Please welcome to the stage, Ryan Burkhardt.
Good morning, everyone. My name is Ryan Burkhardt, Senior Director of Investor Relations here at HubSpot, and it is my pleasure to welcome you to HubSpot's ninth Annual Analyst Day here at the Boston Convention and Exhibition Center. I also want to welcome everyone joining us virtually via the webcast. Thank you, everyone, for taking time out of your busy schedules to be here with us today. We really appreciate it. We have got an awesome day planned for you all, with tons of new information that I know you'll all be interested in, because you've asked me about it all the time. But before we get going, no Analyst Day would be complete without a safe harbor statement, and here is ours. Please take a minute to review it. Should be enough time. All right, now on to the agenda.
In just a few minutes, we're going to get going over on the main stage with our INBOUND Spotlight presentation. You'll hear keynote presentations from Yamini Rangan, our CEO, Andy Pitre, our Head of Product, and Dharmesh Shah, our Co-founder and Chief Technology Officer. This is always one of the highlights of INBOUND, and I know you're really going to love it. After the Spotlight, we're going to come back here in this room. We're going to hear a presentation, another presentation from Yamini, this time on HubSpot's vision for durable and efficient growth, followed by a presentation from Kipp Bodnar, our Chief Marketing Officer, on Customer Platform value. Then we'll break for lunch. Lunch will be served here in this room. It'll be about a 30 minute or so break.
After lunch, we'll resume and hear from our CFO, Kate Bueker, who's going to talk about how we're executing on durable and efficient growth. Then we'll wrap up with an executive Q&A session, moderated by none other than Chuck MacGlashing, our Senior Vice President of Investor Relations, Treasury, and Corporate Development. His title just keeps getting longer and longer. So we're really excited about that, and we'll end the day at about 2:00 P.M.
With that, we'll move to a short break on the webcast while all of us here in the room move over to the main stage area for the INBOUND Spotlight. If everyone here in the room could please follow Joe, here to my left, holding up that big Analyst Day sign. In just a second, he's going to escort us to our seats in the main stage area. Thank you again, everyone, for being with us today. We really appreciate it, and I think it's going to be a really awesome day.
Welcome everyone to INBOUND! over 12,000 attendees in person in Boston. Hey, Boston! We have over 100,000 joining us online from all over the world. Welcome. Whoo! I'm so excited that I get to talk with you all today. I know you think I'm only gonna talk about AI, but I'm here to talk about something even bigger: change. AI came in hot on the scene this year, and while we have seen major shifts in technology from cloud to mobile to social, what makes this feel different is the speed of change. From the launch of ChatGPT, to Bard, to LLaMA, to the exciting new ways in which we can use generative AI, more has happened in our industry in the past nine months than other industries have seen in the last nine years. Can you feel it? Yeah. Technology is changing.
The way customers buy is changing, so how we connect needs to change. So I wanna share my thoughts on how you can adapt and grow with these shifts. Now, a small confession: I'm an AI geek. While many people like to watch Ted Lasso, I really like to watch YouTube videos on neural networks and deep learning. I love it! I can't get enough of it. The way generative AI has really transformed the world that we live in this year has just been fascinating and, at the same time, a little daunting. So let's demystify AI. What exactly is AI? Why has it taken the world by storm this year? AI is not new. It's been around for decades, and in fact, Predictive AI, the kind that forecasts future behavior based on data from the past, is ubiquitous. We love it. We depend on it.
This is the intelligence that drives HBO to recommend Succession, that you binge-watch. This is the same intelligence that drives your favorite clothing brand to say, "I know you have that sweater in black, but orange really pops with those new white jeans." Orange is always good. That AI is not new. So what has changed this year? There is a new kind of AI called generative AI, and in the most simplest terms, instead of just analyzing the old data, generative AI can generate something new. AI has gotten really good at creating new things, new content, new code, new insights. It can draft everything from blog posts to biographies. It can generate everything from data reports to great songs. For the first time, AI has the potential to transform knowledge and creative work, and that is a profound change.
And that means generative AI is moving us from the age of information to the age of intelligence. Now, think about this. The internet gave us access to information that was in books, articles, encyclopedia, right at our fingertips. It changed the way we live, work, and buy. Now, generative AI is giving us access to intelligence, and once again, the way we live, work, and buy will change. That's a big shift. How do we process that? Well, what if we put the word artificial aside for a moment and really focus on what's left? Intelligence. Why? We're going from acquiring information to acting on intelligence. And if you're a marketer out there, a salesperson, a service rep out here, I know you're here, then what's the best way to use this intelligence?
The answer is simple: the most intelligent way to use intelligence as a go-to-market professional is to drive customer connection. I wanna share a personal story about the power of this intelligence to drive customer connection. Now, my home is made up of two teens, two careers, two cats. It's just absolute chaos, and we love it. We thought we would add to this chaos with a much-needed kitchen renovation in the middle of the pandemic. I know, that's a bold move, right? I like to live life on the edge. Now, when I first met with this contractor and design firm, I was ready for mind-numbing information gathering. What kind of layout do you want? What color of tiles? What type of wood? They didn't ask me any of these questions. Instead, they actually observed our chaos. They looked at how we are using the space.
They asked insightful questions about how we come together as a family, and they connected deeply with us as customers. And because of that, they didn't help us renovate our house, they helped us create a home. And as their customer, what have I done ever since? Well, it is amazing. I have been their brand champion, their number one fan, and I've talked about them nonstop. That is the power of acting on intelligence, to be able to connect deeply with your customer. Now, imagine this: imagine if you can scale that type of connection with hundreds, thousands, maybe even millions of your customers by observing their patterns, anticipating their needs, and offering them insights. That's possible with AI.
I know some of you are thinking, "Well, it's so great that you and your cats feel so connected with this company, Yamini, but really, does this connection matter?" The answer is yes, connection matters because it drives growth. This is why I'm personally obsessed with customer connection, because in order to help you all grow, we need to help you connect with your customers. So at HubSpot, this year, we took a step back, and we looked at all of our customers who are growing most and how they are connecting with their customers. And specifically, we looked at the growth in the number of deals won. Anybody care about winning deals here? Yeah! Everybody cares about winning deals. So I wanna offer two insights based on the research that we did at HubSpot.
One, companies who focus on customer connection saw five times more growth than the average company. We have intuitively known that connecting with customers is really good business, but now we have the data and the intel to back it up. Five times more growth. Next, we found that companies who consistently connect in every single stage of the customer journey saw 19% more growth. What that really means is that no matter which segment you're in, which industry you're in, the more you meaningfully engage with your customers, the more you're gonna grow. So the takeaway is really simple: customer connection drives growth, and AI can drive that connection at scale. So that's great.
Where do we get started? We start where we always start, with the customer. At HubSpot, we are customer journey connoisseurs. In fact, Brian and Dharmesh just built this into the DNA, and I love it. So with this big transformative shift, we're doing exactly that. We're getting deeply curious about our customers' journey. And we went straight to the source. We asked many of you, our customers, how you think the customer journey is evolving and changing with AI. Let's actually listen.
There have definitely been some customer behavioral changes over the last year or two. Better, faster, cheaper, and more personal. That's what they want. The buying process is becoming more involved for our buyers. Conversely, the information, the content that is available kind of on the internet has gotten worse over the years. Customers are having so many different sources for information. A lot of it's highly indexed on social media. I think you can't be just in one place at one time. You are expected to be in all the places at all times. Customers are looking for more information in their interactions that is valuable and actionable, not just a sales pitch.
Gen AI gives us an opportunity with all the data we have to get more personal. Customer connection is all about understanding the customer at a much more granular level, and forming a genuine two-way relationship. We're talking about connecting to people. Understand the entire person, and that enables us to, where we can, be a better partner, be a more human partner, and engage in the moments that matter.
That's amazing. You just heard them. Now, customer journey is changing. You look at the entire journey. Customer expectations are really changing, and we need to put ourselves in the shoes of these customers to understand this change, from how they discover and consider new products, to how they buy and use these new products. So let's jump straight into the customer journey, and let's start with the discover stage. Now, discovery of new products is actually going from search to social. Customers simply used to be able to search and get access to lots of links from all over the internet. But things are changing because customers are discovering new products before they even search, and that's because companies are finding them where they are, on social. Now, 44% of business buyers say that they use social to discover new products. That's become their primary source.
TikTok, Instagram, YouTube, they're all on the rise because they serve customers engaging and relevant videos before they even have to search... So in the discover stage, it's really clear. Customers don't want to search, they wanna get social. So your customer has discovered your product, that's great news, and they are considering purchase. They'd like to learn more. How they learn is going from clicks to conversations. Now, let's think about this. When your customer wanted more information about your product, what they always do? They head to your website, and within your website, they would click, filter, and sort through all of that information that you provided to try and figure out what they want.
But all that clicking around is just so time-consuming, super inefficient, especially in this ChatGPT world, where they never even have to leave a simple chat box to figure out exactly what they want. So now they're looking for more information, what do they do? They go to the website, but they wanna chat. They just want a one-on-one helpful conversation to find out exactly what they need. So customers have spoken or well, typed, and it's really clear. They don't wanna convert on your website. They wanna converse on your website. Your customers had great conversations, and they are getting ready to buy. Here, their expectations are actually going from being okay, getting personalized information, to getting personal insights, and there is a big difference. Let's think about this.
Your customer is about to get on a call with your rep, and that should be an easy, breezy conversation, right? The call starts, and your customer's getting the sinking feeling. "Oh, no, I'm getting qualified," because your rep starts with, "Tell me what you're looking for, describe your pain," again. And your customer's thinking, "You know what is really painful? Is explaining the pain for the fourth time in a row." You know, customers have given us all of this information across so many different channels. It just didn't make it to that particular conversation. They expect you to take the context across all of the interactions you've had with them and bring them insights every single time that you connect with them. So personalized is templated. Hello, first name, not gonna cut it anymore. Personal is tailored. They expect insights that are specific to them.
All right, your customer bought. Sign, seal, delivered. They're yours. You're out there celebrating, but this is when the real work begins, because in the use stage, the expectations are going from being okay with reactive help to wanting proactive assistance. Just imagine this, your customer, when they want to get a question answered, what do they do? They submit a ticket, they call in, listen to some elevator music, and then try to follow up with an email to get the answer that they need. And guess what? Most of the time, they don't even get the answers that they're looking for. No wonder 98% of customers find service interactions absolutely frustrating. The other 2% must be doing a lot of yoga. Because they know you have AI, and they know that that means you have the intelligence and the insights to delight them proactively.
We all know as customers, how powerful that delight moment can be. In fact, I actually remember my first or one of my very first delight moments as a customer, way, way, way back when I was 15, and I would go to the local library every week. I was a bookworm of epic proportions, and my librarian, who got to know me, would hand me a stack of books, mystery novels, biographies, Archie's Comics books. Anyone? Yeah. And her proactive action made me feel seen, understood, and it just delighted me. I still remember that moment. That's what customers wanna feel, delighted. Customers don't want reactive assistance. They want proactive action. Now, if you step back and you look at this entire customer journey, wow, things are changing in every single stage of the journey.
AI is not only changing the technology landscape, it's causing your customers' expectations to change pretty dramatically. So that means standing still here is not an option. You need to evolve. You need to evolve how you connect with your customers. And if you ask me, my best advice is just get started. There is no playbook for AI, for marketing, for sales, for service, because things are evolving really rapidly. The best thing that you can do is to start small, iterate fast, and iterate responsibly. And that's exactly what we are doing here at HubSpot. In fact, our motto when it comes to AI is do, don't deliberate. So we have been responsibly experimenting, learning, getting a ton of feedback from all of you customers, and we've learned a lot over the last nine months....
So I want to share four ways in which you can start evolving your go-to-market for the age of AI. Want to get started? Yeah! Well, first one, get going with bots. In fact, start one for your website. Remember your customers, they don't want to click, sort, filter through all of that information. They just want to chat. So your chat should be able to answer questions about your product, about pricing, about case studies that your customers are interested in, and it should be able to do it better. At HubSpot, we added a Gen AI-powered Chatbot earlier this year, and it's been working great. In fact, 78% of chatters' questions have been fully answered by the bot, and these chatters have great customer satisfaction scores. Once you have a marketing Chatbot, next is time to add a support bot.
Get the most repetitive questions answered right away by the bot, so your teams can focus on the ones that require complex answers and expertise. Your service levels are going to improve, and your customers will be absolutely delighted. All right, next, hit refresh on your content strategy with AI. And specifically, you should be asking two questions: What kind of content do I generate now? And which communities do I share that content in? Now, whether you're creating blogs or podcasts or infographics, the content that you create should be optimized for AI, and that means it has to have depth. Keywords are still important, but the relationship between words and the context across these words are even more important for Gen AI. So that is how you should be thinking about content. So for example, let's say your customer is going to search for the best standing desk.
They will actually find your blog article, which said, "Best, best standing desk in 2023." But what if they ask the bot question about your product, pricing, models, where they can buy it? Do you have all of that information available for the bot to pull it from? Make sure that you really understand your audience intent when you're creating this content. Next, you have all this wonderful content. Where do you share it? Multiple communities. It needs to be across all of these communities, and here's where AI can really help. It can help you take the base content you have and optimize it for every one of these communities. It can schedule posts on your behalf. It can even recommend the time of the day that you need to be posting based on prior engagement metrics.
Almost every part of content, ideation, creation, and distribution is ripe for change with AI. So this is a great place for you to get started. All right. Third, flip the sales formula. Sales leaders, sales reps, this is for you. There's an old sales formula, which is hire a lot of reps, give them a stack of tools, and drive a lot of activities. That whole, like, more is more strategy no longer works. Your reps are overworked, and your customers are just overwhelmed with their outreach. There's a new way, which is an AI-powered way. Efficient reps that are assisted by AI with connected tools and insight-driven activities will lead to more sales. And here's the best news: You have all the data about your customer. AI can help you convert that into insights.
And that means you can focus on what you do best, which is meaningfully connect with your customers. Okay, last one here, most important, let's talk about service. Believe it or not, getting people to buy your product is not the biggest challenge facing companies today. It is getting them to use it, engage with it, get value from it. This is where you need to be proactive. Instead of just waiting for your customers to call you, be proactive with more insights, because more insight equals more value. Make every conversation count, and AI can absolutely help here. It can tell you the next high-value feature your customer needs to be using, what customers similar to them are doing in other industries. Share that. Make every conversation insight-rich to drive value.
So if you ask me, "How can I evolve my go-to-market for the age of AI?" I would say, start with these four practical ways: Get going with bots, hit refresh on content with AI, flip the sales formula with insights, and be proactive with service. It is such an exciting time to be in go-to-market. We now have the opportunity to drive customer connection with intelligence. And HubSpot, we're there on this journey with you. Our bread, butter, and jam is all about helping you grow. Now, back in 2014, we launched HubSpot CRM, and back then, our motivation was very simple. We believed that millions of organizations can grow better with a great CRM that's easy and powerful. Now, in 2023, we believe every organization deserves an AI-powered Customer Platform. We want to help you leverage the power of intelligence. Yes!
We're building AI into every one of the engagement hubs and across the entire Customer Platform. In a minute, Andy is going to come in, and he's going to take you under the hood of our entire Customer Platform and share all the exciting developments that we have been working on to help you grow. You're gonna be so excited, blown away. I wanna finish by bringing us back to where we started. Change. Technology is changing, customer journey is changing, and how we connect really needs to change. My world is changing, too. GenAI has revamped how I approach my life and work. I wake up in the morning with ChatSpot and ChatGPT eagerly waiting to assist me. I use it to get insights about our monthly pipeline, to prepare for customer calls, to help me write talks like this one.
I use it to unearth incredibly new recipes for the bottomless appetites of my two teen boys. It's really changed the way I'm living, and I'm energized by it. I welcome you all to join me. This could be the most profound change to transform marketing, sales, and service and help us connect better as humans. With that, it is my absolute pleasure and delight to welcome Andy Pitre, our head of products and UX, to take you on the journey with our product. Thank you so much, and enjoy INBOUND.
