The Art of Strategy is About Knowing When to Say No

Executive Summary

In Hubspot’s early days as a startup, CEO Brian Halligan prided himself on being a “yes man” — saying yes to every exciting and half-way feasible idea someone on his team pitched. But this eventually resulted in a chaotic lack of focus for his employees. So, he learned to say no. To say no strategically, the company developed a tool called the MSPOT. With it, they articulate their Mission, the constituencies they Serve, the Plays they’re going to run this year, the plays they are going to Omit, and how they will Track their progress. Using this tool has allowed Halligan and his team to be more careful about how they spend their time, money, and other limited resources.

jan18_11_Hayon-Thapaliya
Hayon Thapaliya

When HubSpot was in its earliest stages, I used to say yes to almost anything: new features, new initiatives, new ideas. It empowered my team to move fast and get things done. I prided myself on being a “yes” man. We were working hard on getting product-market fit right, so anything we could do to get more customers and to find the right feature mix was a critical learning opportunity.

A popular, core feature of our product was our website grader. Looking to expand our reach and impact, I was quick to say “yes” to a Twitter grader… and to a Foursquare grader (yes, that was hot at the time)… and to a press release grader. If someone had a marketing grader idea, chances are I would say “yes” to it.

I said “yes” to a highly fun and creative video series.

I said “yes” to a HubSpot All Star Leaderboard that measured and posted customer engagement with our product.

By the time we’d grown to a couple hundred employees, all that dissipated energy had begun to yield diminishing returns. “Brian, this ‘yes-man’ thing worked fine in startup mode,” said Lorrie Norrington, one of our board members. “But it’s backfiring in scale-up mode. You have half-baked projects all over the place. You need to add the word ‘no’ to your management vocabulary.”

Lorrie had seen the path from startup to scale-up first hand at companies like eBay and Intuit, and I valued her perspective. Borrowing a morsel of wisdom from HP co-founder David Packard, she warned me that “more companies die of indigestion than starvation.” Lorrie was right: I had a serious over-eating problem.

I adopted three practices to put balance into my yes-no diet:

Put It In Writing

The single best tool I have found to help unlearn the yes-man ways of a startup CEO is a single-page document we call our MSPOT. With it, we articulate our Mission, the constituencies we Serve, the Plays we’re going to run this year, the plays we are going to Omit, and how we will Track our progress.

The most painful portion of that document are the Omissions. Painful, because they are usually excellent ideas with high potential—but necessarily omitted because we are better off doing a few things very well. One of the most agonizing Omissions I had to make was deferring the opening of our first international office by a year.

Whether to go international was a no-brainer. At the time, in 2011, we already had over 300 non-U.S. customers in more than 30 countries, representing nearly 10% of our business. What’s more, international customers were particularly happy, with a significantly lower churn rate than we were seeing domestically. Everything was pointing toward a full-on international expansion.

When to go international was another matter. Alongside the international question, I had also made the decision to radically focus on our newly clarified target buyer. We used to have two buyer personas—“Owner Ollie,” the owner of a small business; and “Marketing Mary,” a marketing director of a medium-sized business who needed to convert website visitors into leads. I had made the decision to refocus all of our product development, sales, and marketing efforts on the marketing director.

Could we do both at the same time—align our organization around a single market and launch internationally? We already had significant momentum for international expansion, including a few executives readying to lead the charge, making plans to move their families and careers to London.

Ultimately, I decided going international would have to wait another year, when we would have with the wind in our sails from full alignment across product, marketing, and sales.  I added “international office” to the Omissions box in our MSPOT, and made sure to broadcast the decision internally:

I’m dying to do international, but I want to put HubSpot’s wood behind the core economic engine of the business next year and get the machine running really well.  Europe is going to happen, but I want every extra dollar on my P&L to go into Marketing Mary, and the Europe stuff is going to be a pretty big initiative that will not help with this.

The only thing I regret about this decision is that I totally jerked around [specific individuals].  I feel terrible about this.  I’m confident I’m doing the right thing for the business, but in the process have done them wrong.

Let Your “No” Mean “No”

We’re a reasonably flat organization, and we give the floor to all sorts of competing opinions. Usually, we’re pretty good at coming to a conclusion, and everyone involved heads off to act on it.

Sometimes, though, ardent advocates on the short end of the decision would return to me and renew their case, perhaps with additional data or a more effective spokesperson. And, too often, in the absence of the full team, I’d see the sense in their augmented argument, and give them half a green light as well. Inevitably, that led to a reconvening of all parties, which frequently enough would lead to uninspired compromises.

That decision to “put every extra dollar on my P&L to into Marketing Mary” came after too many such compromises between chasing both Marketing Mary and Owner Ollie. By continuing to serve two masters, we watered down our marketing effort, and hampered our product development velocity. By finally saying “no,” in writing, to Owner Ollie, the post-decision hallway lobbying evaporated. Not only was everyone informed that the book had closed on an issue—but it became much easier to just point to the MSPOT and dispel plaintiffs seeking to re-litigate a decision.

And Let Your “Yes” Mean “Yes!”

The other parts of that MSPOT are for what constituents we will Serve, and what Plays we will do—with conviction, and no looking back.

In startup mode, we could make decisions quickly, and it didn’t necessarily matter if it was the right decision. We could examine the results, and if we didn’t see early promise, we were agile enough to adjust, change course, or if necessary, cut our losses and kill it. Remember that Foursquare grader project? We gave it a run, and we moved on.

That entrepreneurial mindset and willingness to say “yes” was instrumental in finding product-market fit. However, in scale-up mode, the virtue of keeping our options open, and changing gears based on new information, is disruptive and expensive.

When we committed to the Marketing Mary play, there could be no turning back. That comes with risk, of course, in case we had miscalculated. But, in the transition from startup to scale-up, we had accumulated enough data and experience to be confident. And that confidence energized our entire organization as we executed our goal with intensity.

As HubSpot has grown from a startup to scale-up, the discipline of saying “no” has paid big dividends for us. We launched HubSpot 3, our Marketing Mary play, in September of 2012. By the end of the year, we had increased the number of customers by 42% over 2011. And in the spring of 2013, we opened our European headquarters in Dublin.

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