Sramana Mitra: Were you going to grad school with some money?
Dharmesh Shah: The acquisition price was around $15 million. One thing I stumbled about money is that the first $4 or $5 million is life-changing. During undergrad, I was working full-time the whole way through. It took me seven years for what should ideally be a four-year degree.
When I went to grad school, I made the deliberate decision that I was going to be a real student. I didn’t have to work. I always had this aspiration for MIT. It’s why I moved to the Boston area. I moved to Boston in 1999 and didn’t apply at MIT until five years later when I was able to sell my prior company.
Sramana Mitra: Having a little money to bootstrap a company makes a world of difference. You’re not scrambling. There are a lot of entrepreneurs out there who are bootstrapping with a paycheck right now. They are doing what you were doing in your undergraduate. They’re working their day jobs and they’re doing nights and weekends to validate a startup idea. Not having to do all that and focus 100% on a venture makes a massive difference.
Dharmesh Shah: I had two startups before HubSpot. The first one was bootstrapped. Then I had the second one before the first one was sold. This was the biggest mistake of my professional career – trying to be the founder CEO of two startups at the same time. When I did my second one, I had made some money.
My first company had done reasonably well. I wrote the first million-dollar seed check for my second startup. When I did my second startup, the automatic assumption in my head was that everything I did in my first one was a mistake. I was going to do it completely differently this time. The lesson I learned was that a lot of things I did in that first startup were the best things. Running lean and being relatively frugal were all good things.
HubSpot is what happened as a result of taking the pendulum too far the other way. I took the best lessons I got from my first startup. I learned a lot from that first startup experience. Modesty aside, we got a fair number of things right. We got the culture right. We were focused on the customers. We were scrappy about it.
Sramana Mitra: My take on all this is it’s a good idea to think about your entrepreneurial journey. Very few people have the kind of hits like Mark Zuckerberg, Bill Gates, and Steve Jobs had. For most entrepreneurs, thinking of doing something more manageable and getting to some level of success is a good plan.
One of my favorite case studies is Sridhar Vembu’s story. He built this network management software for 15 years before even starting to build out Zoho. Look at Zoho now. The point of having some resources is the freedom to be able to do things differently and without existential pressure.
Dharmesh Shah: Your first idea does not have to be world-changing. It can be something more modest. The other one is that when you get to the point of an exit, some entrepreneurs think, “I’m meant to slog this all the way through.” That’s fine if you’re passionate about the idea, but there’s no shame in saying, “This particular idea has run its course.” Not once have I met an entrepreneur who only had a single idea in their entire life. Sometimes, it’s time to start the second chapter.