“I Think I’m a Historian” — Pivots vs Hops, HubSpot’s Singular Self-Awareness, Why Bundling Gets Rebranded Every 3 Years, and Other Discerning Lessons with Nira’s Co-Founder, Hiten Shah


In the following exchange, Nira’s co-founder and CEO, Hiten Shah (@Hiten), illustrates anew: how years of scrupulously scrutinizing other businesses from the outside and compulsively studying his own, have granted him a hard-to-live-with yet ultimately illuminating insight into fundamental forces that continue to shape startups.

The learning muscle that must inform pivots
Operating with Hiten’s unmatched historical context on tech
Rippling, HubSpot, and how bundling actually works
How market timing dictates enterprise sales
Building new, different, and right products


The learning muscle that must inform pivots

There’s a difference between a hop and a pivot. People think that Slack was a pivot, when it was really a hop. They went from one idea to another with no rooting or basis in why.

Here’s what I mean. In the early days, the goal is to find something people care about. Or, as some would say, “build something people want.” With B2B, that typically extends to: Build something people want to use and buy.

If you’re not finding that, you have to make a change (or pivot!).

You can either:

  1. expand/double down on a particularly sticky part of the product,
  2. find a new customer segment that cares more and is willing to pay more, or
  3. discover a bigger/different problem set for the same segment of users.

In Slack’s case, they first built a game (Glitch). They had also developed an internal messaging tool (which depicted IRC, because the team liked IRC).

For whatever reason, they decided that they didn’t want to continue building the game any more. Instead they started building out the chat tool and even gave it out to a few friends for their companies. That’s how we got Slack.

Again, it was a hop. Not a pivot.

Facebook, on the other hand, experimented and pivoted a lot during their initial stages. They tried (and threw away) a number of different ideas in search of a fit. Finally ending up with a profile and a photo sharing service.

Then they realized that users tagging photos with friends was the next big pull. So the notifications, the engagement, and all that stuff came about. And they’ve had multiple such inflection points since.

This is why they didn’t copy Snapchat, one-to-one.

They implemented it in Instagram in a way that made sense to Instagram users. In the consumer space, a lot of similar fits need to take place once your core starts to grow.

B2B is not dissimilar. We need to do the same thing. I’d say, this is a muscle we all need. A muscle that can cause you to pivot. That’s perhaps the right way to think about pivots vs considering them special or different.

The muscle, in other words, is to deeply understand customer needs, and then adapting based on that understanding. That’s why customer development, in the traditional sense, works so well in B2B.

To sum up, pivots are all about the learnings that you had and the decisions you made about (necessary) changes in your business, based on those learnings.

At Nira, we’re just pretty good at learning things and are not afraid to get started in a new direction. Getting started quickly allows us to gain momentum. Even if we’re not headed in the perfect direction, we can find our way.

We can learn what else to do.

I’ll give you a recent example.

I’ve gotten pretty good at this over the years. And, good, is a relative term. So whatever! :slight_smile:

We just shipped an add-on for Nira. It wasn’t quite ready. But then we freaked out when we discovered that a lot of people really wanted it and were willing to upgrade/renew for it. This is a B2B, enterprise-focused product btw.

We had to step back in the face of that demand and make things scale better with the right margins in place.

The team that worked on this feature deployed the same muscle to figure things out, the one that helped us identify what to pivot into earlier. The muscle of continuous learning.

Operating with Hiten’s unmatched historical context on tech

With historical context on how all sorts of companies work — how they came to be and how they realize a product — in some ways, I know too much.

When I talk to someone who is involved in a business, I’m usually 98% correct about what’s likely happening there. Because of years of observing different teams. All those observations translate into an ability to read between the lines.

The problem with that is that you could read between the lines and read the wrong thing.

I’d rather be either completely wrong because we took a big risk or be completely right because we assessed what we were doing appropriately. For example, with the recent Nira add-on I was referring to, we judged the situation just right.

Or more specifically, it was a massive doubling-down on our core.

A lesson I’ve known from past experiences of my own and others.

The way all that I’ve seen manifests day-to-day is that I have lessons that I don’t even know I have. Because all the reams of historical details, for whatever reason, are damningly stuck in my head.

It’s not the best feeling when you can recall stuff like “ah, that’s why they screwed up, that’s why that other company screwed up.” I remember such things distinctively because a lot of times that’s how I screwed up.

It gets very hard, because if you’re continuously building, you (and I did) screw up all the time. And my lens, in general, is that I’m highly critical of everything and everybody. With one purpose: ‘let’s all get better!’

