Dharmesh Shah, co-founder and CTO of HubSpot, joins Sam and Shaan for a wide-ranging conversation about what it’s like to be a billionaire, the story behind HubSpot, and why he has zero direct reports. He pitches two big ideas — a blockchain-powered LinkedIn and natural language interfaces as the next mega trend — and offers a framework for evaluating startup ideas based on profit potential, passion, and probability of success. The episode ends with Dharmesh giving candid feedback on the podcast’s branding.
Speakers: Sam Parr (host, co-founder The Hustle), Shaan Puri (host, former Twitch/Bebo), Dharmesh Shah (guest, co-founder HubSpot)
Cold Open: Dharmesh Makes Shaan an Offer [00:00:00]
Shaan: Here’s what I say — I even have a seven-figure domain name picked out for you. I will write the five-million-dollar check for you to go do it, as far as a seed round — or up to five million if you want to let other people in.
Sam: That’s amazing. This just got spicy.
Shaan: Oh my god, what’s the domain name?
Introducing Dharmesh Shah [00:00:30]
Sam: All right. We just got done, like thirty seconds ago, talking to the guy we’re about to introduce you to. That was amazing. He’s amazing. That guy — Dharmesh — is amazing. He’s very cool.
So we have Dharmesh. I don’t even know — what is Dharmesh’s last name? Shah, I think. I just know him as Dharmesh. He’s the co-founder of HubSpot. He’s the largest shareholder. He’s like Beyoncé — you know, they just go with one name at a certain point. Ronaldo. Beyoncé. Dharmesh. That’s it.
So Dharmesh is the co-founder of HubSpot. HubSpot’s like a twenty-five-billion-dollar company or something like that. But he’s done some other cool things — early investor in Coinbase, Dropbox, loads of different stuff. And he’s also got that entrepreneurial itch. He’s got like twenty domain names, some worth millions of dollars, and others that are just simple ideas. But he’s got ideas loaded into them — here’s what you might do with this idea, here’s a good domain name for it.
He’s one of our people in that sense. He’s an idea person, a frameworks person.
Sam: He shared some frameworks, he shared a bunch of ideas. Two really big ideas. One idea — on air — he goes, “Shaan, if you want to start this, I’ll fund you right now for five million dollars.”
Shaan: Yeah, he made me an offer I pretty much couldn’t refuse. I just had to sort of squeeze my thighs and sit still.
Sam: But I thought it was exciting. The actual ideas were really great. People are going to like this. We talked a little bit about wealth, we talked about the early days of HubSpot and the Hustle acquisition, and then we talked a bunch about ideas. Some of those ideas are about a new kind of LinkedIn, remote community. He talked about his framework for evaluating whether an idea is good or not — that was actually incredibly educational.
Shaan: It was awesome, dude. It was great.
Getting to Know Dharmesh [00:03:45]
Sam: All right, enjoy this episode. I don’t remember what I was going to say, but right before you came on I was asking Dharmesh what he listens to, and he says he listens to us almost every day for the past sixty days.
Shaan: Amazing. Has that changed you? You seem like a pretty good person — I feel like if you listen to us for sixty straight days, there’s going to be a part of your brain that’s good but a part that gets a little corrupted.
Dharmesh: I think that’s true. That’s an astute observation. We’ve just — I won’t say we’ve completely diverged in paths — but yeah, it’s been good. I’m a believer in orthogonal things. This is not stuff I’m normally looking at — you guys cover a wide array of businesses. But I think that kind of thing builds a different muscle group and it’s going to be useful for me. I’m a weirdo. We’re on now, so this is a pod.
Shaan: This might go a little long and I’m okay with that. So Dharmesh, I was just hanging out with Hiten Shah yesterday and your name came up. We were just talking to Nathan Barry the other day, your name came up. Shaan and I are in this text group where people talk about big stuff, and your name comes up. Your name comes up everywhere. You’ve got your hands in all these little things. Part of it’s because you’ve been in the game for a while and you’re incredibly successful. But do you — this is Dharmesh — you’re the co-founder of HubSpot, your title is CTO. Are you active? Like, are you working really hard at HubSpot? How do you have time to have your hands on all this different stuff?
Dharmesh: The answer is yes. HubSpot is my obsession and preoccupation. Anything else you see me doing, there’s probably some diabolical thread that connects it back to HubSpot. It’s my baby. The thing I spend pretty much all of my non-family, non-personal time on.
Sam: So I want to describe for people who are not watching — you should go to the YouTube channel. So Dharmesh is sitting there, he’s got a keyboard — like a piano keyboard — to his right. He’s got what I think is a Steve Jobs piece of art behind him. Or is that Lennon? John Lennon maybe. And you’re in this room. Is this where you work day-to-day?
Dharmesh: So yes and no. You’re getting tricked, Shaan. This is my living room. But it’s like — I captured a moment in time when the living room was somewhat less disorganized than it usually would be. But it’s a virtual background. I’ve got the green screen set up so I can —
Sam: Oh okay! That’s pretty good. Usually with a green screen half your head also turns into the background.
Dharmesh: I’ve done a multiple green screen, so I’m sort of surrounded by it. If I need to twist the camera one way or the other —
Shaan: So you’re kind of doing the Oasis thing. You basically have a virtual background, but the virtual background is not you on a beach — it’s your actual living room when it’s clean and perfect, regardless of the current reality. I like that trick.
Dharmesh: The keyboard itself is actually real, that’s not part of the background.
