<div class="KonaFilter image-container float_right"><div class="image on-image"><img src="http://static4.businessinsider.com/image/526cef046bb3f73a65114110-1200-900/london-real-estate.jpg?maxX=480" border="0" alt="london real estate man walking" width="480" />REUTERS/Luke MacGregor </div></div><img src="http://hits.theguardian.com/b/ss/guardiangu-api/1/H.20.3/98867?ns=guardian&amp;pageName=This+street+in+east+London+tells+a+story+of+the+great+British+divide%3A+those+who+own+property+and+those+who+don%27t+Article+1987384&amp;ch=Money&amp;c2=53056&amp;c4=Property+%28Money+-+UK+consumer%29%2CHackney+%28News%29%2CHouse+prices+%28Money%29%2CLondon+%28News%29%2CMoney%2CUK+news&amp;c3=The+Observer&amp;c6=Carole+Cadwalladr&amp;c7=13-Oct-26&amp;c8=1987384&amp;c9=Article" border="0" alt="" width="1" height="1" />Six years ago, only a few months before Northern Rock collapsed and the world plunged into a financial storm from which it still has not properly recovered, I met Alex Rossiter, a 29-year-old freelance radio producer, in the basement kitchen of <a href="http://www.theguardian.com/money/2007/may/13/houseprices.business" title="">his parents' house in Hackney, east London</a>.
His father, Alan, a community arts worker, told me how he had bought the house for £9,300 in 1977 and that now "it's probably worth £500,000, if you can believe that". Actually, I told him, it's probably more like £800,000. At which point, he nearly fell off his chair.
But then this was May 2007, and I'd spent a fortnight tramping up and down his road, knocking on doors, asking strangers intrusive questions about their personal lives. I was trying to build up a snapshot of how Britain's super-inflated <keyword id="35061" type="ORGANIZATION" weightage="60" keywordseo="housing">housing</keyword> market had affected the people in a single, randomly chosen <keyword id="6354968" type="COMPANY" weightage="60" keywordseo="London">London</keyword> street.
At that moment, house price inflation seemed deranged, unstoppable; headline after headline documented the rising prices; nationally, values were up 10% year on year. In London, a single house viewing could draw 200 people and result in 10 sealed bids at the end of the day. And everyone I spoke to, both the winners and losers in the great British property lottery, wondered: how could it go on? Where would it end? Where was the money coming from? We know the answer to that now, of course. Global economic meltdown and the biggest collapse in house prices in two decades.
Six years on, though, in London at least, but by no means all over the country, the headlines have returned. London asking prices increased by 10% in a single month, <a href="http://uk.reuters.com/article/2013/10/21/uk-britain-property-idUKBRE99K0C220131021" title="">according to Rightmove</a>. Which means, as one commenter put it, that every minute the average London home is increasing in value by "the price of a Subway sandwich". And this could be just the start. The government's Help to Buy scheme, attacked by everyone from the IMF to former Bank of England governor Sir Mervyn King, is widely expected to pour political booster fuel into an already hyped-up market just in time for the next election.
That 2007 mood? It's back. And so is what Anne Currell, the co-owner of Currell's estate agency, a mini-chain, based in north and east London, and who happens to live on the street I picked, calls "the slightly unreal feeling of it all".
The street was Albion Drive in E8, and I chose it randomly - an inner-London everystreet made up of family homes and 60s in-fill, Georgian detacheds and a council estate. But the super-gentrification that has benefited Hackney has meant that it turned out to be a more exceptional case than other streets in other boroughs.
Albion Drive is hop, a skip and a jump from what has become London's Silicon Roundabout technology district; another hop, skip and a jump from London's new nightlife central, Dalston, both of which have emerged in the six years since I wrote the original article.
It turned out to be an extreme case: a hyperbolic exaggeration of a London street, where some have made millions and some struggle to cover the rent. But in this, it is perhaps a bellwether. Even six years ago, there was a staggering wealth gap between those with property and those without; in Albion Drive, it's now an unbridgeable chasm. This is the rest of Britain, potentially, a few more years down the line.
Have prices really gone crazy again, I ask Currell, or is it just media exaggeration? She sighs and repeats what she said earlier. "There's just this slightly unreal feel to what's going on. Even for an estate agent, it's not hugely pleasurable.
"You think it's easy, but actually when you put a house on the market and there are four or five people who want to buy the same house, that's not particularly satisfying. And how sustainable it is, I don't know. But the fact remains there are not enough properties being built in London."
In 2007, it didn't seem possible that prices could keep on rising. And yet, despite the crash, she estimates that prices in the street are 65% higher than they were at the so-called "height" of the boom.
She bought her house for £170,000 in 1986 and in 2007 told me that it was probably worth £1.2m. "Did I say that? Well we're just having some work done on it, and when it's finished I think it'll be worth around £2.4m-£2.5m, so that's actually a 100% rise. But it's a very specific product."
By which I think she means that it's what non-specialists might call a bloody nice house: double-fronted with a massive garden. In 2007, it seemed impossible that prices could continue going up because, in the absence of wage increases, how would first-time buyers be able to borrow any more? The answer is that, in the past six years, first-time buyers have changed: "There's always two of them now. It's two people buying a one-bed flat together. That's around £350,000 and at least one of them, if not both, will be getting help from parents."
And then there's the overseas market. "That's the other change: 70% of all London newbuilds are sold to foreign buyers, which we play a small part in." There's a perception <a href="http://www.theguardian.com/uk-news/2013/oct/20/london-new-york-times-foreign-rich-property" title="">that this affects only prime central London</a>, but she says: "Even we have a China desk now."
Six years ago, <a href="http://gu.com/p/xj65k" title="http://gu.com/p/xj65k">I'd found every sort of person and every sort of housing story in Albion Drive</a>. People like George Vassiliou, who bought his council house with Right to Buy a decade earlier for £39,000 and had just sold up for £565,000; first-time buyers like Dan Massie, 25, a town planner who'd managed to buy a one-bed flat for £265,000 with his girlfriend because of "massive help" from their parents; young renters such as Jodie Banaszkiewicz who, with two friends, was paying nearly £1,500 a month to rent an ex-council flat on an estate at the end of the road; and academics like Rosemary Stott, who had seen her house treble in value in a decade. She was a film lecturer who told me she taught a course on film in the hyper-inflationary Weimar Republic "and frankly, this feels quite similar".
