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Five MIT Sloan companies to watch (continued)

HubSpotHubSpot - Brian Halligan, MBA '05

HubSpot, Moving the World to Inbound Marketing

The success of Cambridge-based software company HubSpot comes from the simple awareness that the world we live in today differs vastly from the world of 50 years ago. Founders Brian Halligan, MBA '05, and Dharmesh Shah, SM '06, realized that while it was once possible for marketers “to interrupt their way into customers' wallets” (as Halligan puts it) via television and radio ads, e-mail spam, or cold calls, people have become better and better at blocking out marketing. Whether it is through TiVo┬« or Satellite Radio, spam blockers or Caller ID, audiences now have the tools to completely filter out the intrusion of traditional advertising. A new approach was needed to take advantage of the way people now tend to shop.

To that end, Halligan and Shah conceived the idea of inboard marketing, a strategy that enables potential customers to find companies over the natural course of their learning and shopping on the Internet. Halligan believes it is the beginning of a new macro-level trend in marketing—and judging from the success of their software, that trend is already in full swing. After raising their first round of angel funding with the help of MIT Professor Ed Roberts in June 2006, they immediately began attracting both customers and investors. General Catalyst led a $5 million Series A financing in 2007, and Matrix Partners led a subsequent Series B round in June 2008. And with 2009 projected to be another year of 300-plus percent annual growth, HubSpot has clearly tapped into an important need within the market.

To say that the company began at MIT Sloan could not be more of an understatement. Not only did the two founders meet at the School—and not only was Roberts an early investor—but Halligan and Shah also utilized their classes at MIT Sloan whenever possible to help solidify their future business plans. “Because we were going to do a startup together, we knew that at some point we would have to work through founder issues, founder equity, and founder compensation,” says Shah. “We said, ‘Let's just work on it together in a nice safe academic setting.’” Now, with seven out of the nine people on their management team being MIT Sloan alumni and their office literally only a block from campus, the MIT Sloan connection continues to be strong.

“We would love to create a historically significant, publicly traded company right here in Kendall Square,” says Halligan. “In the technology industry, there has been a longstanding rivalry between Boston and California. We would like to build a Silicon Valley-style company in Kendall Square, right across the street from MIT. We are trying to learn as much as we can from the successes of Google and eBay, so that we can create another center of gravity in this new marketing space.”

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