Indian Web Entrepreneur Takes Off on “Inbound Marketing”

Dharmesh Shah, chief software architect and co-founder of HubSpot (photo: IndUSBusinessJournal.com)

The following article is from IndUSBusinessJournal.com.

CAMBRIDGE, Mass. – Dharmesh Shah has some simple advice for small businesses looking to market their products to potential customers:  Stop trying so hard.

Shah, 40, co-founder of Cambridge-based startup company HubSpot Inc., said he believes most businesses spend too much time and money investing in traditional forms of marketing and advertising, methods that often are ineffective in today’s information age, he said.

Hubspot instead taps into the power of the Internet, helping small- and medium-sized businesses develop Web sites with relevant content that will help them appear high on Google searches.

“The way we explain it to people is: ‘How many pieces of junk-mail did you open today?’ and ‘How many spam e-mails did you reply to?’; ‘How many cold calls did you actually answer?’” Shah said. “And then we ask them, ‘Well, how many times did you jump on Google today?’

“It used to be that you would go to the car dealership and the car salesman would tell you about the car and talk you into buying it, because that’s what he’s trained to do,” added Shah. “But in this day and age, thanks to the Internet, people already know all about the car and they know exactly what they want when they come to the dealership. These days, you have to expect your customers to be educated.”

And so HubSpot specializes in a form of promotion known as inbound marketing. The idea is to help companies develop their Internet sites fully so that they rank highly on Google searches related to terms involving their industry.  In essence, the logic behind Hubspot’s products is that companies shouldn’t try to find new customers, they simply should make it easier for customers to find them.

The company takes a relaxed approach in getting out its message. In one video posted on the company’s Web site, an actor portrays the difficulties of cold calling, a traditional form of marketing in which potential customers are called at random in the hopes of making a sale. The skit is entitled, “Dude, Cold Calling Is for Losers.”

“Today, we are saturated with so many forms of advertising, from pop-up ads, to spam, to billboards and radio and television ads, that we’ve become very adept at tuning them out. We’re basically immune to them at this point,” said Shah. “Society is changing and traditional forms of advertizing just don’t work anymore.”

Shah said it is simply common sense to tap into a tool that millions of people use every day.  Hubspot offers clients three core pieces of advice in helping build their Web sites:

Relevant content:  Include information on your Web site that is relevant and interesting and will draw users back. Shah recommends blogs and discussion boards.

As another example, he points to Hubspot’s own “Web Site Grader,” a tool on the company Web site that provides free feedback to companies on the effectiveness of their Internet sites.  So far, more than 450,000 people have used the program, according to Shah. “We are the biggest believers in our own products,” he said.

Avoid unusual search terms:  Choose keywords and search terms that will generate a fairly-high search volume. For instance, you might have the “dance clubs for mice” market cornered, but if only a few people search for that each week on Google, it’s not going to generate many new customers.

Pick battles you can win:  Shah advises businesses to choose keywords and search terms that are narrow enough so that they will appear high in search rankings for those terms. Shah calls this “picking battles you can win,” in that small businesses should narrow their terms down so as to stand out against the competition. For instance “chinese restaurant, Harlem, New York” is more effective than “New York restaurant.”

“If you show up on page 12 of the Google search, very few people are actually going to search through all those pages and find you,” Shah said.

Shah said it’s important to generate content that will draw in repeat users because most potential customers like to develop a comfort level with a company before they engage it for business. He also advises businesses to include multiple forms of contact information on their sites to suit all customers’ comfort levels, including phone numbers, e-mail addresses and online contact forms.

HubSpot now employs 40 people and is based in Cambridge’s Kendall Square, only a few hundred yards from the Massachusetts Institute of Technology campus where the company’s business plan was hatched.

Shah met Hubspot co-founder Brian Halligan while studying at MIT in 2004, and the two formally launched the business in 2006. The company has over 500 customers, according to Shah.

Hubspot has snagged two rounds of venture capital funding. A $5 million first round led by General Catalyst Partners was later supplemented by a $12 million second round led by Matrix Partners. Shah characterized the experience of raising venture capital as a “painful time-consuming process” and said he didn’t think Hubspot would have to raise additional capital because the company is experiencing torrid growth.

“Our revenues are revving up quite quickly,” he said. “We’re doubling our customer base every four months on average.”

A native of Gujarat, India, Shah attended Purdue University in Indiana before graduating from the University of Alabama with a degree in computer science. He has a master’s degree in computer science from MIT.

Shah said he lived in various locations growing up, including 16 different schools in India, Canada and six different states in the United States. “We still haven’t been able to ascertain the root cause of why we moved so much,” he said.

Prior to attending MIT, Shah founded and ran Birmingham, Ala.-based Pyramid Digital Solutions, a software company focused on the financial industry. The company was acquired in 2005.

 source:   IndUSBusinessJournal.com

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