Six years on, the winners have just won more; the losers are just ever further away from being able to afford their own homes. Alan Rossiter says "it's absolutely nuts" when I talk to him about the price of his home now, but he doesn't have quite the same sense of shock and awe that he had back then. Even when I point out that a similar-sized home to his recently sold for £1.25m. "I know it's just crazy. But we love living here. It's a house to us. It's our home not an asset."
In 2007, his son, Alex, said, frustrated: "I don't think I'll ever be able to buy." Six years on, the frustration has been replaced by an air of quiet resignation. He's 36 now and a press officer for the TUC. He rents a flat with two friends in north London.
"I'm in the same position as a lot of people. I've got a professional good job, and earn a decent salary, but unless you have considerable savings, actually buying somewhere is an incredibly distant prospect," he says.
"I've almost reconciled myself to not buying any time soon. I'm 36 and I don't think it's going to happen by the time I'm 40. But there are people in a lot worse situations than me. I'm lucky, I enjoy my job, I'm happy, and I live in a nice part of London. I have a decent quality of life.
"But I'd always assumed that I would have my own place, that I would have children. You review that as you get older."
Some of his friends, mostly those who have had parental help, have managed to buy. "And I don't resent them for that at all. But there is an asset gap that's opening up between those who have and haven't managed to buy. I don't think there's resentment about it. I just think that people want to settle down and maybe have a family and that's become incredibly difficult. It's hard to plan a future in short-term rented accommodation."
That rising house prices take money from the young - and as Martin Weale, the director of the National Institute of Social and Economic Research said last time, "the not yet born" - and gift it to the old has, at least, become a mainstream school of thought since I wrote the piece in 2007. The issue of intergenerational fairness is now on the political agenda, even if nothing has been done to address it - although Jonathan Portes, the institute's new director, tells me that he believes it's somewhat overstated.
"My sympathy for young graduates whose parents own a house is somewhat limited. Old people die, and you can't take it with you. It's young people who haven't been to university, who haven't got the qualifications, and who, if they live outside of London, won't be able to afford to move to London. It's people who aren't going to inherit. And that's why rising house prices are inequitable and regressive, and socially, in all sorts of ways, a bad thing."
He's right: Alex might inherit, some day, though it's not much use to him now. The children of the council and housing association tenants in the street will never have even that distant hope. And the vast wealth gap opening up between London and the south-east and the rest of Britain means that it's not just social inequalities that are being widened - by the price of a Subway sandwich a minute - but also geographical ones.
Homeowners in London can, at some point, exercise the option of moving to a cheaper part of the country and reducing their mortgage, or using their equity as a pension or as start-up capital for an artisanal bakery, or whatever. If you live in a cheaper part of the country, tough. There are jobs in London, and many young people aspire to live there, but <a href="http://www.theguardian.com/education/2013/oct/23/midlands-students-work-london-rent-costs" title="">as a bunch of students from the Midlands told the Guardian</a> last week, the idea of paying the capital's extortionate rents is simply "scary".
If you have a decent job, you can at least afford the extortionate rents. At the end of the road, I meet Dan (not his real name) who's 38. He rents a flat with his girlfriend in one of the council blocks and they're stuck in a flat-baby dilemma. "We can afford to buy something, somewhere using both our salaries, but we want to have a baby, so …," and he shrugs his shoulders.
"I'm old enough to remember the last crash and I always thought there had to be one and it couldn't carry on. But then the government pumped loads of money into the banks, and propped it up and now it's worse than ever."
Dan's friends who bought "are loaded, basically", he says. "That single fact is going to affect the rest of our lives. They will always be rich and have options; I will probably be quite poor, with a massive mortgage, and won't.
"And to be honest, it's the ones who started off rich - whose parents could afford to give them money - who are now in nice houses and all the rest, and the ones whose didn't, aren't. It's got less to do with how successful they've been professionally, than with the fact that they had help with a deposit at 25."
He's still one of the lucky ones, though. A report last week gave the staggering statistic that two in five private renters in London are living below the poverty line.
But then, the whole paradigm of home ownership has changed in the capital. "London is now a minority home-owning city," says Toby Lloyd, an analyst with Shelter. "And levels are falling fast. More and more people are in unstable, insecure tenancies." And while London is "particularly acute", he says, "house prices are higher now than in 2007 in every region of the country. There are really bad hotspots all over the country. We looked at asking prices compared with average wages all over the country, and only 2% of properties were available for those on an average wage."
Is it a short-term bubble? Neal Hudson, a housing analyst for Savills, refers to the "potential for irrational exuberance" but also says his company is about to revise its five-year forecast of house price inflation (18% in the UK, 25% in London) upwards. He adds: "There's one particular piece of data that has started to worry me. The loan-to-income ratio for first time buyers is higher than it was in 2007. They're borrowing even more than they were then."
The story of Albion Drive was a snapshot in 2007. In 2013, it feels more like a prophecy. A decade ago, the wealth gap between its home owners and council tenants and private renters, between its older residents and younger residents, was pronounced but not insurmountable. Now it is.
I chat to Robin Murray, an economist living in Albion Drive, whose specialist subject is co-operatives. He calls home ownership "the absolute plank" of inequality.
Six years ago, he told me that house price inflation had a parallel in the great political struggle of the 19th century over the price of land - how parliament was composed of landowners who introduced legislation such as the Corn Laws for their own benefit. I tell him how that stayed with me. And he's kind enough to say that what I wrote has stayed with him too: that Britain is now two classes: the landed, and the landless. Private renters, council tenants, those who don't have parents to bequeath them a house: they are the new peasant farmers, locked at the bottom of society with no escape ladder to climb.
Neo-serfs, I called them then. The name didn't stick, obviously. But, who knows: maybe its time will yet come. Read the piece. I never say that. But six years on, it feels just a bit uncanny.

