How to build a successful startup culture: Tips from HubSpot CEO Brian Halligan

Nothing is as crucial to the growth of a startup as the culture that guides it, HubSpot CEO and co-founder Brian Halligan, SF ’05, said April 2 in a talk on campus.

“I think if you want to build a company that attracts a lot of great customers, you need to build a unique product that’s very strong,” Halligan said. “But if you want to pull in the best people and retain them, you need to have a unique, differentiated culture that’s very strong and I think we’ve done that.”

Halligan was interviewed by Andrew McAfee, co-director of the MIT Initiative on the Digital Economy, as part of the Dean’s Innovative Leader Series. Halligan is also a senior lecturer at MIT Sloan.

In the nine years since Halligan and Dharmesh Shah, SF ’06, launched HubSpot, a maker of inbound marketing software, it has grown to a publicly traded company with 13,000 clients in 93 countries.

HubSpot had a strong MIT Sloan connection from the beginning, Halligan said. When he and Shah were seeking $1 million in initial investment, the majority of their early funding came from classmates’ families.

“Our first paying customers were classmates who were willing to put up with poor quality software but were supportive of us, which was great,” Halligan said. “And I’d say that 10 of our first 15 employees were Sloanies.”

Today, Halligan said, the company has some 900 employees, but it retains its egalitarian culture. In large part, he said, that culture reflects the values of its heavily millennial workforce—younger employees born in the early 1980s and later.

“We’ve tried to build a culture that’s a magnet for millennials and is really a good system for them to stay in,” said Halligan, a self-described member of Generation X. Specifically, he said, that translates into a highly transparent culture that provides ongoing learning opportunities and inter-departmental mobility. He said employees have few management commands that must be followed. For example, he said, HubSpot has no employee handbook. Instead, managers ask employees to follow a three-word guide: “Use good judgment.”

Halligan also shared tips about dealing with venture capital investors. It’s important to keep in mind, he said, that venture investors are interested in big outcomes and expect full commitment to that end. “If you’re thinking, ‘Hey, I don’t want to swing for the fences,’ or you want to be conservative and play small ball, don’t do it, because you’re going to get shot. They’ll fire you over that because they want to swing very, very hard,” he said.

Halligan encouraged students interested in launching a startup to learn about as many parts of the business as possible, explaining that each piece of the company is connected to all the others and one underperforming unit or functional area can endanger the entire operation.

“Our product in the early days was not that great,” he said. “And when your product’s not that great, the support guys get whaled; and when the support guys get whaled, the customers get unhappy and the word of mouth breaks down. Everything is completely linked.”

“You have to be good at everything. You can’t be just really good at one thing,” he said.