I’m not looking at Evernote/Notion and being like, “why is it so awesome??” Finding that out is simple enough. I could go talk to a user, they’ll tell me why it’s awesome. I can look at the company’s website and they themselves will tell me why they’re awesome.

What I want to know instead is why they suck. I want to know why they got there. I want to know what they should do next. I don’t care about why a product is great unless it’s helping me understand what to do.

Here’s a funny thing. If I was an operator in a business, knowing what to do is much more important than armchair quarterbacking about another business. But it’s more fun because I can be more accurate without biases.

Here’s another example that blows my mind.

BLOWS my mind.

My numbers might be a bit rough but that doesn’t matter. But here goes. When HubSpot was at a $200m valuation, they gave up 10% of their equity to buy a company called Performable. HubSpot was only worth $200m. They’re worth several billions now.

They gave up 10% to bring in this dude (David Cancel) and his crew of around 30 people, to take over HubSpot’s product & engineering and revisit everything from scratch. HubSpot wouldn’t be what it is today without that acquisition.

Prior to that move, most people in tech knew that you didn’t want to use HubSpot because their product sucked. The thing that really blows my mind is that they figured it out. Fairly fast. And then, more importantly, they said “we’ll fix this on our own.”

They said, “it’s that important to us for the long haul that we’re willing to part with 10% of our company to get this team in and fundamentally fix our problems.”

That’s what I call organizational self-awareness.

That’s what we all, whether we know it or not, are looking to achieve. The 2 things you mentioned — customer research and the knowledge of how others have done things — help me achieve that.

Because they allow me to be critical.

I can remember points in tech history that most people have forgotten. The other day I did this to a friend, where we talked for an hour, and I was essentially giving him history lessons.

I think I’m a historian, at this point. :))

Because of all the boring, stupid stuff that I keep remembering that nobody cares about. For me, though, it’s central to how I operate.

What’s the lesson in that HubSpot decision?

Well, product matters.

If you know it sucks, go fix it. Fix it for good.

They did that.

And that company keeps doing this across many different areas. If you ignore everything else, the one thing that makes them HubSpot, is: incredible strategy thinking.

I don’t know any other company in B2B SaaS that does it the way they do. As a founder, I know that saying that you suck is like stabbing yourself constantly in business. They’re able to say that they suck and do something meaningful about it with no damage to themselves.

THAT’s impressive.

Rippling, HubSpot, and how bundling actually works

Someone rebrands bundling every 3 years.

[Rippling’s] Parker Conrad has very successfully rebranded it — as compound startups — recently. While HubSpot, since about 2006, has understood bunding better than any other company I’ve seen.

Companies like Freshworks and others have had their attempts. And they worked for a while when things were good, but they don’t work for them any more.


Why does bundling work for some and not for others?

That’s where Parker’s recent insights come into play. I think he’s also sharing them now because he knows how difficult it is to do things the way he’s describing them.

The way he’s talking about bundling is exactly how HubSpot did it. Probably less knowingly. Everything is in hindsight, anyway. Basically, what Parker is saying (which, I think, is very accurate and also challenging) is that it isn’t just about bundling features.

Freshworks did that. Zoho did that. Many others have done that.

And they’re successful to some extent but they’re not HubSpot or Rippling.

According to Parker, you need a core, almost a system of record that everybody gets to easily adopt and give you data for.

Salesforce’s system of record is: These are all your customers. In this tool. Nowhere else.

HubSpot’s is: These are all your contacts. In this tool. Nowhere else.

And because they’re contacts, they’re able to tell you, “okay, here’s the email, here’s where they first came from, and all that.”

Salesforce doesn’t have that. You have to force that data into Salesforce. They’re both systems of record. HubSpot’s is more evolved because it starts at a larger scale in saying, contacts, not just leads.

That being said, if you use Salesforce properly, you can throw your whole TAM, your whole addressable market in Salesforce. If you use it properly.

HubSpot has that. But also all the visitors that came in. All the people that filled out an event form. And more. Even when someone’s not a customer.

So yes, this is the reason Salesforce is a system of record and an official one. This is the reason why HubSpot is also becoming (their free CRM really took that to town) one, if not one for as many companies yet.

The idea, then, is to have a core dataset that these companies can do tons more on top of. That tons more on top of — and this is the nuance — is just that much better than any other tool because it’s all 1 system of record.

The idea is to keep stacking up methodically.

The sum and the parts would be better for it.

If you look at Freshworks, they’ve not done that.

