Entrepreneurs, Study Redfin Carefully

Who should we look up to?

As HubSpot grows, that question keeps coming up. Sure, we look up to Google and Facebook, but what are smaller, earlier-stage companies doing equally amazing things?

This summer I discovered a new answer to that question: Redfin.

I recently finished buying my first home, and I did it through Redfin. It was a fantastic experience. I left Redfin a happy customer, and a deep admirer of their business.

There are five main reasons:

(1) Their product and service are easy to love. Every bit of my experience with Redfin was a pleasure: searching the site to find listings, visiting properties with my field agent Mark Sanders, wandering around neighborhoods checking out properties with their iPhone app, using data on the site to do my own market analysis, and finalizing the purchase with my agent, Hannah Driscoll.

(2) They empower users with data.
Most companies bottle up data like some kind of secret sauce. Redfin understands that everybody wins when data is shared. They publish all the MLS listings on their site and make them easily searchable.  That means buyers can find properties they like on their own. That saves time for the buyer and the agent since the properties they visit are ones the buyer is most interested in. No more visiting dozens of places just so the agent can understand what the buyer wants.

(3) They align incentives correctly. Traditional real estate agents are paid on a commission of the sale. That means their incentive is to get a deal done, even if it's not a property that makes sense for the buyer. Redfin flips this crappy model on its head. Redfin agents are paid on a salary and get a bonus based on feedback from the buyer. That means Redfin agents have an incentive to make sure the buyer is completely satisfied with the sale.

(4) They’re blowing up an inefficient market. Real estate brokers exist largely because of imperfect information — but now that information is digital, there is no reason it should be imperfect for consumers. If it’s possible to know all the real estate listings and recent sales in a neighborhood, no business should be able to keep that information behind a gate and charge for access.

(5) Their employees are happy. — The Redfin employees I met — Mark and Hannah — were both genuinely passionate about the company. As a customer, there’s no better signal you can get about a company.

I do have one nit to pick with Redfin: They don’t have a good marketplace for service providers. Instead, they recommend specific lawyers, mortgage brokers and inspectors.  As a consumer you have to wonder about service providers — particularly lawyers — recommended by your broker. Is a lawyer recommended by Redfin regularly going to represent your interests or Redfin's? Probably Redfin's. Redfin could remove this conflict of interest by replacing the recommendations with simple listings and customer reviews.

Finally, the thing that makes me happiest about Redfin: Companies like Redfin will eventually pull us out of this recession we're in — companies that are creating thick new value, simplifying life for consumers and freeing us up to do more of the things we love and are good at.


Don’t Build a Personal Brand. Build a Lasting Institution.

at the Online Marketing Summit in Minneapolis somebody asked me whether
HubSpot encourages its employees to build personal brands. 

answer was unequivocal: Yes. We want our employees to be active on
social media. We want them to blog. We want them to grow their reach.
And as a company we want to help them do all that. If HubSpot's
employees have powerful online presences its message will spread
organically and authentically.

But I'm not happy
with that answer. There’s a problem with excessive focus on personal
brand. I don’t want to work at company full of individuals focused on
polishing personal reputations. I want to work on a team. The team can
have stars, but the stars need to know how to pass. They need to focus
on winning, not being the individual scoring leader.

think this why, if you look at companies building products changing people's lives, they're not hiring on the basis of Twitter followers
or blog subscribers. They're making hiring decisions based on
individuals' ability to build — to build products, to build
institutions and to build teams.