This article originally appeared on <a>guardian.co.uk</a>
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One Street In London Tells The Story Of An Insane Housing Boom That's Just Like Right Before The Collapse

16. NASA Uncut

<img class="gwt-Image" src="/photo/22455695.cms" /> 
Is e-commerce 2.0 over in India? Going by the recent ripple of mergers and closures, impacted by an overall volatile economy, we often assume the worse. Investors’ loss of trust in the Indian ecosystem has become a litany for some time now but in spite of the downtime, a handful of Indian e-commerce firms have hit the headlines in 2013 for fast-paced growth and the big bucks they have managed to raise. Their operations vary widely – it can be as simple as business listing, as predictable as selling books and lifestyle items online or as unique as creating a whole new platform for a consumer requirement. But routine or innovative, these six Indian companies have gained both investors’ support and consumer trust that keep them going. Find out what’s making them tick while we bring you a tongue-in-cheek account of possible mergers &amp; acquisitions that may happen on their way. 
 
 
<keyword id="430602" type="COMPANY" weightage="100" keywordseo="JustDial">JustDial</keyword>: What’s next after a roaring listing business? 
Forget MakeMyTrip and its iconic NASDAQ listing – here is one success story just as good. Fresh from a mind-blowing IPO that was oversubscribed 12 times, this India-focused local business listing site has already entered online food ordering space and has some more projects in the pipeline. Of course, the Rs 950 crore IPO – a pure offer for sale in which founder VSS Mani and investors, including Tiger Global, Sequoia Capital and SAP Ventures, sold some 1.75 crore shares – is the largest on the Indian bourses this year and one of the biggest by an Indian Internet firm. 
 
However, the start-up had done its fair share of tight-rope walking earlier in the day. Since his first-ever business directory service AskMe failed in the early 90s, Mani made sure to make the next initiative failure-proof – taking one cautious step at a time (initially answering consumer queries over phone, then graduating to web queries and next moving on to mobile apps). Finally, India got its biggest business listings company, built from a paltry seed capital of Rs 50,000. And here is another interesting bit of information. Since 1999, Mani had taken six shots at the bourses and the last one has gone right home. 
 