HubSpot Background and Hustle Acquisition [00:07:30]
Shaan: Let me do a brief overview of what we’re going to talk about. HubSpot today is like a twenty-five or thirty-billion-dollar publicly traded company. You co-founded it fifteen years ago. Prior to that you had another startup that you sold for a significant amount. You own, I believe, millions of dollars worth of domains. You bought your wife humanism.com as a gift — we have to talk about that. You’re an angel investor in a lot of different startups including Coinbase. According to WallStreetMind.com, you’re worth today $850 million. You do a little bit of everything. You might be the wealthiest person we’ve ever had on this podcast.
Dharmesh: I don’t know. It’s fine. Please.
Shaan: We’re going to ask you questions. It doesn’t really matter — that’s one thing I’ve learned. We can talk about that too.
Sam: Well, that’s okay if it doesn’t matter — we’re going to talk about it.
Shaan: Okay. So, I would have asked about Dharmesh, but my question is actually about Sam. You acquired The Hustle, and I hope you can be as transparent as you want — I think Sam won’t care. DNA-wise, The Hustle is kind of a unique company. Sam’s a pretty unique dude that you brought into your company. Different DNA than the vast majority of HubSpot employees. Give me kind of — what are any interesting observations, entertaining stories, pre- or post-acquisition, about Sam and The Hustle? I’m curious about your view from the other side of the table.
Dharmesh: Yeah. So HubSpot has not done a lot of acquisitions in the past. We’ve done a handful and pretty much most of them have gone well. The thing that made this different — as you observed — is the DNA of The Hustle is different than HubSpot. And that’s both a good thing and a bad thing.
The thing I was worried about — and until now I don’t think Sam and I have actually ever had a one-on-one chat, so this is my therapy session for two people — the thing I was worried about is that Sam is what I’d think of as a Type-A personality. He’s out there, he’s hustling — the name of the company kind of reflects that. Which is fine, but that’s just not most of the makeup of HubSpot. We’re not Type-A. We’re a kinder, gentler, humble, quieter kind of company.
Sam: Today, Kieran — the guy I work with, technically my boss — he was like, “You should probably hire someone outside of HubSpot for this role.” I was like, “Why?” He goes, “I think you’re too direct for anyone who works at HubSpot.” That’s an example.
Dharmesh: That was probably good advice. But it’s worked out, it’s worked out well. The one kind of minor story I can recall: there was a Twitter back-and-forth that I think Sam had with Rand Fishkin. Something that was said about VCs or investment. And Rand’s been a good friend, so I was like, “Okay, well…” Not like either party was right, wrong, or indifferent, but I know them both at least a little now.
Sam: In my defense — and in this podcast’s defense — our goal is we will disagree with people, but I hope it never comes from a place of disrespect or trying to hurt someone’s feelings. But I will say I do put entertainment first sometimes. I will poke the bear for entertainment value when the kinder, simpler thing to do would be to back away. I like to have fun on Twitter.
Dharmesh: One thing I will say — as far as the deal itself — it was one of the better things HubSpot has done. The strategy behind it, I think, is strong. It gets HubSpot into a thing which is where I think the future of SaaS companies is heading: more and more of them are going to control their own distribution versus renting audiences from other people. There are other deals done around the same timeline, but I’m a believer in companies controlling their destiny in terms of distribution.
Shaan: This is where you should just drop a one-liner — “And we got it at a fantastic price.” Just to drive Sam crazy for the next seven years.
Dharmesh: Well, I think — yeah, could we have sold for more? Definitely. Maybe. That always is a maybe.
Sam: When we sold, HubSpot — I felt — was undervalued. The day the deal closed, the stock was worth like three-fifty, maybe two-fifty? Today it’s six hundred bucks. So my guess was that HubSpot is undervalued. And I wanted to create a reputation as a fair deal-maker. People will know that if I built something and sold it, all parties got a good deal.
What It’s Like to Have Money [00:14:00]
Shaan: Okay. Let’s switch off the Hustle acquisition. Let’s talk about money. Is it weird that I know what your net worth is? Because it’s public information.
Dharmesh: Not weird for me, honestly. I’m generally transparent — I believe in the openness of the web. And in a sense, it’s a publicly traded company. My net worth is mostly in the form of shares, which you can take from the public record and multiply by the current price. That’s probably eighty-five to ninety percent of my overall net worth. I don’t find that weird.
Sam: Has your life changed as this has accumulated? You had another company before this — how much did you sell that for?
Dharmesh: Ten or fifteen million, depending on how you count it.
Sam: Has your life changed significantly since that moment?
Dharmesh: So here’s the thing. I’d like to say no, like I wasn’t focused on money — but at the time, when I was younger, I was very focused on money. I had a very modest upbringing. It wasn’t really the money itself, it was the freedom. Ever since I was little I always wanted to configure the universe to my liking. I’ve got my quirks, the way I like to do things. And having to work in a normal classic job doesn’t give you a lot of control over your part of the universe.
The first five million or so had a dramatic impact on my life. That buys you an inordinate amount of freedom. You don’t have to work again, you can invest in things, you can do pretty much whatever you want — as long as you’re not buying small islands. That’s a decent amount of money for folks. And after that, on a marginal basis, more money adds a little more freedom. But the kinds of things I do — I enjoy food and restaurants — there’s only so much you can actually spend as a reasonable human being, even if you like the finer things.
Sam: The most common thing I’ve heard is there are these levels. From debt to no debt — that’s the first jump, the weight off your shoulders. Then zero to a million — you’re mentally a millionaire, that’s kind of just a mentally freeing concept. That’s why we named the pod what we did. Then the next jump I’ve heard is around ten million — at a million you still have to work, at ten you don’t have to work, you can have a couple of places to live, you don’t really need to check prices when you go do things. And then there’s a hundred million or more — the ego gets involved, you’re keeping score in the business olympics, and you can do the bucket list things — buy a piece of an NBA team, whatever. And the joy, what I’ve heard, actually de-escalates from the beginning. Getting out of debt is the most relief, the most joy, and then it starts to diminish step by step.