All right. Hello, INBOUND! My name is Andy Pitre. I work on the product team at HubSpot, and I am excited to be here. Yamini just talked about how we are in a time of change and opportunity, but let's face it, change can sometimes be hard. And so I wanna start today by doing a little product research. How many of you out there are unsure about how to use AI? Okay, I see some hands going up. It's okay. We can be vulnerable together right now. If you're with your boss, just wink. Okay, I see you. All right, how many of you are overwhelmed keeping up with customer expectations? All right, me too. Last one, how many people in this room are stressed out by their CEO and two cofounders emailing them every article on the internet about generative AI?
All right, I thought that one was gonna be just me, but I see some hands going up, too. The good news is HubSpot is here to help, just like we have through other big disruptions. When I joined HubSpot back in 2009, we were helping customers transition from outbound marketing to inbound marketing. But as we just saw, the customer journey has changed a lot since then, and so have the responsibilities of marketing, sales, and service teams. That means more content, more channels, more outreach, more tickets, and a whole lot more admin work. But Yamini just told us that this is the age of intelligence, so we're supposed to work smarter, not harder, right? To do that, we need more than disconnected point solutions. We need a system of work and engagement, and that is what will help us drive growth.
That's also what we are building hubspot Customer Platform. with hubs that help you engage across the customer journey, from generating leads with Marketing Hub to getting paid with Commerce Hub, Smart CRM that centralizes your customer data and gives you insight to help you grow, and our connected ecosystem that helps you extend HubSpot and gives you the tools to customize HubSpot, level up your skills, and connect with your peers. The best thing about the Customer Platform is it keeps getting better. What I'm about to show you today are just a few of the 200+ products and features that we built into the Customer Platform this year. Now, normally, when I give a product demo, I save the biggest announcement for the end, but today I wanna mix it up a little bit.
Artificial intelligence has the power to supercharge how we work and how we connect, and I am excited to introduce to you HubSpot AI. HubSpot AI is our collection of AI features across the Customer Platform. What makes HubSpot AI so unique is it has access to information that other AI systems don't have. HubSpot AI knows your content, HubSpot AI has context about your business, and most importantly, HubSpot AI understands your customers. These are the missing ingredients that will allow you to use AI to drive connection and growth. HubSpot AI includes dozens of features from assistants that help you work faster, agents that help you automate your work, predictive insights that allow you to uncover knowledge, and of course, ChatSpot that combines Smart CRM with ChatGPT... and they are all built into the tools you already know and love. Now, all right, yeah.
I'll take, I'll take the claps. Who is ready to see some software in action? Let's start with the discovery phase. As Yamini mentioned, the way people discover your business and products is shifting, and we expect to see changes in search, social, and influencer marketing. But there's one thing that we think is not gonna change, and that is the need for quality content. In fact, we think the bar for quality content is only getting higher. That's why earlier this year, we launched Content Assistant, which uses AI to help you write for your audience across your website, your blog posts, your emails, social, and more. And in just six months since we launched Content Assistant, HubSpot customers, many of you in the audience, have created over 1 million pieces of content. How awesome is that?
But we didn't wanna stop at just text, because as they say, a picture is worth a thousand words. And so today, HubSpot AI can create images too, on social. In addition to helping you summarize the post, just tell HubSpot AI what image you wanna create, and you can create it. Even better, HubSpot AI can read your content and create the image for you. This is how we are helping you streamline your workflow and making AI work for you. That's image creation with Content Assistant. It's now available in beta. Who is ready to create some images? All right, how many marketers are in the audience? All right. This is INBOUND, so there's a lot of marketers, and I know a lot of you are feeling skeptical right now, and you're thinking, "Andy, it's not just about creating one piece of content.
I need to create an entire campaign. To create that campaign, I need to build a landing page. I need to write killer copy for my landing page. I need to put a form on the landing page with the right fields, and those fields have to sync into my CRM. Then I need to promote the landing page, and to do that, I have to write an email. In fact, I have to write dozens of emails, all targeted at different audiences, all with different content and slightly different CTAs. And don't even get me started on ads. I have to run Google Ads, LinkedIn ads, Facebook ads, Instagram ads. It is exhausting just thinking about the amount of work that marketers have to put into creating killer campaigns. It is time you had an assistant for that, which is why we are launching Campaign Assistant.
In just a few steps, you can have a coordinated campaign up and running. Just answer a few questions about your goals and your tone. Let's say you're running a promotion. HubSpot AI will help you fine-tune your message. You wanna be friendly, creative, and informative because that's the voice of your brand. And just like that, you can have a landing page generated. But here's the really cool part. With just one more click, you can produce Google Search ads, Instagram ads, and marketing emails to drive traffic to your campaigns. What used to take hours now takes only minutes. This means you can focus on creating better, more targeted campaigns. That's Campaign Assistant. You come up with the ideas, and your new assistant will help you build the content. And I wanna share something else really cool about Campaign Assistant. We decided to make it completely free.
That means that even if you are not a HubSpot customer, even if you don't have a HubSpot account, every marketer can now use AI to build marketing campaigns. This is how we are bringing AI to everyone. Your audience has now discovered you, and we are moving to the consideration phase. They're scoping you out, and they're deciding if they are going to keep going. And it all comes down to the experience, starting with that thing that used to take weeks, sometimes months, and thousands of dollars to create. I am talking about your website. What if I told you that HubSpot could help you create a world-class website in just a few minutes with just a few prompts? That's what you can do with Website Assistant.
Like our other assistants, just give it some context about your business, choose your goals and the look that you're going for, and HubSpot will build your layout, your styles, and your content. And just like that, your website is ready. Yes. We just built a website in less time than it took to get through security. Okay, since we're talking about websites, I wanna share a hard truth about the new customer journey. Your customers don't just want a static website anymore. They want their questions answered. They don't wanna stand in line. They don't wanna wait on hold. They don't wanna leave a message. They don't want a call back but that is a little bit unfair because we can't all be online 24/7. I certainly can't be online 24/7. I need my work-life balance, and so we are fixing this with AI Chatbots. Here's how it works.
Put a live chat on your website. That's it. Behind the scenes, HubSpot's AI Chatbot reads your web pages and your knowledge base articles and answers your questions quickly. The beauty of an AI Chatbot is the more content you feed it, the better it gets, because content is truly the breakfast of champions, especially if you are a bot. AI Chatbots are now in private beta in Service Hub, and I am excited to see how this radically changes the way we all connect with our customers. Now, one-to-one conversations aren't just happening on your website. The majority of your customers prefer text and direct messages. Many of you already know this because SMS is one of the top requested features from HubSpot customers, and today, we are announcing that SMS now works natively on HubSpot, just like our other channels.
It's so easy to create an SMS message right inside your marketing tools. You can preview and know exactly what it's gonna look like. You can even add SMS messages to your workflows. And of course, you get all the tracking and subscription management that you expect from HubSpot. When I showed this to our own marketing team, they lost their freaking minds! It was amazing. Now, with SMS, you can use HubSpot as the single place to have better conversations with your customers everywhere they spend their time, and that is how you are going to drive customer connection. Your customer is engaged, and we are now at the next critical point of the customer journey. How many salespeople are in the audience today? All right. I wanna share something with you. This is the most salespeople that we have ever had at an INBOUND event.
Almost a quarter of our attendees are salespeople. Let's give it up for the salespeople. Now, what's especially impressive about having salespeople at INBOUND is that it is September right now. It's the end of the third quarter. There's a ton of pressure on salespeople to close the third quarter strong, plus you need to get ready to set yourself up for a good fourth quarter. It is nothing short of a miracle that you were able to convince your bosses to let you come to INBOUND, which proves that you are all very good at sales. And I promise you, you made the right call to be here today because it is not very often that we completely reimagine one of our hubs from the ground up.
But with the changes that are happening in the customer journey, we knew we had to do something big, and so I am excited to introduce to you the all-new Sales Hub. All right, I'm gonna dust off some of that digital confetti. People in the front row, you might have to dust off some of that digital confetti, too. All right, let's get into it. Here's what drove our thinking with the new Sales Hub. We know that salespeople have a fundamental problem. 88% of salespeople say that building personal connections is the most important part of their job, but only one-third of their time is spent actually building those connections. We wanted to change that equation, and it starts with a better prospecting experience. Today, prospecting is a pain in the butt.
Our days are spent in dozens of tabs, bouncing between tasks, trying to figure out who to reach out to and who to follow up with. Who has time to build personal connections when you are barely treading water, fighting with your systems? So we built a prospecting experience that gives you everything you need to get the job done. That means you have your schedule, your goals, and your to-do list in one place. Tools like calling and emailing are embedded, so the time you spent doing busy work can actually be spent connecting. Which brings me to our next prospecting feature, our new Leads experience. With the Leads experience, every lead comes with context, from their first interaction to their most recent communication. This is something that's only possible on the Customer Platform.
Best of all, we're giving you brand-new, out-of-the-box prospect reporting, so you can see what's driving connection and fix what's not. With Sales Hub's new prospecting tools, reps have fewer tabs, a lot less busy work, and a whole lot more connecting. Okay, you're now opening more doors, but what about closing more deals? From what I understand, that is a pretty important part of the whole sales job. That's why we built a smarter deal management experience that gives reps and managers the information they need to connect and close. Sales reps, meet our new deal inspection tools. You can see tags letting you know what's important and what's at risk. You can filter deals based on priority, and you can get customer context so you never waste their time asking them to answer a question that they've already answered.
Sales managers, you want your team spending time on the right deals. Embedded insights gives you a snapshot of your team's entire progress, and you can even get an in-depth look at how deals are tracking and converting with funnel reporting. I love the funnel visualization. With Sales Hub, you can reaccelerate your revenue growth. In fact, sales teams who have adopted our deal management tools have seen a 109% increase in their close rates. How awesome is that? Speaking of close rates, let's talk about forecasting those close rates. Sales forecasting is hard. I work in product, so I have the luxury of doing a lot of back of the napkin math, but if you try to do that with your sales forecast, you will get destroyed. This is the worst part: you know if you miss your number, you're toast.
But even if you beat your number, you get yelled at for sandbagging. So what if I told you that your projections could go from manual guesswork to up to 95% accurate? That is what AI Forecasting gives you, and it only uses data from your company, so the more you use it, the better it gets. When you look at your forecast, you see everything you need from goals to gap in one place. You can see a history of how deals have changed, and of course, AI will help you accurately predict your forecast based on previous performance. You know what that means? That means a lot less time fighting with spreadsheets and a lot more time connecting. AI Forecasting is now in private beta.
We know that forecasts aren't the only reports you're making, so we're also happy to announce Reporting Assistant, because sometimes you know the report that you want to create in your head, it's the one that looks like the donut, right? We all love the donut chart, right? But fighting with your reporting systems can be hard. You waste two hours fighting with your systems, and at the end of the day, you just wanted to know where your leads were coming from. So I have good news. With Reporting Assistant, we're using generative AI to help you create any report you can imagine. Just tell HubSpot the question you have, and we will answer it. It's as simple as that. We will even get you that donut chart.
There's so much more I could show you in the new Sales Hub, but I wanna leave you with one last thing. Salespeople, what is the first thing you do before you reach out to a prospect? How do you know if they're still at the same company? How do you know if they got a promotion? You check their LinkedIn profile, and I'm happy to announce a deeper relationship between LinkedIn and HubSpot to give you the best B2B connection tools for sales. Soon, you will be able to sync data between Smart CRM and LinkedIn Sales Navigator. This is going to be a game changer, and we are excited to double down on shaping the future of B2B selling together. I can't tell you how excited I am for the new and improved Sales Hub.
It gives you everything you need in one place, just in time for every salesperson's favorite time of the year. Who is ready to have the best fourth quarter with Sales Hub? Now, we can't talk about better selling without also talking about better buying, and that's what you get with Commerce Hub. One big thing that's changing. Okay, Commerce Hub in the back. One big thing that's changing about the customer journey is it's becoming more self-service. In fact, 80% of B2B decision makers prefer digital self-service, which is why we are making buying easier with Commerce Hub. You can send payment links, so you can quickly bill your customers right from inside your CRM or from your website. And this year, we added professional invoices. They are easy to create, easy to send, and best of all, they make life easy for your customers.
And with the Customer Platform, you can automate your billing, connect to accounting software like QuickBooks, and even connect your existing Stripe account. How cool is that? With Commerce Hub, we are making payments easy for you and your customers. It works seamlessly on the Customer Platform, and there's no monthly subscription fee. Who's excited about getting paid? Okay, we have now made it to the last phase of the customer journey. For businesses, this is where we tend to think that the journey ends, but for our customers, this is where the journey really begins, and the stakes are high. Yamini just talked about how you can no longer be reactive with your customers, you need to be proactive. And it's not enough to just support your customers, you are responsible for making them successful.
But who has the time, who has the tools, and who has the budget to do that? This is where Service Hub comes in, and our Help Desk and built-in support assistant can empower service teams like never before. Here's how it works: you get one centralized workspace for tickets and conversation. Every message goes into the brand Help Desk in one single view by ticket. And because everything is powered by the Customer Platform, you can easily see shared data from marketing and sales to get a complete picture of the customer and give them value faster. This makes it easy to assign, triage, and respond to tickets. And of course, we added a little AI right into Help Desk, too. With Support Assistant, you can spend more time solving problems and less time writing responses.
Support Assistant helps you write better messages with the right length and tone, and if you need to recap a conversation, either for yourself or because you're bringing in a team member, Support Assistant delivers a summary. With Support Assistant, reps can save an average of two hours a day! That's time we all get back to make our customers Help Desk and AI Support Assistant are just two features of our new and improved Service Hub, which help you make your customers successful. Since we're talking about making customers successful at every single stage of the buyer journey, every member of your team, from marketing to sales to service, needs to have access to a single source of truth with intelligence about your customers. We call this Smart CRM, and it is the foundation of the Customer Platform.
But the problem with the CRM is everyone on your team needs to work out of the same CRM, but every team and every individual has their own unique needs, unique workflows, and unique data that they need to be able to see to do their jobs. And so how do you have everyone on your team work out of the same CRM, but also have that system work for everyone? With new CRM UI extensions, you can take control of your CRM experience and build the perfect layouts and workspaces for every team. Let's say you're a sales rep looking up a company. You can see where they are in a potential deal and get the info you need to follow up.
If you're a support rep at the same company, you can look up the same contact or the same company and see their health, product usage, and open tickets. If you're a marketer, and you're trying to troubleshoot why somebody received the wrong email, you can see what marketing campaigns they're enrolled in. And just for fun, if you're on the shipping team, you can see why a package is delayed. We have built powerful customization into the CRM to make the CRM work for everyone. And since we're talking about building and customizing the CRM, at the end of the day, a platform is only as good as the ecosystem behind it. That's why the HubSpot ecosystem includes 1,500 apps and integrations, over 6,000 solutions partners. How many solutions partners are in the audience? Let's give them a hand.
Here's my favorite stat: 3.2 million people in the HubSpot community making HubSpot better every single day. That includes everybody in this room. Thank you so much for making HubSpot awesome. Let's give ourselves a hand. These were just a few of the 200+ products and features that we built into the Customer Platform this year. I wish I had time to show you them all. For all you admins out there, we built a new Security Center and a new Audit Log. In Operations Hub, we made huge improvements to datasets, which are gonna make it easier to build reports inside of HubSpot. In Smart CRM, we launched dependent fields and conditional logic, which are two of our biggest customer-requested features. And connect.com is launching new communities. To see everything that I talked about today, go to hubspot.com/new.
For all of you who are here in person, make sure to check out our demo stations, where you can see what I demoed today, plus more, and you get to meet the people who actually built the features that I'm up here taking credit for right now. I hope this leaves you feeling excited about the new customer journey. You have always had the passion, now you have the tools to make your customers successful and grow your business. I am excited to introduce our next speaker, HubSpot cofounder, Dharmesh Shah.
Greetings, all humans! And a shout-out to all the AI bots out there. I know you're watching too. I'm Dharmesh. I'm one of those co-founders at HubSpot that consumes everything on the internet about generative AI and sends it all to Andy. By the way, one more round of applause for Andy. I'm so proud of the team and what they've delivered. It's been amazing. Now, originally, I had thought to make this presentation mostly about AI. You'll be pleased to know I changed my mind. It's now all about AI. Not just because AI is the topic of the day, which it is, but because it's also the opportunity of a lifetime, and not some random lifetime. I'm talking about you and your lifetime. Yamini talked about how we can leverage generative AI to connect better with customers.
