This week marked an important milestone for HubSpot. The company Dharmesh and I founded over 14 years ago welcomed its 100,000th customer and passed $1 billion in annual recurring revenue.
We've come a long way since we began banging the drum about inbound marketing, and yet, it feels like HubSpot is just getting started.
In many ways, it feels like the whole world is just getting started … or re-started.
The events of the past year have transformed entire industries, upended the way we work, and re-shaped human behavior en masse. The technologies we embraced and new habits we formed during the pandemic will not retreat when the coronavirus eventually does. Rather, they will come to define "the next normal."
This represents one of the most profound outcomes of these times: that never before have companies, and the products and services they provide, had a greater capacity to influence human behavior.
When gyms re-open, people will still workout from home, facilitated by fitness apps. When offices re-open, people will still work from home, facilitated by work productivity and communications tools. When theatres re-open, people will still watch live concerts and new movies from home, facilitated by streaming services.
Without these products and services, many of which have gone from being novel to necessary in the past year, life during the pandemic would look very different. And it would be much more likely to snap back to the way it was in 2019.
Instead, we've witnessed countless companies urgently pivoting their plans to meet new customer needs. They've innovated, they've adapted, and they've re-shaped their products.
I've been inspired to see many of HubSpot's 100,000 customers adapt and innovate in the face of uncertainty, and in doing so, play an instrumental role in defining the new ways in which we live, travel, work, and build a better future.
Mindfulness for the Masses
Take mindfulness apps, for example. One unequivocally positive outcome of these turbulent times has been the increased importance we all place on our mental wellness. Over the past year, HubSpot customers like Calm, Talkspace, and Headspace have gone from being helpful tools for people looking to practice mindfulness to vital services that millions of people use in their daily lives.
When Headspace was founded in 2010 — at a time when meditation was still largely the preserve of religious and spiritual organizations — the key question its founders asked was: "How do we put Headspace in places you wouldn't expect to find it?" Now, 10 years later, it is a multi-media organization with a podcast division, a partnership with Sesame Street, and a recently announced Netflix series.
This progress would not have been possible without the level of scale the company has been able to achieve in the past 12 months. On the eve of the pandemic in February 2020, the app reached two million paid subscribers, and since then, its rate of downloads has increased by 20%. And when you look at data from the first few weeks of U.S. lockdowns, downloads increased by 100% against pre-pandemic levels.
Headspace was growing steadily prior to the pandemic, but when society was plunged into a period of unprecedented uncertainty, the need for its services surged. Thanks to a deep-rooted passion to serve its customers, the company was able to scale through 2020 and usher in a new era in which mindfulness is practiced by the masses.
New Tools for a New Way of Working
As the intertwined relationship between work and location continues to unravel, online productivity tools have gone from being a useful supplement to traditional workstyles to an indispensable part of the remote worker's toolkit.
Numerous HubSpot customers have played a vital role in facilitating this shift: Trello has helped parents to manage their kids' homeschooling schedules, SurveyMonkey has supported nearly a quarter of a million surveys about the coronavirus, and G2 has helped companies find new software solutions, seeing a 1,100% increase in searches for virtual classroom tools and a 550% increase in searches for webinar software in the weeks following the coronavirus outbreak.
Another HubSpot customer, Monday.com, had been growing rapidly in the years prior to the pandemic, announcing $120m in annual recurring revenue in February 2020 as its software helped thousands of scaling companies to collaborate more effectively. And then, as the ability to collaborate remotely became a critical need for all companies, the company changed its product roadmap to meet the sudden change in customer needs.
Among the new releases it prioritized were embedded Zoom calls, online whiteboards, and image annotations — all of which could add immediate value to customers. The impact of these changes was significant. Not only did Monday.com accelerate its hiring, increasing its headcount by 27% between April and June 2020, it also announced a new valuation of $2.7bn. Monday.com was even singled out for praise by Fast Company for its remarkably smooth transition to remote work.
The way we work has changed forever, and the impact of this change is still reverberating across multiple industries, affecting commercial real estate prices, triggering mass migrations, and reducing carbon footprints as commute times plummet.
At the heart of these major societal changes are companies like Monday.com, which initially sought to help scaling companies collaborate more effectively, and now finds itself providing an essential tool that is accelerating a once-in-a-generation shift in human behavior.