Road ahead: What feels good about this start-up is that, JustDial is already up and about, looking at new businesses. In a recent media interview, Mani confirmed that the company would soon expand its online service range – diversifying into cab, movie ticket and doctor appointment booking. 
 
If consolidation happens: What if... search giant Google wants to focus more on India and requires a local partner that has scale and reach across multiple businesses? In fact, <keyword id="45395" type="CITY" weightage="40" keywordseo="Google-India">Google India</keyword> has already introduced Product Listing ads that will display features like product images, pricing and more, to highlight merchant offerings. Will it thrive more if JustDial comes on board? 
 
<keyword id="541988" type="COMPANY" weightage="100" keywordseo="SnapDeal">Snapdeal</keyword>: All about pivots, deals &amp; marketplace, but can it do a TaoBao? Talk about pivots and you have Kunal Bahl who has done it as many times as Robert Bruce and courted success. His business pivoted seven times as Bahl started by selling restaurant deal vouchers (and printed ones at that); came up with a daily deal site and finally pivoted to a zero-inventory, e-commerce marketplace just like Amazon, with a B2C (business to consumer) focus. That definitely makes it different from <keyword id="161767" type="COMPANY" weightage="60" keywordseo="eBay-India">eBay India</keyword> where the focus is C2C. Snapdeal claims to be doing it big – with 20 million registered users and around 14-15 million visitors each month, according to his recent interaction with AllThingsD. And a total funding of $114 million or so (eBay is an existing investor in the company as well) definitely speaks a lot in terms of investor confidence. Snapdeal is not profitable yet, but it is eyeing an annual GMV of $400 million this fiscal and wants to do a billion dollar in GMV by 2015. 
 
Road ahead: Media reports say Bahl is all set to do a TaoBao Mall (a dedicated B2C e-commerce marketplace run by China’s Alibaba Group) right here in India. The seasoned entrepreneur prefers to call the marketplace a vast product discovery platform with fast and furious growth and has recently introduced a customer protection service called TrustPay – a service that ensures 100% money-back guarantee in case of any issue with product quality, size or delivery. It also serves as a seller protection service against any kind of consumer fraud. Snapdeal’s agility to move ahead of the market could be its USP, especially now that it has started working on ad revenues, but can it really achieve the momentum and the scale in the Indian context? 
 
If consolidation happens: That eBay is one of the investors in Snapdeal is an interesting fact. If the company ever considers a readymade marketplace with a B2B focus, this will be a good deal. Then there is <keyword id="6354743" type="COMPANY" weightage="40" keywordseo="Amazon-India">Amazon India</keyword> who could be buying out all competition. But given a choice, would it buy <keyword id="6354742" type="COMPANY" weightage="100" keywordseo="Flipkart">Flipkart</keyword> or Snapdeal? Well, your guess is as good as ours. 
 
Flipkart: Big bucks are rolling in, but is the business booming? 
Don’t shop, Flipkart it – that’s the new mantra of this prolific e-com player, founded by Sachin and Binny Bansal (they are not related). They started as a book e-tailer, but soon expanded into all possible categories – from fashion to fitness and accessories, gadgets &amp; electronics to home &amp; lifestyle products, baby care items, toys and more. The success mantra is simple – best pricing and speedy delivery, backed by a dedicated logistics team. Understandably, the traction is awesome – the company claims to have 10 million registered users and over 1 million unique visitors a day. 
 
Flipkart has recently raised a fifth round of funding worth $200 million from its existing investors – Tiger Global, Accel Partners, ICONIQ Capital and South African Internet company Naspers – taking the total funding to more than $380 million. But that doesn’t mean all is well in paradise. It has recently shut down some digital businesses like Flyte (a much-hyped MP3 store launched only a year ago) and cut down on a number of electronics categories. On the plus side, it has launched its own payment gateway called PayZippy, introduced a voice-based search on the site, started selling e-books and has come up with a marketplace where third party vendors can sell directly to consumers. Flipkart has also entered a deal with the US-based indie e-book distributor Smashwords, Inc., which gives it access to Smashwords’ eBook store – a catalogue of 2 lakh-plus vetted and formatted e-books from more than 60,000 authors and publishers. 
 
