Dharmesh Shah: evaluation

Transcript context

…I'm curious what lessons you've taken from that experience being someone that's clearly startuppy person, being an exec at a very fast growing and large company. And I'm thinking from the perspective of a founder who's maybe thinking about starting a company or starting company, what advice you might have to share for them? And also for people in the exact role today? A couple of things. One, since we are publicly traded down, this doesn't get talked about enough. I'm going to go and get this out there and use this as a platform to get this message out, which is I think too many founders, once they get to a... They are very apprehensive of going public and going through the IPO process and being a publicly traded company because they think... I mean, that's like the beginning of the end. "It's going to change everything and my life is going to suck." And I think they're over indexing on what they think it's like to be a publicly traded company. In my own personal experience, and Brian, my co-founder would attest to this. And yes, there's certainly a tax or things we have to do now as a publicly traded company that we didn't have to do as a privately traded company. But there are actually benefits. For instance, if you kind of venture back in private, let's say, you're sort of at a little bit the whim of the market and how VCs perceive your category and all these things or whatever. And you get, every now and then, when you're out raising a round of capital, you sort of get marked to market. Now here's sort of what the valuation is based on what someone's willing to kind of fund the company at. One of the nicest things, and this is underappreciated, is that we know right now what the market values HubSpot at. I can tell you that any business day of the week. And there's a niceness to that. And that's the other thing I tell folks within the company is that the valuation, which is we're in a relatively efficient market. The public stock market is a relatively efficient by the economic definition of the term, in efficient market. So, the valuation will oscillate around the value. So, if you focus on creating values, here's what we're actually building, valuation will sometimes be higher than you deserve, sometimes will be lower than you deserve, but over the fullness of time, those two things will move in lockstep, right? That's been demonstrated. That's what happens. That's almost a definition of an efficient market is that information moves essentially, and then the valuation catches up with the actual value. But here's the other social reason why I think founders should go public, which is... So in HubSpot, and I hadn't thought about this so I'm not going to take credit for being this generous, magnanimous person, is that in our first pre-public years, I think we were eight years old when we went public, we had created roughly a billion dollars in market cap, give or take. We hadn't been a unicorn. So it was slightly below when we went public. So HubSpot was never a unicorn because that's private privately held company, over a billion. In the subsequent years, we went from a billion dollars in market cap to 30 billion, which is roughly what it is now. That first billion of market cap creation, a very small number of people got to participate in. uent years, we went from a billion dollars in market cap to 30 billion, which is roughly what it is now. That first billion of market cap creation, a very small number of people got to participate in. The rest of the $29 billion in market cap, everyone, every public investor got a chance to participate in. And so I like the idea of, okay, well you believe in your company. There's lots of people that believed in HubSpot. It's nice to let them kind of participate. Our customers, our partners, our well-wishers, and they can sort of now have the upside. And you don't get that in the private markets because it's a very closed... you can't just buy shares in every private company you like. I wish that existed, but it doesn't. So, it's a way to let the market at large participate in your growth earlier.…

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