How Mailchimp Navigated Economic Uncertainty with CEO Ben Chestnut and SaaStr CEO Jason Lemkin

Once known as the email marketing brand, and now we're transforming into all forms of marketing. We have this internal motto at Mailchimp. It's, "Listen hard, change fast." I still feel like we're a side hustle. So we would work and then, like, pull up the site and watch Super Bowl commercials, and they were all chimps. So we were like, "People like chimps?" Most people think of us as just a sort of a software company, but we're here to empower. We're here to empower small businesses. Businesses. The design problem solving is, I think, harder with small business. You have to really prove that you're good. They can change on a dime because they're spending $50. You know, it's sort of a Jackson Pollock thing. You spill stuff everywhere and ooh, that's art. We can make something out of that. That kind of opportunism, it only can be fostered in a certain kind of environment. It's such a weird question to me, like, how do you have a creative company? Companies are like legal entities. They're not creative. They're just pieces of paper. You're totally missing the point. People want to be creative. If you build a successful brand, it's because it's different. By definition, no playbook. Too much order is really horrible. I think my job is to find ways to create chaos. If you search for the word boredom in our app, the whole screen turns into an asteroids game. You have to embrace chaos. I discovered this stuff along with our customers. Woo!

It's harder to hear the crowd on digital, isn't it? So let's welcome Ben Chestnut, CEO and founder of Mailchimp. So this is very exciting. 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 as 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 they'll come. But I'm super excited.

Maybe the stars finally aligned and I can be here with you and your audience. And I want a copy of that video. I'm going to play that every morning just to get me going. Really kind of you.

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. I think that, you know, when things do get back to normal, and they will, 6 months after that, you'll look back and things will look like nothing ever happened. Maybe that's just faith. 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, all right, so no thinking of getting back to normal is sort of how you're thinking as a leader, right, for all of this? That 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 to some and work on a few. But I'm super excited. I think I have 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 3 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 it's 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, it's okay, and talk about breakout, right? So Mailchimp is— I don't even— I don't know whether you've announced your numbers. You don't have to comment, but around a 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 microanimation. So what was like the 10x feature, whenever it was, a million in revenue, 2 million, what let Mailchimp break out for real, uh, from the competition?

It had to be freemium. It was 10 years in, 2010, 2009-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 doubled and doubled after that. 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. We didn't even have a free plan.

We didn't even have a free trial before that. You had to pay.

And you were nominally founded in 2001. Right. So, so 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 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 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 do you even know? 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 from Zoom, but we were there with the right tool at the right time.

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

what did you do? But I was, I was getting flashbacks from like the AOL dial-up, uh, issues where no one could dial in, you know, everyone was complaining about that. I was like, oh my God, I'm AOL. Uh, nothing, 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. You know how it is, it's a grind. And so We never really found the one choke. 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, but it was really just once their list grew to about 2,000, that's when they felt like 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, 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 or their next thing. We don't actually count that. We don't count that as churn. We wait 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? 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 want lower ARPU because we want a larger denominator. We want more and more small users than we do very, very big users.

And so 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? Because the smaller the customer, usually the higher the churn, right? That's the law, especially the very small businesses, right? The one-person shops, it's hard, right? Do you still set— what do you see on your dashboard in terms of churn? And 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 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 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 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's, I guess that's obvious that even back when you, in 2009, when you converted, e-commerce was sort of your North Star customer, 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. I 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 let's hit the next one. But so 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 get to know you, to see if they want to fall in love, right? Freemium worked, but 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 didn't know nothing about email. I just found Mailchimp on a Google search, which is probably our next slide I want to talk about. But 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. I was like, you gotta get this done. We've 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 what got engineers and techies inspired to actually work late. And I said, you know what? As long as we 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 fun and Interesting.

Yeah, 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 taking up too much space on mobile and everything. And we get a deluge of complaints. I had one small business customer saying, "He was my only joy." That is a sign of 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 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 know today. They are cheap, but like back in the day as a founder, I'm like, oh my God, how? 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, 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 afford—

on an iPod. Yeah, yeah, hence the name. Yeah.