Road ahead: Ambitious, to say the least, especially after the Series E booster. Just like Snapdeal, this e-com biggie wants to reach an annual GMV of $1 billion by 2015 besides doubling up the number of sellers on the marketplace to 1,000 by the end of this year. Although Flipkart is constantly harping on global level hiring, the biggest chunk of the funds raised is bound to be spent on technology, supply chain and (don’t be shocked) product development. PayZippy could be just the beginning and going ahead, Flipkart may evolve into a technology enabler for offline businesses keen to have an online presence. Infibeam’s Build A Bazaar, SmartStore from BigFoot Retail and PayU India’s PayUPaisa are doing just the same, but Flipkart can actually do a PayUPaisa by integrating the proprietary payment gateway with the Web stores for additional revenues (just like PayUPaisa does). 
 
But it is the Smashwords deal that intrigues us most. According to Nielsen BookScan Retail Panel data, in 2013, Flipkart holds an average of 40-45% in terms of value when it comes to the organised books market in India and the company has plans to grow it substantially. If that happens, it will become the undisputed market leader in the books category – both online and offline. And before we forget, Flipkart may focus even more on private labels – it already markets a private label brand called Digiflip for digital accessories such as laptop bags and camera pouches. But the biggest challenge is to get over the few setbacks, bring back the positive drive and get ready for a much-anticipated IPO. 
 
If consolidation happens: A head-on between Snapdeal and Flipkart or Amazon and Flipkart will be extremely interesting. However, the company is not losing much sleep over the competition from existing marketplaces. Another possibility is Flipkart acquiring Tradus since they have a common investor in Naspers and such deals have taken place before. 
 
<keyword id="6388367" type="COMPANY" weightage="100" keywordseo="Jabong">Jabong</keyword>: Fashion e-tailing on a roll, but for how long? 
Shun the incremental and go for the leap, said Jack Welch of GE. And if there’s one online retailer in the fashion and lifestyle segment that has literally fallen for this mandate, it’s Jabong.com, the dark horse in the fiercely competitive Indian e-commerce space. In less than 20 months, the Rocket Internet-backed venture has banged into the top rung – the third most-visited online shopping site after Myntra.com and Flipkart.com, according to a recent report by comScore. Reasons for such eyeballs? Huge inventory, aggressive marketing, speedy delivery and best-in-class customer care (including third-party logistics services). The deep pockets of the Samwer brothers help it burn the cash left, right and centre, and around 50-60% of its sales are coming from small towns, its founder, Arun Chandra Mohan, said in a recent media interaction. 
 
Road ahead: Could be bleak, going by Rocket’s reputation of creating hype and disposing its assets at the earliest. Jabong claims to do around 14,000 orders a day (average ticket size not disclosed), but it is yet to hit profitability. The company is said to be experimenting with private labels, but does not seem to be pushing it big time in spite of potential big margins. Moreover, just like Flipkart, Jabong has also handed out the pink slips. At the end of the day, it has to find a viable business model and we hope that the third-party logistics can bring in some hard cash as e-tailing spreads across the country. 
 
If consolidation happens: A takeover bid, either by Myntra or by Flipkart, will definitely put the bidder on the top. However, Flipkart is an unlikely candidate as its late initiative to enter fashion and lifestyle space is yet to gain traction and scale. Of course, it is not lacking in funds, but considering that the firm has already launched a marketplace in April this year and facing some stiff competition from Amazon India and other desi e-com marketplaces, will it really invest in an inventory-led model? Myntra, on the other hand, could be game if it is seriously considering a No. 1 slot. Interestingly, Bangalore-based Myntra is one of the heaviest funded players in the e-commerce space and has raised around $64 million till date. It has also made some interesting acquisitions and a shot at a competitor might not be unlikely. 
 
Just Zomato it: You can’t find a spicier chunk of food business 
Is this online restaurant guide doing a Jabong in terms of fast and furious growth? Well, apparently, going by the latest report card. Just five years into the business, this Gurgaon-based firm has expanded to 28 cities across 8 countries (India, the UAE, Qatar, Sri Lanka, the UK, the Philippines, South Africa and New Zealand) – with listings of over 1,18,000 restaurants and 15 million monthly users (web and mobile). And it all happened because founder Deepinder Goyal, while working for Bain &amp; Co. in Delhi, decided to do something about easy access to food joints, rather than stomaching an overcrowded office cafeteria or flying blind to find nearby eateries. 
 
Zomato’s USP is its user-generated reviews (pretty stringent, going by the new parameters set up not too long ago). Moneywise, it is pretty well-funded. Info Edge (India) Ltd, which runs a string of consumer internet portals including the coveted job listing site Naukri.com, is the majority stakeholder in Zomato and invested around Rs 86.06 crore in the company. 
 
Road ahead: Next destinations are Brazil and Turkey, to say nothing of the recent tie-up it had with UK-based toptables for restaurant booking in London, Manchester and Birmingham. And for a change, this start-up has reached break-even in India and Dubai could be next on the cards. As of now, revenues roll in via ads, event ticketing and restaurant booking. 
 
