Thursday, March 31, 2011

HubSpot's CEO Explains Why All Bankers and Consultants are Miserable

HubSpot's CEO, Brian Halligan, explains that every MBA needs "a good job and a good mattress," and banking will only get your the second one. McGill's Desautels Business School is fined $2M for raising their tuition 1882%. And TheRealTomRose begrudgingly admits that nobody likes being a banker.

(1) Headlines: McGill Fined for Raising MBA Tuition 1882%

So the government of Quebec is fining McGill’s Desautels School of Management $2M for raising prices from $1700/year to $32K

Is that in American dollars or moose dollars?

Who cares? That’s a whooping 1882% increase.

Students must be pissed?

They’re actually not. The school needs the money. Just a few years ago they weren’t even ranked in the FInancial Times top 100 and they had to fire ⅓ of their tenured faculty.

Woah, no faculty, who’s in charge of not meeting with students? What happens to ex-canadian tenured faculty?

They’re fine. It’s Canada. They’re getting free healthcare, smoking weed, getting gay married. You know … Canadian Stuff.

Wait, so let me get this:
Tuition used to be $1700
And how many students? Okay, 60 students.

And the entire tuition-based-revenue of McGill last year was $102k

I PAID MORE FOR MY MBA THAN THE ENTIRE B-SCHOOL AT MCGILL LAST YEAR. I feel so alive. Like a true American consumer.

So the school is saying they have to raise prices to be able to compete and offer a good education. And goverment is saying that this violates Qubec’s equal access to education law by making school so expensive.

So what kind of statement are they making to the government here?

I think I’ve got a pretty clear idea what they are saying here. [finger] CENSORED

The human interest story is really interesting here Miro, but lets ask the more important question. Is this move NPV positive? Let’s run the numbers.

What are we losing per year. 1.2M in gov’t subsidies
What is the one time fine? $2M
What is the student revenue at 60 students w/ $32k tution? 1.92M
This project has an IRR of 44.338%

How did you do that so fast?

Miro, I’m in finance, this is what I do. (run the model before hand and then pretend like I came up with the numbers on the spot.)

Wow. that’s really NPV positive. And that makes sense, because all you have to do is pay the fine in the first year and then you more than make up the loss in government funding with the tuition increase.

And I have a solution to that problem.


You can’t do that, it’s illegal!

If I’m not getting the government subsidy, then what do I care if I have an outstanding parking ticket?

I can’t believe you would seriously suggest that an entire business go rogue.

Dude, it’s Canada.

(2) Guest: Brian Halligan

He’s the CEO of HubSpot. HubSpot is an all-in-one marketing software platform for small and medium-sized businesses. It’s one of the hottest start-ups in Boston, the USA, the universe.

Author: Inbound Marketing

HubSpot has been in the news lately for closing a $32 Million Dollar D round with the biggest names in money: Sequoia, Google Ventures, Sales Force, Matrix, General Catalyst

And here’s the best part MBA’s, They’re hiring. [Jazz hands]

Brian, for those of us who aren’t high on entrepreneurship. What is 30 second overview of HubSpot?

You just raised $32M at rumored to be a $200M valuation. At this point, it’s $1 Billion, or bust. You’re on a run rate of $25M this year, I can’t sleep at night thinking about it.

Brian, brian I need your help. My heart says starup. I’ve got an offer from Deutsche Bank for $150k in starting salary with another $50 in guaranteed bonus comp. Talk me down man, talk me down. I will do it, I’ll sign it!

(3) Jargon: COCA. Cost of Customer Aquisition.

So this is the cost that it takes to get each new customer on board. Take all the marketing and sales you spend in a money and divide it by new customers. That’s your COCA.

Brian, you talk a lot about these at Hub Spot. Why is that so important?

(4) Business School Tip of the Week: What is a tip for all MBA’s.

(5) What’s on your Radar?
Miro: My wife is away
Tom: Moving


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