Andy just showed you a bunch of amazing things the HubSpot team's been working on to help you deliver on those ideas. I'd like to talk about love. I have an unhidden agenda. My mission is to have you fall in love, not with AI, but with a future version of yourself that's AI-powered. That's why we're here. So I'm gonna first start off with the story of how I fell in love with generative AI. I'm going to try and convince you as to why you should be enamored, too. We'll talk about where the relationship is headed, and then what I think you should do, otherwise known as unsolicited relationship advice. So let's start with the story of how I fell in love with generative AI. The story goes way back to 2 B.C. , and by BC, I mean before ChatGPT.
It's the summer of 2020, and I get this weird message. Brian, my friend and co-founder, asked me if I want to join him on a call, and my immediate reaction is: "Wait, what?" You see, I'm an introvert that dislikes phone calls, otherwise known as an introvert. My friends and family have learned that the best time to call me is email. And you know what's weirder than that message is the fact that I said, "Yes," voluntarily. Didn't even have to be bribed with a donut. By the way, one thing better than a chart that looks like a donut is a donut that looks like a donut. Just I'm just saying. I made that up on the walk up here, just thought I'd try it out on you. So why did I agree?
Because this call was with an entrepreneur I had known and admired for a long time. He was working on a cool AI startup, and I had been obsessed with AI and machine learning for a long time. Now, I didn't know this at the time, but that startup would end up having a major impact on my life, on HubSpot, and as it turns out, the entire human species. The startup was OpenAI, and that entrepreneur was Sam Altman. I am a big fan of OpenAI, and full disclosure, I'm a small investor in OpenAI. It was a mind-expanding call, but there was one comment from Sam that really stuck with us. He said, "AI will progress gradually for a while, and then at some point, we're gonna hit a breakthrough, and things will start to move really, really fast." He was totally right.
Soon after our call, I reached out to Sam. I emailed him like a proper introvert, and I asked him if I could get access to the GPT API. I got a lightning-fast response back. The man is a machine. No, seriously, he actually might be part machine. So now I have access to a GPT API, so I do what any reasonable AI-obsessed developer would do. I started coding. I built a simple chat app and have my first conversation with generative AI. I am in love. I'm just a boy sitting in front of a generative pre-trained transformer, asking it to love him. I spent many nights over the weeks and months thinking about GPT. And then in November of 2022, the little GPT I fell in love with became a big star known as ChatGPT. ChatGPT is amazing!
I can ask it to draft an article, craft a marketing strategy, help me write a song about AI. ChatGPT is smart, powerful, and makes me a better human, just like my wife, Kirsten. By the way, she has endured multiple practice runs and has heard all five of the dad jokes in this presentation multiple times and laughed at all of them. If that's not true love, I don't, I don't know what it is. All right, so back to GPT. I discovered something even more amazing about it. Yes, it can create things for human consumption, but it's also shockingly good at creating things for computers, like code.
This was a very big deal because although most of the current excitement around generative AI is about creating things for humans, like text or images or video, a lot of the future opportunity is going to be because it can generate code, because that opens up amazing, useful opportunities. All right, so let's look at an example. Here's how pretty much every software application works. There's something you're trying to get done, like building a report, doing something. To get what you want, you have to go through a very specific series of steps. You point and click and drag and drop and touch and swipe, and then you make a sacrificial offering to the software gods, and then maybe you get the thing you were trying to do b ut now with the power of generative AI, we can build natural language interfaces to software.
So instead of going through a bunch of these little steps, you can just ask for what you want, type it into a prompt, and boom, it's done. I was super excited about this idea of building a natural language chat UX for HubSpot. So I did what any reasonable AI-obsessed developer would do. I started coding. I called the app ChatSpot. It's like ChatGPT and the HubSpot CRM had a baby. Now, have you ever worked on something all day and then late into the night, and you wonder where the sun went, and then it dawns on you? That was me for many nights, and we launched ChatSpot on March sixth, exactly six months ago, and since then, we've had over 80,000 people chat with it.
Now, you can do all sorts of things like company research, keyword analysis, access to HubSpot CRM, and a bunch of other things. I encourage you to check it out at ChatSpot.ai. There's a session tomorrow morning at 9:30 A.M., HubSpot Hero Stage, where the team... There's an actual full team now working on it. I'm here. It's an exciting demo. I've seen it. It's awesome. By the way, you don't have to be a HubSpot customer to use ChatSpot AI. It's free. You don't have to be a HubSpot user. You don't even have to laugh at my dad jokes. Worth it. All right, so that's the story of how I fell in love with generative AI. Now, let's talk about why you, the good people of INBOUND, should be enamored with it too.
Let's first compare generative AI to some of our previous relationships with technology. When we first got computers, they had an additive impact to our lives. It was human plus computer, and computers provided computation at scale. Then the internet came along, and it was awesome. And it wasn't just about the cat photos. Okay, it was a lot about the cat photos, but the internet multiplied our capabilities. It was human times the internet. The internet provided information at scale. And now we have generative AI, which has an exponential impact. It's humans to the power of AI. This is not a once-in-a-lifetime thing. This is once in many lifetimes because generative AI provides cognition at scale. In a way, it does this like a toddler might. A toddler watches us, learns from us, mimics us. The mocking comes a little bit later.
What's amazing is that GPT-4 can now ace standardized tests. Most toddlers can't score in the top 10% on the bar exam. Most lawyers can't score in the top 10%. Well, I guess technically, only 10% can. Anyway... All right, so you might be thinking, "Good for GPT. I'm sure its parents are very proud, but what does that have to do with me? What does that have to do with my company?" So let's look at some numbers. McKinsey put a report out, and they project that generative AI will add over $2.6 trillion of value annually. That's trillion with a T. There are other letters in the word, but it's the T that makes the number impressive. And of the 63 use cases they identified, three of the top five are sales, marketing, customer operations.
generative AI can help us market better, sell better, service customers better. But it's not all donuts and dandelions. There are some red flags in the relationship with generative AI, and we should walk into the relationship with our eyes wide open. generative AI has, sometimes has what are called hallucinations. It makes things up, just like some humans. And it says it with 100% confidence, just like some humans. It just doesn't know what it doesn't know, just like some humans. generative AI also has some other hazards. It can generate responses that are inappropriate, biased, or sometimes even harmful. Now, the good news is that the AI providers have been working really hard on this problem and have made measurable progress. Still, my advice is to keep humans in the loop.
When a relationship is moving really, really fast, it's important to invest the time to build trust, and AI is moving really, really fast. So let's look at where this relationship with AI is headed. Turns out I have an inside advantage when it comes to figuring out where AI is headed. No, I don't have Sam Altman on speed dial. I don't have anyone on speed dial. What I do have is a 12-year-old named Sohan. He lives inside my house. He hates changing out of his pajamas, and he loves all things tech, including AI. I, I don't know where he gets it. three years ago, three years ago, I showed him GPT when he was in his early 9s. Now he uses GPT in more creative ways than I do. Recently, he showed me a role-playing game he built entirely inside ChatGPT.
His prompt was hundreds of words long. So what he was doing is basically giving the computer instructions in what I think will be the most popular programming language on the planet, not Python, English. After playing his game, I'm like: "This is really cool, little dude." And he's like: "No cap, bro." The parents in the room will identify. It's like, okay. But Sohan doesn't just use generative AI. Sohan is a member of Generation AI, an entire generation of people that's growing up natively with this technology, just like many of you grew up with the internet. Not me, though. I grew up having to look up things in a book, like a caveman.
Anyway, to see where AI is going, all I have to do is see what frustrates Sohan, because whatever he's frustrated by, it's gonna get fixed, not in decades or even years, but in months. So let's look at some of the frustrations. Frustration one. Right now, large language models are a static snapshot based on when the training data was taken. That's why ChatGPT, GPT-4, doesn't know things that have happened after September 2021. So it doesn't know that Barbie crushed Oppenheimer at the box office. And for Sohan, two years is like a sixth of his life, so that really frustrates him. In the future, we'll see LLMs being augmented by real-time data to create a more dynamic experience. HubSpot AI Assistants and Chatbot are examples of this. They combine the power of an LLM with real-time data from the HubSpot CRM. Now, frustration two.
Today, when we use AI, we mostly have to enter text as input into the prompt. In the future, we'll also be able to submit images, video, audio, code. If you've ever heard someone say, "Oh, AI is moving towards this multimodal future," that's what they're talking about. Frustration three, AI doesn't really start doing things until you ask it to do something. It just kinda sits around passively waiting for you to type in a prompt. In the future, AI will kind of work in the background on your behalf. Now, imagine hearing this message from AI one day. Now, the voice you're about to hear is Dharmesh AI, which is totally not a thing. Listen. The number of new leads added last week went down 22%. Seems that one of your landing pages was changed recently and the conversion rate went down.
Also, I noticed that you don't have a Chatbot on that page. You should add one. People are not looking to convert; they're looking to converse. Sounds almost human. A bit awkward at times. So basically, it's just like me. So those are all exciting developments, but what has me the most excited is how all of these are going to combine to create what I think will be the next big wave in generative AI, Agent AI. And not the kind that wears sunglasses and a suit and a serious look. Agent AIs are AI-powered software. They can work mostly autonomously to pursue specified goals, and they do this by acting as an expert in that given domain. And they are networked with large language models, with the internet, and other agents. They are tailored not just for a specific use case, but for a specific user.
Now, I know that seems a bit abstract, so let's look at a concrete example. This is a concrete example. Now, if you're wondering, for those keeping score at home, if this counts as a dad joke, yes, it does. It's a multimodal dad joke. A real example. One of the most common needs many of us have is prospecting for new customers. Now, imagine having a smart Prospecting Agent. It can search the web, it can crawl a company's website, all the web pages, and it can answer any questions you have about pricing, business model, whatever. So and it would be tailored to you and your individual needs as a salesperson, let's say. So here's an example of how you might configure a Prospecting Agent in the future. Add 5 new software companies to HubSpot every day that are in Boston, are B2B, and sell a subscription-based product.
Notify me by email and include an analysis of their business model and pricing. Now, the agent goes off and works in the background and delivers on that particular goal. How cool would something like this be? Yes, yes. I think it's super cool. In the future, we'll have agent AIs for all sorts of things. It is super exciting. All right, that cue is for me to breathe. You're welcome to do so as well, just so I don't pass out on stage. Slows me down a bit. All right. So for our final segment, I'd like to offer you some unsolicited relationship advice, because the only time you should take relationship advice from me is if it's about AI. And to do this, we're going to pretend like you, the INBOUND audience, are having a chat with Dharmesh AI, which is totally not a thing.
So here's the prompt you might enter: You are a co-founder, CTO of HubSpot. You have 30 years of experience in CRM, and you are obsessed with AI. Answer my questions as best you can. As you wish. First question: How should I now be thinking about data in the age of AI? We already have a plethora of AI models and new ones coming out every week. Falcon, the open source one, came out today, 180 billion parameters. Super cool. By the way, I'd like to thank my wife for teaching me the word plethora when we first started dating, like 30 years ago. It means a lot. So AI models are common. Data is the differentiator. Here's an example. Let's say you want to send a message to an existing customer about a new product you just launched.
Your Customer Platform has the demographic data for the customer, every web page they've visited, every transcript from every sales call, every customer support interaction. You have deep contextual data. Now, you take an LLM, pair it with that deep contextual data, and you can write the message that is the most useful and most effective for that individual customer. It's just like Yamini talked about. It's not just personalized, it's personal. So it's a bit like understanding the customer's love language. What makes them tick? What do they truly value? By the way, if you haven't read this book yet, I recommend it, especially if you're in a relationship with something other than AI. Now, to truly drive customer love, you need to pair the LLM with a next-generation CRM. So the first generation of CRMs were introduced over 30 years ago. They were good.
Early cloud CRMs came out 20 years ago, even better. And now we are entering the age of Smart CRM. we launched HubSpot CRM at INBOUND 2014. Time flies when you're having fun. Today, HubSpot marks the spark of the age of Smart CRM, with a CRM that has AI included. We want to democratize this powerful new technology and help millions grow better. Okay, so a few of you are thinking, "AI sounds Smart CRM sounds cool, but will AI take my job?" You may not ask this question out loud, but a lot of you are thinking it. Here is it 's the most very common question, by the way. Here's the most common response you will get: "AI won't take your job, but a human using AI will, if you're not using AI." I have a different take. AI will take your job.
Now, before you take photos and slam me on social media, let me finish. AI will take your job and give you one that's much better, one that involves less cranky things and more growth, one where you have superpowers with AI Assistants and agents. Okay, now you can take a photo and tweet it, or I guess it's X it now. X it? Thanks, Elon. All right, so let's say you're bought in now. It's like, "Okay, I get it. Let's do this. What should I do next?" Depends on where you are in your AI journey. So I create a simple framework to help you kind of figure that out, figure out what the next step is. Phase one is awareness and investigation. Figure out what AI can do and try some things out. Phase two: adoption, integration, optimization.
Use AI to get things done, weave it into your workflows, and then look for areas to get leverage. By the way, do you know what Old MacDonald said when he saw ChatGPT, Stable Diffusion, and agents? "AI, AI, oh." That's why I call this the AI-AIO framework. Now, you may be wondering, would I go to the trouble of creating an entire framework just to be able to tell my Old MacDonald AI joke? Yes, I would. By the way, thanks for laughing at some of my dad jokes. It really helps to have a live audience. Like, when I try these on Zoom, people don't laugh. Maybe they're not remotely funny. So remember, whatever it is you do, AI can help you do it better.
Here's a list of some of the AI tools I use that make me better, and it's not just about being more productive or doing things faster, it's often about pushing open new doors. So let's say you're a developer like me, and have always wanted to do some design stuff, or you're a copywriter that wants to launch full campaigns, or you're a salesperson and want to strategize like a CEO. AI can help push the frontier of what's possible for you. If you want to chat about what's possible, we're launching a new community today called AI Adventurers. It's on connect.com. Thank you. I'll be hanging out there all week, answering questions, asking some of my own. Hope to see you there so we can all learn about AI together. Last question: What advice would Ted Lasso give... What would he give me, tell me about AI?
Now, I know Ted Lasso, but I am guilty of having binge-watched all three seasons, twice. Here's what Ted Lasso might say: "I may not know the first thing about artificial intelligence. I'm not that into those computery things, but I'll tell you what I do know. Change is challenging, and new things can be downright nerve-wracking sometimes. But if it helps you grow better, I say, go for it. 'Cause it's not about believing in AI, it's about believing in yourself. Barbecue sauce!" Thank you. Thank you. All those on livestream as well, thank you. Now, before I go, I have one final surprise for you. I created a love song about AI, as one does. Hope you enjoy it. Feel free to tap along, dance along, sing along.
Please welcome to the stage, Yamini Rangan.
Welcome, everyone, to Analyst Day. Thank you. I like that. It's so great to see so many of you here in person, and if you're joining us online, thanks a lot for joining us there as well. I hope you got to see the Spotlight today. Did you all see the Spotlight and enjoy it? Yeah. And I really hope you got to see the product innovation and thought leadership that we are driving at HubSpot. Today, I want to share our vision for efficient and durable growth. And so in terms of our agenda... I wanna start with our mission and momentum and the market opportunity that we have. Then I wanna spend most of the time framing our product as well as go-to-market strategy.
I wanna finish by talking about how we are balancing growth, efficiency, and a fantastic culture in order to create an enduring company. Let's get started. A lot has actually changed in the last year, but our mission remains the same. Our mission is to help millions of organizations grow better. We serve companies with 2-2,000 employees, and they're really focused on helping them grow. The way we do it is by offering a Customer Platform. Now, we're gonna spend a lot of time today talking about what the Customer Platform is, but in the most simple terms, system of engagement, like our Marketing, Sales, and Service Hubs, with a system of and an ecosystem that is connected. So what is the market that we're in?
We're in a massive market, and if you look at our addressable market, we're at $51 billion today, growing to $77 billion by 2028. Now, this addressable market does not include commerce, which expands our opportunity even more. So as you can clearly see, we're not opportunity-constrained. We believe we can go from single-digit to double-digit market share in this massive market because of the great product and great go-to-market fit that we have. We are uniquely positioned to serve customers within this market. So who are our customers, and what do they care about? We serve mid-market front office teams, and they have few clear needs. Their top priority is acquiring customers and growing revenue. Absolutely no surprise there. They wanna do that by having data-driven decisions and improving their customer experience throughout the journey that we talked about.