There Are More Smart People Outside Your Company Than Inside

I love this passage from Atul Gawande's book Better:

Among the many distressing things I saw in Nanded [India], one was the incredible numbers of patients with perforated ulcers. In my eight years of surgical training, I had seen only one patient with an ulcer so severe that the stomach's acid had eroded a hole in the intestine. But Nanded is in a part of the country where people eat intensely hot chili peppers, and patients arrived almost nightly with the condition, usually in severe pain and going into shock after the hours of delay involved in traveling from their villages. The only treatment at that point is surgical. A surgeon must take the patient to the operating room urgently, make a slash down the middle of the abdomen, wash out all the bilious and infected fluid, find the hole in the duodenum, and repair it. This is a big and traumatic operation, and often these patients were in no condition to service it. So Motewar [an Indian doctor Gawande visited] did a remarkable thing. He invented a new operation: a laparoscopic repair of the ulcerous perforation, using quarter-inch incisions and taking an average of forty-five minutes. When I later told colleagues at home about the operation, they were incredulous. It did not seem possible.

Motewar, however, had mulled over the ulcer problem off and on for years and became convinced he could devise a better treatment. His department was able to obtain some older laparoscopic equipment inexpensively. An assistant was made personally responsible for keeping it clean and in working order. And over time, Motewar carefully worked out his technique. I saw him do the operation, and it was elegant and swift. He even did a randomized trial, which he presented at a conference and which revealed the operation to have fewer complications and a far more rapid recovery than the standard procedure. In that remote, dust-covered town in Maharashtra, Motewar and his colleagues had become among the most proficient ulcer surgeons in the world.

I came across this story yesterday on a flight back from Austin, where I was speaking to a group about social media marketing — only instead of speaking to the group, I ended up speaking with them, and learning as much from them as they learned from me.

This happens most times I speak — it's how the world works now. If you're a top surgeon at one of the world's leading hospitals, you should expect doctors in India to teach you new ways of operating on ulcers. If you give talks on social media marketing, you should expect the people at your talks to introduce you to new ways of building businesses on Facebook. Innovation is now democratic.

This is a big change for businesses. Information monopolies — expertise — used to be a core competitive advantage for many companies. Now those monopolies are gone; almost everybody has access to the same information.

So, as an entrepreneur or a business owner, how do you deal with this shift? I think John Hagel has the answer. He explains:

We are moving from a world where the source of strategic advantage was in protecting and efficiently extracting value from a given set of knowledge stocks – what we know at any point in time.  As knowledge stocks depreciate in value at an accelerating pace, the focus of economic value creation shifts to effective and privileged participation in knowledge flows. Finding ways to connect with people and institutions possessing new knowledge becomes increasingly important. Since there are far more smart people outside any one organization than inside, gaining access to the most useful knowledge flows requires reaching beyond the four walls of any enterprise.

When I think about what we need to do at HubSpot, I don't think much about building some ephemeral internal expertise — instead I'm focused on how we can become curators of expertise everywhere.

Why HubSpot Is a Field, Not a Factory

A few days ago I posted the following on HubSpot's internal wiki. I'm reposting it here for three reasons: (a) to share a few of the reasons I love working at HubSpot, (b) to add a bit to the excellent conversation Umair started and (c) to point out some of the things I think a growing company needs to do to be successful today.


Umair Haque, one of my favorite bloggers, has a great post this weekend about Leaders and Builders. I highly recommend it to all HubSpotters, and wanted to share some of the things it got me thinking about: 

At HubSpot we talk a lot about changing the way companies do marketing — and we're in the process doing exactly that.

As we grow, I think we should also realize and focus on the fact that we're helping to change the way companies are built.


Think about the difference between HubSpot and companies that were
built in the 20th Century. The GM's, Microsofts & P&Gs of the
world are factories. They're rigid command and control hierarchies that
don't encourage experimenting or innovating. HubSpot and other
companies that are now changing the world (Google, Acmen Fund, Etsy,
Amazon) are fields. Instead of enforcing a rigid hierarchy, we
cultivate great people and empower them to do innovative, world-class


Why is the field better than the factory? Umair Haque's article
and blog archive spells that out. But here's what I think: Fields are
more efficient for the shareholders, more rewarding for employees and
better for the world.

