Ben Chestnut: The Top 10 Learnings Scaling Mailchimp to $1B ARR

Let's welcome Ben Chestnut, CEO and founder of Mailchimp. So this is very exciting to me. Ben, thank you so much for coming and joining thousands of us in cyberspace here.

About time you invited me.

Yeah, I've been asking Ben over Twitter for years to come, and I think his kids got older, they had sports and spring break, and it's hard to lure someone from Atlanta sometimes. Although you never know, every once in a while someone has to have a meeting in the Bay Area or Paris and and they'll come. But I'm super excited.

Stars finally aligned and I could be here with you and your audience and I want a copy of that video. I'm gonna play that every morning just to get me going. You should.

You may miss the office though when you see it. Do you miss the office, by the way?

I do dearly.

Miss it? Yeah. What's your gut on all the office stuff? Where will we be? Has Mailchimp gone, made any formal decisions? And where will you be at the end of next year in an office? Do you have, have you figured that out? I really like what Patrick Collison said recently on Twitter.

Twitter. I think that, you know, when things do get back to normal, and they will, 6 months after that, you'll look back and, and things will look like nothing ever happened. I have blind faith that it'll get back to normal. I have family that was stationed in China for work, and they said it got back to normal.

It's definitely back to normal. Even in Europe, even like all the entrepreneurs I know in France, it's like 90%, right? But, um, all right, so no thinking of, uh, getting back to normal is sort of how you're thinking as a leader, right, for all of this? I— it makes sense to me. So we will run out of time because this is such a great conversation, but we'll try to take a few questions. So hit Q&A here at the bottom of the Zoom and ask some, and we'll definitely, we'll definitely get to some and work on a few. But I'm super excited. I think I've been, I was trying to think last night whether I'm a 3x or 4x Mailchimp customer. But it's fun to, there's apps we use every day, right? But there's not that many times you've been a 3x or 4x customer and it's fun to see it. And then Mailchimp to me is so interesting for founders here because it took me by surprise how big it was. Maybe it's because you didn't raise 11 rounds of venture capital, which we'll touch into, and bang your chest on TechCrunch every week with another huge round. Or maybe it's because I wasn't a marketer by training, right? And I just grabbed an app here or there. But, but Mailchimp several times, I think, took all of us by surprise and is kind of a hero company because of that. So I want to do— I want to go back in time a little bit to the very, very beginning. But to me, the most fun— I want to jump around in time, if it's okay, and talk about breakout. Right. So Mailchimp is— I don't know whether you've announced your numbers. You don't have to comment, but around $1 billion ARR on either side. It's a lot of ARR, whatever it is. It's very large, but it's a category nominally with a lot of vendors, right? A lot of vendors, tiny, minute. They probably pop up every hour. There's someone with some specialized, at least on email, and we'll talk about getting bigger and into marketing animation. So what was like the 10x feature whenever it was a million in revenue, $2 million? What let Mailchimp break out for real from the competition?

It had to be freemium. It was 10 years in 2010, 2009-ish when we launched our freemium plan. Yeah, everything took off. It was, 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 doubled and doubled after that. It was, it's, it's been a crazy rocket ride from there.

So that's interesting. So before you went freemium, which was like 2009-ish, is that right? Yeah. Let's talk about that because we didn't even have a free trial before that.

You had to pay.

And you were nominally founded in 2001, right? So, so, but we'll talk about that. So Mailchimp wasn't an overnight success story by any, by any stretch of the definition. But you launched in the first 2 years before you went freemium. Do you remember? It took you 2 years. 2 years is a long time as a founder too, right? How big were you? Were just— but you still managed to get to a couple million in revenue, but you were not a differentiated tool at that point.

It didn't feel like it. I was eating off the McDonald's value meal. I was still eating ramen. That's all I remember of those days.

Oh, is that true? Even 2 years in?

Yeah, I said, I think my revenue was in the hundreds of thousands.

Oh, wow. Okay, so freemium, which we have. And so that is interesting because, and then why did it work? Were, were, were people, because, you know, freemium alone isn't always a marketing strategy, is it? You have to have traffic, you have to have a denominator, you have to have people searching for you and finding you. So did you even know, and, and to me, Mailchimp's interesting because I would think of it as lightly viral, right? If you're on the free plan, you see the Mailchimp at the bottom. If you take a look at the to field or whatever, you can see that it came or there's URLs, but it's not Zoom viral, right? It's not that real time. So why did it work? Why did freemium work? Besides that it worked, did you even know?

Well, I think, I think it was just perfect timing. I think there was a crisis going on. It was, it was 2009. We were still reeling from the recession and people needed it badly. Small businesses badly needed help. And there we were with the solution, a little bit like Zoom, a much smaller scale.

