Case 17 HubSpot, Inc. Transforming the Marketing Model Brian Halligan and Dharmesh Shah, the founders of HubSpot, met at MIT in 2004. The company is based in Cambridge, Massachusetts, directly across from the campus where it was first envisioned. Both Halligan and Shah were interested in the transformative impact of the internet on small businesses and were early students of Web 2.0 concepts. After two years of discussions and early work, in June of 2006 the company was officially founded and funded. The most interesting aspect of the internets impact on business from HubSpots perspective is how it has changed the nature of shopping and subsequently the shape of every vendors sales funnel. Ten years ago, if a company was interested in buying a new product or service, it started by attending trade shows, reading industry journals, and going to seminars to learn more. Early in the process, it would engage directly with key vendors salespeople, who would provide product information. Today, that same process looks very different. The potential customer starts by googling relevant keywords. The prospect spends time on each vendors site, searching Yelp or Google for reviews, perhaps joining an industry discussion group on Facebook or Reddit, and so on. At some point in the decision cycle, the prospect engages the vendors salespeople directly through email or by text. That first vendor conversation today is much different from the one two decades ago because the prospect often knows as much about the vendors product as the sales rep does and the prospect is already much more qualified. The internet has tended to make every marketplace more efficient. Just as DePop makes the niche market for Off-White suspenders and Balenciaga fanny packs more efficient, the internet is making niche markets for intellectual property law, system dynamics consulting, and food brokerage more efficient. It used to be that the size of a firms sales force was the key to finding the new customers, but that is not necessarily the case today. The good news for small businesses is that on the internet, its easier to hide if your business is a sole proprietorship or a large consultancy. The internet disproportionately favors small businesses, since it enables them to position their niche products so that they are available to everyone who is shopping for them, regardless of the prospective customers location. HubSpot Inbound Marketing Software helps over 4,000 customers to generate traffic and leads through their websites, and to convert more of those leads into customers. Its vision has been to provide a killer marketing application and provide great advice to small businesses, enabling those companies to leverage the disruptive effects of the internet and get found by more prospects. HubSpot transforms potentially static websites into modern marketing machines that produce the right leads and helps convert a higher percentage of them into qualified opportunities. HubSpot focuses on tools to help the small business owner create, optimize, and promote content; capture, manage, and nurture leads to win more customers; and learn to make smart marketing investments that get results. Some of the tools it provides include social media, blogging, search engine optimization, and content management.

Questions

1.How has the salespersons role changed because of internet marketing? Consider differences in prospecting and presentation.

2. Do you agree with HubSpot that a prospect is more qualified to make purchasing decisions when it uses information found on the internet?

3. How might the salespersons compensation be different or the same with internet sales versus traditional sales methods?

4. Should a new small business rely solely on internet promotion? What other methods should it use?