Dharmesh: I have two things I want to pull on, as long as we’re talking about money.
One: the plan my wife and I have talked about is to donate ninety-plus percent. We have one child and we’re not going to spoil him — we’re not trying to build a multi-generational dynasty. So it’s like, even if I make a really good return on a startup, ninety percent of whatever it is goes to my wife’s foundation. That makes me feel better. I don’t think we’re actually capable of spending the money.
But taking it back to the early days — one lesson I learned early on is the relationship between time and money. We spend the better part of the first half of our lives converting time into money. You’re looking for hours, you want to get your rate up. And then the latter half you’re desperately trying to buy time back with the money.
I was making $3.65 in my first job when I came over as an immigrant. I worked all the way through school — took me seven years to get my four-year degree, working full-time the whole way through. Then once I was making ten, twenty, fifty dollars an hour it’s like, okay, all of my time I can make as billable as I want.
The pivotal point for me — it was in my early twenties, I got this bump to $125 an hour working as an engineer. That was an ungodly amount of money in Birmingham, Alabama in the nineties. Real money. And I made the decision: if there’s anything I’m doing with my time that could be done by spending less than $125 an hour, I’m being an idiot by actually doing it myself. If I enjoy it, that’s different. But otherwise it’s just stupid. And I’ve carried that idea ever since.
So now — I went back and did the math, because I knew I was going to be on this podcast — if I’ve worked on average sixty hours a week for about thirty years, my average hourly rate across those thirty years would be like $10,000 an hour. Right now, the future version of me would buy any hour for fifty or a hundred thousand dollars in option value.
The short message is: most people don’t value their time enough. They don’t think about it objectively. Put a number on it, and then ask yourself what you’re doing with your time that isn’t worth that.
Shaan: Naval has a phrase from his “How to Get Rich” podcast. He says: put an outrageously ambitious hourly rate for yourself. He said, “Ever since I was young, I said five thousand dollars an hour — some really aspirational rate.” His friends would joke, “Dude, you bought this blender you’re not even using — go return it.” And he’s like, “No. I’m not going to spend an hour round-tripping to Target to return a blender. I’ll throw it away. What I will not do is give my time back for that.”
Sam: I love that. I’ve done a similar thing. My mom will come to my house and say, “Oh my god, this bill is late, there’s a seventy-five-dollar fee if you don’t call them.” And I’m like, “I’m not calling them. Let them charge the fee. Literally my hourly rate is thousands of dollars. I’m not going to trade that hour for this.” Her other argument is, “Well, you go watch TV.” And I’m like, “Well, that I enjoy. So that I’m actually spending money on.” But the CVS receipt thing — Sam, Shaan went to visit Sam in Austin and Sam had CVS receipts saved in the glove compartment of his very fancy car.
Shaan: He’s a dichotomy. He’s got a nice car but he’s also enjoys being frugal.
Sam: That makes me feel good about myself. I mean, yeah — I have that framework. I assume I’m going to make three million dollars a year. Whatever that hourly rate is — if something makes less than that, I don’t want to do it. But mowing the lawn, I get joy from that. I don’t put a money thing on everything. But Shaan, someone asked us to fly to London to speak at some event in October. And I thought, how much money would they have to pay me to go do this? It has to be a lot. Like a hundred thousand dollars. Because I just hate it.
Shaan: So Dharmesh, a couple more rich-guy questions. You never get to ask these even if you were hanging out personally. But for some reason the podcast makes it okay. I’m sort of projecting — what if I had more money than I could ever spend, what would I do? So my question: what’s a sort of outlandish use of funds that you’ve either considered or done?
For example, some people are like, yeah, I bought a private jet. Or someone’s like, I love Jordan sneakers, so I bought every pair of Jordans — I have a closet in my house full of them, because I always wanted them as a kid. Or if I had a billion dollars, I’d wire somebody a million dollars two days a year. Just randomly wire some kid who’s working on something interesting a million dollars and see how they react.
Dharmesh: The thing I do is micro acts of spontaneity. Someone wants to go to an event and can’t afford it — I’ll be a sponsor. I do that relatively regularly.
I’ve also taken my average tip up to between fifty and one hundred percent everywhere I go. Partly because I want to make up for all the time when I was younger when I probably didn’t tip well. As long as I can do it without drawing too much attention — I don’t want to be that weird guy sending the wrong signals.
Sam: I typically tip fifty percent. It makes me feel good. I’ve worked in the service industry, I know those things matter.
Dharmesh: I’m a cheap bastard so I’ll stay silent on large things. The running joke inside the house is: my wife and I — she’s not from the tech world at all. I want to own the world and she wants to save it. I’ll make the money, she’ll channel it to good causes.
In terms of specific physical things, I don’t have anything I particularly crave. Other than a piano — which I’ve wanted for a while and I have now. But atoms don’t excite me all that much. There’s a maintenance to atoms, right? Versus bits. Whether it’s a yacht or a plane — that takes calories. I don’t care how much you’ve delegated, there’s something in your life that’s attached to you. I don’t like that. It feels more weighty than joyful.
HubSpot: Why Dharmesh Still Works There, With Zero Direct Reports [00:24:30]
Shaan: So HubSpot is fifteen years old, I don’t know how many people — twenty-five hundred, three thousand? You guys grew pretty fast early on. But it seems like you don’t have to do this. You’re set. Why are you still here, and does it still feel like a grind?
Sam: When I see you, I think: you could delegate this. You could walk away. And that was one of the reasons why I sold when I did — I was like, if I don’t sell in this cycle, I’ll probably have to wait another five years. Do I want to put that work in or sell now? Did you face that?
