• How to Startup
  • Posts
  • How to Startup: Creating a Market by Changing the Rules

How to Startup: Creating a Market by Changing the Rules

January 05, 2026

Welcome to this edition of "How to Startup," where we dive into real founder stories that offer practical lessons for early-stage ventures. Today, we explore a company that recognized a fundamental shift in customer behavior and built its success not just on a product, but on educating an entire industry about a new way to reach customers. Their story underscores that how you go to market can be just as innovative and critical as what you sell.

Founder Spotlight: Brian Halligan & Dharmesh Shah, Co-founders of HubSpot

The Beginning

While studying at MIT Sloan School of Management in the mid-2000s, Brian Halligan and Dharmesh Shah noticed a significant trend: traditional marketing tactics were losing their punch. Cold calls, interruptive ads, and email blasts – what they termed "outbound marketing" – were increasingly ignored by consumers armed with caller ID, spam filters, and ad blockers.

They believed a fundamental shift was needed. Instead of interrupting people, companies should attract them by creating valuable content and experiences. They called this "inbound marketing." In 2006, they founded HubSpot to build an all-in-one software platform designed to help businesses, especially small and medium-sized ones (SMBs), execute this inbound strategy – encompassing blogging, SEO, social media, email marketing, landing pages, and analytics.

Early Challenges

HubSpot's vision was clear, but bringing it to life presented major hurdles:

  • Evangelizing a New Philosophy: Their primary challenge wasn't just selling software; it was convincing businesses to fundamentally change their marketing mindset and shift resources from familiar outbound methods to the new, content-centric inbound approach.

  • Building an Integrated Platform: Creating a single software suite that seamlessly combined various marketing functions was technically complex and required significant engineering effort.

  • Competition from Point Solutions: They had to persuade customers to adopt their all-in-one platform instead of using separate, often best-in-class, tools for individual tasks like email marketing or social media management.

  • Demonstrating ROI: Proving the effectiveness and return on investment for inbound marketing strategies required educating customers and often took longer to show results compared to some outbound tactics.

Turning the Corner

HubSpot's success came from ingeniously combining product development with market education and strategic distribution:

  • Walking the Walk (Content Marketing): HubSpot became its own best case study. They invested heavily in creating high-quality blog posts, ebooks, webinars, and free tools focused on inbound marketing best practices. This content attracted a massive audience, established HubSpot as a thought leader, and generated a huge volume of leads for their software.

  • Defining and Owning the Category: They didn't just participate in a market; they arguably created the "inbound marketing" category, defining the terminology and educating legions of marketers through their content and certifications.

  • Building a Partner Ecosystem: They cultivated a vast network of marketing agencies that adopted the HubSpot platform and methodology, acting as both resellers and implementation partners for end clients.

  • Freemium Strategy: The introduction of a free CRM in 2014 dramatically expanded their user base, providing immense value upfront and creating a massive funnel for upselling their paid Marketing, Sales, and Service Hub products.

  • Platform Expansion: They evolved from a marketing-only tool to a comprehensive CRM platform, increasing customer value and stickiness.

By focusing intensely on educating the market and innovating their go-to-market strategy alongside their product, HubSpot grew into a major player in the CRM and marketing automation space, culminating in a successful IPO in 2014.

Advice for New Founders from HubSpot's Experience

  • Observe and Adapt to Customer Behavior: Notice how your target audience's habits are changing (e.g., how they ignore traditional marketing) and build your strategy around those shifts.

  • Educate Relentlessly: If you're introducing a new concept or category, invest heavily in teaching your market through valuable content. Become the go-to resource.

  • Practice What You Preach: Use your own product or methodology visibly and successfully. It's the most authentic form of marketing.

  • Create a Movement, Not Just Customers: Foster a community around your ideas and empower others (like partners or users) to become advocates.

  • Innovate Your Go-to-Market Strategy: Don't assume standard sales and marketing playbooks will work. Think creatively about distribution, customer acquisition, and market education.

Mistake to Avoid: Assuming a Great Product Will Sell Itself (Neglecting Go-to-Market Innovation)

Many startups pour all their energy into building an amazing product, assuming that its quality alone will guarantee market adoption. HubSpot's story demonstrates this isn't enough. They succeeded not just because their software was good, but because they innovated relentlessly on how they reached and educated their customers. Neglecting go-to-market innovation is a critical, often fatal, mistake.

Why It Happens

  • Product-Centric Blindness: Teams, especially those led by engineers or product managers, can become so focused on features and technology that they overlook how the product will actually reach customers.

  • Reliance on Old Playbooks: Automatically defaulting to traditional sales teams, advertising methods, or marketing channels without questioning if they are the right fit for the product or the current market reality.

  • Underestimating Market Education Needs: Launching a novel product or category without realizing the significant effort required to teach potential customers why they need it and how it works.

  • Skills Gap: Early teams may lack the experience or creative thinking needed to devise and execute innovative marketing, sales, or distribution strategies.

Potential Consequences

  • Product Launch Failure: An innovative product languishes in obscurity because the target market never discovers it or understands its value.

  • Unsustainable Customer Acquisition Costs (CAC): Using inefficient go-to-market strategies burns through capital quickly without generating enough revenue.

  • Lost Market Opportunity: Faster-moving competitors, perhaps even with inferior products but better distribution or marketing, capture the market share.

  • Inability to Define a Category: A truly novel solution fails to gain traction because the company doesn't effectively educate the market and establish the new space it operates within.

How to Avoid This Mistake

  • Make Go-to-Market a Core Strategy: Treat customer acquisition, distribution, and market education with the same strategic importance as product development, starting from day one.

  • Deeply Understand Customer Journey: How do your ideal customers learn about new solutions? Where do they spend their time? Who do they trust? Align your approach with their reality.

  • Consider Content as a Product: If market education is required, treat your content (blogs, guides, webinars, etc.) with the same rigor as your software. Make it valuable and discoverable.

  • Experiment with Acquisition Channels: Don't put all your eggs in one basket. Test various channels – content marketing, SEO, partnerships, community building, targeted advertising, inside sales – and measure what works cost-effectively.

  • Design for Virality/Word-of-Mouth: Can your product or onboarding process encourage users to share or invite others? Build flywheels where happy customers help acquire new ones.

Quick Tips

  • Product Development Tip: Ask: "How does this feature help us acquire or retain customers?" Consider building features that facilitate sharing, referrals, or demonstrate value quickly.

  • Marketing Tip: Focus your message not just on what your product does, but on the problem it solves and the better way it represents (like HubSpot did with inbound vs. outbound).

  • Finance Tip: Allocate specific budget for experimenting with and measuring different customer acquisition strategies. Track metrics like CAC per channel and LTV to optimize spending.

Conclusion

HubSpot's journey is a powerful reminder that a great product is only half the battle. By recognizing a shift in customer behavior and coupling their software development with a groundbreaking educational content strategy, they didn't just find customers – they created an entire market centered around the inbound philosophy. For any startup, especially those introducing something new, innovating on how you connect with and educate your audience is just as crucial as the innovation within your product itself.

Until next time, keep building, keep teaching, and keep finding innovative ways to reach your customers!