Now, that tends to be really difficult for our customers because they start with disconnected marketing, sales, and service solutions to begin with. In addition to that, our customers care about efficiency. They're always trying to do more with less. And of course, this year, like everybody else, they're trying to figure out how they can leverage AI in order to be even more effective. So why do we win with these customers? I spent a lot of time talking to our customers, and I asked them, "Why HubSpot?" And it comes down to three reasons, consistently: we're easy to use, we're easy to grow, and we are easy to run. Now, the biggest challenge within CRM is lack of adoption. When the solution is difficult to use, reps just ignore it. This is why we are laser-focused on making it easy to use.
At the same time, HubSpot is just exceptionally powerful, with thousands of upmarket-ready features that we have just added over the past few years. We are easy to grow with. Now, historically, if you think about small, medium businesses, they've had a couple of different choices. They can stitch together a bunch of point solutions, which are pretty brittle, or they can buy enterprise legacy solutions that tend to be very complex and costly. HubSpot is built organically from the ground up, which means our customers do not need to integrate. They can just focus on their growth and scale. And finally, we are easy to run with. On average, our customers get to value in a matter of weeks, not months, and this is exceptionally important in this environment, when budgets continue to be under pressure, and our customers really care about the time to value.
So those are all of the basics. So let's dive deep into the strategy, and in order for us to do that, we should start with our foundational choices. As a company, we like to zig when others zag, and these are four choices that we have high conviction in. The first one is we're focused on small, medium businesses. We certainly have seen a ton of success upmarket, and our product will continue to scale, but we are focused on SMB segment. That's because it's a massive market, which is expanding and is underserved. We believe we can be the number one platform within this segment. The second choice, one we made many years ago, is to go from app to ops. We have a very clear belief that customers need a connected solution that can bring together their front office teams together across marketing, sales, service, and ops teams.
Third, we wanna build product organically when others typically buy. This particular choice forces us to take a step back and think about how we build those products. And we will build those products with primary colors embedded across the Customer Platform. Think of messaging, automation, payments. And this is what has driven the pace of product innovation that we've been able to accomplish. And finally, and you probably heard me talk a lot about this, we like to deliver value before we monetize. We have a very clear monetization strategy. It starts with adding value to our customers, 'cause when we do that, they buy a new HubSpot. Our market share increases. That further extends our reach and brand. And when that happens? We have more market share. It's a nice flywheel, and this flywheel is working.
It also allows us to monetize when necessary and when we have added a lot of value. So these are the four foundational choices that ground us. And with that, let's actually talk about our strategy. Now, HubSpot is in the early stages of two massive transformations as a company, and it's really exciting. On the product side, we're well on our way from app to suite to Customer Platform. On the go-to-market side, we are the M within the SMB, and we want to become the mid-market platform company. So let's talk about the product strategy. Here, our aspiration is to be the number one Customer Platform for scaling companies. Now, if you look at the breadth of what we offer, there's a lot here. So I wanna actually go deep in three areas. I wanna share our AI strategy and what we're building in terms of the roadmap.
Then I wanna talk about the progress that we have made with our engagement hubs, including commerce, and then finish off with Smart CRM. now, back in 2014, we launched HubSpot CRM, and like I said, within the Spotlight, our motivation was really simple. We believe that organizations deserve great CRM that is easy and powerful to use. Now, in 2023, we believe every organization needs and deserves a fantastic AI-powered Customer Platform. So during the Spotlight, we just launched HubSpot AI, and our strategy is to embed AI across every engagement hub and across our entire Customer Platform. So what exactly are we building with AI? We're driving a pace of innovation, and we have an ambitious roadmap for AI. We're building depth of functionality across AI Assistants, AI Agents, AI insights, and Chatbot. Now, AI Assistants are task-based.
Think of them as generating blogs, generating emails, creating new reports. What we're doing is really to focus on time-consuming tasks that marketing, sales, and service teams have. We're solving that with AI in the flow of their work. Now, AI Agents, think of them as goal-based. So these are bots that can create and execute on plans much more autonomously. During the Spotlight, we just launched AI Chatbot for Service Hub, and that is capable of responding to service tickets much more autonomously. AI Insights is all about taking data and information and converting that into intelligence, summarizing call notes, being able to score a deal, predicting the next best action for sales reps. All of that comes here. And then finally, ChatSpot. It's a pillar of our HubSpot AI.
Now, ChatSpot provides a new natural language interface that can bring the power of large language models and HubSpot CRM together. We're really focused on bringing ChatSpot into the HubSpot app, as well as expanding the number of use cases. As you can see, HubSpot AI is going to be a game changer, and it's really going to drive adoption and engagement across the entire Customer Platform. So now, question on everyone's mind: Are we thinking about monetizing AI? It's a great question. I know it's on your mind. Well, before we talk about that, a couple of first principles. You know, one, we wanna democratize AI for SMB. We want every SMB out there to get and access the power of AI, and we wanna lower the friction for them to be able to leverage AI.
Second, we wanna drive value before we monetize, and so we are laser-focused in understanding how our customers are driving value during this beta period. With those couple of first principles, here's what you can expect in terms of how we will monetize. We will increase market share and customer additions by including AI in every one of our tiers, including our premium, Starter, Pro, and Enterprise. It's going to be in all of these. We believe that generative AI is just this moment, it is powerful, and it has w e have a huge opportunity to establish product leadership, thought leadership, and become the platform of choice for SMBs. Next, we Pro and Enterprise tiers by including the more sophisticated features that we have within our AI roadmap with these additions.
This is something that we have done before, taken high-value features, Pro and Enterprise tiers, and drive upgrades as well as more ASP. And finally, we'll expand with add-ons. There are certain functionality within our AI roadmap that are more standalone AI functionality. Those will likely be add-ons, for example, more of the goal-based, you know, features that we talked about within the roadmap. We plan to communicate all of this pricing to our customers when most of these features hit GA by early 2024. So it is super exciting. I'm really thrilled. I hope you saw the level of product innovation that we have launched with HubSpot AI, and I'm even more excited about the innovation that we're bringing to our customers in the next few months as well as the quarters. With that, let's actually talk about our engagement hubs.
The strategy with our engagement hub is to be the AI-powered system of engagement for mid-market companies. One of the many things that I've really liked about Andy Pitre's leadership in the product organization is his focus that he has brought in terms of use cases for every one of our core hubs. Now, you'll see that here, and you'll, you can, you know, he'll be at the Q&A, so you can ask him more questions. I wanna actually touch on marketing, sales, and service, the three hubs, which are our anchor hubs. Marketing Hub is our bread and butter, and here we are focused on serving the needs of the CMO and the marketing operations leader by delivering robust functionality for lead management and marketing automation. We've added a ton of functionality this year, including support for omni-channel marketing.
Today you heard us talk about the support that we are delivering for SMS as well as WhatsApp. We have added new AI functionality into Marketing Hub with Content Assistant. This is a massive opportunity, continues to be a great big market for us, and we are seeing momentum. The Sales Hub has had a fantastic year this year, and you just heard in this Spotlight that we relaunched Sales Hub with more sophisticated functionality for prospecting and deal management. We've had prospecting and deal management before, but now what we're doing is not just focused on the sales reps, but also on the sales managers. Specifically within prospecting, we now have a single surface where sales teams can source, engage, qualify, and work on their leads.
In terms of deal management, we're bringing robust functionality to help them predict and forecast their pipeline much more accurately. There's a lot of AI embedded right there. We're really pleased with the momentum that we're seeing within Sales Hub because it's become a legitimate front door, and I'm even more excited about this relaunch. It's going to drive a lot of momentum. Service Hub is going where our Sales Hub is. We know the playbook, and we're kind of leveraging the same playbook. Here, we are focused on providing a Help Desk, as well as self-service capabilities for support reps and their managers. But most importantly, Service Hub is connected back to sales and marketing. While each of our hubs are individually powerful, what makes them really unique and what drives value for our customers, is the fact that they're connected across all of the engagement hubs.
So let's actually talk about a couple of examples of customers who've gone on this journey with us because our hubs are connected. npower, they're an electricity provider based in UK. They came to us because they were looking for a website solution, and they decided to consolidate their entire front office on HubSpot. They bought CMS Hub, Sales Hub, Marketing Hub, Service Hub. They eliminated five tools, consolidated into one platform, and got much better results based on that. Great example of a multi-hub customer, where we helped them reduce their costs while increasing the visibility and value that we delivered. Next is Legartis. They are an AI-powered contract review firm in the legal industry. They started with Marketing Hub, and in a few months, adopted Sales Hub.
They saw the value of having a single source of truth across marketing and sales organization, and they went full platform with us. They're now a full CRM platform customer. Because of that, they were able to decrease their cost per lead by 75% while increasing the conversion by 200%. Great example of a land with a single hub and then a full platform expansion. All right. With that, let's actually talk about commerce. Now, every time we talk about commerce, we say this is a seed that we have sown for long-term growth, and we continue to remain very, very committed to that. I will remind that this is early stages, but a very, very exciting journey.
So I wanna give you a quick update on what are the customer problems we're solving, what are we building in terms of commerce, and what's the early momentum that we're looking at. If you think about our customers, they have two clear needs in commerce. One, they wanna be able to convert their opportunities into revenue, basically get paid faster. And today, it's a very cobbled process of putting together billing, payments, invoicing systems, and it takes a lot of time for them to get paid. The second is they want to have commerce and customer data in a single place so they can get insights to be able to drive growth. HubSpot solves both of those needs for customers. And specifically, what are we building? Our solution is to build commerce on top of Smart CRM and deliver a much connected experience for our customers.
Last year, we came here, and we talked to you about building payments into the platform, which we've certainly done. In addition to that, we've added depth of functionality across invoicing, billing, subscription management, tax management, everything within that customer experience layer. On top of that, we have Commerce-powered insights, which bring together commerce and customer data together. This is why we are calling Commerce a Hub, because we wanna be able to communicate the depth of functionality that we have added over the past year, and it also makes it much easier for our customers to discover a product. That's great. What is the momentum we're seeing? Well, we really care about a few core metrics, and we're seeing good momentum across all of those metrics. The first question we ask is: Are customers buying, and are they activating?
We've seen 60% increase year-over-year in terms of the activations. The next question we ask is: Are they continuing to remain with us and transact with us? We're seeing 50% growth in the number of transactions, volume growing. We've seen 240% growth in GPV. So clear, early momentum, it's tracking really well to our internal plan. So what's next? Well, I'm personally really excited about the number of features that we have launched with commerce, and really excited to see the adoption within our customer base. As we do that, in the medium term, we'll continue to expand across segments, we'll expand internationally, and we will continue to innovate with depth of functionality in commerce. All right, last, certainly not the least, I do wanna talk about Smart CRM.
This is really the platform, it's an AI-powered system of record across our entire Customer Platform. Today, if you think about the challenge for our customers is disconnected data. They spend a lot of time trying to bring data from multiple sources into one place, Smart CRM enables that. We have a single unified customer record across all of the hubs that is provided by this platform. In addition to that, our platform actually drives customer intelligence. We do it with smart workflows and contextual analytics, all powered by AI. And finally, this is the layer that enables customization and extensibility. Both of these are areas that we have invested pretty significantly over the past few years, and that really helps our customers to model their business. So that's the power of Smart CRM.
If you bring it all together, you can clearly see that we have exciting momentum from app to suite to Customer Platform. We're not only driving depth of functionality and product leadership in every one of our engagement hubs, we're also building breadth in terms of the platform. Very excited to see the progress that we've made this year. All right, with that, let's actually talk about our growth strategy. Now, we have a bimodal growth strategy, and it's working. A couple of years ago, the sweet spot for us was customers with 20-100 employees. And as our platform and our solution has expanded, we've been able to expand our success across all of the segments that we serve. And our bimodal strategy is pretty simple: drive volume at the bottom end and drive value at the top end.
In terms of how we focus on the lower end, we do that because we want to cost-effectively acquire customers that are early in their digital journey. It also helps that we maintain the focus on ease of use with our product teams, and it provides a great competitive moat against low-end competitors. If you think about our higher-end strategy, there, the focus is all about driving multi-hub and suite adoption to drive value. So how exactly are we executing on the strategy? We're investing, so we can drive breadth as well as efficient distribution as we continue to scale. We're investing in three specific areas: digital-driven, sales-driven, and partner-driven. Digital-driven is all about expanding our freemium funnel at the top, acquiring Starter customers, and also driving consumption, you know, selling for seats and contacts.
Sales-driven picks off where digital hands off, which is all Pro and Enterprise tiers, and also landing large, new, and install base customer wins. Partners, they're going upmarket. We are consistently seeing partners source, co-sell, and implement complex deals. So all of these three motions together provides a great moat in terms of the distribution that we're building. So how exactly are we planning to scale all of this? We're scaling all motions for long-term, durable growth, and it starts with digital. Now, I've talked about freemium funnel. We've continued to expand the number of freemium products that we offer, from free CRM to free CMS to a number of early graders, like Website Grader, and all of this drives sign-up volume for us. In addition to that, the digital-driven funnel is what drives Starter customer acquisition.
In fact, 85% of our new Starter customers just purchase online. As we look ahead, we're really focused on expanding digital from focused on acquisition to really driving the focus on activation, engagement, and retention through digital in downmarket. Next is, you know, partner-driven. We've really taken our partners on this upmarket journey with us for our multi-Hub selling and suite selling. And it's working, 'cause when we co-sell with partners, we see close rate of those deals improve. And when partners are involved in activation as well as engagement with our customers, customer dollar retention is up, and revenue retention is up. It's great for our customers, therefore, it is good for HubSpot. So we have invested pretty significantly within partner organization, with enablement, upskilling them, and really ultimately helping these partners grow.
And this is why we have an absolutely vibrant partner community and over 6,000 solution partners that are there within that space. We had our Partner Day yesterday, and it was just full of energy, buzzing, because they understand the value of the Customer Platform that we are delivering. Finally, sales-driven. This is all about consistent execution. Our sales teams are really laser-focused on multi-Hub selling, suite selling, upmarket selling, and you can see that Pro and Enterprise tiers, now with 3+, you know, Hub customers, has grown pretty significantly and continues to scale. So all of this sets us up for long-term, durable growth. How do we think about our long-term opportunities? Well, I'll say our aspiration is to build a great company that future generations are proud of.
At HubSpot, we think a lot about the kinds of decisions that will stand the test of time, and that means we're consistently balancing short-term goals and long-term goals in order to build an enduring company. And that starts with balancing growth, profitability, as well as a fantastic culture. Now, on growth, we've talked about massive market that we are operating in and the momentum that we have to drive that growth across land, expand, and innovation that we'll continue to drive. And in terms of profitability, we're really laser-focused on sales and marketing efficiency and are committed to driving multi-year initiatives in order, order to become even more efficient. And this includes every single motion that I talked about. We will expand our partner productivity. We'll continue to drive our digital efforts to become even more efficient, not just with acquisition, but across the entire customer journey.
This is also where we are investing with systems, automation, AI, so that we can drive our own internal rep productivity to be much higher. So Kate is going to talk about both the growth levers as well as the profitability levers when she gives her update in a few minutes. That leads us to culture. We have a fantastic culture. We think about culture as yet another product, and we are constantly getting feedback from our employees to evolve that culture. I'm particularly proud of the fact that we have 47% women globally, getting to gender parity. Really happy about that. Yes, thank you. And we are on the list of Barron's 100 Sustainable Companies. Again, something that we are proud of. So balancing all three is what is going to drive sustainable, long-term growth.
I want to close out by sharing why I am really excited about HubSpot's future. We are mission-driven, and we want to help millions of organizations grow. We're in a massive market with momentum that is clearly behind us. We're focused on being the number one AI-powered Customer Platform for scaling companies and are driving innovation across all of the product lines. We have great modes for distribution, and each of those distribution modes are scaling. And most importantly, we just have a fantastic team that is aligned, focused, and really motivated in order to build an enduring company. With that, I'd like to welcome Kipp Bodnar, our CMO, to share the value proposition of HubSpot and bring it to life with our product. Thank you so much, and I look forward to answering your questions during Q&A. Thank you.