Yeah.

But we were there with the right tool at the right time.

And what was when you launched it? Not to go too much into deals, but it is interesting because it worked, right? And it worked fast. It worked in 30 days or 60 days. The conversions happened, right? Your paid business went up.

Oh, it was immediate.

Dramatically, quickly, right?

It was immediate. We had server outages. People were running around like chickens with their heads cut off. I mean, it was crazy. I was at—

And what did you do?

I was getting flashbacks from like the AOL dial-up. Issues where no one could dial in, you know, everyone was complaining about that. I was like, oh my God, I'm Eddie Owell. Nothing would stay alive, it seemed like.

Oh man. Yeah. And then, and what was the first, if you remember, what was the first, I hate this word, but what was the first choke or what was your first point where you had to convert to paid that actually worked? Like, did you test anything or what was that insight? When did you know when to throttle the free folks back when you first launched?

It's a little bit weird with small businesses because sometimes with small businesses they need like 5 years to figure it out. And you know how it is, it's a grind. And so we never really found the one choke. What, what we found was that they just need lots of time to find their way. And everything we tried just really didn't seem to work. Sometimes they just needed to get to, you know, 30% of small businesses die in 2 years, 50% die in 5 years. So it's like our sales pipeline It needs to be 5 to 10 years. That's the pipeline for small business, it felt like at the time. And so all we really did was give them more time. That was really the only kind of choke point that we had to make people, they would shut down their business, but they would keep their free Mailchimp account alive. They'd get a job, they'd learn how business actually runs. They'd take that learning, quit, start their business up again, and then with their list.

Yeah.

Yeah. But it was really just once their list grew to about 2,000, That's when they felt like it was more, it was less of like a forcing mechanism, but more like a celebratory rite of passage. Like if they could get their audience to 2,000 and they had to start paying, they felt proud of that. We saw tweets of people saying, I'm finally a paid Mailchimp customer. Oh wow.

Yeah.

Yeah.

It's interesting. I had an eye-opening moment years ago when I first met with someone at SurveyMonkey when it was tiny and they said, we don't count churn when we lose a customer because they may come back in their next job with their next thing. We don't actually count that. We don't count that as churn. We wait waited some— they waited a mammoth amount of time in the early days, probably not today as a public company. How do you think about that sort of churn? Because you didn't really lose that customer, right? Um, even though the revenue paused. Do you have a nuanced view of churn at the very low end of the market?

At the very low end of the market?

Absolutely.

And a very nuanced view of ARPU as well. We kind of went lower ARPU because we want a larger, uh, denominator. Uh, we want more and more small users than we do very, very big users.

And so when you're, when you're the CEO and you're— I would imagine at this point you've got a few dashboards at Mailchimp. How do you think about the goals for those? For those? Because I, you know, the smaller the customer, usually the higher the churn, right? That's the law, especially the very small businesses, right? The tight, the one-person shops. It's hard, right? Do you, do you still set— what do you see in your dashboard in terms of churn? And how do you, how do you, how do you incent the team or drive the team to do better in those tiny, tiny customers? In terms of churn?

Well, what you do is you say, what, what are the industries where our small business customers are really tech savvy and they really push the limits of innovation inside of Mailchimp? And we, yeah, we didn't say where the most revenue comes from. We said, where do they push our limits? Because that's what drives us, is innovating. And then we said, well, it's e-commerce customers. So we really look at just a few slices of our, of our audience and we say, what's going to help them sell more? And those are small customers. They're, they're tiny. But they can make millions of dollars after sending every email campaign. They're making hundreds of thousands or millions of dollars every time they hit send. So we focus a little bit more on those and any technology that we get out of serving those sort of high-end, high-innovation, high-impact customers, it trickles down to the small businesses.

It's interesting that I guess that's obvious that— so even back when you in 2009, when you converted, e-commerce was sort of your North Star customer was, was folks selling And then Mailchimp is almost like your ERP, isn't it? It's certainly your marketing automation, but it's almost more, right? Your list can be everything as a tiny vendor, right?

I can walk through a restaurant and I can see someone, or at a coffee shop, they're using Mailchimp. They're using it like a CRM. We see them with their database, the Mailchimp audience screen up live. It's less of the sending and it's more of the analyzing the data of their customer base for sure.

