On the morning of August 3, 2020, MassChallenge hosted Brian Halligan, CEO of Hubspot and Carolyn Tisch Blodgett the former head of marketing at Peloton for an exclusive seminar focused on driving customer-centric growth. The webinar was masterfully moderated by Chris Denson of Innovation Crush, who carved a path for the conversation that provided insightful strategies and tactical advice that founders, and small business owners can apply to their business now.
After the event, the MassChallenge team collated notes the highlight key themes from the conversation and have compiled them to share with you here.
What you do and why you do it?
Carolyn: Up until a few weeks ago, Carolyn led the marketing team at Peloton. At Peloton, the ability to create a brand and a whole new category from scratch was an incredible opportunity. Also, Carolyn is personally passionate about the Peloton brand and was excited to make is accessible to other people.
Brian: As Co-Founder and CEO of Hubspot, the ability to help little startups, founders, and small teams grow sustainably and quickly keeps Brian going.
Why did you create Hubspot?
Brian: Two big realizations with Hubspot Co-Founder, Dharmesh Shah, led to the creation of HubSpot. First, as Brian spent time with Startups, the old methods of marketing, such as buying lead lists, cold calling, and live trade shows were too old-school for the modern generation. Additionally, Dharmesh's tiny business school blog had more interest and engagement than any of the venture-backed startups he worked with. As a result, HubSpot was born to create a modern, streamlined approach marketing for small companies.
What was the inflection point at Peloton where the focus on Marketing began?
Carolyn: The early years of Peloton were focused on the actual creation of the product itself. Marketing didn’t become a focus until Peloton knew they had a product that they loved. Soon after, as marketing became the center focus of Peloton, the goal became to break down the barriers of home and boutique fitness and create a whole new product category.
What steps did HubSpot take to approach Critical Mass in the early days?
Brian: The first step was to help our customer understand that they have a problem and then help them relive that problem. We created a tool: company.greater.com which helps companies realize their deficiencies and then as they realize the depth of their pain and their problem, HubSpot was available as a solution.
As Peloton approached Scale, what were the main pain points?
Carolyn: Most people are happy in their current routine, so you need to connect the dots for them, so they know that there is a better way and that the way they’re currently acting is from the past. Peloton wanted people to understand the value of Peloton: while the bike might seem expensive, you need to consider the price of your gyms, fitness routines, and the number of people who can use the Peloton bike within your home.
What is a good timing point to begin Marketing?
Brian: In the past, marketing began relatively late in the cycle of a company and was very arts and crafty. Now, Marketing has changed to an early part of the company and has become much more technical and hardcore. By creating a new type of Marketer, marketing has become a critical role in the beginning of a company.
Was the “Tribe” Mentality a core to your approach to Marketing?
Brian: Within HubSpot, we created a few different personas, or tribes, for different types of possible consumers. Picking one persona, or one tribe, has a lot of benefits and is much more effective as all the content, sales approach, and product design can be created and directed towards one group of people. Eventually, all the personas we created were utilized for marketing content, but it’s important to focus on one at a time.
Carolyn: Within Peloton, we had many conversations about who our main target was. Eventually, we had to pick one specific group, that might not appeal to everyone, to create marketing content for. Tribes and community get involved once you have a product that people can truly love and be passionate about. Creating an organic and natual product, creates a community.
How did Peloton identify the Target audience?
Carolyn: For most companies, the founders are the early target! As Peloton grew, we shifted from the hardcore cyclist consumer to the average gym-going consumer. It was important to start off with advertising geared toward the cyclists who already understand the benefits of indoor cycling, but as Peloton grew, it was important to broaden the market and shift the marketing focus.
Internally, Peloton used retention rates to make sure that the marketing strategies being used were effective.
What types of research did you perform to get your marketing strategy?
Brian: Using Unit economics, HubSpot looked at how much money you would get out of a consumer if you put one dollar in, for every possible consumer persona. Understanding which consumer would create the most profit for.
HubSpot ultimately determined the marketing strategy that would later be utilized.
Carolyn: At Peloton, the relationships between different consumer groups was super important. Qualitative research demonstrated that advertising to hardcore cyclists didn’t have the halo effect and didn’t spread the word to other consumer groups. Other groups however, such as regular gym-goers, demonstrated the Halo Effect as the word spread throughout different groups.
With Covid-19 what shifts did you guys make within your companies from the Marketing perspective?
Carolyn: For Peloton all the 2020 Marketing plans went out the window. We were no longer able to create marketing strategies in advance and had to create new plans overnight. For Peloton, the need for at home fitness benefitted the business itself but the marketing strategy has completely shifted. The uncertainty within society right now led peloton to focus on emphasizing the value story of a peloton bike.
Brian: For HubSpot, the switch to remote business has sparked a need for online marketing. As such, HubSpot continues to emphasize how online marketing is much more effective and accessible to people. After the dust of Corona passes by, online marketing will become much more prominent because of all the changes that are happening now.
How have you guys approached experimentation within Marketing?
Carolyn: Peloton uses Test and Learn. After using social media platforms at first, Peloton broadened into TV advertising and inclemently made their way into bigger marketing platforms, like NFL Playoff commercials. Looking at the effects of individual campaigns and platforms, Peloton is able to assess what works best for their marketing goals.
Brian: HubSpot hosts Inbound events every year, which has become virtual this year, making the event much more inclusive and diverse. Transparency within a company and its employees creates a great atmosphere and betters the consumer experience. As CEO of HubSpot, Brian Halligan makes himself apparent on different social media platforms and has become as transparent as possible to his company and his customers.
At Scale, how do you approach culture?
Carolyn: The hardest thing a company does is to scale culture. Over time, culture and relationships within a company shift. At Peloton, as a small company the culture was very informal. Now with a much bigger team, the culture has tremendously changed. Most importantly, sticking to your company's core values over time is extremely important and beneficial.
How has diversity played a role within HubSpot?
Brian: Having a diverse staff and company is important both for the company culture and the betterment of the decisions your team will make. HubSpot specifically, has slowly made progress with gender and racial inclusion. Employees today, have a huge care and passion for having a diverse workspace. There are two products within your company. The first product is the product you're building for your consumers. The second product is the product you're building for your employees, the culture.
What was the system of thinking around Diversity at Peloton?
What constitutes a great culture has evolved as society has, a greater focus on racial inclusion and diversity. It’s important for a company to look past different superficial aspects, and to analyze what they truly need to change within a company.
How to approach competitors and make sure you're staying on top?
Brian: “Watch your competitors but never follow them.” It’s not only about the product, but about the customer experience. Most of the products or brands we use today didn’t come up with new ideas, but instead have a better consumer experience compared to the old companies they disrupted.
A great product experience is as important as the product. With peloton, they invested in direct delivery from Peloton. Even though there is an extra cost, this benefit increased the consumer experience.
When you first entered Peloton, what “win” put you on the path to success?
Carolyn: I made the mistake that everyone saw the world through my eyes and that every company needs the same marketing strategies. I quickly figured out that I needed to communicate effectively to different groups of people and build relationships with others before diving straight into the marketing work. Once you have relationships and communication with others, the work sells itself.
How did you approach the decision of being both a Co-Founder and CEO of HubSpot?
Brian: Within the last 15 years, the idea that the co-founder cannot be the CEO has completely changed. If you’re investors and team is okay with you taking both positions, just try to better yourself in both positions, read articles and books to learn more, and join different support groups.
The Driving Customer-Centric Growth event was hosted by MassChallenge on August 3, 2020.
Learn more about the 2020 MassChallenge US Cohort here.
If you have any questions, please contact us.