Big questions ahead for HubSpot after dismissal of top marketing executive

Brian Halligan, CEO and Co-Founder and
Dharmesh Shah, CTO and Co-Founder of Hubspot ring the Opening bell at the New York Stock Exchange on October 9, 2014 in New York City. Former CMO Mike Volpe has his fist next to the top of the S in the picture.
Brian Halligan, CEO and Co-Founder and Dharmesh Shah, CTO and Co-Founder of Hubspot ring the Opening bell at the New York Stock Exchange on October 9, 2014 in New York City. Former CMO Mike Volpe has his fist next to the top of the S in the picture.

Boston’s most transparent tech company went all opaque on us yesterday.

HubSpot, the publicly-traded maker of sales and marking software, tossed out a press release at 4:45 p.m. Wednesday announcing a new chief marketing officer, Kipp Bodnar. Oh and by the way, the release added, HubSpot has fired its prior CMO, Mike Volpe, for trying to obtain a copy of a not-yet-published book about the company. And the board had “sanctioned” HubSpot’s CEO and co-founder for not telling the board quickly enough what he knew about Volpe’s efforts to procure this unpublished manuscript.

It’s a situation with echoes of Deflategate: a star player on a winning team does something damaging that probably didn’t need to be done. But there could be something more serious here than PSI adjustment: HubSpot’s release yesterday said that the company had notified “appropriate legal authorities” about what it knows about how Volpe tried to get his hands on the manuscript. (A vice president, Joe Chernov, resigned before the company could decide on his fate.)

No one from the company is saying much else about what happened, and spokesperson Laura Moran told BetaBoston’s Curt Woodward yesterday that no one in the company, including chief executive Brian Halligan, knew the specifics of what Volpe did.

That’s an odd statement, given that Halligan was dressed down by the board for not reporting it promptly enough. And this morning, Moran clarified for me in an e-mail that “there is a small group of employees who are now aware of the circumstances under which Mike and Joe sought to obtain the manuscript,” as are the board and attorneys for the company. But Moran said that “we will have no further comment on the matter going forward.”

So it left people to speculate on what Volpe might’ve done to get fired. The grapevine was buzzing yesterday: hacking? Stealing the author’s laptop?

The author in question is one of Boston’s highest-profile tech journos: Dan Lyons, who used to blog as “Fake Steve Jobs,” spent a decade covering the tech business for Forbes, and as Newsweek’s technology editor wrote cover stories on Google and Apple. Lyons has also recently worked as a writer on the staff of the HBO comedy series “Silicon Valley,” which sends up the startup lifestyle, along with the fickleness of venture capitalists and the grandiosity of Google-esque companies.

Back in March 2013, Volpe hired Lyons to be part of HubSpot’s content-creation (a/k/a blogging) team, writing:

We want HubSpot to be the absolute best resource for all marketing professionals in the world. Hiring Dan, a world class journalist (who is also darn funny), is another step along that path. And for the same reason, Dan knows the future for someone like him is in working at a company that values inbound marketing

The future didn’t last very long. While he worked at the company, one senior HubSpot executive told me that Lyons had a tough time adjusting to the company’s culture, and especially its focus on generating blog posts that would be spread around in social media and attract lots of attention. After about a year at HubSpot, Lyons took a leave last May to join the writing staff of “Silicon Valley” in California. By Thanksgiving of last year, his HubSpot tenure was over. He joined the tech gossip site Valleywag this January, but quit in February, citing back problems, the flu, and a contract to write a book about his time at HubSpot.

The title? “Disrupted: My Misadventure in the Startup Bubble.” (An earlier version of the title used the phrase “Startup Cult.”) The publisher’s description of the book, due out next April, includes this passage:

[Lyons’] new employer made the world a better place…by selling email spam. The office vibe was frat house meets cult compound: Shower pods became hook-up dens; Nerf gun fights broke out at lunch; and absent bosses specialized in cryptic, jargon-filled emails. In the middle of this sat Lyons, old enough to be his coworkers’ father.

With portraits of devilish angel investors, fad-chasing venture capitalists, entrepreneurs and wantrapreneurs, bloggers and brogrammers, Disrupted is a hilarious story of self-reinvention and a definitive account of life in the tech bubble.

So naturally, Lyons’ old boss might be a little curious about what would wind up in the book. And he seems to have stepped over a line. What line, exactly? We don’t know yet.

“Building a business is messy,” says Mike Troiano, chief marketing officer at Actifio, a Waltham storage startup. “Providing intimate access to people who don’t understand that, especially people [like Lyons] with such a big microphone, can be a risky proposition.”

While Lyons didn’t respond to my Twitter messages seeking comment, former HubSpot executive David Cancel tells me that Lyons claims to know nothing about what happened, “and that the book is in New York at the publisher, i.e. out of his hands right now.” Cancel says that he saw Volpe last week, and Volpe said that he was “on sabbatical” from HubSpot.

Volpe’s firing is a big loss for the company. He joined the company in 2007 as the fifth employee. He was the top marketer at a marketing software company, and he helped spark a revolution the company dubbed “inbound marketing” — relentlessly publishing information about your product or service on the web in social media, rather than buying traditional ads. The company’s philosophy was that it was better to have an interested buyer find you on Google than spend millions to bother people during their favorite TV show. Along the way, though, Volpe served as the co-host for HubSpot.tv, a popular video series webcast from the company’s Cambridge office, and “The Growth Show,” a podcast launched earlier this year.

“Mike and his marketing team had to prove the HubSpot ‘inbound marketing’ thesis, that the traditional marketing playbook was broken,” says Tom Wentworth, chief marketing officer at Acquia, a Boston-based digital publishing company. “HubSpot’s success was coupled to Mike’s ability to make the inbound marketing mission work in the real world, well before HubSpot had a viable product. HubSpot became its own best case study, which provided it with the credibility they needed to sell the product they were building. HubSpot either pioneered, or proved with data, nearly every modern marketing tactic we now take for granted.”

Cancel, who was HubSpot’s head of product development until last fall, says that there is “no way HubSpot would exist without [Volpe]. I’d say he was as important, if not more, than the founders.”

The big questions for HubSpot now: Does this situation blow over with the departure of Chernov and the dismissal of Volpe, as the company clearly hopes? Will there be more revelations ahead as legal authorities investigate what happened? And how will HubSpot’s CEO and new CMO lead the company past this, especially if transparency — simply telling employees what happened — isn’t an option?

The company hosts an investor call next Thursday, after it releases its second quarter earnings report. No doubt some of those questions will come up.

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(I covered HubSpot in advance of its IPO last year, and wrote about co-founders Dharmesh Shah and Brian Halligan in the Globe Sunday Magazine last year. In the interest of disclosure, I am scheduled to speak at a HubSpot-organized inbound marketing conference in September, though I am not being paid to do so, and I was a guest on HubSpot’s webcast in 2009 to promote a book I’d published. I also serve on the advisory board of the Nantucket Conference with Laura Fitton, who is an exec at HubSpot but was not a source for this story.)

Scott Kirsner writes the Innovation Economy column every Sunday in the Boston Globe, in which he tracks entrepreneurship, investment, and big company activities around New England.
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