If consolidation happens: If you are not on Zomato, you are not really there – that’s how the saying goes for restaurants. So the next logical step is to expand into restaurant booking (it has already done it in the UK) and online food ordering. Zomato has reportedly declined such expansion plans in India, but going by JustDial’s latest foray into the online food ordering space, a look at Foodpanda (India), a food ordering platform backed by Rocket Internet, or other homegrown restaurant reservation sites like TableGrabber.com, Dineout.co.in, PoshVine.com and Tablewalla.com may just work out well for Zomato.

Watch Out! These 5 Indian
E-com Players Can’t Stop Growing

<div class="image-container float_right" style="width:480px"><div class="image"><img src="http://static2.businessinsider.com/image/51bf5f5fecad04da01000001-4368-3276/brian-halligan.jpg?maxX=480" border="0" alt="Brian Halligan" width="480" />Matt Plays, <keyword id="249410" type="COMPANY" weightage="60" keywordseo="HubSpot">HubSpot</keyword></div></div>Marketing software company HubSpot has gotten attention from <a href="http://www.businessinsider.com/hubspot-slidedeck-on-company-culture-2013-3">media</a> and even <a href="http://www.businessinsider.com/professor-studies-hubspots-culture-2013-6">academics</a> for its radical transparency.
The Cambridge, Mass. company reveals everything from cash burn rate to valuations on its Wiki page.
It turns out this is only the start of HubSpot's push toward <a href="http://www.businessinsider.com/HubSpot-slidedeck-on-company-culture-2013-3#-1">a modern corporate culture</a> that's vastly different from most companies out there.
We got the lowdown from CEO Brian Halligan, who started the company in 2006 with MIT Sloan classmate and current CTO Dharmesh Shah.
Here's our conversation, lightly edited for length and clarity.
BUSINESS INSIDER: Did you have a clear focus on <keyword id="24504" type="ORGANIZATION" weightage="60" keywordseo="culture">culture</keyword> from the start or did it evolve?
BRIAN HALLIGAN: We didn't think at all about it when we first started the business, we didn't ever talk about it for the first two years of HubSpot. Then two things happened at the same time. I joined a CEO forum of 10 Boston-based CEOs who got together once a quarter. In the first forum [I attended], the topic was culture, and I kind of rolled my eyes about it, and I thought, "Well that's stupid, when are we going to talk about selling or hiring — the meaty stuff?"
I remember during the meeting one of the other CEOs was this brilliant guy named Colin Engle, he's the CEO of iRobot — they make the the Roomba — and he spoke so eloquently about it, and talked about how powerful it was as a tool to manage a growing business. He sold me on the fact that I was missing the boat, and I needed to get going. So I came back all fired up about culture. It turned out that at that exact same time we had done our first survey of the HubSpot employees. When we surveyed them one of the questions was something like "what do you like about working at HubSpot?" Almost everyone came back and said that they really liked the culture.
I remember talking to my co-founder and saying, "Well that's funny I didn't think we had a culture, we never talked about it." Those two things sort of came together at the same time, so we decided we needed to invest in this and figure it out because it seems like it's a key asset. It also seems like a key tool we can use to scale the business.
BI: What's something that people get wrong about culture? 
BH: At the core of it the happy hour and the ping pong table are not culture, they're like health insurance or a 401k. I think of culture the way I think about marketing. The main thing behind Hubspot is that we feel like humans have radically changed, they've changed the way they shop, and Hubspot is building a modern marketing platform that enables marketers to change the way they market to match the way humans actually buy stuff.
The way I think about culture is that modern humans have radically changed the way that they work and the way that they live. Companies need to change the way they manage and lead to match the way that modern humans actually work and live. We're trying to re-craft culture in a way that really matches that. I think that 99% of companies are kind of stuck in the '90s when it comes to their culture.
BI: What's the biggest change you've had to make going from being an employee to being CEO?
BH: In a weird way, going from employee to CEO hasn't hasn’t changed me that much. The way I think about management is, it’s overrated. I think it's a little silly and antiquated how in startups that the frontline employees are talking to customers, and the CEO has like a 50X difference in salary, it seems a little silly to me.
We’re trying to create an extremely flat organization, an extremely transparent organization, and there's all sorts of things we do around that. I think that if you were in the company, on a day-to-day basis, you’d have a hard time figuring out that I was the CEO of the company versus just one of the employees.
I’ll give you an example: I sit out with everybody else, I don’t have a desk inside of HubSpot, I don’t have an office or anything like that. My salary is not that different from regular employees. There’s a Wiki inside of HubSpot, probably the world’s most active Wiki, and people have no problem calling me out on the Wiki.
I believe the Gen y-ers coming into the workforce, the millennials, they like this idea of the highly transparent organization, and they expect transparency and authenticity from their leaders. So, I’m trying to be as transparent as I possibly can. I feel like people who grew up on Facebook and Twitter and social media sites just have a different a sense about hierarchy in life, and so we’re a little bit allergic to hierarchy over here.”
BI: What's your involvement in the hiring process?