Dharmesh: So a couple of things. It’s not widely known, but Brian and I — my co-founder — we had a heart-to-heart founder chat. I’ve published this on my own blog, Startups.com, but one of the things was around who’s going to be CEO.
We decided Brian would be CEO because I’m just not good at it. I did it with my first startup for ten years — just not that good at it. But decision two was much more unconventional: I have no direct reports. My agreement with Brian was I’m not going to have any management responsibilities. I’m going to be in it a hundred percent, but I’m not a good manager.
Now I’m a reasonably smart guy — if I spent a bunch of time I could get passably okay at management. But I don’t want to spend ten, twenty, thirty years of my life getting passably good at something I’m not naturally suited for. I’m a big believer in: take your strengths, whatever they are, and put all your energy into amplifying those strengths. Don’t worry about your weaknesses.
So HubSpot has over four thousand people. I have zero direct reports. I’ve never had direct reports in fifteen years. That’s partly what makes it — I don’t think of it as a grind at all. It’s completely discretionary.
I’ve sort of whittled down my life at HubSpot to three things I’m going to work on, and I change those every few years. For a long time it was: brand, culture, and what I call boldness — which is, is the organization taking on enough risk? The temptation once you have customers and revenues growing is to just drag the spreadsheet. The numbers will flow. I push against that.
Whatever it is I’m working on, I’m maniacally focused on those three things and I say no to pretty much everything else. When I had culture on my list, I spent three hundred hours on the Culture Code deck at HubSpot. And yeah — I find it enjoyable. I get to pick the things.
Sam: Did you see that he’s in your copywriting course, Shaan?
Shaan: Yeah, I saw that. I was like, how does this guy have time to do this?
Dharmesh: I found it very useful. Copywriting is one of the most underrated skills in entrepreneurship generally. People don’t realize the amount of leverage you get by spending ten, twenty, fifty hours on it. You can learn a lot of what you need just by reading the top three books and practicing the craft. And it’s measurable — you can objectively measure whether you got better at it by looking at conversion rates on whatever numbers you’re trying to move. It’s a learnable skill.
HubSpot Origin Story and Founding Decision [00:29:45]
Shaan: One more question before we move on. You were the first investor in HubSpot — you put in about half a million of your own money to get it started. Aren’t you the largest shareholder?
Dharmesh: I am. So the idea of HubSpot — you have to decouple two things. HubSpot was not supposed to happen. Here’s what I mean by that: when I sold my last company, after running it for ten years and working entrepreneurial hours, it was self-funded and bootstrapped. I promised my wife I would not do another startup.
The analogy I use: starting a self-funded company is like being at a gaming table in Las Vegas where you don’t know the rules of the game. You’re playing, trying to figure out the rules as you go. And the one cardinal rule is that if you leave the table, whatever chips you have on the table are gone. Every now and then the house comes up and says, “Would you like to cash in your chips?” That’s the position I was in. I had to keep playing — if I chose to get off the table, a lot of lessons and a hundred percent of our net worth was invested in this thing.
So eventually when I sold, that was the decision — I’m leaving the table. I don’t have to do this anymore. I went to grad school. My plan was: go to grad school, maybe get a PhD, then go teach. I had a great time — one of the best things I did. I was thirty-five, thirty-six. A thirty-six-year-old college kid living the dream.
Then I met Brian in grad school. We both had this shared passion for SMBs, we both come from tech backgrounds, and the first decision we made before we even decided what HubSpot was going to be was that the two of us should do a company together. If Brian was not going to do a company, there would be no HubSpot. We were dueling on ideas all through grad school. We had like five ideas, we went to the business plan competition, wrote a business plan for early versions of HubSpot. Eventually we narrowed it down to two companies: one in marketing, which is what we ended up doing, and one that was like Oracle for small business — an ERP similar to NetSuite.
What Technologies Are You Most Excited About? [00:34:00]
Shaan: Let’s do some ideas. One thing I love about technically minded people who have business success is that they never stop loving what’s new, where technology is going, how behaviors are changing. They sort of live as a user at the edge. So — what are one or two technologies or spaces that are most exciting to you right now?
Dharmesh: Two. One is broadly defined cryptocurrency — as applied to mainstream things. The other is natural language processing. But let me give you my pitch on the first one.
Since you’re now out of Twitch, you should build a professional network powered by the blockchain. And I say this kindly —
Sam: Can I say my opinion? LinkedIn sucks.
Dharmesh: Right. A lot of people say LinkedIn sucks, and I’m suggesting building a different one. I even have a seven-figure domain name picked out for you. I will write the five-million-dollar check for you to go do it as a seed round — or up to five million if you want to let other people in.
Sam: This just got spicy. Oh my god, what’s the domain name?
Dharmesh: I am dead serious. I have one and I’m in the midst of negotiating the price. I’m not going to reveal it — I don’t want to be outbid.
Shaan: How many letters is it?
Dharmesh: Seven.
The Crypto LinkedIn Idea [00:35:30]
Dharmesh: Here’s why it makes sense. LinkedIn was a product that was great for its time, and times have changed. The thing I’m excited about is the intersection of a couple of things. We didn’t have things like blockchain or cryptocurrency before — now we do.
One of the issues with LinkedIn is spam. You’ve got all this noise. The arc for LinkedIn is diminishing utility — it’s just going to become painful over time. There’s a cap on where you can go with it.
So imagine a professional network on the blockchain where you have your own currency. And you can say: for five hundred dollars, I will look at your company and apply. For ten dollars, I’ll open your email. Right now if I go pay LinkedIn, I can send you spam InMail. You do not receive any of the revenue from me paying LinkedIn for the right to spam you. In this case, I could say: here are my prices. It becomes revenue-generating for me.
