SaaStr 804: AI and The Future of Sales, Marketing & CS with HubSpot CEO Yamini Rangan

25:09We added one more agent this year. We're here to prove product market fit. We just want to make sure that every customer that's actually leveraging an agent is getting clear, consistent, repeated value from those agents. So if you're using a customer agent, it should, like clockwork, be able to solve your tier one and maybe even tier two tickets. If you're using a prospecting agent, it should look at your entire customer base and be able to tell you what are the best prospects to go after and even help you set up meetings with those prospects. Content agents should look at the distribution of the content that you have and be able to say, here is the best channel to put this content in.

25:53Here's how I would cut it for Instagram. Here's what I would do for YouTube. It should be able to help you do that work. And that's what we're trying to prove. And what is interesting is that in the world of applications before, it was somewhat predictable. You go in, you point, you click, and you can see what the customers are doing. I think in AI, it's very new usage patterns. And so all of us in the industry have to be very curious about what those usage patterns are, because we just can't go back to what we saw within technology and usage in the last 10 years. It's a new playbook. So we are so obsessed about what are they clicking, which ones have daily repeat usage versus weekly repeat usage versus novelty use.

26:43Because what's happening in the industry is there are novel, neat AI things. We've all used it in our personal life. We've used it once and it has this beautiful image that it creates and then we never go back to it. That's just neat. But AI has to be necessary. It has to go from just being neat to being necessary to being in the flow of everyday work in order to have the promised transformative benefits that we all think there is. And so that's what we're obsessed about. Just a couple of questions I had when you said that. So HubSpot's got, I think, six core products right now, right? Six. As they all have an AI, and as you said, AI is core to HubSpot.

27:24It's not an upsell. It's not an addition. It's not a 60 bucks a month extra feature. Are those products blending more into one? Because AI can stretch across them. The difference between sales support, marketing, service. If it's one AI I'm communicating with, the products aren't always, they're getting less distinct, aren't they? Tell me why you're asking this. I'm very excited that you're getting there, but tell me why you're asking this. There's two reasons. One, it might be on the next slide, but I'll tell you the real reason. No, I'll go back. Oh, yeah. And what I've seen in, I think the bleeding edge here on B2B has been in e-commerce.

28:06Yes. E-commerce is because it's super high volume, super transactional. And in e-commerce, the lines between sales and support were always blurry. Yeah. In B2B, I buy the product often with a human and then support handles the headaches and customer success smooths over the bumps. In e-commerce, when I go to buy, some cool shoes or this neat bracelet online, I might want to buy it. I might have a question. Is this in my size? Do you have it in gold? Or I might need a return. Or I might, there's a myriad of things. Or I might come to the site for the bracelet, but I've got to get disaster. I might need a coupon.

28:44So I go back later. So that's marketing, sales support. And what I've seen from the companies I'm close to in e-commerce, they're already blended. Klaviyo, Gorgeous. All these folks in the Shopify ecosystem, they're already merging into one AI. And it's almost, it's incredible the pace that is happening. Classic B2B is behind, but HubSpot is in this unique position where you have all the apps. Yeah. So I just think this idea that I talk to this SDR that thinks SaaS is next week, and then I have to talk to an AE. Yeah. And then I have to talk to a CSM that doesn't know who I am. And then the marketer's got to get the data and learn, like, Like the customer wants, and I'll tell you one last, the customer wants one experience.

29:27Yes. And the interesting thing in e-commerce, this just literally changed. A couple months back, my secret gaming chair is I'm not a gamer. No, I'm not. Anyone have a secret chair? Not enough gamers. All the gamers you'll watch on YouTube, they all have these secret chairs. Oh, yeah. If you're going to sit in here, if you're going to stream all day. I've always wanted one of those. Yeah, we'll get you a secret. We'll get you a secret. And you can brand them on the spot. You can brand them. They're pretty cool. So I go to buy one with my son. I'm at his college. He's a freshman. And we're tired.

29:51and we like bought the wrong chair or something. So I had to switch it. And there's five links. There's chat, our new chat GPT. There's support, there's sales, there's questions. And there's like literally five chats on the site. I go back, there's one. There's one. So I asked that question, this little quote from John Deke teased at this. Totally. But not that many in B2B have the whole stack, right? I'm so excited that you're going here because I think two things are happening. One is that the usage patterns are creating a blur of lines between the different functions in B2B, just like it created in B2C and like other places.

