HubSpot’s App Marketplace by the $ Numbers

Exclusive Market, Vast Potential

I'm a product builder and software entrepreneur. Since 2021, I've been diving into HubSpot's app marketplace, as a both builder with a small team and as an avid data nerd. For individuals and small teams building software businesses HubSpot is a goldmine – with all of the ingredients independent publishers need to sell high-value software without massive marketing. I often find myself convincing friends of the opportunities here (trust me, there's plenty to go around) - and decided to finally pull the most interesting numbers into one easy place for reference.

If you're not familiar, HubSpot is a high-priced platform that serves customers who have valuable, recurring, critical business problems — marketing and sales teams. Thankfully these dept's are often the best-funded within a business, with budgets to pay for the tools they need. HubSpot's user base is massive (194,000+ customers currently) and its marketplace is a well-designed sales channel that they've given massive tailwinds.

Most amazingly, HubSpot charges no or transaction fees to sell products in its marketplace.

As a long-time design and product nerd, my approach has always been to uncover and anticipate customer needs, trying to craft solutions for desires they may not even know they want yet. However, in the journey of building software businesses with limited resources, I've become an increasing fan of tapping into areas where high-value customer demand has already been solidly demonstrated. This focuses our efforts within a proven and valuable market where we can do the smart product work necessary to create competitive solutions.

To help us better understand HubSpot's marketplace dynamics, we've culled together a ton of data about its products, landscape of publishers, customers' satisfaction, and did the legwork to estimate revenue across products and categories (which requires a couple assumptions, noted below).

I find this data and type of analysis invaluable for building worthwhile products — I hope it's useful to you too. If you have any questions, just let me know on X / Twitter.

Massive Value & Few Players

HubSpot's App Marketplace is generating massive value, with relatively few products and players addressing its massive user base. Of course, like any market, there are outliers that pull the average numbers up, and some products are produced by large publishers with strong tailwinds outside of HubSpot that help drive their adoption.

But the vast majority of products are produced by independent publishers who are creating significant revenue in a low competition environment. Think back to the early days of the iOS App Store, WordPress, or Shopify. This is still an ideal market for new entrants introducing competitive, well-crafted solutions.

Product Categories

Publishers - A Few Big, Many Small

Products by Publisher

Revenue by Publisher

Revenue Estimation Assumptions

Since many products have multiple plans and pricing, estimating revenue accurately requires a fair bit of research, elaborate calculation, and a couple of assumptions. When a product has multiple plans we've assumed the vast majority of its installs are on its cheapest plan (starting at 70% and dropping no lower than 55%), including a free plan if it exists. The number of remaining installs is presumed to significantly decrease across each remaining plan.

When a monthly plan offers annual subscription discounts, we've assumed 20% of this plan's installs are on discounted (annual) pricing. These assumptions provide a realistic but possibly conservative estimate, actual revenue may be higher.

Products with pricing in other currencies have been converted to and calculated in USD.

Marketplace Tailwinds

If we're evaluating this marketplace to understand the opportunity for creating products that can largely sell themselves, we need to measure the products that create their value by primarily extending the value of HubSpot to its users.

A key way to tell to determine this is by asking "which way does the data flow?" – a product can bring data into HubSpot, take data out, or do both. Those that only take data are likely enhancing the value of another product and its users (who may also be HubSpot users, but HubSpot's marketplace isn't likely the primary driver of product marketing and sales).

Independent Products' Value

Overlapping these dimensions - we're able to evaluate the independent products that are creating value in and through HubSpot's ecosystem, based on real-world sales –

• 1,388 products are made by third-party publishers
• of these 1,320 are made by independent publishers
• of these 1,184 have paid plans that we can measure revenue of
• of these 954 bring data into HubSpot, increasing platform's value to its users

The demand for these 954 products as a whole is strong. The average numbers look very attractive, but the best performers in this group definitely pull these numbers up.

The median number of installs (63) can still be a significant number of customers with the higher plan prices products are able to command in this market. When we look at the median annual revenue across all of these products it drops significantly to $57k ARR - which isn't nothing, but isn't terribly amazing either…

The interesting catch to this is – many of these products in this group are not very well executed or supported. They have found valuable pain to solve within a targeted ecosystem and are earning for it — but as you look across the marketplace you see how a well-conceived, well-positioned, and well-supported product could likely capture a significant share of customers.

Performance in the Smart Middle

What is the performance of the products in this target group that are at the middle of the pack and a bit above average?

This subset of products have managed to capture at least the median number of customers from our total target group (63 installs), up to the number of customers captured by the products that are performing at the 80% mark (330 installs).

Most importantly, this group omits the top 20% of outliers that drive up our average numbers.

These are the type of products we're aiming to match if we compete in this market. They're the type of products that can be built by a smart, small team, and represent the sales and revenue that are possible with relatively small marketing and support.

Independent + Paid + Bring Data In + Smart Middle of the Pack =

The average product with this pack has 148 installs (customers) and generates $23.4k every month ($280.5k ARR). It's also worth noting – many of these products are simple products that solve a single problem well – and fuel a solid revenue stream through a relatively small customer base, with less customer support required.

Becoming Above Average

All of the numbers above are nicely focused on the safe middle, but the ability to become an outlier is definitely in reach, even with relatively simple functionality.

A product that can solve a specific and valuable problem, makes its value clear to customers, and supports it users well can become an extraordinary performer in this marketplace much easier than elsewhere.

Some great examples of independent publishers making a killing helping HubSpot's customers –

If you happen be behind one of these products and I've wildly mis-estimated your revenue, I'd love to know. Again, they are estimates, but with enough thought put into them that I'd expect that they are directionally correct.

Building with Strong Tailwinds

Building a product isn't really the issue – especially now.

As an independent publisher (a solopreneur or with a small team) I personally can’t afford to bet on product ideas that will require massive amounts of marketing or customers to be successful.

Understanding our customers is critical, but understanding which market to build for first - and where to build within it - is vital to finding the tailwinds it takes to succeed.

02/24/24 update

A Way to Find High-Value & In-Demand Opportunities?

Based on the interest this report has received, my team is considering creating a public version of a tool we use internally to pinpoint high-value, new product opportunities for HubSpot.

We use it to connect dots across a massive amount of market and customer data to uncover the highest-value opportunities for new product offerings. Importantly – it provides us with the details for each opportunity's Jobs-To-Be-Done, current competitive landscape, and specific customer preferences. We use this intel to strategically develop and market new products.

If we make this into a product it would cost around $350 (for findings, database, and supporting tooling) - be usable by anyone, and provide an unfair advantage if you want to build in HubSpots's ecosystem.

Sound interesting?  See the full details & let me know →