All right. How we doing? I feel like I'm in Between Two Ferns: Analyst Day Edition. Anybody remember that one? It's definitely, definitely what it feels like up here, so, so me and the trees are gonna hang out with you for a little while. Okay, but in all seriousness, I am here to talk to you about our product for a little while. Andy did an amazing job on the main stage. Congrats to Andy for that, and I want to go a little bit deeper with you now. And I want to talk to you all about the value of our Customer Platform, or as you could also maybe label it, how I finally explained to my parents what I do after all these years. But we're gonna go straight through to our agenda.
We're gonna talk about why CRM isn't enough, why, why are we doing this Customer Platform thing, basically. And then what is the value prop, and how do we think about building Smart CRM? how do our engagement hubs really deliver value for our customers, and what's our point of view and philosophy there? And then our ecosystem. Our ecosystem is a huge part of the future of HubSpot, and we want to walk you through how we think about and approach our ecosystem. So why Customer Platform? Why now? Well, we launched HubSpot CRM in 2014, and it was a huge breakthrough for our customers. We went beyond marketing into sales and CRM. The challenge is that CRM has changed a lot. When CRM started, it was a database for salespeople, and it was awesome for that, right?
You're a salesperson. You could go, you could get your contacts, get your account, get the data you need, make your calls. It worked really great. Then us pesky marketers came along. We were like: "We want our database, too. We want to email some people. We want to do some stuff." And then the customer support folks came along. "Oh, we need a database, too." And it just became this really cobbled mess of data and systems. And we are fundamentally at a breaking point today. It is just no longer working for the average business out there. And so that's where we said: "Hey, you know, CRM is no longer enough. It is no longer sufficient... We need a Customer Platform, and the core, like, oversimplification of that Customer Platform that you saw Andy and Yamini walk you through is this: We're gonna have these engagement hubs.
They're gonna help you connect with your customers. We have Smart CRM that's going to be your system of record, and it's going to be smart and intelligent and give you insights, more than just access to data. We're gonna have this vibrant, connected ecosystem that make our customers more successful every day, every month. That's what we're trying to do. The detailed version goes into the details of all of our hubs, and I'm gonna talk to you about some of the use cases across all these layers today, and we're gonna deep dive on the core hubs, marketing, sales, customer service, as well Smart CRM. when you think about the value of our Customer Platform, it starts with CRM. You need a system of record to be a front office platform.
I want to draw a fine line between legacy CRM and what we call and think Smart CRM. for Smart CRM is data plus artificial intelligence. And the reason you need data plus artificial intelligence, those legacy CRM systems you have, you used to have to unify by force. You had to have all of these integrators and technical team members basically checking every day, is the data actually still syncing? Is it still working? Smart CRM, that is all in one place. It works seamlessly, works great. Legacy CRM was a pain in the behind to configure. You needed to hire very technical administrators, and they'd have a long queue where you sent requests in, and after a few weeks, you may get the system change that you actually need to run the Smart CRM, it's easy to configure.
Anybody can configure it. Whether you be a system administrator, whether you be a frontline manager, doesn't matter. It is simple and easy to configure. Legacy CRM was all about access to Smart CRM is all about access to insights. With AI, we can give you the insights around your data. We can give you next best action. We can save everyone on the front office team so much time and so much effort. When we think about Smart CRM, there are a couple things I want to show you. The first is Custom Objects. The reason Custom Objects is so important, it was one of the long-term requested features for HubSpot CRM. It's because it is what enables you to make HubSpot CRM work for your business.
So if you're a business where you're in the business of collecting customer reviews, they're an important part of your go-to-market, you can make a Custom Object all around customer reviews, and then you can see that in the contact record. You can do engagement, you can email, you can act on that data from the Custom Object. And this is really magical for our customers because it allows them to see their business in HubSpot once they create the Custom Objects they need inside of HubSpot CRM, and it's all mapped and part of their CRM model. The next part that is so, so important is extending your CRM data. As Andy showed you, you can have all that data, but you have different folks across the front office, and they all need different views of the CRM.
A marketer wants to see how their leads are doing. A salesperson wants to see the details of the prospects that they're doing engagement with. A customer support person wants to see product usage, right? Through our CRM customization, you can assign custom views and custom user experience for everyone in your go-to-market, and that really brings Smart CRM to life. It's a dynamic system that really is custom for the person who's using it on your team. Smart CRM is all about data and all about artificial intelligence. Now we have our engagement hubs. Our engagement hubs is all around how we connect with our customers. We heard from Yamini, Andy, and Dharmesh all about the power of customer connection. The reason that's so important, the reason it is so very important, is we are on the precipice of activity Armageddon.
Oh, the old way of doing things is essentially more activity, more activity, more activity. If we do more activity, we'll get more sales, and it's gonna work. Well, I will tell you what AI is. AI is a lot of things. It is also the smartest, most efficient spam system that has ever been made, right? Like, any smart human being can connect the line. And what's gonna happen? All of that outreach, all of that activity is gonna be completely commoditized. And if you're like me and you believe that activity is gonna be completely commoditized, then you're like, "Well, we have to find a way to do it a different way." That way is an outcome-obsessed way versus an activity-obsessed way. And you need Smart CRM wherever they are. Before AI, humans were how we drove connection. Most connection was primarily human-driven.
Post AI, it is all about humans with agents, whether those agents are assisting the humans or the agents are doing their outreach themselves. That connection is a very different method of connecting with customers than we saw just a year ago. Nurturing flow, to try to get them from a lead to a qualified lead. Oh, 'cause if I can get a qualified lead, then my sales team can engage with them, and I have a better chance of turning them into a customer. And that's what Workflows is all about, because customers now wanna interact with you all hours of the day when it's convenient for them. And so you need automation to scale your lead gen, and especially nurture customers through the buying process. And that is what HubSpot Workflows is all about, and it works omni-channel, not just email. Works across SMS, text, all of the...
or SMS, WhatsApp, all of the channels that our customers need. And that backbone, that automation, is critical to actually being able to scale your marketing efforts, 'cause without that, you're just on the end- endless campaign hamster wheel. The other thing that you saw Andy demonstrate was the new prospecting workspace in Sales Hub. And what's great about our hubs is they're all seamlessly connected to each other. And so that qualified lead that that workflow just generated, well, that just shows up in that prospecting workspace, and it makes it very easy for the rep to go in, see their leads, and then from there, they can make a phone call, they can log some notes, maybe they're gonna send an email.
They're gonna do what they think is the next best action, and they can determine that because they have all of that marketing data, everything that that person has looked at on the website, forms they've filled out, content they've downloaded. It doesn't matter, it's all there. And the rep can tailor, with the help of our AI assistant, a very personal outreach to that qualified lead, and that is incredibly powerful for increasing rep productivity and increasing conversion rates. Say that rep does a great job. She kills it. That prospect becomes a customer. What happens next? That customer's gonna have a question.
They're gonna go right into Service Hub, they're gonna chat with us, and now we have an amazing unified support inbox, where all tickets and chats come together, and that service person can see not just what the problem is, but the entire customer relationship. Because, again, this data is just shared, one database, seamless and smart, connected all together so that, that customer journey is all clean, and that customer support rep doesn't have to keep asking for the same thing over and over again. They can, they can focus on answering that customer's question. And that's the value of our Engagement Hubs. They're great on their own. They're even better together. They work seamlessly together, and the automation connects them in a pretty magical way.
The last part of our Customer Platform is our connected ecosystem, and when it comes to our ecosystem, we're obsessed with two things. The first thing is we want both our customers and our application partners to be able to customize our Customer Platform. We want them to continue to solve the edge cases of their needs and be able to build and customize as much as they need to on our Customer Platform. The other thing we wanna do is we wanna build for our marketplace. That means build both our application developers, developers, but also the broader SMB marketplace that we're trying to serve. The commonality between those two things is you've got to open up APIs. You have to have great APIs. You have to have great documentation.
It has to be very easy for a developer who might not be familiar with hubspot Customer Platform to build on it easily, and that is what we're obsessed with. To give you a quick update on the state of that ecosystem, we now have over 1,500 application partners, and those application partners have been installed over 2.1 million times across our install base. The other very interesting thing is that those application partners represent a wide set of use cases. Whether it be ERP, whether it be IT, whether it be productivity, all of the use cases that are kinda tangential to the core front office use cases are encapsulated in our marketplace and our app ecosystem, really extending the value of HubSpot and making our customers' ability to customize the Customer Platform even better.
The thing our customers are gonna be exceptionally excited about that I wanna underline, that Andy said in his talk, it got a round of applause, is our LinkedIn CRM sync. This is one of the biggest platform and partnership innovations we have had, because it takes one of the most popular sales tools, LinkedIn Sales Navigator, and our amazing new Sales Hub product Smart CRM, and connects them together. And allows you to sync your data back and forth between your CRM and HubSpot and LinkedIn Sales Navigator. And that is going to save the average salesperson a ton of time. Sales reps, sales managers, love LinkedIn. They love Sales Navigator. They're gonna love it with HubSpot and HubSpot CRM. It's not just about the app ecosystem, though. The connected ecosystem is broader than that.
For example, we invest a lot in educating and training our customers. We think part of scaling is having well-informed, well-educated customers who can achieve their goal, and HubSpot Academy is a big way that we do that. We have over 100 courses in HubSpot Academy across six languages, but the thing I find the most interesting is that we have over 38% of our install base uses and consumes HubSpot Academy every month. So it's a core way that our customers and our install base learn about the new products or how to solve a new problem that they might have had in their business using HubSpot, and better and deeper adopt HubSpot. When it comes to our ecosystem, there's one last thing I wanna tell you about. I wanna tell you about how one of HubSpot's biggest customers customizes our Customer Platform.
And one of our biggest customers, that's me. I'm actually one of our biggest customers. I use HubSpot for everything. We love HubSpot. Like Andy, I got a bunch of emails about AI. I am obsessed with AI myself, like our leadership team. And so my team and I immediately went to work of how can we integrate AI into the work we do at HubSpot? And we found... We came up with, like, 120 use cases. It was incredible. And what was even more incredible is that we could do them, and we could do them in partnership with great large language models like OpenAI and the HubSpot platform.
And so one of the things I will show you, just one of the many AI use cases we've solved, is we connected HubSpot conversations with OpenAI and Google Dialogflow to build our own specially trained Chatbot. We first started in customer support to basically answer customer support questions. The bot was able to answer 78% of customer support questions, and customer satisfaction increased a couple hundred percent. And now we're working on having that bot triage and take and answer a lot of the sales and prospect questions. And that is the power of integrating and then being able to fine-tune a model based on your own data. We've had a few months of a head start in this, and it's going really well.
This is an example of anyone who's building on HubSpot can go and do this. That's the power of the APIs that we're building and the power of the platform that we have built. I think it's pretty remarkable. So this is our Customer Platform. As Yamini went through, it's easy to use. That is core to HubSpot's DNA. We're gonna keep it as easy to use as possible. We want everybody across the go-to-market to be able to use HubSpot. It's easy to grow with. It scales. I think we're showing our commitment to that with all of the features we just announced. Making Campaign Assistant free, but then having all those advanced AI features you can grow with, is just a commitment to that easy to grow with. It's easy to run.
You don't need an army of administrators to run HubSpot because you have Smart CRM that's giving you data plus AI all in one place. You have engagement hubs that work seamlessly together, and you have a vibrant ecosystem that's building for the future. So that's our Customer Platform. I appreciate you all taking a few minutes with me to deep dive on it, and thank you for having me. Appreciate it.
Please welcome to the stage, Kate Bueker.
Hello, everyone. Is this working? Yeah. Okay, great! It's nice to see you all here. I hope now, after presentations from Yamini, from Andy, from Dharmesh, from Yamini again, from Kipp, that you're excited about our product, our strategy, and honestly, the most important thing, which is the value that we deliver to our customers. What I'm gonna try to do is share some insights with you on how that strategy translates into our financial results. In terms of our agenda, this should look familiar. I'm gonna start by talking about our financial performance and our key levers to drive durable growth. Then I'm gonna talk about how we think about balancing growth and profitability. And finally, I'll share some thoughts on our track record of delivering value to shareholders. Let's start by diving into our levers for durable growth.
HubSpot has a consistent track record of delivering strong top-line growth. Since 2019, our revenue has grown at a compound annual growth rate of 33%. We expect full year 2023 revenue of just over $2.1 billion, which is a growth of 22%. And that growth has been enabled by consistent and strong customer growth. Over the last five years, our customers have grown at a compound annual growth rate of 30%. At the end of Q2, we had 185,000 customers, representing 23% year-over-year growth. And the good news is, we are still early against a really big market opportunity.
As you heard from Yamini, the core markets that we serve are growing from $51 billion this year to $77 billion in 2028, and we still have single-digit market share in these large and growing markets. We have three foundational levers that we can use to grow our business and capture market share: new customer acquisition, expansion of existing customers across a diverse set of motions, and new innovation in product areas like AI and commerce. Our platform strategy and our bimodal strategy have transformed how we land customers with HubSpot. Let's take a look. The drivers of our growth are diversified. We have a nice balance in net new ARR across geographies and go-to-market motions. Our international revenue has continued to be strong, growing 57% year-over-year in the first half of 2023.
Our partners have long been an important part of our go-to-market strategy, and they represented 40% of new ARR in the first half of this year. Finally, net new ARR is about evenly split across new customer acquisition and existing customer expansion. From a product perspective, the way customers start with HubSpot is becoming more balanced and more multi-hub. Marketing used to be the way that customers started with HubSpot. Today, marketing and sales are both primary front doors, and we see a balance of professional and enterprise customers, starting with marketing, sales, and multiple hubs. The share of our new customer ARR that comes from multi-hub has grown consistently over the last five years.
In the first half of 2023, more than 60% of new customer ARR comes from customers who are buying more than one hub, and almost a third is coming from customers who are buying 3 or more hubs, which means they are choosing HubSpot as their go-to-market platform. We have a bimodal strategy that seeks to drive volume at the low end and value at the high end. At the low end, we've expanded our freemium motion by launching new free tools, optimizing pricing and packaging, investing in top-of-funnel, SEO, and content, and refining our product-led onboarding and enablement efforts. Starter customers are the majority of our new customers in any given quarter. We have grown Starter customers at a compound annual growth rate of 47% over the last five years.
They now total 80,000 or almost 43% of total customers as of the end of the last quarter. At the high end, we want more customers to use HubSpot across all of their front office teams, and this is translating into a growing proportion of our professional and enterprise customers who are starting at more than $3,000 in monthly recurring revenue, which is an internal threshold we have for what we call large deals. And the volume of 3k+ deals has grown at 1.7 times the rate of our overall net new ARR growth. 3k+ deals represent more than a quarter of our new ARR in the first half of this year. As you can see, how we land has really transformed.
We're landing through a diverse set of go-to-market motions, we're landing with more multi-hub customers, and we're driving both volume at the low end and value at the high end. Now, let's look at how our platform fuels expansion. I want to start by grounding us in gross retention, what we call internally, customer dollar retention. As I've said in the past, customer dollar retention is the metric that we believe is most closely aligned to the value that our customers see in our product. We have seen consistently, that customers who use more of our platform stay at higher rates, and over the past five years, we have seen an improvement of a few points in customer dollar retention, and we have seen strong and consistent customer dollar retention in the high eighties during this recent period of economic challenge.
We've inherently improved customer dollar retention by becoming a platform. As more customers use more hubs, they see more value, and you can see it in the numbers. The retention rates for multi-hub customers sit above our overall retention rate at 90% and is often higher. Now, between gross retention and net revenue retention, there are a number of upgrade and downgrade drivers for our existing customers. There are really four primary expansion motions: marketing contact tiers, seats, addition upgrades, and cross-sells. And when I think about these motions, the first two, marketing contact tiers and seats, are really more tied to our customers' growth, and therefore, more correlated to the external economic environment. Internally, we refer to these two as consumption-driven motions.
