Hubspot, Stripe Engaged in Secret Arms Race with Mysterious Startup

‍America’s Finest City, CA / April 25, 2024 / PRNewswire—Two of the behemoths of the tech world—Hubspot and Stripe—had Twitter aflutter this week as they announced a slew of new features. Stripe’s new features were announced yesterday at the company’s Stripe Sessions conference in San Francisco, whereas Hubspot’s announcements can be found here.

But the story that’s being swapped by Silicon Valley insiders tells a more ominous story—both companies have been furiously building in an effort to reach some semblance of feature parity with a little known and mysterious start-up, Outseta. 

“The boards of both companies are deeply concerned,” says a TechCrunch reporter who asked to remain unnamed.

Let’s take a closer look at each company’s attempt to fight back and maintain relevance.

Hubspot

The major announcement coming out of Hubspot was the public release of the company’s “Commerce” product—Hubspot’s first foray into the payments space. 

Outseta—which launched its platform that fully integrates payments, CRM, email, and help desk tools in 2017—now has a true peer with a similar feature set. Both companies cover the core tools required to run many types of small businesses.

“I’m kind of shocked it took Hubspot so long to offer a payments product,” said Outseta Co-founder Geoff Roberts. “For a company whose mission is to help their customers ‘grow better,’ it’s pretty tough to grow when you can’t collect payments.”

As for what took Hubspot so long to reach feature parity, Roberts could only speculate.

“It became pretty clear to me that (former Hubspot CEO) Brian Halligan sat down to watch a Grateful Dead special on Netflix and became transfixed,” said Roberts.

“His pint of Cherry Garcia melted on his couch. I heard he didn’t even watch the eclipse!”

When asked about Hubspot’s product leader—CTO and Co-founder Dharmesh Shah—Roberts had a different theory.

“I think Dharmesh became obsessed with reaching feature parity with Wordle,” said Roberts. “That was to our advantage—it took (current Hubspot CEO) Yamini Rangan taking the reins of the company to awaken the beast.”

Stripe

As for Stripe’s announcements, the company created buzz yesterday by announcing the launch of their usage based payments API as well as the ability to pay for products like Stripe Billing and Stripe Tax on either the current pay-as-you-go model or a subscription basis.

“We’ve offered a usage-based payments API since 2017,” said Roberts. “In fact, it’s how we’ve charged our customers since we started.”  

“Honestly, I’m a little surprised by the reception to this product,” continues Roberts. “Considering Stripe currently charges for many of their own products using a usage based model, I’m very surprised they didn’t offer this sooner. Maybe they just weren’t processing enough payment volume to make it worthwhile—or maybe people just really like spaghetti.”

When asked about Stripe’s offering of Stripe Billing on a subscription basis, Roberts’ comments focused on the simplicity of Stripe’s pricing model.

“Look—I applaud Stripe for offering their customers the simplicity of yet another payment model,” said Roberts. “It’s kind of a strange move though—my read is the Collison brothers simply couldn’t agree, so they decided to offer both models. It’s tough to break a two-way tie.”

“As for us, customers processing payments with Outseta don’t pay any Stripe Billing fees—and never have,” said Roberts. “We built our own invoicing and subscription management features to save our customers on these fees—and that’s a position we’re excited to maintain.”

Stripe has yet to release the new subscription based pricing tiers for Stripe Billing and Stripe Tax. 

Roberts however had nothing but praise for Stripe’s announcement that they’ll soon be offering automated registration and tax filing for US based businesses. 

“This is the big one,” he said. “Kudos to Stripe for delivering—it’s something our mutual customers will immediately make use of.”

What now?

While both Hubspot and Stripe have significantly deeper pockets than Outseta, Roberts seemed poised and comfortable with his company’s position in the market. 

“Look, competition is a good thing. Hubspot and Stripe creeping towards feature parity with Outseta is a reflection that we’ve focused on building the right feature set.”

“And I mean look at it this way—Outseta’s annual revenue is many multiples of the number of customers that Hubspot has. To infinity, and beyond!”

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About Hubspot

Founded in 2006 in Cambridge, MA, Hubspot raised over $100M from investors including Sequoia Capital and Google Ventures prior to their IPO in 2014. The company currently generates more than $2B in annual revenue and employs more than 8,000 people. Hubspot is traded on the New York Stock Exchange (HUBS).

About Stripe

Founded in 2010 in San Francisco, Stripe has long been a darling of Silicon Valley. The company has raised more than $9B in funding from investors like Andreesen Horowitz and Goldman Sachs. Today Stripe employs more than 7,000 people. 

About Outseta

Founded in 2016, Outseta has focused on offering fully integrated payments, authentication, CRM, email, and help desk tools for small businesses since they started. The company is funded by its customers, 95% of which you’ve never heard of. Today Outseta employs 6 people and operates profitably. Imagine that?