The second thing: when somebody reaches out, I can quickly assess their value in the network based on how much other people believe in this person. On current LinkedIn, every node looks the same on the surface. In this version, they would not.
And one more thing — think of it as PageRank for the professional graph. Right now the professional network is all symmetric. Every person you follow gets an equal follow value. It’s not weighted in any way.
Shaan: Explain PageRank a little bit.
Dharmesh: The beauty behind Google, the original idea: how do you determine what the best results are for a keyword search? It came down to two things. One is the overall context of the page — quality and relevance. Two is authority. And authority is where PageRank comes in: they measure authority by how many links are coming into that page, because that’s an endorsement effect. And the value of those links passed to that page is based on the PageRank of the linking pages. It’s a recursive function. If the New York Times links to you, that’s much more valuable than if my blog links to you.
The last piece: the amount of PageRank you pass across links from your page is proportional to your PageRank and distributed across how many links you have. So if I have two units of PageRank and I link to just Sam’s blog, all my PageRank accrues to you. If I link to ten people, it gets distributed.
So imagine a professional network that works the same way. I endorse Sam, I have a certain authority — as a result, Sam’s currency goes up by some amount. The notion of a “follow” should go away. If you really like someone, buy a dollar, buy five dollars. That’s the signal. And because your coin is worth a lot, the fact that a valuable person owns Sam’s coin means Sam’s coin goes up not just by the five dollars you paid, but by some multiple of that in the algorithm.
Shaan: Correct. Like, if you’re a startup and you raise money from Sequoia — a million dollars is worth nine million dollars in terms of signal.
Dharmesh: Exactly. A follow from you should matter more than a follow from someone who just joined the platform yesterday.
Shaan: This is a tremendous idea. I’m having trouble containing myself. People don’t know exactly what I came here for, but I got excited about BitClout because the idea is that we want a social network that’s inverted. Instead of one platform controlled by one company that owns all the data, it’s inside out. No company. You own your own business on top of it. Decentralized — without saying decentralized.
A bunch of people were like, “I can’t believe you’re endorsing this scam project.” And I’m like — that’s beside the point. It might make me rich or it might not. But this is what the next Twitter, LinkedIn, Facebook are going to look like, in either one year or ten years. I’m not sure if BitClout is the one, but I’m going to play with it so that when the right one arrives, I know what I’m looking at.
Dharmesh: I’ve been spending a fair amount of time trying to understand the mechanics of BitClout. How far are you up the top creators list?
Shaan: Moving up. How much have you put into BitClout?
Sam: It’s gotta be a million dollars.
Shaan: The thing that annoyed me about BitClout was I got into this pissing match about who was building the better position on it, and — there was money on the line — and I just thought, I actually don’t want to play this game. I fundamentally agree with most of what you’re saying, but on the other hand, if this exists I’m going to be getting into a lot of pissing matches, and that kind of freaks me out.
Dharmesh: This is one of the issues with BitClout right now. You have people gaming the founder rewards and things like that. But this is what happens — this is why we can’t have nice things. Anytime something new comes along, people will try to game the system. Even in the early days of Google — the internet wasn’t a scam, Google wasn’t a scam — but there were a bunch of people doing spammy SEO to show up in the results. Same thing with BitClout.
You have to separate that from the platform. The idea does not feel like a scam to me. Yes, they needed to open it up and have it listed on exchanges so you can actually take money out — minor details — but they’re fixing those. I talked to the founder. It feels legit. That’s not to say it’s going to succeed, but I’m relatively confident it’s not a scam.
Sam: One of the things that happens with a Google or Facebook is you’ve got this big honeypot — either users or money on the line — and you get good people excited about it, but you also get schemers. People who aren’t doing anything illegal but they’re thinking, how do I play this so I get the highest score? Whether it’s Buzzfeed gaming News Feed, or Zynga with Facebook games. And for as much as people hate that Facebook and Google can pull the rug out from under you, they are able to swat down these schemers so they don’t ruin the experience for everybody. With decentralized platforms there’s nobody in charge to do that.
Dharmesh: I’m a believer in self-governance over time. It all depends on the time horizon — will it fix itself in a year or two? Maybe not. But once the underlying technology figures out what it wants to be when it grows up, and people build real things using it, things will settle down.
Shaan: What’s the name of the domain you bought for this idea?
Dharmesh: I’m in the midst of negotiating it. I’m not going to reveal it yet. I don’t want to be outbid.
Natural Language Processing as the Next Mega Trend [00:47:00]
Dharmesh: The other space I’m excited about is, broadly defined, natural language processing. Let me try to keep this a quick rant.
Every software company that ever was has said their product is intuitive and easy to use. And the reality is every one of them lies. Here’s what happens: in order for a human to use software, you have a thing you want to do, and you translate that intent into a series of drags and clicks and swipes to make the software do the thing you intended. Right?
Now imagine: if you’re in Photoshop and you want to remove the background, you should just be able to say “remove the background.” If you’re in HubSpot and you want to know how many new people signed up for your service hub product in the last ninety days, you should just be able to type that question in as a question. Not: go to HubSpot reporting tool, build this dashboard, pull in these three columns, whatever — you should just be able to say the thing you want. We have the technology now on the language side to understand natural language in English and other languages. All we really need is a translation layer.
This is, in my mind, a mega trend that’s bigger than mobile. Mobile added: the thing you used to do on your desktop, now you can do from anywhere. This thing is: the software you never got good at because you never had the time to learn — now a billion people can use that software, because they don’t have to learn the clicks and drags. They can express what they want and the software does it.