And like, just one last question on this and then I, let's hit the next one. But so the, so the, the, the step function was going to freemium, 2 years charging everybody the second they get, give me your credit card. No chance for a small business to, to get to know you, to see if, to see if they want to fall in love, right? Freemium worked, but what was, what, what, what was the surprise and delight feature? People back then loved Mailchimp, right? And it wasn't just the chimp and the cute ads. And I can't remember because I, I didn't know nothing about email. I just found Mailchimp on a Google search, which is probably our next slide I wanna talk about. What was your surprise and delight? Why did they love you? Did you have a hero feature? What was that special product moment or feature?

I was a real stressed out entrepreneur in those early days, and I was just constantly micromanaging everybody in the office. Like, you gotta get this done. We got these goals. I have a Gantt chart of everything. And I noticed nobody wanted to stay late. They just weren't inspired. But one day people were staying late and I was like, what are you doing? And they would hide their screens every time I looked. And then later I found out what they were doing was they were planting Easter eggs. And that's, that's what got engineers and techies inspired to actually work late. And I said, you know what, as long as we hit, hit our goals, do all the Easter eggs you want. And so people start to infuse personality into the app. They started to build an app that they wanted to use. And it 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 of was the key unlock for Mailchimp in the early days. Just personality.

Yeah. Make it accessible, right? Make it, make it fun and, and trying.

Yeah. We've, we've, we've had, I've seen news headlines where we take down a billboard of Freddy and people complain. They say, that was my only joy in life. We've reduced the amount of Freddy in the app because people were saying it's literally, it's taken up too much space on mobile and everything. And we've had, We get a deluge of complaints. You know, I had one small business customer saying he was my only joy.

That is a sign of something, something special. Yeah. And then this one, this is just one of your billboards. This isn't the one, but Mailchimp's always been bootstrapped, which we can dig into, but that especially means every dollar is scrutinized a little bit in the beginning out of force of necessity, right? For years. And then it becomes part of your mentality. And then I remember one day I was driving up 101 in the Bay Area and I saw, I think that the one on the right, I'm colorblind, the yellow one, right? The classic one. And I'm like, Mailchimp must be like, how can they afford these? Like, you don't even, I didn't even know what billboards cost back then, right? I shouldn't, I know today they are cheap, but like back in the day as a founder, I'm like, oh my God, how? But, but, but still you were buying billboards and then now I get it. It's tech, your customer, you wanted to expand into tech, right? But what did you learn about brand? Because all you had was that chimp on the 101 in the Bay Area and people, people, this display ad and brand advertising, it's not intuitive to founders, right? It is not intuitive. Why did you do that relatively early and what were your learnings about how to build on your brand?

Well, I was always really cheap, always experimenting with different kinds of media. I was doing podcasts when they first came out. Really just for a—

for an iPod.

On an iPod. Yeah. Yeah.

Hence the name. Yeah.

And so in billboards, it was just one of the things we always tinkered with. We have a culture of tinkering and experimentation at Mailchimp. And the thing about billboards and branding is one thing is I always wanted something tangible with our brand. 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 feel or see, that makes your brand real when you can see it out in the real world, like you saw it in your car on the I-111. And then with the billboards, I had a competitor, we would listen to their analyst calls every quarter, and they said that they opened up a San Francisco office and that was gonna really stick it to us 'cause they could have a physical office right there in the heart of Silicon Valley and they would have everybody come to their office. And I told my team, you know what, why don't you set up a billboard across the street from their office? So that was sort of the—

Ah, that might've been the one I saw, right?

Thankfully, thankfully my team saw that that was kind of a jerk move. And so they said, we like the idea of billboards. We won't do that. We're going to put them up. And somebody put one up across from this building I never heard of called Moscone. I'd never heard of it at the time. And they did it right before Apple's WWDC. And then right after that was Google I/O. And it just went viral. People took pictures of that mysterious monkey, posted it to this new thing called Instagram. And it just kind of went viral from there. So, I mean, I guess the lesson is care about your brand, try to get it physical, not just digital only when you can afford it. Always be tinkering. And, you know, if you're always tinkering, then when they really become available, like CBS and all the people that do outdoor, once they saw us buy a couple, then they just went nuts. Said, we've got all these other properties. How about the highway? How about this? How about— and then And then it just kind of grew from there.

And what do you— and then related to this, like brand, brand is really— it's a funny thing. It creeps up on us as founders, doesn't it? Because we kind of make fun of it in the early days. We think, at least we used to, we think that's a Pepsi thing, a John Sculley thing. Brand is— we— the last thing you want to do in the early days is hire a marketer that just wants to work on your brand. And then you realize they were right. Like, like Mailchimp has this brand and what it— when, when does that work? How do you know when to invest in brand versus leads versus the other thing? And how do you— How do you protect your brand today? Like, because it's always, it's always at risk, right? We, we'll talk a little bit, maybe more about Doom that we talked about the other day, right? But how, what have you learned about brand and when does it matter?

