Tag Archives: Acquistion

Superpowers or Asteroids? HubSpot gets all Asymmetric

Just read an excellent blog posting by Brian Halligan, founder and CEO at HubSpot, the leader in inbound marketing. Entitled “8 Lessons From HubSpot’s $32 Million Round with Salesforce, Google, and Sequoia”, the blog’s ostensible purpose is to act as a set of do’s and don’ts for wannabe tech entrepreneurs. It’s a very good post with lots of valuable insights from a business that has defined a new marketing service category and, putting their money where their mouth is, leveraged their own technology to grow their user base from zero to over 4,000 businesses in a mere four years. Impressive stuff.

Accolades aside, the lesson that really resonated with me was number 7, “Partner with Asteroids”. Quote:

“I had dinner a couple of weeks back with Drew Houston, founder of Dropbox.  He said that a big part of his job was navigating his spaceship through the asteroid field of potential competitors.  Part of that statement motivated me to partner with and Google on this deal as they are asteroids that could blow up our spaceship or could accelerate it if we can hitch a ride.  Too early to tell if this decision is a good one, but it feels right.”

Good decision Brian. Co-opting the momentum of two SaaS juggernauts rather than going head to head with them is a great idea. There is no question that your assessment of Google and as potential ‘asteroids’ who might wrest the Inbound Marketing opportunity away from HubSpot at any time is wholly accurate. Better to align your interests with theirs and, in doing so, explore opportunities to make their scale and momentum work for you.

HubSpot has learned the most important play in the Asymmetric Marketer’s book: Identify you most likely ally (or competitor) from amongst the ‘software superpowers’ and find out how to make what you do work for them, all the while quietly (formlessly) nurturing your own aspirations for market and ultimately, multi category, domination. This is a tried and tested approach that has helped propel numerous businesses from startup to multinational cross category aggregator, organizations like Microsoft, Oracle, Google and Salesforce.

HubsSpot seem to get it. I’m going to watch how their Asymmetric strategy plays out with interest. I suggest that all superpower aspirants do the same.

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Posted by on March 15, 2011 in Uncategorized


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The New Asymmetry: How web 2.0 businesses are outfoxing the superpowers to remain independent and strong.

The hegemony Enjoyed by software superpowers (for new readers unfamiliar with the lingo, this means multinational IT aggregators with a product or service in every significant technology category) has long been maintained through the consistent implementation of a very simple strategy, that of market co-optation. When a superpower feels threatened by an emerging technology player they generally do their best to neutralize the threat; either through the introduction of an alternative product, like Microsoft bundling Explorer with Windows to crush Netscape, or through acquisition, like EMC’s masterful takeover of VMWare. As superpower businesses are, for the most part, highly cash generative, they have historically possessed deep war chests with which to employ such tactics. And they have generally been successful, as evidenced by the sheer size and breadth of businesses like Oracle, Microsoft and SAP. It appears, however, that the rules might be about to change.

The world was shocked in December of last year when Groupon, a high growth provider of localized promotional offers, turned down Google’s $6Billion takeover bid. On the surface, the deal appeared to be beneficial for both parties. Google would have an opportunity to diversify its business and Groupon’s stakeholders would get a mighty payout. What happened instead was interesting and bears reflection. Groupon leadership leveraged the Google bid to raise almost a billion dollars in private finance. This is not the first time a superpower has been denied in its drive to acquire a promising business. It may be the first time, however, that a small player has used the interest of a large acquirer to access a massive amount of third party capital.  A new normal? A paradigm shift? Is it possible that age old mechanisms for establishing and maintaining superpower status are suddenly invalid? I think the answer is yes. Perhaps. Temporarily.

The fact is that there is an awful lot of cash on the sidelines right now, as investors attempt to ascertain which way the global economy is going. There is also a scarcity of quality high growth investment opportunities. The result is that investment banks are falling all over themselves to invent investment vehicles that enable Web 2.0 businesses to retain their independence and escape regulatory scrutiny while onboarding giant infusions of capital. This in turn allows such businesses to satisfy their own aspirations for category domination while evading the clutches of their friendly neighborhood superpower. An anomaly? The world’s biggest software businesses hope so.

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Posted by on March 8, 2011 in Technology


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