Some examples of how we're a field:

  • Tremendous transparency. This wiki is wide open and it
    contains tons of real discussion, data and documentation. As a result,
    anybody in the company is able to participate in any conversation they
  • A flat organization. Everybody at HubSpot does
    stuff. Very few people just manage. Look at the engineering team and
    the marketing teams — engineering is all engineers, regardless of
    experience; marketing is all inbound marketing managers, regardless of
    experience. That's awesome.
  • Agile Methodology. It's an
    example of the transparency and enables flatness. It also empowers us
    as individuals by giving us the chance to pick and define our own
  • Data-driven culture. In god we trust, all others bring data. This kind of culture reduces political crap by 110%.
  • Access to data across the organization.
    Anybody can collect any piece of HubSpot data they
    want. This data is our Twitter API. By opening up and publishing it
    internally, it enables individuals to do all sorts of creative stuff
    that benefits the company, but that nobody would have expected.
  • We're building a cathedral.
    We're focused on building something that lasts and has a positive
    impact, not hitting some revenue threshold, then trying to flip the

All this is great, but it hasn't happened by accident, and it will
be increasingly difficult to maintain. As we grow we need to be very
focused on building a different kind of company.

Specifically, I think we need to focus on:

  • Flatness. As we build out teams we need to work to retain flatness.
  • Avoiding fiefdoms and turf battles. Instead we need to focus on getting shit done.
  • Education & Training.
    We need to empower people with learning; sounds like training is
    AWESOME for new employees. How can we build the skills of existing
  • Open data. We need to give people within the company more access to company data.
  • Staying focused on the Cathedral.
    Each group is focused like a laser on our monthly numbers. But we need
    to make sure we pick up our heads and look around on a regular basis.
  • Hiring more rockstars. (All levels of experience.)

What do you guys think?


PS, if this kind of environment excites you, you should work at HubSpot.

The Flaw in Demand Media’s Fast-Food Content Model

After Mike Arrington and Paul Kedrosky's posts on fast-food content this week, I went back and reread the excellent October Wired article on Demand Media.

Demand produces tons of content (4,000 video clips and articles a day) related to specific keywords its software decides are lucrative.

The quality is lousy, but the company meets vast swaths of content demand that aren't currently being filled.

As Wired explains:

What Demand has realized is that the Internet gets only half of the simplest economic formula right: It has the supply part down but ignores demand. Give a million monkeys a million WordPress accounts and you still might never get a seven-point tutorial on how to keep wasps away from a swimming pool. Yet that’s what people want to know.

Demand makes money by cheaply producing articles that rank for "how to keep wasps away"-type searches, then selling ads next to those articles.

There's one problem with this business over time: It's an arbitrage, it's not creating lasting value.

Over time, businesses like exterminators will figure out that they don't need to purchase traffic from Demand. Instead, they can create their own awesome content about keeping wasps away from swimming pools, and replace Demand in Google's organic results.

As soon as exterminators start creating this kind of content, they'll realize they get a lot more value out of the content than just the value of the advertising they had been paying Demand for. They'll find significant additional value in PR, lead generation, social media growth, in internal company communication, and lots more I spelled out here.

The best part? When businesses create content, they have an incentive to do it well. Exterminators want a strong brand, so they'll write strong articles about keeping wasps away from pools.

Ultimately, these incentives will keep us from getting stuck the world of fast-food content that Mike and Paul fear.

Don’t Worry About China, Just Innovate

IMG_0265 For the past few days I've been in Hong Kong visiting my brother. I've been walking around the city, gawking at everything that's changed (a lot) since 1999, when I was last here. Earlier in the week I took day trips to Shenzhen and Macau, cities growing as fast or faster.

With these changes in mind and in front of me this morning, I read David Brooks' recent column comparing China's economic growth with U.S. stagnation. He says that, "The Chinese, though members of a famously old civilization, seem to possess some of the vigor that once defined the U.S. The Chinese are now an astonishingly optimistic people. Eighty-six percent of Chinese believe their country is headed in the right direction, compared with 37 percent of Americans."

