Insight
Chestnut: SMB Software Sales Pipelines Need to Span Five to 10 Years
“It's a little bit weird with small businesses because sometimes with small businesses, they need like five years to figure it out and you know how it is. And so. We never really found the one show. What we found was that they just need lots of time to find the…”
Insight
Chestnut: Brand marketing is the most economical marketing founders can do
“It's actually the most economical marketing you do because it goes viral that people tell their friends about, and that's the cheapest marketing that you could pay for.”
Disclosure
Chestnut scaled Mailchimp purely by ensuring his monthly bank balance grew
“I never had investors, so I never had to do reports. No business plan. I never, I had a monthly bank statement, and I said, what's What's the starting balance, and what's the ending balance? Ending should be bigger. And it always was bigger.”
Insight
Founders cannot replicate Mailchimp's bootstrapping success in the current bundled cycle
“Now I think that we're at a different time when people want it bundled back together again, and the cycle is just going to keep continuing. I think right now I don't know that you could do what we did. Yeah, I think there, it will happen when there is a great …”
Insight
Entertaining M&A talks creates irreversible executive momentum to sell the company
“If you don't ever want to get acquired, never open the door to anyone. Because here's, really, honestly, if you open the door and let one in, you have to bring your executive team in with you eventually, and once everyone gets in on that, it's very tough to ba…”
Insight
Chestnut: Mailchimp's 2,000-Subscriber Paywall Felt Like a Celebratory Rite of Passage
“Once their list grew to about 2000, that's when they felt like it was more, it was less of like a forcing mechanism mechanism, but more like a celebratory. Right of passage. Like if they could get their audience to 2000 and they had to start paying, they felt …”
Insight
Chestnut: Infusing humor and personality into the app was Mailchimp's key early unlock
“Turned out small business customers running a small business is dismal. I've learned over the years and they really need like A ray of sunshine, some sense of hope some kind of humor in the app, and so I think that was sort of the, that was the thing that kind…”
Assertion Not checkable as stated
Chestnut: Mailchimp bootstrapped because Atlanta funding was unavailable post-dot-com bust
“I couldn't get funding even if I wanted to after the dot com bust. I was in Atlanta, so don't use me as a hero.”
Opinion
Chestnut: GDPR hurts marketing companies financially
“GDPR really hurts marketing companies financially.”
Insight
Chestnut: Regulatory compliance is not a SaaS moat unless enforced on everyone
“I think that this sort of stuff is, is not quite moat level. I'd like to believe that it's moat level. Yeah, I don't know. You know how it is. A lot of startups don't care about that. Don't care about following those rules. If everyone had to force, everyone w…”
Assertion Partly supported
Mailchimp scaled without any sales or customer success teams
“We've never had any kind of sales or customer success ever.”
Insight
Founders giving sub-account keys to a new VP signals high churn risk
“What we looked at was if the founder set up a sub-account, You know, send a username and password to their VP. You're basically making a copy of the keys for a VP. That was the potential breaking point. That was our red flag. If a new VP comes on, they're not …”
Insight
Scaling from $800 million to $1 billion ARR is the hardest stage
“I'd studied the art of it, though, and I'd learned from a lot of CEOs and founders out there that you could Probably get up to eight hundred million, and that last two hundred million is the hardest you'll ever get, and that was absolutely true.”
Opinion
California wins B2B enterprise, but Atlanta is unmatched for consumer brands
“If you're gonna start a B-to-B enterprise company, California's absolutely the best place to be. B to C, like a consumer brand, you can't beat Atlanta. We've got Coca-Cola, Home Depot, UPS, Delta Airlines, Chick-fil-A, like top, top brands are all right there …”
Insight
Non-technical CEOs have an advantage because they cannot micromanage software engineers
“I actually think if you don't come from the tech side, it's an advantage because you stay the hell out of the engineer's way.”
Assertion Partly supported
Mailchimp Grew from Tens of Thousands of Users to 1M in Year One of Freemium
“It was 10 years in, 2010, 2000 nine-ish, when we launched our freemium plan everything took off. It was this rocket ride right after that. I mean, we went from, I don't know, tens of thousands of users to a million in the first year, and then it doubled and do…”
Disclosure
Mailchimp targeted lower ARPU to capture a larger denominator of small users
“We kind of went lower ARPU because we want a larger denominator. We want more and more small users than we do very, very big users.”
Insight
Chestnut: Digital brands need physical artifacts to make their brand feel real
“The thing about billboards and branding is one thing is I always wanted something tangible with our brand. I, everyone interacts digitally, but you need something to feel. So I always have like MailChimp toys, something that I want on your desk that you can fe…”
Insight
Chestnut: A second product act takes hold at 30% of revenue
“We'll still be looking act one for a long time until act two, except, you know, what, 30, at least 30% of our revenue is my philosophy. Then really act two has taken hold.”
Assertion Supported
Chestnut: Mailchimp had no sales team two years prior
“Not two years ago. No, small little teams that, that dabble a little bit, but you know, we just hired a chief customer officer starting in a couple of weeks.”
Assertion Not checkable as stated
Chestnut: Many SMBs rely on creative agencies to run Mailchimp
“A lot of our small businesses. I love to believe that small business entrepreneurs log into MailChimp and do all of their marketing. A lot of them rely on partners. And creative agencies. Yeah. And we have to really communicate to them everything that we're do…”
Assertion Not checkable as stated
Mailchimp's freemium model drove 10,000 new customer signups every day
“We were so, with Freemium, we were getting, you know, I remember, 10,000 signups a day from new customers.”
Insight
New small businesses prioritize making sales over adopting back-office software
“When you start a small business, I don't know. I don't think that you're thinking about your CMS or your CRM or anything. I think you're thinking marketing first. How do I sell my stuff? That's the first thing you're thinking of.”
Assertion Not checkable as stated
Mailchimp's freemium tier was invented by an engineer avoiding splitting code
“And after a year, he said, it's impossible. Your code sucks so bad. Let me just keep it one product and just make it free up to a point. And really, that's where freemium came from.”
Ben Chestnut