It matters always. It's, it's what I was a designer at heart. So brand meant a lot to me from the, from the early get-go. I mean, I started wanting to build a global brand, so I might be the wrong person to ask about that.

Well, maybe you're the right person.

I wanted a brand from day one. Yeah, maybe. But the thing is, like, it makes people loyal. They make— it makes people love. I mean, you should— I don't— I've always said I don't shoot for loyalty, I shoot for love. I don't want people to just blindly use my property. I want them to use it out of its merit. But you do want people to kind of just love that brand. And it's actually the most economical marketing you do because it goes viral. People tell their friends about it, and that's the cheapest marketing that you could pay for.

Yeah, for sure. So this slide you guys put together, who, who am I seeing here? What's going on in this slide?

Can you, so that's me and my co-founder. So that's my mother. She ran an hair salon in the kitchen. I couldn't get an action shot of her actually doing her, her work. That's just Thanksgiving. That's just Thanksgiving. And over on the right, that's my co-founder Dan. He's the tall one. And that's in his father's bakery. So we both had entrepreneurial families and we both grew up in the kitchen watching their businesses grow and then ultimately fail. And that's what drives us today. We really want to empower small businesses. That's DNA of Mailchimp. So that they don't fail like our parents did.

Yeah, I hear. And they failed while you were— you saw them fail.

You say you see them and you can see that it's not just a business that fails, it's a person, it's family and the other things linger for generations.

Yeah. When we were chatting before this, this, I, I heard some of that linger in your thinking, right? There's, there is this, there's this conservatism is the wrong word, but there's this fear of doom that we chatted about. Maybe it tracks back to your childhood. It's interesting that it, that it inspired you to be an entrepreneur, right? Because these feelings linger with us, don't they?

They really do. And they also kind of tell you that doom and despair might be the norm. So you just have to kind of marching. You know, everyone's talking about 2020 is a dumpster fire and it really is. And sometimes I ask people, what if it's always been a dumpster fire? We're just now noticing it.

It was—

it's entrepreneurialism is about one setback after another, isn't it?

Yeah. And you told me that when we were chatting before, which, which floored me a little bit, that even at Mailchimp scale, you have doom thoughts. You worry that the company could, could fail, right? I felt I feel like my SaaS learning is that after $10 million or so in revenue, you can go into a terminal decline, right? But it could take a decade, right? I mean, let's look at Oracle and companies like even if Oracle never releases a new product, we want it to be 2050 before those last Oracle servers are shut down. Yeah, some data center. But you have doom fear still today. Today you still have doom fear.

Yeah, I told somebody that, you know, I still build this way. We could die tomorrow. We could die tomorrow. And then somebody told me, no, You really can't. Most likely the plane won't crash like this. The plane will just glide to a slow kind of embarrassing descent. And I just thought, that's worse than crashing. Yeah, yeah. I do have that. That is the attitude that I think is necessary. I mean, isn't there a book about that? Only the Paranoid Survive or something along those lines?

There is. What that means, like, I think we all take away slightly different meaning from that title, right? That might have been more about competition killing you than doom, right? And, uh, it is, it's funny that the Intel, you know what, when we were growing up, I thought hardware was the hard one and software was the easy one, but it's backwards. These hardware cycle, look at phones, hardware's like harder phone, but the cycles are so fast. But Mailchimp will last 30 years at this point if you don't totally screw it up, Ben. Uh, software's harder than hardware, which doesn't even still make sense to me. Um, but, uh, hardware's ephemeral, right? But software, if you do it right, look at the decacorns. Right? Look at these companies. If you do software right, it'll last 40, 50 years. And if I was running Mailchimp, like, I'm jealous. I literally mean jealous. But it's up to you, right? It's your job now to build a 50-plus-year platform. And we're not going to have that AOL experience, right? If we do it right.

That's right. It's like S-curves. Your first S-curve is like the fastest and the tallest, and then it's like lots of, lots of subsequent smaller, harder S-curves. I look at some of those software companies that have lasted over the years and it's like, constant reinvention is what I see in their numbers, right?

Yeah. And they're— what, which phase? I, I wanted to do a little bit more in the early stage for what I have, but which— tell me about the phases of Mailchimp, because today we're sort of this— we're even more than a marketing automation platform, right? Where Mailchimp's like a marketing platform. We've got social and images and timing and AI and ML and all of these things. But, but Mailchimp stayed email only for a long time, didn't it? Are we in the second phase of Mailchimp or the third? And what, what did you learn? What were those evolutions and why did they a while versus a year?

