Sequoia CEO coach: Why it’s never been easier to start a company, and never been harder to scale one | Brian Halligan (co-founder, HubSpot)

Why scaling a company is harder than starting one

Brian Halligan spent 20 years building HubSpot and now coaches very fast-growth CEOs at Sequoia Capital. His premise is that starting a company has never been easier and scaling one has never been harder, because distribution and organization design are the bottleneck. From that coaching room come lessons on executive hiring, spiky teams, CEO evaluation and how AI may reshape go-to-market and valuations.

Takeaways

• Starting is easy, scaling is the hard part. Halligan's premise is that cheap cloud tools made company formation simple, and the number of companies formed will mushroom over the next decade. Distribution is now the hard part, so scaling a durable organization is the real challenge.
• CEOs overrate interviews and skip blind references. Halligan still overrates his ability to interview after 20 years as CEO. HubSpot used eight-person panels scoring candidates one to four, then shrank panels to four. He favors blind references and asking whether you would enthusiastically rehire someone.
• Half of C-level hires fail in 18 months. Halligan estimates at least 50% of C-level hires are gone within 18 months. MongoDB CEO Dave averaged two C-level departures a year over 10 years. Hire slow and fire fast, and avoid big-company hires and McKinsey cohorts.
• Build spiky teams like the 2004 Red Sox. Halligan models teams on the 2004 Red Sox, a mix of homegrown drafted talent and a few paid free agents such as David Ortiz and Curt Schilling. HubSpot learned to hire spikier candidates instead of the person everyone scored three out of four.
• LOCK plus student identifies exceptional CEOs. Halligan evaluates CEOs on lovable, obsessed, chip on the shoulder and deeply knowledgeable, plus student. He names Winston Weinberg of Harvey and calls Bret Taylor a rare five-tool CEO, unlike Steve Jobs or Jeff Bezos.
• AI will upend go-to-market and valuations. Halligan predicts buyers will research in Gemini or ChatGPT, websites will have all-knowing avatars, and every knowledge worker will have an assistant in three to five years. Enterprise sales look unchanged apart from renaming sales engineers forward deployed engineers. He also expects private valuation retrenchment and layoffs.

Halligan's operating rules

• Rip the Band-Aid off on bad news, credited to Ruth Porat.
• Never waste a good crisis.
• One directly responsible individual per outcome.
• Silver bullets are an illusion.
• Prioritize EV over TV over MEV.
• Run quarterly employee and customer net promoter surveys, broken out by department.