They don’t have anything at the center that makes all features better.

The qualifying question is: Do you have a bunch of features/products simply strung together? Or do you have a core compounding aspect that ties them together? Something that makes it so that customers wouldn’t want to use point solutions anywhere else?

Rippling’s thesis is to build a similar thing for employee data.

But, if you think about it, how many such systems are there?

How many such opportunities exist?

Yeah, not enough!

Hence it’s among the hardest things to land on. I can’t imagine Parker coming in with a thesis, that solid, early on. I’m damn sure the early HubSpot, beginning with inbound marketing, doesn’t point to where they eventually got to.

As Parker has pointed out, they’ve created a culture where builders and founders want to work. An environment where they can innovate. A place where folks with that aspirational mindset to build better get promoted.

Here’s the thing, though, if we figure out something like this at Nira, we wouldn’t tell anyone until it’s obvious. Exactly what Parker did at Rippling. He didn’t tell anyone until it was self-evident that this thing was working.

The Nira add-on works so well because it’s connected to the core of what we’ve built and to the value prop that people have to come to us thus far.

Is Nira a system of record yet?

I wouldn’t tell you if it was.

Because I don’t think anyone should be talking about this stuff as it’s so hard.

Not because someone is going to copy. But because there’s so much to develop, there’s no point speaking of it. Because people would think you’re crazy!

If Parker had raised this framework earlier in their journey, people wouldn’t have bought it. If HubSpot had proclaimed, 15 years ago, that they would compete with Salesforce one day, most people wouldn’t have believed them.

I would have believed them because I know they’re incredibly good at strategy. If they say they want to do something, I would bet that they’re going to do it.

Lo and behold, today, they are a direct competitor to Salesforce.

In a lot of aspects, better than them. Way better. For some segments, I would say, they’re wayyy better, like 10 times better. And they’re coming at it with the gusto of a team that knows the significance of what they’ve achieved.

How market timing dictates enterprise sales

We’ve always sold enterprise and mid-market deals at my previous companies. But with Nira, we can work with the largest companies on the planet, while serving mid-market and SMB segments.

Having sold Nira in the current market, I’ve learned that enterprise sales have much to do with market timing than most people appreciate.

Right now, the budgets are squashed. The CFO is the buyer. The environment for selling software is extremely challenging. That dictates what you build, how you position yourself, and everything else.

Today, if you’re not positioning the product to help customers either make more/save more money with clear ROI calculation, you’re pretty much dead in the water.

Unless you have AI as people have some exuberance for that. But then you’d have churn. All the AI stuff has major churn. Unless, of course, the AI thing is an add-on to Loom or an already useful tool.

I’m learning more about operating and selling in a setting when most companies don’t want to buy by default.

Building new, different, and right products

We don’t build in categories like Vanta, Secureframe, or Drata. Those spaces get crowded really fast. I tend to shy away from packed software categories. For better or worse, I’m always trying to build something that’s new, different, and right.

It’s something I’m learning to evolve.

We’re not a compliance tool that helps you sell to larger customers. We’ve found gaps in how people are managing who has access to what within companies. Something that’s obviously missing as per every potential customer we speak to and there’s no other way to solve for it.

New, different, and right is what we aimed for and that’s what we got. A new product that is different from what exists but is right for the market. The key with hunting for these types of opportunities is to do extensive customer development upfront to understand where there is underserved demand for a solution.

Building for such an open space is a completely different process.

I’m attracted to such problems. I don’t think it’s a healthy thing. But I’m attracted to it.

Along those lines, I’m also making sense of how product isn’t the only way to innovate. There are other ways. With a lot of stuff we’re doing next at Nira, the innovation would be around how the product gets deployed and how it’s sold.

That’s what fascinates me these days.


Related reading from the Relay archives:

Hiten Shah’s Relay AMA from 2020
Summit’s founder, Matt Wensing, on pivoting (4 times) towards PMF


So glad to have you on here, yet again, @Hiten. Thanks for doing this! Loved the story of what drove HubSpot’s Performable acquisition. And the lesson of self-awareness (“They’re able to say that they suck and do something meaningful about it…”) that you’ve drawn from it. I think it’s exactly correct. Perhaps the most important thing that companies need to get right.


Thanks for taking the time, @Hiten! Couldn’t agree more on how bundling is hard and on HubSpot’s genius moves. There’s a lot to learn from the journey that Dharmesh and Brian have been on. And from yours as well! Thanks for discerning how SaaS really works and for consistently paying it forward to the community over the years. :raised_hands: