Less than 24 hours after the Cambridge marketing firm HubSpot dropped a cryptic press release announcing that they had fired an executive for ethics lapses, HubSpot chief executive Brian Halligan said that the chief marketing officer in question, Mike Volpe, had engaged in “some really aggressive tactics” to try to get a copy of the manuscript to a forthcoming book by a former HubSpot employee. But Halligan wouldn’t reveal much more, saying that company attorneys had advised him not to describe what exactly those tactics were — even to the company’s employees, whom he addressed in an 11 a.m. meeting on Thursday.
Volpe’s actions led to his dismissal from the company this week, and questions remain about why he was so concerned about the contents of the manuscript. The book, by Winchester journalist Dan Lyons, is titled “Disrupted: My Misadventure in the Startup Bubble,” and it is scheduled to be published next spring.
Halligan said that while he couldn’t be specific about how Volpe tried to obtain a draft copy of Lyons’s book, “there was definitely some fishiness. But I didn’t report it. That was my bad.” The company’s general counsel, John Kelleher, learned of Volpe’s behavior from another HubSpot employee. Subsequently, the company’s board formed a subcommittee to investigate the matter, led by director Lorrie Norrington, a former executive at eBay and Intuit. Halligan says he acknowledges that he should have told the board earlier what he knew. The board sanctioned Halligan by reducing his pay package by an undisclosed amount. “I agree with the message they sent me. I agree that I showed poor judgment,” he said in an interview this afternoon at the company’s East Cambridge offices.
Halligan said that the company’s outside law firm, Goodwin Procter, investigated the actions of Volpe, another executive, Joe Chernov, and HubSpot’s management team before making a recommendation to the board. Yesterday, attorneys at Goodwin Procter handed over the results of their investigation to law enforcement agencies. But Halligan said he couldn’t reveal specifically which agencies had been notified.
Halligan said that Lyons never told him he planned to write a book, and that he only learned about Lyons’s plans after Lyons left the company in November 2014. All HubSpot employees sign a confidentiality agreement when they join the company. As for whether that could be used to prevent the book from being published, “We haven’t explored that at all,” said co-founder and chief technology officer Dharmesh Shah. Shah and Halligan said they only read the description of the book this morning, soon after it appeared online.
Shah said that Volpe’s termination “was a tough action, but a relatively clear decision. It wasn’t like, oh, they were dancing on the line. It was unanimous.” (Chernov, vice president of content, resigned from the company.) Halligan said that the attempt to procure the book manuscript was the sole reason that Volpe was fired.
As for the possibility of any law enforcement action against Volpe, Chernov, or current HubSpot employees, Halligan said, “It’s going to be up to them. We handed everything over. It’s up to them.”
The board “ran a very tight process,” Shah said. “We were told not to talk to each other during it,” Halligan added. The two founders both said they were unsure whether the board committee spoke to Lyons.
HubSpot vice president Katie Burke said that the company’s attorneys had advised it not to be specific about when these events transpired. Volpe was on a sabbatical in July, not on a mandated leave, when he was terminated.
As to whether Halligan thought Lyons joined the company in 2013 with the intention of chronicling his experiences in a book, he said, “Not at the time.” Shah added, “We don’t know for sure.”
Shah and Halligan both said they weren’t worried about how the book’s eventual publication will affect their company, which went public on the New York Stock Exchange last October, and which reports its second quarter earnings next week. “I’m not losing any sleep over it,” Shah said. Halligan said he expected it to be “a satirical take on HubSpot. It’s not going to be pleasant, but I don’t think it’ll be that bad.”
HubSpot’s founders have focused on establishing an open and transparent corporate culture as a way of attracting and retaining employees, and creating a productive workplace. (Part of the company’s culture code: “Sunlight is the best disinfectant.”) Shah said the current contretemps “was not a failure of HubSpot’s culture,” but that “this was a failure in one specific situation to live by it as well as we should.”
Shah said that he and Halligan considered Volpe “almost like a third founder of HubSpot. He did a fantastic job while he was here.” Shah said that Volpe originally hired Kipp Bodnar, the executive who will now take over Volpe’s role at HubSpot.
“I did the math on how many days I’ve been a working professional,” says Halligan. “It’s something like 6,250, and yesterday was the worst.”
Halligan said he hadn’t yet written the script for next Thursday’s earnings call with HubSpot analysts and investors, but said that “I suspect I will” address Volpe’s termination. “If there are questions, I will answer them.”
Neither Volpe nor Lyons have responded to requests for comment.
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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