This acquisition may seem odd at face value, but both companies actually form the perfect marriage in today’s digital landscape.
Let’s find out exactly why Hubspot bought The Hustle, and what we can all take away from this clever acquisition.
What is Hubspot?
For those of you who don’t know, Hubspot was founded in 2006 by Brian Halligan and Dharmesh Shah as a software house that would help companies plan and execute specialized inbound marketing strategies.
Its products and services aim to provide tools for lead generation, customer relationship management, web analytics, and more.
The platform was so successful that it quickly spread to over 120 countries, with about 121,000 clients using their services. Since its inception, Hubspot has established itself as a key player in the business software market. Hubspot has also taken a giant leap forward by becoming a publicly-traded company.
Hubspot and The Hustle
Over the years Hubspot acquired several smaller companies that they believed would help them create better solutions for their clients. As part of these acquisitions, the tech marketing company recently purchased the media company The Hustle, which started as a daily email subscription in 2016.
At the time of the acquisition, The Hustle had over 1.5 million readers, making it a valuable addition to Hubspot’s inbound strategy. Hubspot’s blog generates an estimated 5 million visits each month. Content Marketing is huge for Hubspot. In fact, Sam Parr, CEO of The Hustle, tweeted “The goal is to build the largest business content network in the world”.
What is The Hustle?
So, what exactly is The Hustle and why did Hubspot want it so badly? In short, The Hustle is a seriously popular daily newsletter that explores topical news stories focused on things like business and tech. The newsletter is created in an easily digestible, entertaining format.
The Hustle didn’t start life as a media company though. Instead, it began when the company’s CEO Sam Parr met entrepreneurs Erik Bahn and Elizabeth Yin in San Francisco, who had the name “HustleCon” and an email list of 300 subscribers. HustleCon was a conference that would give people a chance to connect with successful entrepreneurs
Parr managed to sell 400 tickets to HustleCon in just 7 weeks, generating over $60,000 in revenue. The Hustle’s first daily email was sent out in 2016, and the company hasn’t looked back since then.
Parr says, “the mission (of The Hustle) is to help give business builders the information they needed to put their dent into the world and change how media companies operate.”
How Does The Hustle Make Money?
The Hustle makes most of its money from advertising. The company also makes a small portion of its revenue from subscriptions to its premium arm called Trends.co. At the same time, the regular HustleCon events also bring in a lot of money for the company every year.
The Hustle has raised a little over $1 million in funding from seed rounds, but to this day, it hasn’t tried to raise any capital from venture firms because the company does pretty well on its own.
At this point, The Hustle is estimated to have between 5-8 million annual visitors to its main site, over 2 million annual visits to its paid Trends site, and over 11k members in various niche FB groups. This is all alongside the 1.5 million newsletter subscribers.
If you have no idea what all of this means, let’s just say that these are some pretty incredible numbers. In a deal that is rumored to have cost Hubspot between $25 and $30 million, they now have direct access to the Hustle’s massive, highly engaged audience.
Why Did Hubspot Buy The Hustle?
While Hubspot originally only targeted people looking for marketing and sales solutions, this acquisition clearly shows that they’re seeking a new customer base.
With the newly launched customer service products, Hubspot is now hoping to reach out to entrepreneurs, founders, execs, tech startups, and even investors – and all of these people can be found through The Hustle.
This decision came when the company’s CEO Dharmesh Shah realized that technology and media content go hand in hand and that the next generation of tech companies will need to produce the right kind of media content if they want to generate revenue sustainably.
Shah believes that next-generation software houses will adapt to the market’s growing needs by investing in media companies to capture their audience’s attention. According to one of his tweets, instead of the traditional model of having a software company embedded inside a media company, the next generation of tech businesses will be the exact opposite and have a media company house embedded inside a software company.
How Will Hubspot Use The Hustle?
Are you still a little confused about how this acquisition makes sense? Well, look at it this way: Hubspot has built a large community around its educational content. The company has a blog and a YouTube channel that attracts millions of people every month.
Hubspot also has an online academy where over 100,000 people take lessons every month to receive a marketing certification from the company. With the Hustle, Hubspot has the chance to gear their products and content towards their customers’ needs through the mediums that will resonate the most with them.
“By acquiring The Hustle, we’ll be able to better meet the needs of these scaling companies by delivering educational, business, and tech trend content in their preferred formats,” said Kieran Flanagan, Hubspot’s senior vice president of marketing.
This is what you call an extensive inbound marketing strategy. Using platforms like YouTube, podcasting, e-books, and blogs – Hubspot’s primary goal is to engage users with the content they want to see.
And with the Hustle on their side, Hubspot now has access to millions of trusting readers, boosting their existing media capabilities. Hubspot now has some of the world’s best content creators on their side, an industry-leading newsletter with excellent open rates, and they can now become leaders in topical, daily news and trends (instead of just evergreen SEO content).
What Can We Learn From This Acquisition?
This unconventional marriage between a huge tech company like Hubspot with a relatively smaller media startup like The Hustle is a useful lesson in marketing for the rest of us.
Through this acquisition, Hubspot now owns a brand that millions of people already trust. At the same time, they took the chance to diversify the kind of services they can offer to their already existing customer base with an editorial team that can reach audiences most other marketing firms will never be able to.
And above everything else, it showed just how much marketing firms can benefit from putting their audience right at the center. This seems to be the direction that the industry is taking.
Hubspot’s acquisition of The Hustle shows us just how important it is to build an engaged audience for your brand. This multi-million dollar deal is not the usual kind of acquisition for a major software company like Hubspot. However, in today’s world, combining a marketing solution company with a news media company makes a lot of sense.
Although we don’t all have $30 million to spend on a newsletter, this acquisition is something that all business owners can learn from. Having a large audience that trusts your brand, and putting this audience at the center, is an important strategy for growing any kind of business.
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