Well, I always felt like, you know, I read Crossing the Chasm a long time ago by Geoffrey Moore, and he said that a lot of people want to cross that chasm. It's important to cross it, but they cross it too stew. And I said, oh, okay, I'll just dwell a little bit longer. And I think that that's kind of the advice. If you read between the lines, it's like really master what you do. And so I took that seriously and I mastered email. And then it wasn't until I started talking to customers out in the Midwest, you know, what is it that Mailchimp's brand means to you? And they told me it's marketing. It's not just email. Get out of email, expand. And that was when I was inspired by that. It wasn't like a strategic, like a genius strategic decision that I made. It was talking to customers and they said, you know, dear God, expand, sprinkle that Mailchimp magic on other marketing channels. So that's kind of what took us so long. And so I tell my employees, we're in Act 2 of the business. Act 1 was great. It took us really far. It's not going to be enough. We've got to evolve from here.

Yeah. So I didn't— you're not in Act 3. I didn't miss one, right? Act 1 was email. Nailing it. Probably lasted 15 years though, Act 1, right? Some part, better part of 15 years, right? Depending on how you count, depending on when you start, right?

We'll still be milking Act 1 for a long time until Act 2 makes up, you know what, 30, at least 30% of our revenue is my philosophy. Then, then really Act 2 has taken hold.

And is, do you, because I want to ask about proportionality, right? How big that, that those product extensions need to be. Do you, do you think of that as just the same customer and maybe more revenue from the time, or do you think of this as accessing different customers? And that has to be big because Mailchimp is already big, right? You can't add something that adds 2% to your revenue because it doesn't move the needle, does it?

Yeah, it's, it's, it's maybe not so much a different customer, maybe a little bit like the whole world is skewing more to e-commerce. So in a sense it is more of a little bit of a different customer, but, but the product is more sophisticated and it's going to require different amounts of sales. And so we're looking into that, like how do we broaden a self-serve app that just quickly sells like one point solution called email? That's kind of easy. But when you start to sell multiple channels across the whole platform, that's going to take more assistance and handholding. So yeah, it's going to take an evolution.

Well, right. I've never talked to a sales rep. Did Mailchimp have any salespeople today? Did it have any salespeople 2 years ago?

Not 2 years ago.

No, no, 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. So, yeah, change is afoot.

Change. There may be, there may be a few hundred, a few hundred sales reps at Mailchimp next year. That'll be an interesting journey right there, won't it?

Everything changes.

Yeah. So let's not talk about— this is a fun side— let's not talk about the dot-com bubble because there may be a few folks on the Zoom that may not know what a dot-com is. But, um, let, but let's do talk about two things on this. First of all, Mailchimp was, well, was founded. I know we had a, maybe a different slide here. We might have missed it. It was founded nominally in 2001, um, after this, but it took you 6 years to get up the nerve to leave your agency and then another 2 years to get to the product market fit. Like how did you, how did you mentally get through this so long? How did you survive that phase as a, as an entrepreneur?

Well, the 6-year slog of being an agency isn't that hard. It's just survival. The question was, how do we break through and become something great? How do we really thrive after that? So we got focused on, you know, passive recurring income. The answer is software. How do we switch from services to software? That was the mantra at the time. And it was very hard to let go of $50,000 projects because we thought maybe we would get $50 a month SaaS clients. That's, you have to let go. And the, the mental trick, everybody asks me, a lot of people go through this and they're like, how did you make the leap? And it was really simple for us. I said, every, every month at the end of the month, whatever monthly revenue we made from Mailchimp, we cash it out and stick it in our pockets. So we would split it 3 ways and you would feel like you, it goes from like a, a couple hundred to a thousand to a couple thousand. And you'd have to start to say, whoa, whoa, this whole software thing. It's got legs. Let's try that. And so that was the thing that kind of mentally made us, all right, we got to switch from services to software. That's the future. So it was a little trick and we spent that money at the racetrack. We drove fast cars around in an oval.

Well, it is. You were— I think there's some ways you weren't lucky. One way it sounds like you were lucky is that because a lot of folks want to go from an agency or a services business to software, they see it, they're running a services business, they get really good at the industry and they're like, they need this, they need this. This specialized email, this specialized mapping tool, but you were able to do both at least long enough to get beyond race money. You were able to do both somehow and get a couple thousand dollars a month so you could, you could build a spreadsheet and say, hey, in 12 months this will eclipse the profits of our agency. Because not everyone has that. Other folks get, get scared, right? It's hard. The agency's doing $5, $6 million, but there's a lot of people working there and giving that up is, can be, it's a chicken, it can be a chicken and the egg feeling for some folks, right?