This kind of woe-is-us thinking resonates when you're visiting this part of the world. When you see a 30-year-old city like Shenzhen that dwarfs Boston, or when you see wealth accumulating like it is on Hong Kong Island, you wonder why the U.S. economy doesn't have such visible signs of strength.

But I don't think it's useful to frame this discussion in national terms. The vigor, optimism and growth David talks about are decreasingly connected to place. Increasingly, what matters is the ability to constantly learn and re-invent your livelihood.
China's economy is vigorous, but there is equal vigor in the U.S. economy if you look at the right individuals or institutions. Google and Apple are thriving because they focus more on developing new businesses than on propping up old ones. The same goes for small business owners like Charlie King and Duncan Page who are figuring out how to use new tools to run their businesses more efficiently.

This type of constant innovation is the key to creating vigorous, competitive businesses today. It will certainly be the key for us at HubSpot as we grow from a successful startup to a thriving institution — and whenever we're ready to start selling in China.

Photo: A bus stop in Shenzhen on Wednesday.

Dear Marketers: Don’t Put Advertising in Filters. It Will Get Filtered Out.

On Tuesday evening I was in Washington DC having dinner at Jaleo, a Tapas place near the Verizon Center. Since I’m on a Foursquare kick right now, I checked in, and poked around.

I checked out the profiles of a few of the other people who had checked in at the restaurant that evening, and I looked at their Twitter streams.

I found some very interesting people, and thanks to the mayor of the restaurant, Ben T (a Gov 2.0 guy who’s @xeus on Twitter), I learned that U2 is streaming a concert at the Rose Bowl live and for free on YouTube this Sunday.

I thought that was pretty cool. Foursquare is suddenly a valuable filter, turning up interesting information for me.

Foursquare obviously isn’t my only filter. I have tons. Google Reader and Twitter are my most important. I also use Facebook, LinkedIn and lots of other sites like the HubSpot blog, Inbound Marketing.com and on and on.

I love all these filters. They give me higher quality information with better context. A lot of the material I end up reading is still from traditional media — but it’s from a broader range of traditional media outlets, and tends to be better produced, more thoughtful and more relevant to my life.

There’s broad acceptance that these filters are helping people spend their attention more efficiently. John Borthwick explains it clearly in this video [ugh! video was removed for copyright violations!] Bijan Sabet posted this week.

But here’s what surprises me about filters today: Many marketing and media types are trying to use them to “target” consumers via advertising. Steven Johnson explains this effort in the video above.

I don’t think targeting via filters is going to work.

I use filters to improve the quality of my information flow. If businesses try to force information that I don’t find interesting into my filter, I’ll just improve the filter. To reach me, businesses have to get through the filter organically — they have to get a recommendation from somebody I trust or show up when I’m looking for a solution to a problem they can help me solve.

How do businesses do that? By building trust and creating useful, valuable content. Not by advertising.

Advertising in Web Apps Is So Last Century


If you look at pictures of public transit systems in the late 1800s, you'll see a lot of horse-drawn streetcars.

these pictures seem like weird snapshots taken in the middle of an
evolutionary leap — a fleeting intermediary step between the eras of
horse-drawn carriages and self-powered streetcars.

Ads in today's web apps are similarly weird. Web apps are our modern street cars. They're the beginning of something big that will be with us for a while. But just like those horse-drawn street cars, web apps with advertising are flawed with an anachronistic power source. Most advertising on web apps is an inefficient means of matching a buyer and a seller. It's an interruption that's expensive for the advertiser and annoying for the user.

This incongruity struck me as I read Ken Auletta's profile of Google in last week's New Yorker. Google — the company that's done more than any other to launch the era of low-cost web apps — seems set on monetizing its software with advertising, pulling these new streets cars with horses.