30:33And this is exactly right. Like we launched our customer agent and we were specifically thinking about the support use case. And we're obsessively watching like how our customer is using this agent and what is the daily usage patterns. And what is interesting is that But they're not only, you know, when someone is using a customer support agent, they're also asking about pricing questions. They're also asking about the next event that is getting thrown, the next webinar that you can attend. And so for them, it's not, oh, this is a service product and I now can only ask questions about a ticket.

31:09It is, I'm your customer and I have questions. That's it. It is not, I'm your customer and I have a service question, a marketing question, a sales question. So you literally cannot do that when you put an agent out there. And this is one of the realizations that we had. The lines are blurring. And at the end of the day, you serve your customer. Your customer does not need to know which work they're dealing with. And we've been saying this for a while in our industry. It is now possible to do. I do think the lines are blurring. And in order to do that, the level of documentation, the level of history, the full context of the customer journey needs to be there.

31:53And we do think that's one of the reasons why platforms will continue to win. Point agents will not win in this whole race that we are in. That's one part of it. There's another subtle thing that is happening, which is we have in B2B software always focused on providing technology for specialists. BDR has a tool. A pre-sales person has a tool. A solution consultant has a tool. A salesperson has a tool. A content manager has a tool. A video editor has a tool. We've really provided tools for specialists. And what AI is going to help us do is to enable generalists. in marketing, you might not be the translation expert, but you can now translate.

32:38You might not be the video editing expert, but you can edit your videos right now. You might not be specified like social channel media expert, but AI is going to help you do that. So I think it's also going to lead to more generalists that can then leverage technology to be able to do more. So that's fascinating as well. Yeah, maybe just two thoughts. One about HubSpot and then more about John's insight here, your insight. But I also think if I'm thinking like 2024, 2023, everyone here is a HubSpot customer, but maybe some is for their old school, they're just marketing. Maybe a lot are just CRM because HubSpot owns CRM for this community.

33:17But maybe in 2024, I might use two vendors or three vendors. I feel like in 2026, I might be like, if I just have one AI, I really don't want my AI leaving my platform and going to a different AI. I want this whole thing to be transparent to the customer. So I think in an ideal world, I want one app that does it all. And I think I want HubSpot to do all of it. But there are also tons of agents. So we're not going to take it lightly. We're just not going to assume that we have the ability to provide that platform. We're going to fight for it because while the premise is that point agents cannot solve more than point questions and you as a customer, you'll need to be able to answer all the questions for your customers.

34:04That is given. If you peel back the onion, think about what does an agent need? An agent needs to be onboarded just like your employee needs to be onboarded. When your employee joins your company, what do you do in the first week for that employee? You provide your products, your ideal customer profile, your brand voice, your tone, your competitive differentiation, your value proposition. You're actually training your employee with all of that context so that the employee can contribute meaningfully to your organization. That's the same thing that's happening with agents. When you onboard an agent, you provide the same thing, your brand, your tone, your knowledge-based articles, your history, your ideal customer profiles.

34:50And when you do that with the most exhaustive and unified set of data, then your agents can actually perform better. And so you really have to start thinking about what is this required to leverage AI. It is more unified data. It is data across your entire customer journey and it's context about you, your company. I prompt crazy and I'm spending time on Cloud. I'm spending time on ChatGPT and I probably do tens of prompts, but I have a generic one, which is this is my role. This is what I do for HubSpot. This is our company. This is our customers. Now I have a question for you. Like that first part of the prompt, I'm just going to assume anytime I prompt that's there as part of my prompt.

35:36And then I write the second part of the prompt, which is a more specific question. And your applications need to do the same thing. You shouldn't have to give that context every time you use an agent. It should just be available for you. And that is the difference. Yeah. And just for folks that maybe are behind here, this point that I highlighted, I mean, I already brought it up. But the team started using it beyond service is pretty profound. Our own little AI, 140 ,000 chats. Yeah. It was just, I thought people would ask about what Yamini said when she was at Dropbox. They've reviewed hundreds of EC pitches, hundreds of board sections.