Cross-sell and addition upgrades, on the other hand, are more tied to our product value proposition, and they're enabled by our go-to-market teams, and we refer to these as value-based. Now, as you know, over the last five years, we have seen a period of net revenue retention expansion, followed by a period of net revenue retention contraction, but to a lesser degree. And the drivers of the expansion of our net revenue retention from 100 to 110 were largely value-driven. It was cross-sell, it was addition upgrades, and it was a positive change in churn that really drove the expansion from 2019 to 2022, reflective really of the value of our platform. Now, the story over the last 12 months is different.
The consumption levers that really were more tied to macroeconomic factors are the majority of the reason that net revenue retention has come down to 104. It's seat expansion, it's marketing contact tiers, and it's additional portals. While we obviously don't love this contraction, we continue to believe that net revenue retention will remain above 100 in the near term, and we continue to believe that we will see that expand as the economy recovers. All right, turning to our hubs. We are building a world-class system for the front office. Our ARR continues to become more diversified across our engagement hubs. Marketing Hub is now a $1.3 billion business. It's growing at 20% year-over-year at the end of the second quarter.
Sales Hub is approaching $600 million in ARR, growing 30%, and Service Hub is well north of $100 million, growing at 40% year-over-year. CMS Hub and Operations Hub are both on track to become $100 million businesses in the near term, growing 25% and over 100% respectively. While each hub is powerful on its own, the real value for our customers comes when they are connected. We continue to see growth in multi-hub adoption across our customer base, and a larger portion of our customers are leveraging three or more hubs, giving them real visibility and connection across the whole front office. Today, 70% of professional and enterprise customers use more than 1 hub, and while that's good, there is significant cross-sell opportunity that still remains within our install base of customers.
Only about a third of our customers, and about 50% of our ARR, come from customers who use three or more of our engagement hubs. Our buy model strategy creates two common upgrade paths for our customers. Both of them remain very strong. At the low end, we see a consistent rate of upgrades from Starter to professional tiers, even as we invest and expand our freemium motion. Upmarket, we continue to introduce significant innovation into our enterprise tier, creating an expanding upgrade path. Our enterprise edition upgrades grew at a compound annual growth rate of 45% over the last five years, outpacing our overall ARR growth. What's also notable here is the increased diversity. It used to be that customers just upgraded to Marketing Hub Enterprise, and now we see much more of a mix, including Sales Hub and Service Hub as well.
The last expansion opportunity I want to talk about is expansion through seats. On a nominal basis, we have seen nice growth in active users, in paid seats, and customers across Sales and Service Hubs. We now have 1.7 million active users and well over 1 million paid seats across Sales and Service Hubs. While growth in seats has moderated a bit over the last year as customers optimize their spend, we believe that this will normalize as the economy recovers. In addition, that gap between active users and paid seats represents opportunity as we continue to add features and functionality into our paid products. Okay, let's recap before we move forward.
We continue to see healthy expansion across our existing customers in a balanced set of expansion motions, and significant opportunity remains for customers to continue to expand their use of HubSpot, really driven by the platform that we have built. All right, let's turn to our final lever for growth, innovation. Now, innovation for HubSpot means a balance of consistently improving our existing hubs and also introducing new products. Over the past four years, we have added a ton of value into our enterprise tier in general, and our Sales Hub Enterprise product most specifically.
As a result, we are increasing the price of our Sales Hub Enterprise seat from $120 to $150 as of November first, and this will apply to all new customers, and it will apply to all new seats that our existing customers add after the beginning of November. We'll see the impact of this hit the financials over the next year or so, and it should provide a modest tailwind to growth for us in 2024. We also remain focused on investing in new product areas like AI and commerce. This should not be surprising after the last set of presentations you've seen. We are clearly moving fast in generative AI.
You heard Yamini and Andy talk about the robust AI roadmap that we're building, and we believe that the strategy that we have to really embed AI across the platform is gonna help drive adoption and retention of our customers. As you heard from Yamini, we'll communicate specific pricing for AI as more of a critical mass of these features and functionality hit GA in early 2024. That said, we do believe that AI will be a tailwind for HubSpot over the next couple of years. Commerce remains a key area of innovation for HubSpot, as you heard. Yamini shared some of the, you know, key progress that we've made in commerce this year. We launched a number of features, and our GMV is very strong.
I'm also obligated to tell you that we are still early in our commerce journey, but we do expect that commerce will begin to contribute modestly to our financial results in 2024. But we believe over the long term, it can be a meaningful contributor to HubSpot's financial results. Okay, I'm gonna shift gears and talk about our long-term model and how we're balancing growth and profitability. Before we dive in, I thought it would be helpful to ground ourselves in our overarching philosophy on balancing growth and profitability. It notably has not changed. We are committed to building a big and profitable company. This means that we're gonna continue to invest to drive durable, long-term revenue growth at scale. But at the same time, we are committed to driving progress against our long-term financial framework, which means we will expand margins over time.
Let's look at the model. Over the last five years, we have grown our non-GAAP operating profit at a compound annual growth rate of 52%. This year, we're gonna deliver just under $300 million in operating profit, which represents 600 basis points of margin improvement over the last five years, from 8% in 2019 to 14% this year. Now, let's look at the model. As you've heard me say many, many times before, we continue to believe that HubSpot can be a 20%-25% non-GAAP operating profit company, and our long-term financial targets remain the same. As you saw on the previous slide, and you can see again here, we have made significant progress in expanding leverage over the last five years, from 8% in 2019 to 14% in 2023.
We've done this by increasing gross margins, reducing sales and marketing, and G&A expenses as a percentage of revenue, and we've reinvested some of these margin improvements back into R&D to drive innovation. Now, we have work to do still to get to our long-term targets. So today, I thought I would provide us with some color against each of these line items around how we're gonna continue to make progress. And I wanted to provide you with a checkpoint between now and the long term, that will give you a gauge to see how we are progressing against our targets. So we are introducing an interim margin target for 2026 of 18%-20%, which I will walk you through now, beginning with gross margin.
For 2026, we're targeting gross margins of 84%, which, as you can see, is down a point from the high levels that we are seeing in 2023, and there are some offsetting factors here. On the positive side, we're gonna continue to optimize our infrastructure, and we expect that we're gonna be able to continue to see leverage from our services and support teams through systems and through AI. At the same time, we are investing to drive better reliability, to drive better speed, and to drive better security, and these investments are gonna put pressure on gross margins. And finally, our commerce business is a lower gross margin business, as you all know, and so as that business scales, it will put pressure on our gross margins over the next couple of years. Moving on to R&D.
We wanna continue to invest in innovation to fuel long-term growth, so I expect R&D to remain relatively flat at around 20%. Sales and marketing, as I've talked about in the past, is the place that we expect to see the most leverage over the next couple of years. Sales and marketing expense will represent 43% of revenue in 2023, and we expect this to decline by five to seven points by 2026, through digital, partner, and AI-enabled plays. Let's drill in to see where we're gonna get this leverage. As you heard from Yamini, we go to market through three primary motions: digital-driven, sales-driven, and partner-driven. We're focusing on creating scale and efficiency across all three of these motions. First, on digital-driven. Today, we have a strong and efficient Starter acquisition model, and we have an emerging commerce business.
Over time, we aspire to have digital drive even more top-of-funnel demand, and we want to enable touchless conversion across all of our segments, not just Starter. We aim for consumption levers, like seats and marketing contacts, to be fully digital. Finally, commerce is digital by design as it grows, and so digital really represents an opportunity to both drive top-line growth and also drive go-to-market leverage over the next few years. Moving on to sales-driven. Today, this is our primary motion across the customer journey. As we make progress on digital, our reps can concentrate on higher ASP and multi-hub deals, which should drive increased levels of productivity. In addition, we are actively investing in systems and AI to unlock productivity gains within our sales team.
Like Dharmesh talked about in his keynote, we wanna automate the time-consuming, mundane tasks so our salespeople can spend more time with customers and prospects. The sales-driven opportunity is the biggest potential needle mover for us on the margin side over the next few years. Finally, on partner-driven. This is a highly valuable motion today. It has generally higher ASPs and has generally higher retention. We've made changes over the last couple of years, as you know, to more closely align incentives across partner and direct. Today, about 40% of our deals have a partner attached. Over time, we want partners to attach to many more of our deals, particularly upmarket, and we want partners to service many more of our customers, particularly upmarket.
These are all multiyear initiatives that are going to help us reach our 2026 targets, but they're also going to drive leverage beyond the medium term and help us realize our long-term financial targets. Okay, I'm going to go back to the target model. Through 2026, we expect G&A to remain relatively flat, around 8%, and we will continue to find ways to automate and scale our business support. All of this nets out to an 18%-20% margin by 2026, which you can think about as a checkpoint along the way to our long-term target of 20%-25%. Finally, I want to talk about how we think about our balance sheet and our track record for delivering value to shareholders.
We've worked hard to build a strong balance sheet and capital structure that really balances strategic flexibility and financial prudence. At the end of Q2, we had $1.7 billion of cash and investments on the balance sheet, and this strong cash position provides us with the flexibility to invest in organic growth that can drive long-term growth for us and also consider M&A, if it can accelerate our progress. I also wanted to touch base on our gross dilution, as it has bounced around a bit over the last few years. As many of you know already, we have made some deliberate investments to stock-based compensation in 2021, including moving our RSU vesting from four years to three years.
While we continue to believe it was the right thing to do to attract and retain talent, it means our stock-based compensation expense as a percentage of revenue is going to remain at an elevated level until we anniversary that change in 2024. Looking forward, we expect stock-based compensation expense to moderate over the next three-five years, and we expect gross dilution to be in the 2%-3% range. Over the last five years, we've delivered strong top and bottom line results. 33% revenue growth, 600 basis points of margin improvement, and almost $700 million in free cash flow. Our performance has translated into a 38% annualized shareholder return, which is more than double the rate of return of the software sector and the major indices we track internally.
Okay, with that, I'm going to wrap up with a few key takeaways from today. Our Customer Platform drives significant value for our customers, and it creates strong and diverse growth for HubSpot, and we're still early in a really massive market opportunity. We remain committed to driving balanced growth, and we're on the path to achieving our long-term financial targets. And finally, we have delivered strong, consistent shareholder value. And with that, I'm going to ask the rest of the executive team to join me back on stage for the Q&A session. Thank you very much.
All right. How's everybody doing? Good. Good. It's great to see a bunch of familiar faces in the crowd. I appreciate everybody making the trip here to Boston, and I want to thank everybody for joining us online as well. We've got about 45 minutes for Q&A. We'll have Joe and Johnny running mics around, so go ahead and get those hands raised once we get started here. Not quite yet, but we'll get there. As for the format, we're going to prioritize our friends on the sell side first. There's a bunch of you out there. I know that you all have questions, and so the only ask from my perspective is that we keep it to one question, so we can get to as many of you as possible. And with that, I think we can go ahead and get started. So take it away.
Hey, great. Thanks. DJ Hynes from Canaccord. Yamini, maybe one for you. Obviously, all the AI announcements today were impressive, you know, the momentum you're seeing with the products in the market, the roadmap for the second half. I want to double-click on kind of monetization. You alluded to it in your presentation, but would love to go a little bit deeper and just think about, like, how are you balancing the massive market share opportunity-
Yep.
with kind of democratizing it through the Free and Starter tiers versus kind of monetizing on the, you know, the more premium, you know, enterprise and advanced SKUs.
How did I guess that monetization was going to be the topic? Thank you, DJ, for that question. AI is going to have positive impact on our business, and it's going to have, like, a huge tailwind for the business. No question about that. We also think about it as very, very early in a pretty big transformative shift that's happening within the industry. And if you look at like almost every part of a marketer's job, a salesperson's job, a service person's job, it's going to get reevaluated with AI, and this is the moment for us to drive innovation. And I hope you all saw very clearly that we are driving that innovation. And when we drive that innovation, we're going to drive a ton of value for our customers. And when we do that, we're going to gain market share.
So the focus for us is to iterate fast, get a ton of feedback, get beta products, and then move it to GA as quickly as possible and to drive value for our customers. Now, having said that, we will monetize, and I talked about the couple of ways that we will monetize. One is that we will add sophisticated AI features within Pro and Enterprise tiers, and then we'll think about add-ons for very specific functionality. Having said all of that, this is a moment in time, and there aren't that many times where, you know, the industry goes through a big tectonic shift like we are going through right now, and we want to be at the forefront of that shift. And I hope you all leave with more confidence that we are at the forefront of that
On top of that, so I agree with everything that Yamini said. I also would like to monetize our AI features as the product person, just to say that out loud.
I would also like to monetize our
Yeah.
AI features as a finance person. Yeah.
But I think for us on the product side, the biggest thing that we care about right now is getting usage of the AI features and driving value with the AI features. Like, that's what we think of as the hardest part in this whole equation, is like proving that we can actually add value, proving that we can get usage of the features. And once we get there, it's going to make sense to monetize the features based on that usage. But the worst thing we could do right now is put, like, a gate in front of our customers using those features, 'cause that's gonna hurt our ability to innovate. And as the AI guy, it's my job to temper expectations.
Do that.
Yeah. Oh, Parker.
Parker Lane, it's Stifel . Questions for Andy and Yamini. Andy, good to see the relaunch of Sales Hub today, and all the new features you're bringing to the table there. Can you talk about which of them you think are going to be the biggest needle movers for your customers and prospects over the next couple of years? And, Yamini, how do we think about that as a growth driver for this business for the next year or two? Is that going to be meaningful?
Yeah, I'll start, and then
Okay, yeah, go for it.
Jump in, Andy. Sales Hub is on an exciting path, and you could see that even before the relaunch, and the relaunch actually puts that on a different trajectory, I think. It's three things that I want to maybe emphasize. The first is we've always built sales for sales reps, and we wanted to make it, like, super easy for a sales rep to get in every morning, get into the Sales Hub, and drive productivity. Now we're making it even more powerful for sales managers. So that's kind of a big part of the shift that we're making, which is great. The second thing is more of our features are up-market ready and really driving that up-market momentum.
You've seen this consistently through the drumbeat, all the way from Custom Objects, but to the advanced kind of functionality that we are releasing right now. And probably the third and most important for me is AI. AI is deeply embedded within forecasting, within reporting, within everything that the sales teams are really targeted to do. So really good momentum. And how does that translate into growth? A couple of ways.
You know, you saw Kate actually share how Sales Hub is becoming a clear front door, and this relaunch is going to drive even more momentum for us to become a front door, where more of our customers land with Sales Hub. So that's great. The second way, I see it is it'll be part of every multi-hub deal. We're becoming a multi-hub and platform company, and so everything that we do will have Sales Hub. We are beginning to see it, and I think it's going to continue to drive momentum. But
Yeah.
You know, Andy, like for those of you who don't know Andy, he has been with us for a long time, and he's touched every product from CRM to Sales Hub to, you know, Ops Hub, so ask him some Ops Hub questions.
Okay.
But he has been really focused on driving the use cases for Sales Hub, so I know you have a lot to share there.
Yeah. Yeah. So I think in Sales Hub, you know, ultimately what we want to see is adoption of the Sales Hub features by sales reps, and then we want to see them buying seats, because that's the way Sales Hub is largely monetized. If you the typical CRM, right, that salespeople use, and that's kind of a requirement, but then there's also sales productivity tools. And when we think about Sales Hub and our strategy, you know, going into this year, was we wanted to very clearly focus on the sales productivity tools as part of Sales Hub in order to drive that adoption of Sales Hub by sales users. And so, you know, our GM of Sales Hub came up with a strategy that I think is very, very good in focus. He was like: "I want to do two things really, really well.
I want to do prospecting really well, and I want to do deal management really well." There's nothing like revolutionary about those two things, right? It's like clearly, sales reps have to be good at prospecting, they have to be good at deal management. But I think that focus in how we're building the product is going to allow us to build the right tools. So what we'll hopefully see is customers who today are using our CRM, because we have a lot of salespeople who use the CRM and say, "CRM is awesome.
Right, like, I'm doing great. Maybe I'm like low volume, you know, I don't need necessarily to buy a sales seat. What we wanna see is those customers looking at those Sales Hub features and prospecting that make their lead management easier, that make their deal management easier, and say, "Hey, you know, I want that for every single person on my team." That's kind of like our thinking on the product side in Sales Hub.
Awesome. Okay.
Thank you. It's, Terry Tillman from Truist Securities, and I'm in perfect agreement. I would like to see AI monetization as well.
Excellent.
Well, if you say so.