Of course, the horses won't last. Google's tools like Reader, Blogger, Gmail and Analytics are part of a foundation of new tools that give businesses an alternative to advertising. Instead of going out and interrupting potential customers, businesses now create content and communities that attract customers. The more businesses use Google's free tools for marketing — the more they attract people via Google Reader and analytics — the less they'll want to pay Google to interrupt people via AdSense.

If you look at young, growing companies you'll see a new approach to revenue evolving. Twitter is adding premium features. Visible Measures charges for access to video analytics. At HubSpot we charge for access to tools that simplify the process of attracting customers.

We're evolving towards a world where companies don't pay for the right to interrupt people, but for the tools they need to attract them.

Evolution happens slowly. There are a lot of people who own horses, a lot people who like horses, and a lot of people who will resist the idea of putting engines in our streetcars.  But it will happen.

Photo: Wikipedia

A Great Journalism Job — And Why It Won’t Go to a Journalist

At work right now I'm spending most of my time trying to find somebody to fill an amazing job.

I'm looking for somebody to take the HubSpot blog, which we've built from 5,000 subscribers to over 20,000 subscribers in the past year, and make it into a small business media property bigger and more respected than anything else out there.

This would be an amazing opportunity for a journalist. In a world of shrinking headcounts and budgets, this is a utter anomaly. It's an opportunity to build a new type of media company — and to have the full support of an organization with momentum and resources.

But I'll be surprised if we end up hiring a journalist for the job.

I want to, it's just that I'm worried about three basic problems with hiring journalists for marketing content jobs:

(1) Most journalists don't believe businesses can produce high-quality content. The traditional view is that businesses can only produce biased advertorial content. The idea of leaving a news organization to go work at a company like HubSpot is summed up in two words: selling out. Few can get beyond this dogma to see that businesses now have an incentive to produce high-quality content. Or that the hundreds of thousands of people who consume HubSpot's content love it, and are using it to build their businesses and their livelihoods. (I am proud of that.)

(2) Most journalists avoid the business side of publishing.
The news industry tends to keep its business and editorial teams separate. We don't have that distinction at HubSpot. The person we hire to manage our blog needs to be a writer, an editor and a product manager. Most journalists will look at that model and say it's a recipe for biased, low-quality content. In fact, it's one of the few new models of content production that's financially viable. We need a single individual who can churn out thoughtful how-to posts about online marketing — and assess those posts to make sure they're attracting leads for our paid product.

(3) Many journalists don't understand the physics of the web. Because of the extreme division of labor at big news organizations, many journalists don't understand how content moves across the web. They pump their copy into a production line, then go home. They never see how it drives search engine referrals, or travels across the social web. It's impossible to build a media company today without a deep, intuitive understanding of these forces.

Of course, these are generalizations. I know plenty of journalists who display one or more of these qualities. But as a hiring manager (and a former journalist) with one chance to hire the right person, I'm wary of somebody with a background in news.

Of course, I'd love for somebody to prove me wrong. I'd love for some great writer and story teller who's had it with the news business, to embrace the approach to content we're taking, wrap his or her head around the business of content and develop an intuition for the viral nature of the web.

Maybe that's you?

More Data About Your Audience? I Know! Better-Targeted Advertising!

Two reactions to this week's announcement that geodata will soon be attached to tweets:

Department of Stale Media Models: "Biz touts the “cool” factor of being able to read tweets from people in your city or neighborhood to stay updated during an event like an earthquake (or even a cool concert), but the potential for geotargeted ads instantly comes to mind." (PaidContent.org)

Department of Technology & Business Improving People's Lives:
"A small business on Twitter could potentially use the location feature to reach out to local customers, or a Twitter user hungry for pizza could search for nearby pizza joints offering specials, for example." (NYTimes.com Bits Blog)

Let me think. As a consumer, do I prefer the restaurant that blasts my Twitter account with ads because I happen to be in the neighborhood? Or the one that reaches out to me with a personal message when I ask Twitter a question?