That's true. That's true. I mean, we were 3 people, so it's not like we left behind 10 people to your point. And it's also not like we cut off all of that business either. All of those service clients that we had that we were charging $50,000 a month for intranets and websites, we went to them and we sold Mailchimp to them. I mean, they, we still kept—

That actually worked. They still wanted, they wanted to, they would buy another product.

They would cuss me out. Most of them, most of them hated me and cussed me out for ditching them on the website.

Oh, I see.

But, but still, I mean, I relented. I, you know, I know I persisted on selling them and I got my first few customers that way.

Now, related to that, I tried— there's not enough— I tried to look at like all the public bootstrapped cloud companies. There's not that many, right? But I tried to look, talk to other founders and try to figure out what's the downside to bootstrapping, right? Other, you know, it's not really— it's really— and I think that I tried— there's not enough companies. I think it's time. And I think the average— if you look at Atlassian as an example and Qualtrics, because those are, you know, they did bootstrap until the end. Both of them took 3 to 4 years longer than similar companies. Now, the internet was at a different time. It was slower, right, until the cloud took off. But when folks are trying to make that trade-off and we'd all like to bootstrap, who wants to sell 90% of their company? I mean, no one except— at least not once you've been through life, right? But if you, if you have to decide Do you agree that that sounds roughly right, that it's time in the early days is the trade-off if you had to advise other founders?

Yeah, it's, it's basically time.

Yeah. Because it feels like you had time at Mailchimp in the early days. You had time, right? That you started here when the world was slow and the world had blown up and it's terrible, but you get time when the world stops, right?

Time to evolve, time to get through crises, time to build your brand, time to really find the thing that's going to be really 10x. Not time to kind of sit on your front porch and sip mint juleps, uh, you know, but time to like build your business strong, build the roots strong.

Yeah, yeah. So just because you are the hero for many bootstrappers, right, if a founder came to you today, pretty competitive market, a little bit worried, right, and they just graduated from Demo Days and could raise $5 or $6 million with little work, um, and they had 8 competitors, right, and time's clicking, would you tell them to still— what would your gut— with just that, with those facts, what would your gut, as, you know, one of the most successful bootstrappers of all time, what would you tell that founder?

It's their choice, not mine. It worked for me to bootstrap. I tell them about the situation. 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. I'm no hero. Just— and I tell them to keep in touch. I have no advice for their deck. For their pitch deck, I'm say, I tell them I'm probably the worst person to ask about your pitch deck.

'Cause you never had to do one.

Never done one. And so I tell—

Roadshow will be the first one.

But I tell them when you have your first growth hurdles, when you have trouble, come to me. I will, you know, come sit on my couch. I will share growth stories with you, all the pain and suffering and doom and despair that I've been through. I'll help you out there.

All right, let me make sure we hit, 'cause we'll run outta time, hit at least 2 things I want to chat about. One just ties to the early days, which is crises, right? And doom. And we just hit the whatever, the dot-com boom. Then you talked about Mailchimp took advantage of the 2009 downturn, right? Which more people remember to do freemium, right? Right. To come out of it. And I've seen actually a lot of e-commerce companies I found did that right after March. Right. They launched GDPR plan. I mean, not GDPR, we won't talk about that. But, you know, COVID plans, it actually worked, right, to help their small customers. But You reminded me with GDPR and a bunch of other things, you've had like 4 or 5 almost existential crises at Mailchimp, including the shutdown of email in the early days, right? And that it doesn't end. And that I had, hadn't thought about GDPR was almost an existential threat. That's the whole business of part of it, right? So share some of those learnings and let's talk about GDPR because it never ends, right? GDPR was another potential threat to the whole marketing business and email, right? So it never ends. And what have you learned there? That's what I mean.

Doom is always waiting around the corners. As soon as I walk around out this door, it's waiting for me. And yeah, GDPR was, you know, it's, it, it changed everything for us. We had to redo our infrastructure to comply with it. I could have taken it very negatively as the capitalist that I am, like, darn them. But then I said, you know, let's think about our customers. Our customers badly need to comply. It's confusing to them. They just want to know, help me comply, Mailchimp. And so that's the attitude we took and we spooled up a team and they got it done. Is, is it a happy ending?

No.

GDPR really hurts marketing companies financially.

It hurts.

But the silver lining is that, you know, it built a lot of trust in our brand with a lot of customers out there. We helped them comply with the regulation and so they trust us and we did something that really is you, you would think it's a conflict of interest for us. It hurts us to comply, uh, but we did it anyway to help small businesses. That's how much we care about them. And then also it gave us the code base. So now, you know, California launches theirs and all the other states and everywhere else and municipalities launch their own, uh, privacy regulations. We kind of have the code base to help us scale that out. Um, so yeah, you become compliance tool after— I'm sorry.