If I were an enterprising VC, I’d pick the categories where this has the biggest impact. Business intelligence, reporting, B2B software — that’s a natural fit. But I think it goes elsewhere too. We’ve seen the beginnings on the consumer side with things like Alexa, but the B2B world is open.
Shaan: Have you seen anyone build a piece of software that gives you a magic trick? Where someone shows you something and you’re like, “Holy —” and now you can’t look at the old software the same way anymore. Like Instagram filters. You saw that and you could not unsee it. Have you seen any cool magic tricks with natural language interfaces?
Dharmesh: Something I built myself: GrowthBot. A few years ago. It was built for marketers to get marketing data out of your systems — HubSpot, Mailchimp — but also other data sources. Like: what are the top three keywords Uber buys on PPC? Or: when was this domain registered? I would go through every night and look at all the questions people asked, because they had a blank canvas and no idea what the thing was capable of, and then I’d go back and update the software to handle those patterns.
It came close. I think we were a little early. But we’re further along now — people are more used to the notion of being able to express something they want.
Sam: God, that’s so funny that you do this stuff. Everything you do is kind of related to HubSpot. You’re also really into website graders — what’s going on with that?
Dharmesh: So I was talking to Hiten Shah — he and his partner Neil have NeilPatel.com, UberSuggest, site graders, all types of things. Why are you so into these website grading businesses?
The original thing was called Website Grader. Funny story. Back when we first started HubSpot, it was just Brian and me, and we’d go look at people’s websites to see if they’d be a good fit for the software. I would do a View Source in Chrome, look at the source code — do they have the right meta tags, what’s their Alexa ranking. We were doing it manually, and there were no tools.
So I did what I do: I wrote a tool that automatically does those lookups, brings down the HTML source, checks if the tags are right, and gives it a score. And I had not planned it this way — I built it as a tool for just the two of us — and I thought, I’ll put this on the web. What name can I give it? It grades websites. I’ll call it WebsiteGrader.com. The domain was available fifteen years ago.
I put it out there and it was on fire. Tens of thousands of people. And then the leads — oh my god, leads were coming in and I hadn’t thought to collect an email address. We had like a hundred thousand people use the tool and I never thought to put an email box on it.
Shaan: Gail Goodman — who was CEO of Constant Contact at the time — she met with you guys and suggested that?
Dharmesh: She loved it. She’s like, “You might consider putting an email address box.” Because we had no way of knowing who these people were. Obviously I fixed that.
But the thing I want to say to the listening audience: the power of building a diagnostic tool for your industry is immense. Website Grader was not the solution — it’s not like a freemium HubSpot. It was a thing that made you realize you needed HubSpot. That was super valuable. And it can be done in any industry. I got a 23 out of 100? That sucks. Here’s what we do, here’s how we can help. It works.
The one key lesson: relative scores work. Website Grader, from its early days, would tell you: your particular score ranked better than 87% of the 800,000 websites we’ve graded. People love that. A percentile score matters to people. It’s like, I’m in the top ten percent or the bottom ten percent? That relative score versus an absolute one makes a big difference.
Shaan: I think what you just described is actually a really big idea that people sometimes say in passing. The concept — if you think about one of the best businesses ever built, people say Google. You go in, it’s just a search box, like a magic genie. You ask a question and it tries to give you answers. The way I view what you’re describing: it’s next-level Google. I ask it any question, and it doesn’t just give me a list of pages where the answer might be — it gives me the answer. In the business context that might be like a business Google, but there are many versions of this.
Shaan: Have you seen dBuild? Have you checked out that website?
Sam: Yeah, we talked about dBuild. My friend Sharif — there’s a perfect example of a magic trick. He was messing around with GPT-3. New technology comes out, he gets access right away, drops his whole startup, and starts just hacking on this thing at night. And his idea was: Squarespace, Wix, website builders have been around forever. Everybody wants to code without having to code. But even now it’s still so complicated — even after Webflow and all this stuff. Why can’t you just describe what you want?
You could type in “I want a website with two columns, on the left pictures of places you can stay, on the right the price,” and it’ll build you a website that looks like Airbnb. He posted a GIF on Twitter — “I’m messing around with GPT-3, watch this: build a website with a photo, add a PayPal button, and make it so the PayPal button can only take five dollars max.” And it spit out the HTML and CSS that did exactly that.
Off basically one tweet with one GIF, he raised like two million dollars instantly from really smart people. Because they saw a magic trick. I don’t know what the company is — I think he still doesn’t know what the company is — but go down that path and see what you can find.
Dharmesh: I remember when that tweet went live. I played with GPT-3 across multiple things. It’s the closest thing to magic. It’s a different vector — originally it’s a text generation mechanism, writing prose, because it’s got this corpus of data. I talked to Sam Altman, the CEO, and had a conversation about where this is headed. Right now I don’t think it’s quite there to implement practical use cases to actually do the thing people are trying to do. But it’s one of those that’s going to go from zero to one very quickly. All of a sudden that wasn’t really possible — and then it’s going to be like holy crap. There’s that phrase: slowly, slowly, then all at once.
Shaan: Sam, do you see his list of ideas? Let’s start banging them out.
Sam: I like it. So what you just described is a growth hack without calling it a growth hack. It’s basically a lead gen tool where you get a bunch of qualified leads — people who self-assess, go get it checked out, your digital doctor says “you indeed do have a problem,” and all you had to do is prescribe a solution called HubSpot.
RemoteCulture.com: The Easy Million-Dollar Business [00:57:00]
Shaan: We just talked about something huge. Let’s talk about something small but still cool. Did you buy RemoteCulture.com?
Dharmesh: I did.
Shaan: Okay — 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? What would you do there?
