My First Million Podcast Art Cover

Billion Dollar Business Philosophies With HubSpot Co-Founder Dharmesh Shah on the My First Million Podcast with Shaan Puri and Sam Parr

Check out the My First Million Podcast Episode Page and Show Notes 

Key Takeaways

  • Talent and resources, that would otherwise be unavailable during an economic boom, become increasingly available during a recession
  • A founder must convince talented people to do the “irrational thing” and join their startup
    • Salary is just one vector of value for an employee, and one that people often over-index
  • There are three types of employees: creatives, completers, and collaborators 
  • The Trillion-Dollar Venn Diagram of Success: create value at the intersection of two of your skills 
    • Acquire skills that are rare and also ones that reinforce the skills that you’re already exceptional at 
  • Most things require skill, not talent 
  • Find what your time is worth on an hourly rate and either don’t do or delegate, any tasks that return a value less than that amount 
  • Creating a successful business requires a big dream and constant iterations on ideas, processes, and products 

Articles and Websites Mentioned

  • Why To Start a Startup in a Bad Economy by Paul Graham 
    • An evergreen blog post written by famous venture capitalist Paul Graham in 2008 that argues a recession might be paradoxically a good time to start a business
  • – a word guessing game that is similar to the web game Wordle 
  • – an internet chess server, news website, and social networking website


  • Dharmesh Shah (@dharmesh) is the co-founder and CTO of HubSpot, a publicly-traded company that develops and markets software products for marketing, sales, and customer service. He shares his thoughts on his blog OnStartups and on his LinkedIn profile. 
  • In this conversation, Dharmesh Shah, Shaan Puri, and Sam Parr discuss why starting a business in a bad economy might be a good idea, the trillion-dollar Venn diagram of success, and why Dharmesh created an alternative game to Wordle, among many other entrepreneurial topics
  • Hosts: Shaan Puri (@ShaanVP) and Sam Parr (@TheSamParr

Why a Bad Economy Is a Good Time to Start a Business

  • A “bad economy” is either a neutral time to start a business or an even better time to start a business, according to Dharmesh 
    • Talent and resources become available during a recession that would otherwise be unavailable during an economic boom
  • Competition decreases when there’s less money flowing into various competitive verticals and/or marketing channels  

Founders Recruiting Talent

  • A founder must be good at convincing talented people to do an “irrational thing” and join their startup
  • A founder recruiting talent must either:
    • Offer the person something they can’t get anywhere else, such as earning their “startup MBA” at your company, or making them a co-founder
    • Identify “diamond-in-the-rough” talent and find superstar talent early in their career  
  • Salary and compensation are just one vector of value when working at a company, others include experience gained, growing a network, job satisfaction, etc. 
    • People tend to over-index on their current salary and compensation vector
    • Salary should not be the primary driver of why you join a start-up
  • HubSpot’s early hiring policy: “hire smart people that get sh*t done”
    • “High wattage” person (high IQ, measurably smart) + a predilection to action 
    • Did not look to make “press-release-hires”, or hires that would have necessitated a press release
    • Press-release-hires have a certain skill-set that tends to be less beneficial to early-stage start-ups

The Three Types of Employees 

  • The Creatives: these people start things and have ideas
  • The Completers: task-oriented people that focus on what needs to get done
  • The Collaborators: strong communicators that bridge the gaps between departments and other people 
  • Start-ups should look for someone that’s a 9 or 10 on one of these dimensions, a 7 or an 8 on another, and typically very low on the third dimension
  • Completers and creatives tend to clash, but both play a vital role within a company 

Angel Investing

  • Dharmesh has not met 80-90% of the founders of businesses he has invested in 
  • For most deals, he decides whether or not to invest in the company within 24 hours 
  • Dharmesh does angel investing for two reasons (neither of which are to make a return):
    • #1: to live vicariously through other entrepreneurs 
    • #2: bragging rights
  • There isn’t that much due diligence to do on early-stage start-ups
    • You either like the idea or you don’t
    • You either like the founder or you don’t

Value Your Time

  • Find what your time is worth at an hourly rate and either don’t do or delegate, any tasks that return less value than that amount 
  • Solve for “raw impact” to amplify your time and do things at scale
    • Example: going on a large podcast instead of going on a small one

Why Dharmesh Built WordPlay

  • He liked Wordle, but there were certain limitations in the game that bothered him
  • He wanted to learn more about various coding languages 
  • His son was learning python, so he wanted to build something using python that his son could see materialize into the real world with real users 
    • This showed his son that software can be used to create things and solve problems 
    • It made software more approachable to his son 
  • If WordPlay was optimized for monetization (via ads), it could generate about $90,000 per month 
  • Dharmesh believes WordPlay could sell for something between $2M and $10M 

Buying More Stock in Your Own Company

  • Dharmesh bought more shares in Hubspot because he thought the company was undervalued 
    • He has done this several times 
  • It signals belief in the company 

How It Feels To Lose $500M

  • “It does not phase me one bit.” – Dharmesh Shah
  • The stock going down 50% doesn’t change his day-to-day life one iota

Investing During Bad Economic Times

  • HubSpot models out offensive and defensive strategies going into an economic crisis
    • Defensive: involves having enough cash, preparing for uncertainty, etc. 
    • Offensive: “What can we do to capitalize on this crisis?” – Dharmesh Shah
  • Dharmesh writes larger checks for start-ups and businesses during economic downturns 
  • Business valuations tend to self-correct over time

Entrepreneurs Creating New Things

  • “Everything that’s ever been done has been derivative to some degree.” – Dharmesh Shah
  • Entrepreneurs don’t have to create entirely new things to have a successful business.
  • Entrepreneurs can improve upon one component of an already successful product or service and can create a viable business if that improvement is compelling enough

The Trillion-Dollar Venn Diagram of Success

  • Find at least two things you’re good at and create a business that operates in the intersection of those two things
    • The rarity of the skill matters 
    • It’s optimal if the different skills reinforce one another 
  • Acquire skills that are rare and also ones that reinforce the skills that you’re already exceptional at 
  • Creating value at the intersection of two skills gives you an advantage in an area where there will be naturally less competition 

Skill vs. Talent

  • Skill is something that is learnable
  • Talent is the rate at which you can acquire new skills
  • Most things require skill, not talent 
    • Examples: starting a company and public speaking 
  • Being able to simplify the task at hand, or the ability to abstract the idea down to its simplest form will reveal that the task typically requires skill, not talent

How to Create A Successful Business

  • Dream really big and iterate on small feedback loops
    • The “big dream” is required to start the endeavor and provide something to aim at, but the effectiveness of the iterations is what’s vital to creating a successful business 
  • The quality of the output depends on the number and quality of iterations involved in the process
  • The iterations must be meaningful so compounding effects can take place 

Additional Notes 

  • The maintenance required when owning a home, and the psychological toll it takes on the homeowner, makes owning a home not worth it to Dharmesh 
    • Family aside, Dharmesh prefers to rent a house or apartment instead of buying one
  • Renting gets you one step closer to “living in the Matrix” as the physical atoms surrounding you mean less to you
  • Dharmesh’s company HubSpot acquired Sam’s company The Hustle for an undisclosed amount in February 2021
    • Dharmesh and Sam agree that it was a fair deal for both parties 
    • The acquisition included the rights to the My First Million podcast, which Sam believes could be worth more than the entire deal was worth within the next three years
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Notes By Stan Rizzo

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