36:14They've written SDR pitches. There've been a lot of therapy sessions with Digital Jason about their business slowing down. There've been a lot of conversations about whether they should fire a CRO or a CMO. Oh, and RAI, which I didn't know, RAI closed one sponsor here. That's amazing. But I wouldn't have, I wouldn't have this experiment. And so the fact that HubSpot at their scale can see it already do more than service. If you're not in production with your customers, letting them drive you, you're not in the old, one of the old Saster posts, which I know you would agree with is everyone needs to do customer support or you don't learn.

36:51Right. Right. So pre-AI, you do customer sort, you go, oh, my God, I can't believe we're saying that. Or, oh, my God, I can't believe our product has that. You learn these, you learn like things that you knew, but were a little different with AI. Customers take you places you did not expect it to go. Right. That's the power. Yeah. You have to be obsessed about usage patterns. What are they clicking? What are they returning to? And then we are constantly sifting between neat and necessary. Yeah. Daily usage and one time use. And that's the pattern that you have to like really follow. This whole thing of every company needs a website, every company now needs an agent.

37:26Here's the thing. What was happening in the previous generation is you search and then you click and then you consume information. That is the pattern that as an industry that we're using, that we've used for the last couple of decades. Search is gone. Like we're not just searching to get the information anymore. or AI overviews are actually providing answers. So waiting for search to lead traffic to your website is gone. And that is one thing. The other pattern that is emerging is that it is not search, click, and consume. It is have a conversation. That is the new pattern. And so we're now in this mode of a completely different pattern, which is all about ask a question and get an answer.

38:15You're not pointing, clicking, searching, consuming. You're just asking a question in your natural language and getting an answer. And that's a huge paradigm shift. And that means a lot of things in go-to-market has to change based on that. It is a huge... Now, I was actually... The reason I put the slide of is the bottom part, but now I get the top part much better, which is the whole idea of a website is somewhat dated, right? The website now is a carrier, a vehicle to interact with... we can call it an agent. The terms agent have one, I like to just call it an AI. It is a carrier so that I can talk to an AI in a variety of vehicles, prospect, customer, user, and have it do things.

38:55I don't know everything that you're getting here, but if your website is a static website with a data chat for research, you're falling rapidly behind. Everyone wants to talk to their documents, to their vendors. Like they just want to talk to these things. That's the shift. Yeah, it's a big shift. I think the interesting thing is, the other thing I learned from our AI, not to get on a tangent, because I do want to at least talk about partners before we're out of time, even though it's not AI, is why does our AI work so well? It's Haster. And I guess this is an obvious point, and some people make fun of it because it's a conceit, but when they're talking to me, if you have, I don't know if you have a Yamini AI like Brian does, but if you put one on the HubSpot website, right?

39:37Not everyone knows who's the CEO of HubSpot is. Honestly, you have 260 ,000 customers. And a lot of them know they will talk to you. Yeah. And because they'll talk to you or me, the prompts are inherently different. Yeah. They're specific because they've been reading SASA for 12 years. Jason, I know you did this thing at SASA with Yamini last week and you talked about how we have to motivate the team. I've got a CRO who's angry and yelling at me that she doesn't want, like that inherently creates the right prompt. Yeah. I just, I don't even know. I don't even know if we should be prompt experts in a year, should we?

40:09I still think there is benefit in that. I don't think like everything is going to be like so obvious and easy that the conversation that you and I have is going to replicate itself. I do think that you have to be decent at writing the context for the prompt and being good at prompting. I don't think it's going away. It's asking a lot for a customer, isn't it? Yeah, it is. Yeah, it is. All right, we hit the point. Fascinating. Yep. All right, I want to, we've come back to AI with the questions, but I know AI is really exciting. but this one in just in terms of helping folks learn yeah i find so many founders do not understand partners and indirect sales so many partners i was literally catching up with this an up-and-coming vp of sales i know who just washed out at a company of 30 million yeah and i said to him what happened i know you i would recommend you in a heartbeat we went into an environment that was 60 indirect 40 direct he only ran outbound talked to the customers myself was pretty good at it.

41:04What happens when it's 40 % of your revenue? Revenue defined. Exactly. Even though that 40%, I bet he tilted the curve, right? Look, I think that as an industry, we got fascinated with product led growth to the point where we solve everything with product led growth. And that is not the case in go to market. There is a sales team and how you actually bring them to the most productive use. There is a whole partner ecosystem. And then of course, there's product led growth. And for For HubSpot, 40 % of our ARR has been influenced by partners. That is, either they are bringing us leads or they are co-selling with our sales team and helping them close.

41:43Those two are what we call as influenced. And if there are HubSpot partners here, thank you, because we love having you in the ecosystem. And it's been a great journey to, one, we've had that 40 % from the time that we were like$100 million to now we're close to 3 billion in ARR. We've had partners be part of that. It's scaled. It stayed 40%. Yeah. So they've scaled. And we're, in the old days, a lot of these were agencies or smaller shops. Yes. That ratio has probably changed. Yes. That's who they are, right? Absolutely. So the couple of big transformations that have happened within our partner ecosystem, most of our partners, we have about 7 ,000 partners, and most of them started as agencies, marketing agencies, building websites, and it was great.

42:29Then as we started expanding from marketing to sales, to service, to content, and building an entire platform, we went to our ecosystem and we said, look, this is the journey that we are on. We're going from an app to a suite, to a platform, and now to an AI-powered platform. So come on this journey. And we've spent a lot of time talking to them about the journey. And many of them, it's just one of the most fulfilling things for me to see many of them have transformed what their organizations were to now become CRM implementers and AI-powered CRM implementers. That's one part of the journey. The other part of the journey was when we got started, we were really focused on SMB and most of our customers were 100, 200 person companies.

43:12Now we've gone north of that. We're serving customers with 1 ,000, 2 ,000, sometimes 3 ,000 employees. And our partners have gone on that upmarket journey with us. And they've done a wonderful job and it requires a lot of focus. It requires creating vibrant ecosystem where there's support. And it's been just this wonderful journey. And that's why you see these numbers out here. Yeah. I think what folks might not realize is that we talked in the opener about modes versus momentum. Maybe it's changing today, but at least in the past, most HubSpot partners only work on HubSpot. Yeah, it still is.

43:50So if the customer goes to the partner or the agency, they're not going to look at three vendors because, listen, I need help with my CRM. I need help with my marketing. We'll help you. We deploy HubSpot. So it is, not only if you ignore partners, do you maybe lose 40 to 50 % of your revenue, but it's super hard to compete when they're HubSpot. Like web buyers can, if they have the energy, they can evaluate 100 vendors. Really, it's two or three? Yeah. But with partners, it's just one, isn't it? Yeah. How many of them sell 11 other competitors? None. 70 % of our partners are focused very specifically on Humpspot.

44:28Yeah. And yeah, it's a huge moat. There are moats and there is momentum and a lot of them are getting disrupted. But I do think having a great partner ecosystem is a very good moat. yeah whatever you do as founders at least this direct thing even if you don't know anything about sales direct just intuitive okay i gotta gotta email somebody get them study your ecosystem if your ecosystem is in any way partner driven and you'll see if you go super if you go like into security or enterprise sometimes it's a hundred percent whiz is all partners you want to compete with whiz and you want to sell direct and be like you just gotta lose but at least study at least calmly study your marketing don't make this mistake this vpsl cro said who's obviously They didn't study the market.

45:11They see, like, if you don't adapt to these ratios, you're just going to lose. You're just, we're not all direct buyers. But all right, thanks. I got more questions, but do you guys have questions? In the last session, Jason said that 20 to 40 percent of the workforce might not make the cut. Now, this is a tough one for Yamini, but keep going. Yeah, I did say that. Yeah. I was interested in knowing who makes the cut at HubSpot. What skill sets or traits or strengths are you prioritizing for the future for those that remain? Yeah. Curiosity and growth mindset. That's what will make the cut. And I think that I agree with Jason.

45:54If you're trying to slow roll AI, if you think that this is going to go away, if you're not investing in yourself and developing a level of AI fluency, then you've pretty much lost the game. And so I think that is what we are focused on within HubSpot. Thank you so much. First of all, thanks for the great session. It's awesome and insightful. My question is that in the beginning, you mentioned about after a ChompGPT release, you changed the business roadmap and product roadmap. So what would be the good attitude that CEO would need to have to cope with change? Because things are changing dramatically.

46:33Yes. see. And I would like to understand how you cope with change and what kind of do you prepare for it? Yeah, you just embrace it. I think if you're in the tech industry and I've been in this industry for 25 years, of course, this is an unprecedented level of change, but change has been the constant and you just have to thrive in it. I'm like a kid in the candy store right now, looking at all of the new ways in which we can help customers. And so you have to embrace it. And when people around you see that you're excited about it and you are learning, you are answering questions. And a lot of times this is a time to say, I don't know.

47:08I say this within the company a lot. If there's a question I don't know, I'm like, I don't know. This is like two year old phenomena. So how would we know? And so I think being able to role model how you are thriving with change will encourage others to do the same thing with change. Thank you. For once, I want to take another question, but it's really interesting. you said kid in a candy store. Yeah. Actually, to me, that's the bar. Like, sometimes people get mad when I say this, but when I, especially when I talk to product teams or engineering teams, if they're not saying this is the kid in the candy store age, you have the wrong team.

47:41Yes. They should be excited. They should be excited. They should be going home at night and screwing around and coming up with, they should be doing internal hackathons, even though you haven't had one in five years. They should be like, finally some cool stuff I can do. If you're not seeing that, it's brutal, but you got the wrong team. The last five years were boring. Boring. We were doing the same playbook and we were trying to push the same. Another sock. What? Yes. Another compliance I got to build, Yamini. Yeah. How I can do, it's fun. Exactly. So if you don't feel that, it was interesting that even Yamini said it.

48:10Like, that's a sign. Thank you, Yamini, for being here. I do have a question, but the first question is, hopefully Brian Halligan's doing well. I know he's doing great. The founder's had an accident. I don't know if he's still involved in HubSpot or not. He is. But my question is involving scaling. So does HubSpot have a direct competitor? I used to describe HubSpot as the easy to use Salesforce. Yeah. And I know you mentioned that you guys can handle companies now with 2 ,000 to 3 ,000 agents. Can you go enterprise? Yeah. So on the first part, thank you for asking about Brian. He's doing great.

48:49He's fully recovered. He continues to be involved. He's on our board and he's doing fantastic. And I particularly enjoy having conversations with him and learning from him. So I think that's good. On how we think about the segments that we serve, we really care about ease of use and time to value. And we think that the segment, which is 2 ,000 to 2 ,000 employee segment, which most of us can call it as like a mid-market segment, they've been underserved. They've been underserved because there's like very complex enterprise tools that try to fit into that market, or there's like point solutions that you have to cobble together.

49:24And it has been underserved. We focus on that particular segment and we want to serve it really. And we want to be the market leader within that segment. HubSpot runs on HubSpot. We're an 8 ,500 % company, but that doesn't mean that we want to take our product all the way up to the enterprise. We really want to focus on serving, scaling companies really well. Thank you. Just one follow-up. My epiphany, we did this in 2021, all outdoors out there. Pretty funny. Yeah. And that was the first time when I asked this question, this type of question, nobody in 2021 now was migrating off HubSpot. Yep.

50:00But I meant in the old school, everyone loved HubSpot. But when HubSpot CRM was early, folks would use it and then graduate to Salesforce. Yeah. Then in 2020, 21, I was like, no one's really doing this now. I mean, but the folks that are now at that next level, you want to stay with them forever, don't you? We can. Yeah. And like I said, HubSpot went on a HubSpot and we've grown and scaled over the last five years. We've gone from 4 ,000 employees to 8 ,500 and we've continued to scale on HubSpot. So it's not necessarily product scalability, but which focus market do you really want to serve? And that's where it comes down to.

50:40I just literally haven't been. It's been years since I've been in some sort of meeting where someone said we've gotten too big. I just don't hear it. It's just an interesting evolution. Yeah, I just don't hear it. Good. All right. The next time you come to Sasser, we'll talk about price and bread. It'll be totally different. Thank you so much. Let's give y 'all money if they can.

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