So, Kate, I had a question in terms of I like seeing that kind of middle of the journey kind of operating margin target for FY 2026. It's nice to have that for us to anchor ourselves to. What I'm curious, though, is about how we see the linearity in terms of getting to that midterm guidepost, because this year, you know, I think you, you're gonna expand margins about 400 basis points. You know, next year, you know, I don't know if you're gonna provide 400 basis points. Is it gonna be more flat, or just how's the shape of the improvement over the next, you know, 3-4 years? Thank you.
Yeah, it's. Thanks for the question. It's, I guess, not surprising that you would be interested in 2024, and particularly more not surprising, given how strong the leverage was that we delivered in 2023. Also, probably not surprising, I will not expect to share 2024 at this moment. We will have much more to say as we get closer to next year. That said, maybe step back and talk about how we do think about leverage. The goal here is that every year, we would take a step toward that long-term financial target of 20%-25%. Some years, you're gonna see us take a larger step. Obviously, we're taking a big step forward in 2023. Some years, we'll deliver less leverage.
Any year, what is going to determine how much leverage we actually can deliver is, one, it's gonna be a matter of the external environment, particularly the strength of the demand environment, and then it's gonna be a factor of, like, what is the set of opportunities that we see in front of us, and you will see us deliver some, more leverage in some years and some leverage in or less leverage in other years based on sort of those two factors.
Thank you. Mark Murphy with JP Morgan. Great event. Dharmesh, I am wondering, what are you seeing in the beta test for ChatSpot and the other AI Assistants? Is it producing yet? I think there was a mention of saving two hours per day for reps and agents. I mean, it's completely staggering. It's mind-blowing, trying to imagine that. But, you know, is it increasing engagement? Are people using it five minutes per day, or are they using it eight hours per day? And then, is it resulting in better content? Is it resulting in better emails that drive, you know, kind of better email response rates? Just because it's a little bit of a black box to us externally.
Yeah. So the way I would think about it is we have buckets of these AI features, and the most popular, as a result of it having kind of launched first, is around content creation. So that's kind of bucket one of creating different kinds of things, whether it be websites or emails, social messages, whatever it happens to be. The second is around summarization and search, which we haven't talked about a lot yet because that's still kind of happening. The idea there is we have all of this information sitting inside of HubSpot, and can we do vector embeddings and create AI-driven search and summarization for those things? And we're starting to see that. And then the third bucket, which is very early, is around what I think of as a next-generation automation model, right?
Versus just the workflows and the manual automation that we've done historically. So to answer your question, what we're seeing the most kinda adoption, most people get excited about is the stuff that they understand the most, which is, "Oh, I was writing an article, publish, but, boy, does it get me off of blank canvas syndrome." That's kinda thing number one. Thing number two is around company research. Super popular use case to say, "Hey, I used to go to eight, 10 different websites to try and figure this out, and even then, it was hard and took a lot of time.
I can now do that, much more efficiently in something like ChatSpot, because we're able to kinda get data from a bunch of different sources." But I think we're still in the early days. I think people are still feeling it out. We're still seeing excitement, right? You know, I shared the fact that we had 80,000 people so far sign up for ChatSpot. That number continues to grow, right? Yeah, it's like over 90,000 as I checked last night. So it's going. And same thing with the assistants.
Yeah.
Andy can share more in terms of adoption.
Yeah, that two hour stat that came specifically from the support assistant feature. It's currently in beta inside of Service Hub. So people are definitely seeing results from it. And I think that specifically, customer support is one of those places that we at HubSpot, and I think just in the industry in general, think that is going to see a lot of productivity improvements from AI, so that's where that specific stat came from. And what we're seeing in the product is, you know, people are using the AI features. The ones that have been out the longest are the content creation features, so we're seeing, like, the most adoption there.
Again, we had, like, one million pieces of content being created using the Content Assistant features in the past six months, which was awesome. When I was, like, looking up that stat for Inbound, I was actually, like, pleasantly surprised by how much it's getting used. In terms of better content, you know, the self. This is all anecdotal, right? It's hard to, it's hard to, like, qualify that exactly, but customers who use it say that it is helping them create better content. I don't think there's anybody.
I mean, maybe there are, but I think most HubSpot customers understand that they're not just, you know, asking AI to write something and not reading it and hitting publish. But to Dharmesh's point, like that blank canvas syndrome, helping you write, whether it's a blog post or an email or a social post, it's helping people work faster, and then they can put more time into fine-tuning the posts. I think that that's leading to better content, but again, it's hard to exactly qualify that.
Great. Thank you. Hi, Dharmesh, this question's for you. If I think about just the, the platform journey that the company's been on, and I compared that to maybe some other enterprise software companies over the course of history, opening up the platform and allowing the building of custom applications is, is often been a big, big part of that, right? Especially as you get to bigger companies. How do you think about that being on HubSpot's roadmap or journey? And then how does AI potentially make that more or less necessary if it allows some of those workflows that may be custom to not be used as much if we're automating those?
Yeah, we're super excited about platform and opening it up. That was a bet we made a long time ago, and has proven itself out, both in terms of, adoption by our app partners, people building integrations, and our customers themselves using the platform. What I'm most excited about is I think the introduction of AI now, sort of because, like, building platform and having that kind of duality, that virtuous loop of, oh, I have app partners that build apps, making the platform itself or the, the product more valuable, and you get more customers, get that flywheel going, that's a very hard moat to disrupt, right? And this is one of the reasons why so many, great companies invest in it. What AI is gonna do a little bit is gonna hit the reset button on that.
What's gonna happen, I think, is that, you know, we're all familiar with APIs, application programming interfaces. I think over time, we're gonna see an evolution in the way platforms open up, and we may have something I think of as application agent interfaces that say, "Hey, we have 50 different agents within the HubSpot software that do all manner of tasks, and you can build a higher level agent as a partner or as a higher-end customer." And I think the most important thing is that as startups wake up today and say, "Oh, I'm gonna build some sales, marketing-related capability, I have a set of platforms to choose from," before it would be like, okay, well, I'm just gonna go with the default choice that everyone's done for 15 years.
Now, I think they're gonna say, "Oh, well, what's the best AI platform to build on in terms of both access to user base, both the joy of development, how quickly can I get something out there, and the relationship itself?" So our thinking on platform is we want it to be easy to build on, and we want HubSpot to be a joy to work with, and then we think that'll drive this next virtuous loop. We have an opportunity now to build our own moat, from a platform perspective. That's
Yeah. And I think, I think you're correct that AI is going to change some of the direction of where the platform is going. And also, like, I mean, my hope is that in the future, there's interfaces that don't need to be used or created anymore, right? Because you're asking an agent to do things. I think we're still fairly. There's still some work to, to do for HubSpot and the industry to get there, but I do think that that's the direction we're going. On the pure platform side, I think we're still gonna need the platform.
In fact, like, when Dharmesh started working on, on ChatSpot, you know, I started getting emails from Dharmesh being like: Hey, where's the API for this, and where's the API for that, and how do I get access to this information? So it actually is already starting to drive us to think about what, what we need to open up in order to allow, like, a, an AI agent to get access to the right information inside of HubSpot. So I think we'll see those changes, and I'm looking forward to them. I think it's gonna be cool and fun.
By the way, just anecdotally
Yeah
The number of companies that now pick HubSpot to build on that are in the kind of CRM or front office related space, just over the last three years, anecdotally, we will be one of the ones that they support, if they support anything at all. And that wasn't the case, let's say, four or five years ago. It's like, okay, well, some did, some didn't, but now it's. As I just kind of browse the web, it's like, oh, here's a cool new startup building something, and they have a integration with a CRM. We will be one of the
Yeah
one of the first two.
Yeah. Hi, Taylor McGinnis, with UBS. Kate, maybe one for you. You reiterated the 110%+ NRR. So just curious, like in a normalized environment, how do you see the drivers of that evolving over time? Because I know you talked today about, you know, you're getting bigger lands with multi-hub adoption. You talked about pricing opportunities, you know, emerging areas with payments. So I guess maybe you could break that down a little bit more for us and talk about how you see that evolving over time.
Yeah, I think it's a really good question. I think the near term, what we are waiting for is the change in the external environment that will really lessen the pressure that we're seeing on net revenue retention by sort of consumption motions and downgrades. That's gonna be the first thing that sort of allows us to go back into sort of that expansion. And then I think you're gonna see a continuation of multi-hub adoption, which has been a big driver of net revenue expansion, continue to be a big driver of the sort of incremental from there.
I have to say, AI will drive that, too, right?
You have to say that.
I know. But I think, like, the reason we are so focused on innovation is that the next cycle of technology, valuation, and purchase is going to be driven by whoever is forefront in AI, and I think that's going to become a driver as we get out of the cycle.
Thanks. Kirk Materne with Evercore. Question for Dharmesh. Can you just talk about how your thought process on the infrastructure, the platform's gonna be built on, changes with AI? And I was wondering actually for Kate, after Dharmesh speaks, can you just talk about how that factors into your gross margin outlook? Because I think there's a concern that obviously as AI comes along, 'cause that pressures gross margins.
Two-parter there from Kirk.
Yeah. Sharp violation of our one question rule, but we'll- Yeah. That's all right.
I have good news and better news in terms of AI, the kind of direction things are headed. The good news is the fact that there are already really good options, commercial options. I've mentioned OpenAI, there's Anthropic, there's Cohere, there's other ones. And the net result of that is that we see and have already seen dramatic reduction in the overall kind of cost of what it takes. So this is gonna, I think, take the path that we saw in cloud services with AWS and Google and Microsoft. You know, the three big players are getting in. The even better news is that the kind of movement in the open source world, where you have kind of free available open source models that are now approaching the same quality of some of the commercial offerings.
Today we saw, you know, Falcon 180 billion parameter model come out, which early indications are, is as good as GPT-3.5, just in terms of, when you run the evals against it. And so my expectation is that the kind of cost part of that equation is going to be kind of factored out over time. There's gonna be big companies competing with each other. There's gonna be these open source models available.
I think AWS has actually a very interesting offering with Bedrock, that says you pick your own model, whatever happens to you, that's open source, and you can just happen to run it on, on AWS's infrastructure. So that's there's lots of things that kind of keep me up at night. The overall kind of cost of goods sold around generative AI is not one of them. Simply because of these kind of macro-level trends, I think we're gonna see prices come down by orders of magnitude, I think, over the next several years.
Yeah, my interpretation of that, Dharmesh continues to tell me not to worry about it. But the reality is that it's just really still early, and there is gonna be a lot of this innovation, and we will learn and see, and we will take that into account as we think through our overall, like, pricing and packaging.
Dharmesh didn't email me any articles about generative AI today, but I did have to look up Falcon after his presentation, so.
Thank you. Arjun Bhatia. Oh, there we go. Thanks. Arjun Bhatia with William Blair. Maybe one for Yamini or Dharmesh. It seems like what you're saying with the advent of AI is that it might become the new advantage in software, whereas over the last decade, plus maybe it was workflow. And so there's a bit of a, as you say, a shift happening. When you think about HubSpot internally, do you view that as a risk that now AI is displacing the workflow layer as the source of competitive advantage? And then internally, is that DNA that you're gonna have to develop as a company, or is that more of an evolution of your current talent and culture that you have at the company?
I can start, or you want to?
Go ahead, start.
A couple of things. One is, you know, HubSpot's original genesis, you know, as we kinda grew up in the Web 2.0 original internet world, was that we saw SMBs, disproportionately benefiting from the advent of the Internet. Right? That says, "Oh, this levels the playing field," so now allows a small, medium-sized business to actually compete, on relatively equal footing because you could blog, you could create content, you could do all these things. I think we're gonna see a similar evolution with AI, which is it's a leveling force that allows SMBs to do more things more efficiently and more productively, that historically, maybe only bigger companies could really afford, that now they're going to be able to do it.
This is very much in our core DNA, is to be able to take technology, understand it, teach our customers how that gets applied, and then build the software and make it, you know, approachable and accessible to our market. So I'm very excited. I think one of the reasons AI is such a big deal is this is the first real technology shift we've seen that's relevant for the CRM and front office industry, right? So mobile wasn't it, social wasn't it. Yes, interesting, but not that that relevant for us. AI is deeply relevant to our customers and to our market.
So we think, in the same way that, when cloud CRMs launched, over a period of time, took a little while, it's like pretty much every CRM now is a cloud CRM. We think something similar will happen, Smart CRM, as we're calling it, and that CRMs over time will become Smart CRMs. part of our kinda push right now around the thought leadership is that we wanna become synonymous with that in the way other companies are synonymous with cloud CRM back in that day.
And this is part of the reason to kind of push for mind share, but we think it plays to our strengths. In SMB, whatever happens in the Fortune 500, I think that's a separate matter. But in SMB, if we can capture that mind share and become the de facto choice for Smart CRM across the millions of businesses that we have in SMB, we think, there's lots of headroom to grow this. So excited.
Yeah, I completely agree with what Dharmesh is saying, but, Arjun, the maybe the other way to think about it is that, workflow is not our core competency. AI does not need to be our core competency. Our core competency is solving for the customer, and we're obsessed about it. I think that's what is built truly into the DNA. We're constantly thinking about what is changing with the customer, how are they using technology, how are they improving productivity and effectiveness? We get, like, really close to, you know, talking to customers. I think every company meeting starts with a customer.
We have customer first meetings at the beginning of every month, and we ask them the question of what is changing with the use of technology. I think I really appreciate your question, and I think about it as the way to answer it is to get obsessed about outcomes for customers and helping them grow. If we can continue to be really laser-focused in helping our customers grow, then whether we leverage workflows or AI or any technology, we wanna be, you know, in that mission-driven company.
Yeah. And, and also just to the spirit of your question, on the product team itself, you know, thanks to Yamini, Dharmesh, Brian, we made a really big push earlier this year to push the entire product team to think about AI and think about AI, how it's gonna change the entire product. So the features that you saw me show today and, and in Yamini's presentation, all the bullet points, like, those are all features that we worked on this year, and those are distributed across the entire team. So we have teams that are taking tech, new technologies, bringing them into the products that already exist, creating new products out of, out of, you know, you know, out of those technologies. And so we're seeing that shift happening on our product organization towards AI.
Hi, everybody. Michael Turrin from KeyBanc Capital Markets. So I wanna come back to Commerce Hub, and with payments last year at this conference being a, quote, "primary color.
Yep.
And now we have Commerce as a Hub. So has something changed in your outlook on payments and commerce, and what has changed in terms of the capabilities that makes it a Hub now?
Yeah, it's a great question, Michael. I think, we are doubling down, and you're absolutely right. Last year, we talked about payments as the primary color. What has changed is the depth of functionality that we are bringing for our customers. I talked a little bit about this. As we've gone back and talked to our customers, what are the more fundamental problems that they want us to solve? It really comes down to having commerce data and customer data together as a single source of truth. Just like marketing data and sales data needs to be together in order to solve the front office, they want commerce and customer data to be together. Why is this valuable?
Well, it's valuable because if you have a transaction information, a payment information, and you bring that into your marketing campaign, your sales outreach, your ability to solve, you know, a support ticket, then it becomes exceptionally valuable. And that is the core problem that we're solving. And as you heard me talk about, we've added functionality and depth of functionality with native invoicing, with subscription management, just additional recurring subscriptions, billing in every one of those layers we have added.
So what we just did was to reposition commerce beyond the value from payments to all of the value that we are adding across all of those layers. So that's what we're doing, and we remain very excited about the long-term opportunity, and there's just a lot that we continue to talk to customers about and really iterate in terms of the functionality. I don't know if you wanna add more.
Yeah, no, I agree with that. I mean, last year, you know, when we were launching the commerce features, ultimately what we want, the strategy hasn't really changed. We want adoption of those commerce, commerce features across our existing customer base. And so with the hub, that strategy stays the same. We want people to adopt those features, but we... As you saw this year, we launched invoices, we launched, we launched the Stripe integration, we launched the QuickBooks and accounting integration, and so we just wanna put more, push and more weight behind commerce as something that our customers know that we offer, so that they can adopt it, so that they can use it in their workflows inside the CRM.
Thank you.
Hey, everyone. Ken Wong, Oppenheimer. This question is for you, Dharmesh, and by the way, another extremely entertaining and formative keynote, so thanks for that. No cap.