BH: In the early days, I interviewed everyone and at some point that wasn't scalable. We hired 40 people last month, and of all the people we hired, we probably interviewed 10 for every opening. I work more on the criteria than I do on the actual interviews themselves.
Hiring sales people — it’s a pretty inefficient process. Most companies have very high turnover in their sales organizations. What I’m trying to put in place is a much more scientific way to hire sales people. What I'm doing is I want all of our existing sales people, and all of our past sales people who we've let go, to take a relatively long survey, and map the results of the survey to their performance. That’s why it’s key to have people leave; if we push them out for non-performance we need their data here. Then I want to get a sort of good profile of what the recipe is — here’s how they answered certain questions. Then I want to shorten that test and then for every candidate who comes in — for sales we get about a hundred candidates for every person we hire — rather than have the first step in the process be a big staged interview or role-play, that first step is just, take the test.
If you look and smell, based on the survey results, like a current star employee, then you get to that next step. And that next step isn't an interview, I think interviews are radically overrated. The next step in the sales process is you’ve gotta go and start a trial of our software and learn about it and, then we’re going to do a sales role-play with you on the telephone. If that goes well, then we’ll do an interview itself and we’ll hire you. So I want to have a much more scientific way for hiring sales people than most companies will.
BI: Have you guys experienced a tech talent crunch?
BH: Absolutely. And I have a theory behind it. I feel like there’s a massive supply and demand problem, and there are two reasons for it in my mind. One reason, I think for a long time people didn’t go into computer science because they thought the whole computer science industry was going to be outsourced to India. It turns out that wasn’t true. While that was going on, kids and fathers and mothers didn’t rush into computer science. That's one thing that really hurt from the supply side. The second thing that really hurt from the supply side is there are so many alternatives for good software developers today. They can go to a Google or Facebook, they can go to a HubSpot, they can start their own darn company. There's just this plethora of nice opportunities for them, so the supply and demand ratio is way, way off. There's a massive demand for high-quality developers and a low supply. We’re being extremely aggressive about it.
For example, our referral bonus for new software developers, is $30,000. If you know a software developer, and you refer them to me and I hire them, we cut you a check for $30,000. That's 10X more than we do for any other function inside of HubSpot. So we're working hard to try and get the best and brightest developers here.
We're doing crazy stuff to coax them in. That supply and demand problem doesn't exist for us on the sales or services side where we get 100 resumes for every opening, and it's all inbound. On the software developer side its 10x harder, so we think about our funnel, referrals, and everything about that in a very different way than we do the rest of the business. I think everyone's going to have to deal with that reality. You're going to have to think about hiring and raises and stock options and all of that stuff in a very different way for software developers than other parts of the company.
BI: Is there a particular company out there that you look up to?
BH: It's totally cliché but it's Google, and it's Google for a couple of reasons. A lot of companies, when they're in hyper-growth mode, they win awards for being the best place to work and stuff like that. Google always won those in the early days, and people are like, "Yeah, yeah, yeah, it's a goldmine — they've got AdWords, they're printing money, its growing fast, of course people like it, people like working for a winning team."
Now Google's in much more of a steady place, their growth is slower, their stock price is relatively stable, but it's still a remarkable place to work. People love working at a talent magnet — they've scaled that unique culture over time and they use that as a real competitive advantage. And when I say unique culture, what I like about the Google guys is that they reject conventional wisdom in so many ways. They'll look at a playbook of how to hire people, the playbook of how to motivate people, they'll look at the playbook for every aspect of culture: hiring, and motivation, and HR, and they throw it away and start from scratch on everything
They built a very unique culture which makes it a very attractive place to work not just as an early-stage startup not just as a high growth company, but as a big stable-state company.
BI: Do you remember the moment when you realized you wanted to start a company?
BH: When we were going to start HubSpot I had three choices in my career. At the time I was an entrepreneur in residence and a venture partner, so I could keep doing that. I could go run sales at kind of any company — I had grown up through sales I had a strong sales background. Or I could be a CEO at kind of a crappy company. I wasn't quite pedigreed enough to get a CEO at kind of a top-tier startup, so I was interviewing for CEO jobs at re-starts.
My fourth choice was to start HubSpot. I never thought I would start a company, and I'm absolutely thrilled I did it. But the idea was, "Could I start HubSpot and turn it into a great company?" Fortunately that happened. With lots of luck along the way, a lot of good decisions and good hires along the way but that was sort of the decision tree.
