E17 with Scott Brinker, VP Platform Ecosystem at @HubSpot and Editor of chiefmartec.com, who famously maps Marketing Technology Landscapes. Learn about HubSpot evolution to open platform and why marketing SaaS needs to integrate to survive and thrive. Part 1/2.
- Scott, delighted to speak with you. You are wearing two hats, you're the Editor in the famous chiefmartec.com and the VP of Platform in HubSpot. Both of them are very impressive. Let's talk about each of those areas separately, and then the mix of them. Since you started in HubSpot, your integration ecosystem has scaled tenfold. Can you explain how you think about building this integration ecosystem?
- Well I think one of the ideas of getting to a platform, versus more of like a product strategy, is almost every product in the cloud has some sort of API's. Certainly every company at scale has partnerships with other products that are complementary to it. I think the difference that happens when you really make this transition from product to platform, is you're trying to open up an ecosystem where it's not about individual partnerships, it's really about this opportunity for really anyone, to be able to build some sort of integration, or to build some sort of app and do so in a way that brings more value to their customers and brings more value to your customers. You know, and this is a mix of things. Part of it from a technical perspective you have to make sure your product is open enough to be able to support that sort of platform dynamic. Are there opportunities for people to build additional value on top of your foundation? And then the other half of it is very much the go-to-market business dynamics of that. Everything from, do you have a marketplace where people can come and discover these things? How much governance is there over vetting solutions that are available in that marketplace? How easy is it for customers to install stuff and try these products? And so I think the HubSpot is still very much on that journey. We've got a lot of work ahead of us still, but I do feel that we've made very good progress in that direction over the past few years.
- Brilliant. I would imagine there are maybe thousands of companies who want to integrate. Some of them have a competing solution with you, some of them have a complementary solution with you, some of them have a lot of traffic. How do you choose?
I think that is one of the philosophical beliefs of an open platform. Is we don't want to have to be in the position of saying, "You can integrate, you cannot integrate." We essentially want to make it as open as possible so that anyone who chooses to integrate, customers have the choice to decide which products they want to put together in their stack, which products they work. And does that mean that some of those products compete with some of our products? Yes, but the bigger value proposition for the customer is to give them that choice and to give them one central platform that they know, whatever else they want to connect to it, they're going to be in the position to make that decision. That we're not artificially restricting that decision for them.
- How do you see your customers actually reacting to you scaling your ecosystem pretty significantly? Now you have like 150 integrations, probably more than that, right?
- Yeah, it's well over 400 integrations at this point. And that's actually just the ones that are officially partners in our marketplace. We know there are actually hundreds of more integrations out there too, that people have done, sort of independently, and hopefully will come into this marketplace.
- How do you see your customers actually respond to that? Do you see any specific value, like they adopt your product much broader?
- Yeah, I mean certainly, we've been tracking the average number of integrations that customers have to HubSpot, and that's been steadily rising here over the past several years. And there is also a correlation between the more products that someone integrates into the HubSpot platform, the greater their retention tends to be. Yeah, I mean at the end of the day, this is a customer-driven opportunity. It's customers saying, "Hey, I've got these different products "and I want them to work together," or "I love HubSpot and what you have, "but there's this one thing I want that you don't have. "Is there some product in your ecosystem that could provide that for me and work with your platform?" The more we can answer YES to those questions, actually the better it is for our customers.
- If I'm a company and I want to build a platform or I want to move into this platform play, how my mentality, and also product side changes? Should it change, and if it should, in which way?
- So, again I think the idea of a platform approach to products, is to increasingly think not just about the specific interface or value, that you're delivering yourself, that your engineering or product team is delivering for a particular customer. That's still very important of course, but it's now layering in this other dimension of saying, okay, we want to think about extensibility. What are the opportunities we can build into the product through API's or some sort of UI extension hook, that will then allow third party developers, to create additional value, to augment the capabilities on top of that HubSpot foundation.
- You've been truly amazing in terms of mapping ecosystems and thinking in a meta level about technology. In your last year marketing trends, you showed a graph with tens of platforms, hundreds of category leaders, and a long tail of other companies. Do you still think this is true or how is this changing now?
- I definitely still think that's true. We're actually in the process of completing the research right now for the 2020 landscape map, which most of the research was done before this current pandemic crisis. It's a whole separate question to debate what will happen as a result of this current crisis? And I think frankly, not just for MarTech, but for every industry. What's the recovery period going to look like? But up until that point, it is a long tail dynamic. There are a small number of major platforms. You see them as largely, I mean, you could name them up on one hand, they are the public companies that are leaders in this space. There certainly are the category leaders. I mean, here we are, we're having this interview on Zoom. They're clearly the category leader right now in video conferencing. But it is really interesting as you go further down that tail, because being big isn't the same thing as having something valuable to provide to customers. And I think what's really interesting, as you go further down that long tail, you have these specialist companies, that their total addressable market might be relatively modest. Their customer base might be relatively modest, but the value they provide for those customers is terrific. I mean, the customers love them, the customers pay them, there's profitable companies there. And so I think the big question for MarTech is, when it was exploding, most people looked at it through the lens of venture capital. Like, okay well, venture capital is just going to back a whole bunch of companies, and then only a small number of them will reach the top of that long tail. And that's true, but I think what that failed to consider is, not every business in the world is a VC-driven, model business. I mean, look at services businesses, which have an interesting interplay in this world too. You've got a bunch of software companies that are not VC-based, that are essentially profitable ventures that they build something for their target audience. They do it well, they're not going to become a billion dollar company, but if they're a 10 million dollar company or 20 million dollar company and all those participants are earning a great living, they're making nice money, their customers are happy with them, there's a lot of really interesting MarTech businesses in that category.
- It seems that nowadays many of those companies have a partnership manager on board, and this partnership manager is trying to either integrate with these other companies or do some marketing type distribution with these other companies, by partnering with them. Do you also see this dynamic?
- Absolutely. I mean again, if we look at it ultimately through the lens of the customer, what does the customer want? Survey after survey of marketers, when they're asked, "Okay, what are the biggest challenges you face right now?" Outside of lead generation, which is the perennial challenge. Integration of marketing technology remains one of the top challenges for marketing departments, marketing teams. Because, again, when this initially exploded, all these different technologies, they weren't well integrated together. It was very much up to each marketer to figure out how to get these things to work together on their own. And quite frankly, that's not where marketers should be spending their time. They've actually got marketing to do. So, what you're seeing now, and why this convergence is happening around these platforms is, whether you're a platform, or you're a specialist who's going to interface to a platform, what you're trying to achieve is a level of integration that basically eliminates this barrier for customers to adopt your product. And certainly, there are business development dynamics around that too, but at the end of the day, it's actually a product driven motivation. Like, "hey listen, if our product doesn't interface to the platform that a target customer has chosen, they're just not going to buy it, because they can't afford to try and figure out how to integrate this independently. They just need these things to work together out of the box.
TBC in part 2