Thank you.
Love that.
So I couldn't help but notice that besides a lot of the AI functionality being free, you guys indicated it was free for non-HubSpot customers. So should we see this as a new front door to potentially bring in more active, potentially paid users at some point? And then, maybe secondarily, hypothetically, is a seat-based model the right model, since you did say that you think AI is coming for everyone's jobs?
Let's take the first part first. So we think there's opportunity on the AI front with tools like Campaign Assistant to essentially broaden the top of HubSpot's funnel. That says, "Here's a use case that's applicable to even people that are not HubSpot customers." Can we get lots of people to use that? Because we have learned, in the past, with even non-AI functionality, if we can build web tools that are really, really popular, it kinda dramatically lowers the kinda cost of acquisition for us. It's a great channel. So we'll continue to look at those opportunities. ChatSpot's another good example. It's like, oh, this is something anyone can use.
You don't have to be a HubSpot customer, but it kind of brings them into the fray, and then we have another channel to kind of to reach this this set of customers. In terms of the seat-based versus non-seat-based, I think it's just too early to tell. My a nd this is gonna sound a little bit philosophical. At the end of the day, the value that HubSpot will be able to get from our customers is a function of the value that we create. And so if someday in the future, the value we create is driving productivity, awesome.
If someday in the future, it's like, okay, you can do this with less headcount, that's fine, too, because then the value of the product itself, I think, goes up, and then we will be able to kind of get our fair share of that value creation over the long term. Over the fullness of time, we think it works out as a net positive as long as we can add value, and we're not worried about, is it shifted into per seat or does that go down? Something else will go up to make up for it if we're creating true value.
Ken, maybe the other thing I would add is that the way we think about packaging, there's a clear philosophy that we have. We'll have freemium features, and we'll continue to add that, and that is primarily to expand the top of the funnel. Then we'll take some features and put it into Starter tier, and that drives market share and lowers the friction of adoption. Then we take high-value features Pro and Enterprise tier, and that drives value as well as upgrades. And so that's our philosophy in terms of packaging. We'll be very consistent in terms of thinking about our AI roadmap with that as well.
Spans, yeah, front here. Thanks so much. Great event today. Thanks for
Yeah.
Having us, and great to see you all. Brad Sills from BofA Securities. One of the things that stood out to me today, not just all the exciting things you're doing with AI, you know, assistants and bots and reporting analytics, but that you're doing it with leverage. You're saying R&D is actually gonna come down a little bit from at least from where we are modeled. So my question is: What is it about the platform such that you are prepared for AI, so this is really just iterative process, not something net new for you? Maybe if you could just help us understand kind of the underpinnings of AI from a data, data management standpoint, that you're, you're, you're prepared for that. Thank you.
You wanna take this?
I guess, yeah, I guess I'll take that one. You know, for us, you know, we talked a lot about AI this year. We've had an AI platform team at HubSpot for the last probably five years. That's mostly been working on predictive models 'cause that was where we saw the most benefit. You know, this year, obviously, the huge thing that changed was generative AI, and a lot of the technologies we're using have been actually very easy for us to bring into our platform and have our team, you know, work with and use. We continue to have an AI platform team, and that platform team, their goal is to make it easy for other teams at HubSpot to build on top of AI.
So the way we happen to split it up is we have a generative AI side of the platform team, and their goal is to make it easy for someone at HubSpot who wants to build a feature to say, "I have some data. I'm going to feed that to, you know, an LLM, and then it's gonna come back, and I'm gonna put that result back in the product." So we're trying to build it that way. For the on the predictive AI side, you know, which is like forecasting, like the AI-powered forecasting, same thing. It's like, take, take my data, extract it from wherever in the product they need to be, feed it into the AI magic box, and then spit out the model on the other side. So with the platform team, the goal is to basically drive leverage for the rest of the product.
And then ultimately, a lot of the innovation and the features that you're seeing are sort of coming from the front lines of the product, the teams that are talking to customers every single day, who understand the needs of what customers have, but then those teams don't all have to become, they're all gonna learn AI, but they don't have to become, like, the world's best experts at AI. They can basically just say, "This is what I wanna do. I can use the platform to do it," and then that's what drives our leverage an d we still have room to grow on the platform side, but that's, that's the way we think about it.
I think this is a great, you know, question, Brad, because it really comes down to building product organically and having clear, almost primary colors that are leveraged across the platform. I talked about this last year. This year, it'll be the same. That allows the product team to work in smaller groups of triads. We call them the UX, the engineering, and the product team in triads, but leverage all of the value that comes from a common infrastructure, and that's what drives the pace of innovation. So-
Just one final thing to end. Go ahead.
You add your final thing, and then I'll add my final, final.
I'm more likely to forget mine, so I'll go for it while I'm
Final stare.
So one of the advantages that we have is HubSpot, you know, yes, we have this unified database, which is awesome, especially for AI, because things are together already. The other one, I think it's gonna be super important for AI, is that we are part of the user's workflow. So going back to the Sales Hub discussion earlier, one of the advantages we have is that people are using Sales Hub. Sales reps are sitting in Sales Hub, managers are in Sales Hub, and we want them to do that more, because as we introduce AI features, what we don't think people wanna do is to say, "Oh, there's this other tool that helps me from an AI perspective for sales."
It's like whatever is actually in the application, in their daily workflow already, will get the most adoption, and whatever gets the most adoption will actually end up, over the long term, becoming the best product, because we will be able to take the usage feedback that says, "Oh, here are the kinds of things users wanna do. Here's where we're struggling with. Let's feed that back into the software and make the product itself better." So we think that's another virtuous loop we can capitalize on, because we have both the engagement hubs and the platform. I think the two things together.
I just really have more of a clarification. There is effectiveness and efficiency in the product and engineering organizations because of this platform and organic build strategy. We are not expecting to get financial leverage and efficiency from product and engineering over time. We think that's gonna come more from the sales and marketing side of the business. Okay.
Smart CRM here.
Thank you. Brent Bracelin, Piper Sandler. One clarification for Dharmesh, question for you, Yamini. Dharmesh, I have to ask on dad joke material, any of that sourced with ChatGPT this year? It looked like there was a step up.
There are very few things ChatGPT sucks at. Dad jokes is one of them, as it turns out.
But seriously
GPT-5 will be good at dad jokes.
Maybe.
The question here for Yamini is-
Yeah.
is a little bit on the strategy side, thinking about the focus Smart CRM, the focus now around Customer Platform. Sounds similar to customer data platforms and standalone, and the value of data there as we think about kind of the vision going forward. Does your vision start to converge with these standalone CDPs? Do you build your own CDP? Just walk us through maybe how your Customer Platform differs from the CDPs out there and the value of having more data beyond what's just in the supporting the standalone hubs would be helpful. Thanks.
Well, thank you so much for the question. I'll say CDP is not something that our segment of customers really ask for, right? So there's a whole difference between an enterprise segment of customers and SMB segment of customers. If you look at our customers in the 2-2,000 space, they want data, they want visibility across, you know, their whole customer journey. They wanna bring their front office teams, including marketing, sales, service together and ops teams together, and they don't talk about CDP.
What they talk about is: Can I get much better visibility, and can I get all of this data? And can I do it faster? Can I do it, you know, cheaper? Can I do it easily? And so I think our strategy is not to go build a CDP. It is to provide a unified Customer Platform, which has the system of engagement , the system of record, and like a broad ecosystem. That's how we think about it.
Yeah.
You thought a lot about the Ops Hub strategy as we were kind of going through this evolution.
Yeah. I mean, if you, if you look up the, the definition of CDP, and we've had some of these debates internally, right? CDP, it's basically comes down to unifying customer data across channels, right? So if you think about what HubSpot does, we do absolutely help you unify data across channels. But when you think about, like, the message that we're giving to our customers, like, that's ultimately what it comes down to.
If I go and say CDP to a room of 8,000, you know, like HubSpot customers, they're gonna say, "What are you talking about?" Right? But Customer Platform, they understand. CRM, they understand. So that's why we stay with that terminology. But when we think about the Customer Platform, and then we think about tools like Ops Hub, that let you sync data from different systems, we're absolutely trying to solve.. Whatever you call it, we're trying to solve that core problem for our customers of how do you, how do you take your data and unify it and put it into some sort of a structure that makes sense, so that you can actually service your customers and provide value to them?
Thanks very much. Michael Turrin of Wells Fargo Securities. Your partners are saying they've never seen HubSpot move so quickly, so on the AI stuff, so congrats on that. I'm wondering if you can talk about the consolidation opportunity you're seeing across the sales and marketing stack. We're seeing a lot more customers more cognizant of where they're spending. You've become a more complete platform. And maybe as a complement to that, can AI or are there certain areas you see where AI can help with product discovery or building awareness around where you see what commerce or ops or opportunities for further adoption?
Yeah, I'll start and, you know, definitely feel free to jump in here. Yeah, glad that you're talking to partners, and we are moving fast. I think huge kudos to the product organization. They looked at where we were going, they looked at where the industry was going, and they've done a tremendous job. And we didn't even get to cover the set of innovation that we've been working on for our customers. So, thank you for that. I think, you know, more broadly, I think your question, I want to make sure that I get the essence of your question. It was I want to make sure that I get that. But it, I
Is that like consolidation, across martech stack and sales tech, and how we think about that going in the future? Yeah.
Yeah. And if that's
Yeah
something that you're seeing more opportunity to lean into
Yeah
and expand your presence with customers currently.
It's absolutely happening, right? Last year, I came to INBOUND, and one of the stats that was just incredible was that an SMB, over the last couple of years, during the pandemic, post-pandemic, had purchased a lot of point solutions. And we saw our customers had, like, 250 point solutions, you know, going into it, and that was just this massive explosion of marketing solutions as well as the sales, you know, tech solutions. As we are looking at budgets being, you know, under pressure and under scrutiny, there is consolidation happening. This is why our value proposition resonates. This is why we have customer after customer consolidating five, 10 different solutions down into a single platform, because, 1, they can eliminate costs, 2, they can get, like, visibility across the whole platform, and they can do that in a matter of weeks.
Now, we started seeing this in marketing because that's where the initial explosion was. We're seeing that, you know, for sure, in the sales ecosystem. One of the things that I like about prospecting and the focus that the team drove this year in providing a unified space for prospecting is that's a place that's ripe for point solutions, and our customers have already always talked to us about, "Hey, we have the core CRM, we have deal management. Can you get like a space where we can also prospect, and then it becomes a better flow?" That's exactly what we deliver today. And so I do think that it's a continued trend that we are seeing both from a macro but also better value and visibility perspective.
Yeah, I totally agree. I mean, your original question, you asked, like, can we use AI to drive more of that? Like, I mean, the answer is probably yes, but I don't even think we need AI to drive that, right? Like, I think we need to be really focused in what we're building for our customers. We need to make sure that we're telling the story, like, really, really well to our customers of what HubSpot can do. And when you think about our customers, you know, on the smaller side, we have customers who are using nothing today, right? And so, like, the pitch that we have to make to them is like: Hey, these are things that you didn't even know that you could do, that you can do with HubSpot, and that's what's gonna sort of bring them deeper onto the platform.
And then for our larger customers, you know, they're using other tools right now, and so we need to convince them that there is, there is, a benefit in consolidating on top of HubSpot. And then when we think about our hubs, we need to make sure that we're understanding, well, what are the things that we're missing today, right? Like, what's stopping somebody from switching on to Service Hub, for example, right?
And then again, like, it all, to me, it comes down to, like, the focus of, like, what are the things that we're gonna be really good at? What are the things that we're gonna do well? What are the things that our customers need the most from us, right? And then make sure that we're building those things in the product. Again, like, like Yamini and Kate both showed, we're seeing the trend of customers buying more hubs, both upfront and, you know, after they've purchased the first time.
Okay, I think we have time for maybe two more. One here, one here.
Thanks. Same question. Ryan MacWilliams from Barclays. How do you envision AI changing HubSpot utilization? Like, with AI insights and the new analyze tab in Sales Hub, do you think over time it becomes more HubSpot prompting the user instead of the user inputting a campaign or issuing a prompt themselves? And if you agree with that, kind of what are the follow-through impacts of that? Is it more content creation, more consumption? Thanks.
Do you want to go or
Yeah, I think I mean, I think I, I would love I mean, I think that would be a huge win for us, right? So it's like to kinda just be on the same trend. We're early, we're figuring things out, but I would love to see the way that people use HubSpot, like, change over time. When I, when I joined HubSpot, it was like, you know, that 13 years ago, 13 and a half years ago, 2009, we had customers coming in using HubSpot, and we used to have one of our churn reasons when someone, like, left HubSpot was, "No time, to hard." And that was like, you know, they were like: "Hey, I really like HubSpot.
I just don't have time to use it." And we've gotten better at that over the years, but that's been one of the things where it's like we just want HubSpot to be incredibly easy for people to use, right? In my, like, perfect world, you know, when we, when we were building CRM and when we were building Sales Hub, we talked to sales reps, and we were like, sales reps don't want to log into a CRM, right? Like, when you talk to sales reps, they want to close more deals, they want to prospect faster, they want to build better relationships with their customers. But no one's like, "I look forward to logging into my CRM every single day."
And so I would love a world where, you know, like, you know, HubSpot was just this, like, invisible, you know, thing surrounding you, right? And like, giving you the right pushes, giving you the right information, right? Maybe one day, when we're all wearing our virtual headsets, like, it'll, it will be that thing. I think we have some time to go. But I would love to see those types of changes in behavior, where HubSpot didn't feel like work, right? Like, HubSpot felt like more of a value add, to you as a customer of HubSpot. That's the goal.
I'd say that if you look at the CRM industry, and I have to say this is my third decade in this industry, the two problems that we have consistently had is lack of adoption and lack of engagement. Lack of adoption is you roll it out to 100 users, and not all of them use it. Why? Because it's difficult, because you have a better day job, and you really don't want to take the time to figure out something that is difficult. Lack of engagement is because it's too complex to use, where I got to, like, do the point and click and, you know, configure to be able to get a report that I want, and I do think that AI fundamentally can help solve that, because now you have a new language, which is English.
You know, if I can, like, use an interface and say, "Give me the best keywords that actually worked last week," or, "Give me the set of reports from last week and compare it to last month and send it to me every Monday morning at, like, 7:00 A.M.," you can say that, and you can get that type of a report. And so I think, more fundamentally, it is a big change in terms of driving adoption and engagement with AI.
Okay. So, Keith Weiss from Morgan Stanley. I wanted to pull on that thread that we were just talking about a little bit more. Yamini, in your presentation, it's easy to run, easy to grow, right? Dharmesh, you're telling us about this future of generative AI, of where there's agents helping us out, making everything much easier on a go-forward basis, and that's not gonna be available just to HubSpot. Everyone's gonna have that ease of use come into their platform. So on a go-forward basis in this generative AI world, does the axis of why HubSpot win, does that have to change? Do it have to move beyond just easy?
I don't think so. So my sense here is that, once again, HubSpot's kinda core strength is around this customer obsession and an amazing ability to build organic product. So as things evolve, like, 'cause the thing I'm, like, most excited about is that we can further simplify as a result of AI, but even though the models are available, and then those will be commodities over time, the source of comfort is the fact that we are so SMB focused. In a different end of the market, there's a different set of problems, but we get SMB really, really well and have for 17 years and are committed to that. And that's a conviction, I think, is going to still continue to be rare. So I'm not saying we're gonna enjoy this blue ocean forever, but w e still have single-digit market share, so I just, I have a hard time kind of grappling with, like, we just execute and continue to be obsessed with customers and create value. I just, see a lot of future opportunity for us long term.
I really like your question, and I really like your answer. I think the question is really you were saying it's easy to use and AI is gonna make it easy for everybody, then, you know, is that a grand neutralizer? And it's not as simple. If our monetization strategy ever includes start with, you know It is not the case. It is about getting features, getting it access to everybody, and then making it, you know, super easy for everyone to access it, and that's an inherent advantage. It's not just because of AI, it's an inherent advantage in terms of our product, our obsession on customers, and our ability to scale that.
All right. I think that's all the time we have. I wanna thank the the team here on the stage, and on behalf of all of us, thank you all for joining us today. I think we'll probably call it wrap there. Thank you.
Thank you, everyone. Thank you.