You become a compliance tool, you help, right? You solve this problem, right? Is that, is that, does it, do the customers know? Is that a little bit of a moat for Mailchimp now? Or is being better at regulatory stuff a moat? Or are the customers not really aware? Is it, does it not rise to moat level?

I think that this sort of stuff 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. I don't care about following those rules. If everyone had to force—

they don't—

everyone was forced to follow the rules, then it would be a great moat.

Yeah. Are, do you think, are there any moats at Mailchimp? Moat's an interesting question in a lot of SaaS products, isn't it? Um, besides brand, are there other moats you have? I don't wanna lose my list, right? But even the list is exportable for Mailchimp, right?

Right.

Um, yeah, I, what is, is, is there any set of moat?

Yeah, I don't want one there. We probably have one. If I had my chief strategy officer here, he'd probably be quick to remind me we have plenty of moats. Think about our enterprise value, Ben. But I'm telling you, my attitude is I don't really want to moat. I just want to keep running faster. This is my speed, is my only moat. Just stay ahead of the curve, listen as hard as I can to customers, and keep adapting crisis after crisis. Just adapt.

Yeah. Well, let's hit, related to that, let's hit at least one last topic before we run out of time. 'Cause I, when we chatted before, I found it really interesting, which is what you've done with AI and ML, because these buzzwords outside of certain areas, right, facial recognition and other things that are interesting, right? But it's— Mailchimp's interesting because you take a product that back in the day was relatively static. I'll write my campaign, I upload my images, then maybe I see a time warp, a few other cool features, I hit send, and you've, you've bought some teams and added some technologies so that it works. And what does AI and ML mean for founders, right? When is it not a buzzword and But the idea that my email and my marketing in general could be automatically generated and A/B tested and improve, like the ROI, especially e-commerce, can be insane, right? If that can increase my click-through rates 5, even 5%, whatever it is, it's, it's crazy. So what, what's real here and what have you learned about AI and ML?

Well, thank you. Maybe that's my moat.

Oh, maybe.

Oh, it's maybe. Yeah, it came, by the way, it came from freemium. It came from wanting to help small businesses and then what that, And what that has led to is millions of small businesses importing their lists, and that has led to 4 billion email addresses and trillions of interactions that those email addresses have. So we know a little bit about what makes better marketing and what gets sales. So we're— AI and ML to me is like, first of all, just parsing the data and then, and recommending the next action. So yeah, we made an acquisition a couple of years ago in Sawa. We pulled them into Mailchimp. Yeah, it's called our creative assistant and it uses machine learning. And what it does is it, it, it looks at all of our users and it recommends how to design your email campaign, but then it takes it a step further and says, gosh, you've got like a bajillion different size formats you've got to worry about. Now let us go ahead and make a carousel ad in Facebook for you. Let us go ahead and make a, a Twitter card. Let us go ahead and resize all of that for you. And it makes it look really beautiful at the same time. So it's just, to, to me, AI and, and ML is really just about parsing crap tons of data from freemium and doing something useful for our small business customers.

And what we've all been, you know, trying to do things for, for a decade. What's, what's, what's the step function? Is there something really different today beyond the buzzwords? What can you do today with AML that you couldn't do in 2015 or 2016? What's, what's truly different?

It speeds things up. It, it's just, it allows small businesses to be everywhere at at once. They have to be on 24/7. How do you do that when you're busy running your business? You know, you can't be there sending marketing campaigns and resizing them all day, but this technology helps them resize and automatically push those campaigns out even while they're sleeping.

Got it. All right, maybe one last question because we will run out of time and then I will, in case there's something you want to hit, let me make sure I leave one last thought. But these are like really weird times in the cloud, right? I mean, we have 40% unemployment, we're working from home. And yet some folks are benefiting, right? Clearly from this, from, from living in the cloud like a science fiction novel. And then there's other folks that are decimated, right? Travel and events. But you've lived this. For folks in the middle, I call them the COVID impacted, right? Their business is hurting because especially if they sell to SMBs, but they're not dying. What's your advice to them? Right? They don't have all the answers. They didn't get a big boost like like a Shopify or a Zoom. What's your advice, having done this 5 times? What would you tell the COVID-impacted, um, when it's tough but not, not over? Any, any, any, any best advice from these doom experiences?

Yeah, don't pause. Don't pause.

Don't pause.

Pivot. Don't relent. Keep, keep persisting and keep trying new things. Uh, don't stop.

