HubSpot invented the term Inbound Marketing, and has lived it’s mantra, driving their business from an idea in 2004 to a $50M+ run rate in 2012 in the competitive marketing tools and services category. But is the story that simple? A deeper dive reveals that a deep belief in metrics, an organizational focus on growth, and a commitment to sales excellence has fueled their explosive rise.
In 2004, HubSpot co-founders Brian Halligan and Dharmesh Shah met at the Massachusetts Institute of Technology. Or, as Halligan says, “HubSpot was born out of the loins of MIT.”  Founded in 2006 on the concept that traditional marketing is broken, HubSpot offers an inbound marketing software platform that helps businesses “market to humans.” 
The Cambridge-based company’s growth has been impressive. HubSpot began in 2006 with just three customers, and they ended last year with 8,440.  In 2011, the company did $29 million in revenue, which was a full 81% growth over the previous year , then jumped to almost $53 million in 2012.  As of 2012, their Average Customer Value (ACV) was somewhere around $6,220 per customer ($52.5m / 8,440 customers).
To date, the company has raised $131m through VC funding.  Major sources of funding include General Catalyst ($5 million in VC funding in 2007), Matrix Partners ($12 million in VC funding in 2008), Scale Venture Partners ($16 million in VC funding in 2009), Sequoia Capital, Google Ventures, and Salesforce.com ($32 million total VC funding in 2011).
Data on whether or not the company is profitable yet isn’t easy to source, but HubSpot CMO Mike Volpe explained on Quora in 2010:
"HubSpot could be profitable if we wanted to, our current revenue run rate is in excess of $20 million. We just believe that there are tens or hundreds of thousands of businesses that we can help transform with better marketing (beyond the 3,000+ that use our product today). We want to continue to grow fast and be the leader in this market, so we are investing in even more rapid growth. There are many things that worry me, but our ability to be profitable is not one of them." 
HubSpot has chosen to focus on growth rather than profit for now, and that dedication is evident in the numbers above. So how has HubSpot made such huge gains, so quickly?
Gaining Early Traction by Practicing What They Preach
Both Shah and Volpe say that HubSpot uses a combination of inbound and outbound marketing , but data that speaks to how much is spent on what isn’t available.
In 2009 Halligan and Shah literally wrote the book on inbound marketing—Inbound Marketing: Get Found Using Google, Social Media and Blogs. True to form, HubSpot offered promotional resources like free eBooks with content sneak peeks.
Volpe says that inbound leads are generally cheaper to acquire, and it should come as no surprise that inbound marketing has been critical to HubSpot’s growth:
“I cannot emphasize enough the importance of inbound marketing in our growth. (I know I am biased and I know it is self serving, but that does not make it a lie.) ” 
The company’s inbound marketing strategy covers the spectrum, but one area in which they’ve really excelled is content marketing. From the outset, HubSpot has offered resources like expert blog posts, webinars, and tools. For example…
Between 2006 and 2011, HubSpot’s free Website Grader was used to grade more than 4 million websites.  Anyone could enter a URL and get insight about which aspects of a site were performing well and which ones could be better.
Like the best free resources, Website Grader was good for both Hubspot and prospective customers—first, it helped users understand that their sites weren’t performing as well as they could be, making the value proposition of an inbound marketing system more appealing. Second, it did this for free, functioning much like a free consultation, yet the time and hassle of speaking to someone was replaced by a simple web experience. Hubspot didn’t have to pay sales staff to walk users through the process because it was automated.
This is why Website Grader (and free-but-valuable tools like it) are a win-win. Website Grader was easier to market than the actual HubSpot product, because it required no up-front investment yet provided instant value. Additionally, Website Grader brought visitors one step closer to becoming customers by showing users the need for HubSpot and collecting contact information for sales, generating tons of inexpensive leads.
Hubspot went back to the free tools playbook in 2009. When business owners were still working to figure out the appropriate application and ultimate value of social media, HubSpot launched Twitter Grader, generating a ton of buzz among influential social media types and making HubSpot a part of the growing conversation around social marketing.
Twitter Grader generates diagnostic reports of Twitter users, measuring their influence based on factors like follower ratio, update frequency, and level of community engagement; and playing off of powerful motivators such as vanity and game mechanics (like how users rank among Twitter users in their areas).
CTO Dharmesh Shah explains, “What Twitter Grader is trying to measure is the power, reach and authority of a Twitter account. In other words, when you tweet, what kind of impact does it have?”  Similar in form and function to Website Grader, this free tool gets tens of thousands of uses per month. 
When Twitter Grader first launched it set off a wave of viral awareness, with people sharing their Twitter scores with their followers, perpetuating a seemingly-endless cycle of more and more people checking their Twitter cred. Again, this free tool drove leads and tons of awareness for the company.
HubSpot’s Blog—Inbound Hub
When searching HubSpot’s blog Inbound Hub for “landing page,” you get 4,480 results. That’s a lot of content, most of which comes in the form of resource posts like “What Is a Landing Page and Why Should You Care” and “11 Simple (But Critical) Tips for Creating Better Landing Pages”—each with a relevant call to action at the end. Volpe claims that HubSpot’s addition of a Call to Action at the bottom of every blog post tripled the number of leads they were getting from the blog. He explains:
“A lot of people have calls to action, or offers in the sidebar of their blog, and those work. But having one… and again, it wasn’t the same one on every single article, it was tailored to that article. So if you’re reading an article about, you know, optimizing landing pages you’ll have an offer at the bottom of that blog article that has something to do with a landing page optimization webinar or something like that.” 
As HubSpot has become more sophisticated in identifying onsite visitors and personalizing the experience, they’ve been able to drive calls to action not just for new visitors, but to re-engage existing customers as well. For example, the marketing on Inbound Hub for customers suggests new tools to try in the HubSpot suite, while new visitors will be driven to ebooks or free tools.
Inbound Hub generates real results, the blog is full of useful and shareable content that results in 20% of all of HubSpot’s organic leads. 
In response to a question on Quora about how HubSpot got so many Twitter followers, Mike Volpe writes:
“As far as I know, we were the first company to hold a webinar on the subject of "Using Twitter for Marketing and PR" - we got over 3,000 registrations for it, and tons of new followers that day back in 2008. And during that webinar and all of the webinars after it, we used Twitter as a discussion tool during the webinar, to allow people to chat and ask questions. I am also pretty sure we were the first company to use Twitter for discussion during webinars - we started that in 2008. Because of this, many of the hashtags for our webinars have become trending topics on Twitter - most recently #emailsci, but I think more than 5 of our webinars have been global top ten trending topics since 2008.” 
Just like with Website Grader, Twitter Grader, and Inbound Hub, HubSpot uses webinars to educate users, generate buzz, and attract thousands of new website visitors—a number of whom will eventually become customers.  One of their most popular webinars, Volpe reports, had 13,000 signups. 
Through focusing on inbound marketing as a means of establishing themselves as an authority in the field, HubSpot was and is able to generate a huge volume of relatively low cost (especially when compared to outbound marketing), high quality leads.  How do these leads compare to those resulting from outbound marketing? Volpe explains:
“The conversion rate from those leads, if you compare…inbound leads vs outbound, or paid, the types of things where you’re annoying people and kind of getting in their face…the comparison between the two of those, the conversion rate is more than double…for the organic leads, or the inbound leads.”