hubspot Business Model – How does hubspot make money

What is the most important thing for a business? A good niche which the business owner understands and a vision to grow the business. These are the basic things that you need to start a business anywhere in today’s world. These are the only things that will help you or motivate you to start your own business. But if you want your business to be successful then you need to do something more than just having a good business idea or a product. The thing you should have your focus on is marketing and customer relationship management. These are probably the two most important things that people who start a new business don’t understand completely. The marketing part is something that many people know is important but don’t know how to implement it properly. On the other hand, the importance of customer relationship management is something that new business owners don’t understand. 

All these things were a bit simpler in the past as the technology was not as advanced and accessible as it is today. Because of this people had only fewer options and they would choose the best thing that was available to them. However, today it is a completely different game compared to what it was a decade ago. Today you can get any product or service just using your smartphone. People have a wide range of options to choose from. So if you want to be successful in today’s world you have to make sure that people know you have the best products and services. Not only that but once you offer your services you must retain those customers. So in order to do this, you have to maintain a good customer relationship.

Everyone knows this so they are using the latest technology and techniques to market their products and services. You even have companies that provide these advanced software tools to make sure you do it effortlessly. One such company is Hubspot. People who are into digital marketing know about it. But not many people know what its business model is and how it makes money. This article is completely about that. But before learning about its business model let’s know a little bit more about the company.

What is Hubspot?

Hubspot is a software company that offers software products for inbound marketing, customer service, and sales. This company was founded in the year 2006 by Dharmesh Shah and Brian Halligan. The pair had this idea when they were studying at MIT. They observed that technology was transforming people’s lives in a great way but the business could not adopt them effectively. They thought that leveraging technology to help businesses will be a great idea. This would change the way people would do business. To start the company Dharmesh Shah invested $500,000 of his own money and both the founders started to build the framework. By 2010 the company was bringing in more than $15 million dollars annually. In that same year, Hubspot acquired the app store of Twitter called Oneforty. Hubspot released new software that allowed users to personalize their websites. 

In 2012 the company was able to raise 100 million dollars of investment from companies like Matrix Partners, General Catalyst Partners, and Scale Venture Partners. Initially when the company started its target was small businesses but as time passed it was able to provide its services to larger companies that had over a thousand employees. In 2014, the company had its initial public offering. In this IPO it managed to raise another $125 at the Newyork stock exchange. Another important acquisition was made by Hubspot in 2017. In this year it acquired Kemvi which is a company that applies machine learning and artificial intelligence for helping sales teams. The company was made more than $600 million dollars in 2019. Hubspot is currently valued at $1.6 billion. 

Business model of Hubspot

Hubspot follows the flywheel business model. Many people know about the tunnel model but not many people know about the flywheel model. The tunnel model looks at the customers as an end result but not the flywheel model. In the flywheel model, the customer is at the core of all the operations. It keeps enhancing the customer’s experience even after acquiring them. Basically, it keeps providing products or services to improve their experience. Hubspot has done it successfully and effortlessly. Let’s look at how it was able to do it. 

Offering integrated tools for social marketing and lead generation

This is the first and foremost thing that made this company successful. Hubspot offers various software services that help businesses in inbound marketing. Not only that but the tools provided by it are very efficient in generating leads and sales. The great thing about the products provided by it is that they can be integrated with other platforms. 

The best option for small and medium-sized businesses 

Hubspot is the go-to company for small and medium-sized businesses that are looking for good marketing and customer service software. Hubspot provides its services to more than 18,000 customers around the world. It has customers in more than 90 countries. Itz services are used by all kinds of institutions like e-commerce companies, advertising agencies, educational institutions, marketing agencies, recruitment companies, and more. Most of its customers belong to small and medium-sized businesses. The best part about using Hubspot is that it also has a free subscription model that can be used by small businesses. 

A single platform to manage inbound marketing and CRM

Hubspot makes it very easy for people to manage inbound marketing and customer relationships. You can get all things you need directly from the Hubspot website. Even the purchases can be made using the website by contacting them directly. The importance of customer relationship management has already been discussed. Hubspot provides a platform where users can manage both customer relationships and marketing at the same time. 

How does Hubspot make money?

Hubspot like another company has multiple revenue streams. Let’s go through them one by one. 

Subscription fees

Apart from the free model Hubspot also offers subscription plans for its customers. The subscription plans offer a wide range of features compared to the free version. It has three subscription plans. The Basic plan and Pro plan cost $200/month and $800/month both of them are billed annually. The enterprise package is the most expensive plan which is priced at $2,400/month. 

Advertisements

This is the most common way in which any platform is making money these days. Hubspot displays ads on its websites. It receives a certain amount of money for displaying those ads.

Selling extensions and templates

Apart from the ways given above Hubspot also makes money by selling third-party extensions and templates. 

Conclusion

This is the business model of Hubspot. It is one of the best platforms for inbound marketing and customer relationship management for small and medium type businesses. The thing that makes it a great platform is it is willing to incorporate new technologies to make their customers help their customers. You can know more about other business models on Zeen. Click here to know about the business model of Revolut.

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