So you— I've heard you say that, don't pause, pivot. It is, it's, it's it sounds really good, right? But what is it really? What is it really? Because if you dissect it, some folks would say don't pivot, stay the course, right? Like your office, the economy will be back. So what do you really— you don't really mean drop your product. You mean something different.

You know, we have a local restaurant that serves amazing hamburgers. I used to go there all the time. They can't serve that right now. So what do they do? They deliver. But you can't deliver hamburgers. That's not very scalable. They deliver family meals. They, they took that ground beef, they turned it into meatloaf and mashed potatoes, no French fries. I got mashed and I can serve my entire family every night. So that's an example of pivoting. They didn't relent. They just kept experimenting and trying new things. There's still a restaurant, you know? So that's all I mean. And for, for us, during all of the different crises, it was all about get in front of customers and talk to as many as you can and find out how to be the most useful to them. Even at Mailchimp, We pivoted a little bit ourselves. We were, we were working on a big gigantic product in e-commerce and we said, no, no, no, no, narrow it down. Get all of these people who are, you know, unemployed right now and trying to sell their hot sauce, grandma's hot sauce recipe, you know, or their Pilates class and help them build, give them a domain name, help them build a landing page and put a damn buy button on there and help them make some money to where, you know, we're pivoting ourselves a little bit there and focusing on some of those landing pages with buy buttons would be will be launching real soon. So that's what I do. I'm like, don't pause, you know, pivot.

And like, so we should almost break there, but just one tactical question I will ask you if there's one last thing you want to share and then we'll break. But so you've compressed— your pivot was going even deeper in e-commerce since March 15th, right? Bringing out Buy-In, doing this whole suite to help even more, even though you've been e-commerce since day one, which I hadn't thought about till this, right? How do you How do you— when you add something new, how do you communicate to that customer? Even if it maybe it's something they weren't expecting. I wasn't expecting Mailchimp to be an automation suite, marketing automation suite. I might not have been expecting Mailchimp to do even more in e-commerce, right, with Stripe integration. I know. I think it's more complicated than you think. How do you, how do you share this with your customers without overwhelming them? And if maybe they weren't expecting that from you, right? They weren't expecting you to go in these areas.

Email helps. Did you know what I'm saying?

Anyway, it does help.

Communication and emails helps, but also we're relying a lot on our partners. 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, agencies, and partners and creative agencies. Yeah. And we have to really communicate to them everything that we're doing.

Yeah, we miss— for folks that don't work in the space, in e-commerce, you miss how, how important agencies are, right? They're the ones doing the deployment. For so many things in marketing and e-commerce. I, I don't know how to do this. Right. Um, and, uh, in many ways they're the customer, right? They're, at least they're the initial customer. You have two customers, don't you? Yeah. Yeah.

You know, you take those, take your clients out for dinner and then, uh, you know, when they drink a beer, you know, you say, why did you choose Mailchimp? And they'll name all the features and why and why they love you. And then let 'em drink a little bit more and they say, why though? Why, why, why? And then they'll finally, after the sixth time you ask, they'll say, you know, I don't know my agency sign. My agency signed up for Mailchimp and then you really get to the heart of it. It's like, okay, I gotta go talk to the agency now. Yeah.

Yeah. And do you have, do you have like in the, in the earliest stage, do you market to the agencies differently? Do you have a team just working on agency enablement and all that sort of stuff? Or is that, or is that too nuanced?

One of the things you can rely on a cool brand for many, many years and then the agency want to be cool too. So they're gonna replicate the brand and over time you have to get, you know, systematic about it and intentional and build a program around. And that's something that we've been doing the last couple leaders. Yeah.

Well, it's cool. Ben, this was incredible. Is there anything, anything I missed that you wanted to hit or chat about at the very end?

No, I hope all the entrepreneurs out there, you know, see us and recognize we are transitioning from Act 1 to Act 2. So watch us.

I'm excited. Let's continue the discussion about Act 2. I think this is one of the great case studies, right? Mailchimp, the learning the freemium, doing it bootstrapped, and then taking, depending on how we count, 12 years to go to Act 2, right? Whether we start in 2007, 2009, 2001, it's a slow, it's a slow roll to Act 2, right? It's a slow roll to get to $10 billion in revenue.

Characterize it as slow. You can characterize me like making lots of money.

Deliberate. Yeah. Lots of, lots of money. Yeah. So I want, I wanna, I wanna track the next 10 years, uh, for fun as a, as a fan and as a case study, right? It's gonna be a fun case study to see how Mailchimp evolves on these two vectors today. So, We will keep pestering you, Ben, to share your learnings over the next 10 years on Phase 2. So thank you again for the time. This has been— this has been tremendous. And thanks to everyone for tuning in.

Yeah, a lot of fun. Thanks.