Dharmesh: I would start a community for RemoteCulture.com. I’m going to do a blog, I’m going to do a paid community, and it’s going to be targeted at people ops and HR people around the world who need to figure out the new world order. We’re not going to try to sell them software. We’re just going to connect them to each other. I’m a big believer in these community and network-based businesses. They’re efficient — you’ve got to get to critical mass, that’s fine — but I think this one would work. It’s a community that’s necessary at this moment in time that hasn’t existed because it hasn’t needed to. Now it does. And I’m sure there are people out there doing it, but money helps. You can actually build something.
Shaan: Yeah. There’s one on the list that I really like.
Domain Ideas Speed Round [00:58:30]
Shaan: Let’s do a speed round. By the way, when I have an idea that’s enough in my head that I think, “this is kind of cool” — I don’t write it down in a notebook. I go find a related domain. It costs fifteen dollars if it hasn’t been taken yet, or more if something really strikes my fancy.
Sam: What’s the most expensive domain you own?
Dharmesh: I haven’t had them valued. I don’t really sell domains. I own BirminghamAlabama.com — I live there. I think that’s probably seven figures. Just bought Humanism.com and Humanism.org. And I bought TheHustle.com for you as a gift that I’m going to give you on the podcast.
Sam: You also bought one for me?
Dharmesh: I bought TheHustle.com for you as a gift — something I’m gonna give you right now, on the podcast. And I’ve got a deal trophy concept too. When I was talking about the acquisition — I guess it’s a tradition in the deal-making world: when a deal closes, you get a little ornament that has some meaning to the deal. Our code name was Project H or something, so they got this cool-looking knife. I think your deal trophy is this domain.
Sam: For the record, Dharmesh, if you gift that to The Hustle company, we would love it. And I actually do like domain names — my whole point was just, don’t let the domain name stop you. Ninety-nine percent of people don’t do the thing. They have stupid excuses like, “Well, I don’t have the domain name” or “I do have the domain name, therefore I should do that.” Just don’t let it stop you. But I still think owning the domains is sick and awesome.
It’s like what Justin said on the last podcast — there should be a dating app that matches you based on your credit card spending history. For me, if you just tell me how many domains you own that you bought but don’t have a live project on — if that number is greater than ten, we’re going to be thick as thieves. If I just knew that and how many tabs you have open right now, I could tell you if this podcast is a fit for you.
Dharmesh’s Idea Evaluation Framework [01:01:00]
Dharmesh: That’s a good one. But one thing I want to make sure I get out there, since we’re talking about ideas — how do you assess ideas? How do you think about them?
Here’s a simple framework for evaluating whether you should do something, whether you’re starting it yourself or investing. Three things:
One: profit potential. If this thing went exactly as planned, as the founders envisioned, what could it be? Assume all the stars align. What’s the overall potential?
Two: passion. Are you excited about it or not?
Three: probability of success — the probability that you achieve the outcome you want.
I’m a quant-based guy. I’ll take each of those factors, score zero to ten, multiply them together, and get a score out of a thousand. You can weight them differently depending on what you care more about.
The common mistake people make: they look at probability of success first, and almost exclusively as the high-order bit filter. “I had this idea, but the likelihood of it working is like 0.01, so I’m not even going to think about the potential or how passionate I might be about it.” And they discard the idea.
That is statistically unwise. The way you should look at it: take the profit potential and multiply it by probability — that’s the expected value of the thing. One percent chance at a billion dollars has an expected value of ten million dollars. 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 anything with higher odds.
Shaan: That’s a really good framework.
Dharmesh: Second note: good ideas are dangerous. They’re dangerous because what you want to find are great ideas. Bad ideas are easy to find. Good ideas masquerade as great ideas, and it’s hard to tell them apart. The good idea is the one that ends up spinning a bunch of cycles for you — and you end up with a mediocre outcome. And that’s what’s scary. Not failure — mediocrity.
Failure’s not a problem. Mediocrity is the thing everybody should be fearful of. A mediocre idea wastes the most valuable resource: time. It’s not going to die quickly, nor is it going to take off. It’s a slow long burn at a mediocre level.
The hardest thing about bootstrapped tech companies with a low capital need is they can live forever and not go anywhere. You don’t have investors pushing on you to produce some outcome. You can run that company indefinitely and waste years of your life, when the next idea you could have done was sitting right behind it.
I have talked to hundreds of entrepreneurs. I have never met one that had just one idea. So if you’re not excited about it, sell it if you can. There’s no harm and no shame in that.
Sam: Did you raise a significant amount at HubSpot?
Dharmesh: A hundred and five million before going public. Classic venture-backed company, intentionally so.
Sam: That seems interesting — you seem like a guy who values freedom. A guy who knows what he is, who likes to bootstrap.
Dharmesh: I’ll tell you the exact conversation. When Brian and I started, we were firmly agreed: we didn’t want a single or a double hit. We wanted to swing for the fences. Every decision, every fork in the road — we were going to take the one that gave us a higher chance at the spectacular outcome, even if that meant we might go down in crashing burning flames.
Brian hadn’t had a prior exit. This was his first startup. But he was like, “This is it. This is the one that’s either going to do it or not.” We weren’t worried about dilution. We negotiated the fairest value we could, made sure we had good investors, but we were not worried about what percentage we owned over time. If this thing does what it needs to do, equity dilution won’t matter. We wanted it to be a binary outcome — either it’s going to be this huge massive thing that changes our lives, or it goes down in flames.
We didn’t want to be king. We wanted to be rich.
Starting with a Bad Idea Is Fine [01:08:00]
Sam: When you’re doing ideation, you wrote somewhere that you’re actually fine with starting a project with a bad idea, because you’re confident you can make it great as you get into it. Right?