Destination: Anywhere
While the pandemic has forced entire populations to stay in one place, it has also dramatically changed the ways in which we move in the world. One HubSpot customer at the forefront of this shift is Airstream.
For decades, Airstream has been building its much-loved state-of-the-art travel trailers, and in doing so, has become one of the most iconic brands in the United States. As the pandemic unfolded, the company was quick to produce new, relevant resources about everything from how to exercise in small spaces, to how to learn and work remotely. As Airstream CEO Bob Wheeler put it, "these virtual products looked very different than the vehicles we're used to producing." But it was through this innovative adaptation to the new habits and interests of its customers that Airstream achieved a 45% year-on-year increase in sales in May, and a 100% increase in June.
The pandemic has made work less location-dependent and leisure less time-dependent. It is now possible for many to travel while working and adventure without taking large amounts of time off work. By recognizing this new dynamic and quickly adjusting its strategy, Airstream has gone from providing a means of travel between destinations to providing the destination itself.
Even after the pandemic has been brought under control, ongoing economic uncertainty and fears of a resurgent virus are likely to result in a continued reluctance to travel internationally. As a result, staycationing and domestic location-hopping are set to remain popular choices for years to come. By re-positioning its value proposition to suit the new habits of its customers, Airstream has further accelerated the shifts triggered by the pandemic, while also continuing to scale as a global business.
Scaling Better for Society
As the pandemic sent people indoors, racial injustice brought many out onto the streets to protest long-standing inequality in our society. Over the past year, customers have increasingly come to expect the companies they spend money with to be a force for good in the world.
Lemonade, the insurance provider and HubSpot customer, is an example of how companies can have the type of positive societal impact that now customers demand, while also scaling rapidly in the process.
Lemonade is a certified B-corp that gives all of its unclaimed premiums to non-profit organizations chosen by its customers. As the company's website says, "Social good is baked into the core of our business model."
When the pandemic hit, Lemonade allowed customers experiencing financial hardship to defer payments (and even in more normal times, it allows customers to cancel their policy at any time and receive a full refund). It also gave its customers the opportunity to switch their non-profit-of-choice to an organization directly involved in fighting the coronavirus outbreak — and tens of thousands of them took them up on the offer. And late last year, the company's CEO, Daniel Schreiber, called on companies to encourage their employees to get vaccinated.
While using its influence to help in the fight against the coronavirus, Lemonade also showed its support for artists facing financial hardship during the pandemic by launching an Instagram campaign to highlight works of art it commissioned.
The insurance industry has not been immune to the downward economic pressures triggered by the pandemic, and yet, Lemonade was one of 2020's most impressive growth stories. In December, after just four-and-a-half years in business, the company announced that it had passed 1 million clients. And just a few weeks after that, its stock hit an all-time high. The company achieved this level of scale while also racking up $1.1million to donate to nonprofits, including ACLU, March For Our Lives, and 350.org.
According to Edelman's 2021 trust barometer, business is now the most trusted institution when compared to government, media, and NGOs. As Lemonade scales its business while simultaneously having a positive impact on the world, it represents the newly defined role companies are expected to play in society — where they are both for profit and for good.
This new expectation of companies and their CEOs creates a responsibility and an opportunity for businesses to play an active role in building a better future for all in the next normal.
Preparing for the Next Normal
I've witnessed more change in the past 12 months than I did in the previous 12 years. But now, on the occasion of HubSpot welcoming its 100,000th customer and passing $1 billion, I'm not looking back as much as I'm looking forward.
The next normal won't look anything like 2019, and it won't look very similar to 2020 either. It will be an era unique in the trends it ushers in and the opportunities it presents. At HubSpot, it will be our job to help our future and existing customers take advantage of those opportunities, while also continuing to support the likes of Headspace, Monday.com, Airstream, and Lemonade as they scale and shape the behaviors that will define the next normal.
We plan on doing that first and foremost by listening to our customers, and by then using their feedback to provide a world-class CRM platform as unique as the times in which we live and capable of empowering scaling companies to thrive for years to come.
I want to thank every customer, partner, and employee for helping us get to where we are today. Without their passion, advocacy, trust, and feedback, the past 15 years would not have been as exciting, and the next 15 would not look as promising.
Our mission is to help millions of organizations grow better. This week, we reached an important milestone on that journey. But, just as the next normal is getting started, so too is HubSpot.
