceptionally well, I’ll get some rockstars. And even if I don’t do a phenomenal job at training and managing them, rockstars will figure out a way to win. Versus if I don’t get rockstars in and I get a bunch of the B’s and maybe a few C’s in here, even if I’m awesome at training and managing them it’s going to be an uphill battle. So I literally spent like probably 40-50% of my time when we were a small, small organisation just going out and trying to source and interview and recruit the best possible sales team.
Are we seeing, with the emergence of products like Slack, that maybe SaaS companies will no longer need salespeople if their products are so good? Slack have reached 500,000 new customers with no known salespeople. So could you foresee this future where actually the sales people have gone because all the products are fantastic?
It could be. Probably not as aggressive as product folks would expect and probably more aggressively than sales folks would expect. You know, I think it’s amazing, and I think this is going to be led by the world of SaaS in this whole sort of B to C to B freemium movement, consumerisation of software, however you want to frame it. It’s just the repositioning of the focus of product development around the needs of the decision maker and VP and moving it more toward the early phases focused on the end-user, and complementing that focus when they go to market strategy that makes the end-user the decision maker. Enabling them to adopt software without getting approval from the C-suite, without getting approval from I.T., without getting approval from finance. I think that’s the winning formula that’s very difficult to find and execute on but when you have it you’re going to crush it especially in the SaaS business.
In that case you can use sort of cookie crumbs along the way to get adoption, initial adoption, to get some purchase, get some expansion of both the purchase as well as the usage without ever needing to talk to those folks. And that’s phenomenal.
I think one of the ones that’s been around more along those lines, I don’t know if most people would classify it as SaaS, like Dropbox being very, very successful at getting a lot of usage and then expanding that usage over time without talking to them. But even in their case, you have situations where the CIO of Fidelity finds that of their 80,000 employees 30,000 are using Dropbox without his or her permission, which can be an enormous security threat. And I don’t think the CIO gets over that hurdle like of their research around sort of the Dropbox for business package and whether it meets their security needs online.
I think even in that case where you’ve got a company who executed so phenomenally on the human-less adoption cycle needs salespeople out there, and this is in fact happening with them, they need salespeople out there to have those handshakes and the biggest of customers and with the most influential decision makers.
Now that’s the extreme case. I do think that as you execute this at SaaS businesses, I often talk to these entrepreneurs and they’ll say, “How do we know when to introduce the salesperson? How do we know when we should pass a company over to sales?” And my counsel there is try for the Slack/Dropbox model, try to do all of this with no-one right out of the gate. See if you can get people to your product, adopting your product, buying your product, expanding your product, succeeding with your product without anyone. Chances are you’re going to fail somewhere. If you’re not, call me. I want to invest.
But chances are that you’re going to fail at some point. And wherever you’re failing on a conversion rate, throw some people at it. And don’t throw people at it in the frame that you’re waving the white flag and you’re giving up and you’re going to have to have a team there. Throw some people at it to see if they can diagnose what’s going on and then step back and ask yourself, “Is this a problem we can solve and still dehumanise or is it just the reality that we’re going to need people there?”
In the HubSpot context for us with a marketing software, we were never able to get anyone to buy without people. We were super, super successful at getting folks aware of our mission. We were super, super successful at educating them on inbound marketing and our product without talking to them, thanks to Mike Volpe (CMO Hubspot) and my team. But we were never able to get them over to buy in. And probably just because, inbound marketing, it’s just a lot to absorb. It’s not like you’re going to do this for a day and see tons of leads flowing in. You’ve got to commit to it and there’s kind of a personalised discussion on how to adapt this to your particular business and that required a person. That’s fine.
We built a huge inside sales team and brought on 14,000 customers with a really successful business around it and that’s just the reality of our mission.
I think companies hopefully will succeed on the product side and it will diminish the importance of sales and the traditional software function they’ve had over decades, but I think that sales will still be necessary to bring a lot of these missions to fruition, whether in the Dropbox model or at the complicated Enterprise sale or the HubSpot model where it was just we were able to get to the buy stage.
*listen to the full interview in The SaaS Revolution Show Podcast here
by Alex Theuma @alextheuma