Dharmesh: My general advice — and this is not just my personal lived experience, but from talking to hundreds of entrepreneurs and looking at history — is that so many of them, the thing we know them for now is not the idea they originally started with. There are a handful of cases where, yes, the plan was exactly this and it worked. But often, you will not find the great idea until after you start the company, until after you have contact with customers and are actually trying to do the thing.
If you sit on the sidelines trying to assess ideas and look at market metrics, you’re never going to get started. That’s the wannabe entrepreneur who analyzes things to death. You wouldn’t even know what a good idea was until you actually try something.
What’s Coming Next, and Dharmesh’s Podcast Critique [01:10:00]
Shaan: We’re going to have you on again if you’re down. Here are five topics I want to hear about: Why I don’t play golf and what I do instead. Why I hate inefficiency in markets. Why I don’t believe in karma but I do believe in extended feedback loops. Sometimes faking it is making it. And the introverted engineer’s guide to public speaking. I need all of these.
One question I want to wrap with: you seem like a pretty astute observer. You know who we are and what we care about. So I’m curious — what would be the most fair criticism you could give us on the podcast? What’s your critique?
Sam: You can offend. That’s kind of what I’m taking you up on — say whatever you truly feel.
Dharmesh: All right. So partly you have to recognize you guys are multi-channel, so you’re kind of solving for the audio format. But the one tactical thing you should fix — like next week or the week after — is you should apply the Shaan-twenty-five-headlines thing to every podcast episode title. What’s the one nugget that’s going to cause people to want to listen even if they’re not subscribed, when they see it in their YouTube feed?
“Why This Successful Entrepreneur Never Played Golf and You Shouldn’t Either.” Whatever it is. Right now you kind of just identify the episode number and who the guest is, or the topic area, but there’s no real hook.
Sam: Me and Sam don’t even touch the headlines. Dan does them. I see the notification, it goes out, and I judge the headline myself — like, “Ah, that’s not gonna get many clicks” or “Oh, that’s a juicy one.”
Shaan: Give Dan a free pass to the copywriting course.
Dharmesh: That’s awesome. Okay, what else?
Sam: That was a weak criticism. You have more.
Dharmesh: Okay, this is a harder one. It’s about the brand. Anything that can be reduced to an acronym will be, which “My First Million” often gets reduced to. And then you kind of lose the punch. Anyone who sees “MFM” immediately doesn’t know what it is if they don’t know the show. There’s some value to brand equity in the acronym among people who know it, but it doesn’t compensate for the opportunity you have.
The other thing: “My First Million” resonates with a certain cadre of people — “Oh, I want to learn about that.” But I think your reach is much wider now. There are probably more people outside that frame who would still love the show. The Biology episode, which I think is one of your best — had nothing to do with getting your first million. It was about big ideas.
Sam: I actually agree with you. We’ve had this conversation. The problem is we’re pretty deep into it.
Shaan: We can’t change.
Sam: I hate the name. I don’t really care about the brand equity. I don’t love it. I don’t love the name of The Hustle either.
Dharmesh: If you believe this thing is going to get ten times bigger in the future — which I do — then ninety percent of your future listeners haven’t even heard about you yet. You’re only changing on a very small population of people for the good of the long run.
And here’s what I would do to make it easier on yourselves: don’t decide to change the name. Decide to come up with alternatives. Objectively measure those alternatives. Am I willing to give up the brand equity and go through the pain of changing a name because this one is just so much better? If something clicks — great. But make an honest concerted effort to come up with those alternatives. Then you can still decide: “These are better, but they’re marginally better — not better enough to go through the headache of changing it.” That would be my advice.
Closing and Guest Recommendations [01:17:00]
Sam: Okay. Sam, you want anything before we go? We’re going to follow up with some intros. We’ve got to use Dharmesh — he knows everyone.
Dharmesh: I’m curious — I don’t actually know as many people as you think. I’m kind of an internet person. I don’t leave my house. You have to interact with carbon-based life forms in real life to build those kinds of relationships, and I don’t do that.
But on your list, I would have Naval. He’d be awesome to have on the podcast. That Biology-level thinker. I think the audience would love him.
Shaan: We’ll take that intro. Thank you.
Dharmesh: He knows me loosely. Don’t demand your expectations — I’m willing to try but just, you know.
Sam: Anyone else?
Dharmesh: Someone I do know well: Drew from Dropbox. I know him really well. That’s an intro I could make.
Shaan: What’s up? Yeah, that would be a good one. I heard he’s an amazing singer.
Dharmesh: He’s a good singer for a founder. But an amazing founder — legit.
Sam: So Dharmesh, Shaan was pretty nervous coming into this because he likes to over-prepare. I told you yesterday — I’m going to predict the future. You’re going to come on, and then you’re going to start wanting to come on once a month. I have a feeling we just accomplished that.
Dharmesh: This was fun. And more importantly, I hope it ends up being useful for the audience. That’s the thing I’m solving for honestly.
Sam: Looking at this doc, I feel like we left a lot on the table. We have a lot more that we could do.
Shaan: I always feel this way with a guest. The first twenty minutes were slow but then it got really good. Maybe we should actually pull the future forward — just start at the twenty-five-minute mark.
Sam: What’s your Twitter handle?
Dharmesh: It’s just Dharmesh — D-H-A-R-M-E-S-H. I’m pretty active. LinkedIn, Twitter, Facebook — pick your thing.
Sam: Anything you want to promote?
Dharmesh: I’m not a promoter. That’s not my thing.
Sam: Thanks, man. This is awesome. We’re going to have you back on. Did it turn out as good as you thought?
Dharmesh: I love you guys. This was fun.