I don't consider myself born and raised to be a founder of a company. I always thought I'd be somebody who would help the founder of a company move it along. But I had the right idea, I had the world's perfect co-founder and we just kind of closed our eyes and did it.
BI: How'd you find that perfect co-founder?
BH: My co-founder's name is Dharmesh, and I'll tell you a funny story about him. He and I went to MIT together, and there was an event the night before the first day of classes at MIT and he's very introverted. So what he does at parties is he has his wife go out and kind of scout people and look for people who she thinks he'll like and get along with. So she came over to me and she chatted with me, and we had a nice chat. I realized about halfway through the conversation that she was the spouse of a student. So she went away and went back to Dharmesh and she said, "I met this guy Brian, I think he's kind of interesting, he's got a software background. I don't think you'll get along with him though, he's kind of a sales guy, kind of a jock, I don't think you'll like him very much."
I think that's so funny because two years later we started a company together, and eight years later we got one of the hardest startups on the East Coast together. We're pretty close and best friends at this point. We took some classes together and got along and I thought we were a good match. I think of the Venn diagram of so many firms is you've got a real tech person and a real kind of marketing sales person, and there's a Venn diagram that overlaps a little bit not too much. It's where you have somebody who can really sell, and somebody who can really build, and that really worked for us, it's a little one plus one equals three.
BI: How do you deal with rapid growth?
BH: We're growing fast, we've probably added 200 people in the past year, and we grow in kind of spurts. When we grow too fast the way I think about it is like a car, if I put my foot all the way down on the gas, the car starts to shake a little bit, you can physically feel it start to shake a little bit, the decisions aren't as good, and things start to break. And so we've gone through a couple starts and stops. When we've hit the gas hard and started to hire very aggressively things tend to break so we're a bit "fits and starts" on how fast we grow in terms of head count, and we've found it hard to manage that.
Interestingly along the way our culture's been a great guide. The culture and the systems and the processes really broke around 150 employees. We changed a bunch of stuff around then, and kind of got back on track. It's been relatively smooth since then. I don't know what that rate is but I can kind of feel it when we're growing too fast.
BI: Why'd you stay in Boston?
BH: There are a couple of reasons. I'm from here, I like it here, my network is here, so we didn't even consider moving to the Valley. I think there are a couple of big pluses to starting a company in Boston relative to the Valley, let's say.
One is just the corporate talent is rough here, it's not even close to as rough as it is in the Valley, particularly for that R&amp;D talent, it's so hard to get up there. That's one big thing. The second big thing is the pond syndrome. We're a pretty big fish in a pretty small pond here in Boston and that pond in the Valley is a very large one and it's hard to get heard, it's hard to be seen out there. So I think Boston is sort of underrated in terms of a place to start a company. You walk around in the Valley and go to LinkedIn or Google or any one of many great companies, and it is chock full of kids from MIT and Harvard. So what we try to do is catch them before they go to the West Coast. The talent here is excellent and we try our best to keep it here.
In Boston we missed the PC revolution and we really missed the internet, and to bring it back I think we need to build anchor companies that really stand alone as a business. Employees make some money and they leave and they take some risks and start a company and the other employees fund it. Very much what happened with people at Facebook and PayPal and all these great companies on the West Coast. We want to be one of those anchor companies in Boston that's around for decades and spawns out lots of other companies. That's part of it; we're real Boston boosters.
BI: What do you think about the assumption that millennials are bad workers or narcissistic?
BH: I think the disconnect there is that Gen Yers think, work, act differently, and we're trying to manage them with the Baby Boomer or Gen X playbook, and it just doesn't match very well. If you have a new playbook that embraces them, they're plenty loyal, they're not narcissistic, and they're terrific.
I think when the history books are written they'll be the best generation that's come along. They're just smart. They grew up on the Internet, they know how to get stuff done, they're much more sophisticated, I've found, at least than I was when I graduated college. So we do a whole bunch of stuff to embrace that.
If your mission is to increase your bottom line by three-fifths this year, gouging customers and gouging the Earth — that really turns off Gen Yers. I don't think Gen Xers care about that stuff, but I think these new folks do.
BI: How do you maintain a work-life balance?
BH: I do work a lot. One of my hacks is that every Wednesday is my work-from-home day, so if I'm not traveling in a given week, or even if I am traveling, I keep Wednesday open and that's the day that I can just think and get stuff done, so that's one big hack — staying at home on Wednesdays.
The other hack I have, I find that people work work work and don't think think think, and that the percentage of time people work versus think is off. I've tried to shift that, and I try to think lot and try to increase the amount of time I spend thinking about things versus on the phone or in a meeting or emailing people. So I see people working a lot and I say what's your time spent thinking versus working?

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