Dharmesh Shah on How HubSpot Designed Its Famed Startup Culture

Summary

In this engaging discussion, Dharmesh Shah, co-founder and CTO of HubSpot, shares insights on company culture, the concept of 'HubSpot Mafia', and the importance of embracing entrepreneurial spirit within a company. Shah emphasizes the intentionality behind HubSpot's culture, which has led to its success as a 'mafia company', fostering an environment where employees are encouraged to innovate and eventually start their ventures. He also discusses the evolution of HubSpot's culture code, the significance of viewing culture as a product, and the critical need for diversity in early-stage hiring. Reflecting on his experiences, Shah advises startups to prioritize culture and diversity from the outset to avoid the challenges of 'culture debt' later on.

Takeaways

• 🎉 Dharmesh is the co-founder and CTO of HubSpot and has significantly contributed to the company's culture and success.
• 📚 Dharmesh published HubSpot's Culture Code, which has been downloaded nearly 4 million times, highlighting the importance of company culture.
• 💡 HubSpot is recognized as a 'mafia company', fostering an ecosystem where former employees go on to found successful companies like Drift and Inside Squared.
• 🤝 Dharmesh believes in the intentional development of a culture that supports entrepreneurialism and is open to employees starting their ventures.
• 🌟 HubSpot's culture has been acknowledged with awards such as being voted the number four best place to work in 2021.
• 👥 Dharmesh does not have direct reports and was tasked with defining HubSpot's culture, an interesting role for an introvert.
• 🔧 He approached defining the culture like an engineering project, starting with a survey to understand what attributes were correlated with successful HubSpotters.
• 📈 The Culture Code started as a 16-slide deck and evolved into a comprehensive 128-slide document, reflecting the company's growth and learnings.
• 💼 Dharmesh advises thinking of culture as a product, with employees as its customers, emphasizing the need for continuous iteration and improvement.
• 📊 Culture should be optimized, not just preserved, and companies should listen to employee feedback to shape their culture, similar to product development.
• 🕊 Dharmesh regrets not focusing on culture and diversity earlier, referring to the concept of 'culture debt' that can be challenging to repay later.

Q & A

Who is Dharmesh Shah and what is his role at HubSpot?

Dharmesh Shah is the co-founder and CTO of HubSpot. He is also known for publishing HubSpot's Culture Code, a document that outlines the company's culture and values.

What is the significance of the HubSpot Culture Code?

The HubSpot Culture Code is a document that Dharmesh Shah created to define and articulate the company's culture. It has been well-received, with almost 4 million downloads, and serves as a guide for the company's operations and decision-making.

What is the concept of a 'mafia company' in the entrepreneurial ecosystem?

A 'mafia company' refers to a company whose early employees go on to start their own successful companies, creating a network or 'mafia' of interconnected businesses. HubSpot is an example of such a company, with several successful startups like Drift and Inside Squared being founded by former HubSpot employees.

How does Dharmesh Shah view the departure of employees to start their own companies?

Dharmesh Shah is supportive of employees leaving to start their own companies. He sees it as a natural outcome of hiring entrepreneurially minded and creative individuals, and HubSpot is intentionally supportive of this, even offering to help with pitch decks and investments.

What is the 'Pajama Principle' as mentioned by Dharmesh Shah?

The 'Pajama Principle' is a concept Dharmesh Shah introduced, suggesting that success is proportional to the degree to which you let people stay in their pajamas, implying the value of flexibility and remote work options in a company culture.

How does HubSpot approach hiring and the importance of diversity?

HubSpot aims to hire entrepreneurially minded and creative individuals who may eventually leave to start their own ventures. Dharmesh acknowledges the importance of diversity and advises startups to be deliberate about it from the early stages to avoid 'culture debt'.

What was Dharmesh Shah's approach to defining HubSpot's culture in the early days?

Dharmesh treated the task of defining culture like an engineering project. He started with a survey to understand what attributes were highly correlated with successful HubSpotters and used this data to create the initial set of core values for the company.

Why did Dharmesh Shah decide to publish the Culture Code internally and later externally?

The Culture Code was initially published internally to help guide the company's operations and decision-making. It was later released externally to share HubSpot's approach to culture, which has been influential and has helped other companies define their own cultures.

What advice does Dharmesh Shah have for founders regarding company culture?

Dharmesh advises founders to think of culture as a product, with employees as the customers. He suggests that founders should work on culture from the early stages, involve employees in defining it, and iterate on it regularly to ensure it continues to serve as a well-functioning operating system.

What is the concept of 'culture debt' and why is it significant?

Culture debt refers to the long-term negative impact of not being mindful of diversity and inclusion from the early stages of a company's formation. It is significant because it is much harder to address later on and can lead to a homogenous organization that struggles to innovate and adapt.

What does Dharmesh Shah believe startups should do to ensure they are hiring for diversity?

Dharmesh suggests that startups should make deliberate efforts to hire for diversity, even if it takes longer due to pipeline challenges. He recommends implementing processes like the Rooney Rule, which requires considering at least one diverse candidate for every hire above a certain level.