And so, and billboards 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. 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 feel or see. That's, that makes your brand real when you can see that in the real world, like you saw it in your car on Highway 101. 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 going to really stick it to us because 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—

that might have been what 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 at— 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 we, 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, wow. I mean, I guess the lesson is care about your brand, uh, try to get it physical, not just digital only when you can afford it. Uh, always be tinkering. And, um, you know, if, 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. We've got all these other properties. How about the highway? How about this? And then, 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— 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 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'll talk a little bit maybe more about doom that we talked about the other day, right? But, uh, 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. It makes people love. I mean, I've always said I don't shoot for loyalty, I shoot for love. I don't want people to just blindly use my product. 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, It's actually the most economical marketing you do because it goes viral that way. 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 am I seeing here? What's going on in this slide?

So that's me and my co-founder. So that's my mother. She ran a hair salon in the kitchen. I couldn't get an action shot of her actually doing 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 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 the 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 a family, and the effects linger for generations.

Yeah, when we were chatting before this, this— 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. Um, 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 keep marching. You know, everyone's talking about 2020 as 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? 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, 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'll be 2050 before those last Oracle servers are shut down. In 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 feel 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. That's worse. Yeah, yeah, I do have that. That is the attitude that I think is necessary. I mean, wasn't— 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? That's doom as well. It is. It's funny that the Intel, you know, when we were growing up, I thought hardware was the hard one and software was the easy one, but it's backwards. These hardware cycles, look at phones, hardware 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 is harder than hardware, which doesn't even still make sense to me. Um, but, uh, hardware is 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, I'm jealous. I'm not 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 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 there, which phase— I want to do a little bit more in the early stage for one at a time, 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? Mailchimp's like a marketing platform. We've got social and images and timing and AI and ML and all of these things. 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 did you learn? What were those evolutions and why did they take 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 soon. 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. And 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. Um, 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's 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 gonna take more assistance and handholding. So yeah, it's gonna take an evolution.

It will, right? I've never talked to a sales rep, but did Mailchimp have any salespeople today? Did it have any salespeople 2 years ago?

Not 2 years ago, no. Now it's small little teams that dabble a little bit, but, uh, you know, we just hired a chief customer officer, uh, starting in a couple of weeks. So yeah, change is afoot.

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

Everything changes.

Yeah. So let's not talk about— this is a fun slide. 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's do talk about two things on this. First of all, Mailchimp was, well, was founded— I know we had maybe a different slide here, we might have missed it. It was founded nominally in 2001. 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 so long? How did you survive that phase 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 sort of 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 hard to let go. And 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 month at the end of the month, whatever monthly revenue we made from Mailchimp, we cash it out and stick it in our pocket.

Tickets.

So we would split it 3 ways, and you would feel like, you know, it goes from like a couple hundred to 1,000 to a couple thousand, and you 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 gotta 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 and 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 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 is 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 websites.

Oh, I see.

But still, I mean, I relented. You know, I— no, 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 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 what— 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, you know, but time to like build your business strong, build the roots strong. Yeah.

Yeah. So just because you are a 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 and they had 8 competitors, right? Times 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, 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 tell them I'm probably the worst person to ask about your pitch deck.

Because you never had to do one.

Never done one. And so I tell them—

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, because we'll run out of time, hit at least two 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 that 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 hadn't thought about GDPR was almost an existential threat, not to the whole business, a 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 I walk around out this door, it's waiting for me. Yeah, GDPR was, you know, it's— 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 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 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 help them comply with the regulation. So they trust us. And we did something that really is— you would think is a conflict of interest for us. It hurts us to comply. 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 privacy regulations. We kind of have the code base to help us scale that out.

So you become a 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, I think that this sort of stuff is, is not quite moat level. I'd like to believe that it's moat level. Um, 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—

they don't—

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

Yeah. Do you think— are there any moats at Mailchimp? That's an interesting question in a lot of SaaS products, isn't it? Besides brand, are there other moats you have? I don't want to lose my list, right? But even the list is exportable from Mailchimp, right? What is— is there any moat?

I don't want one. 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. It's 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. Because 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. Um, and you, you've, you, 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 improved, like the ROI, especially in e-commerce, can be insane, right? If that can increase my click-through rates 5%, even 5%, whatever it is, it's crazy. So what's real here and what have you learned about AI and ML?

Well, thank you. Maybe that's my moat. Maybe. One of my moats, maybe. Yeah, it came, by the way, it came from freemium. It came from wanting to help small businesses and then what did 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 AI and ML to me is like, first of all, just parsing the data 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 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 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 me, AI 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 a decade. 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 truly different?

It speeds things up. It's just, it allows small businesses to be everywhere 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. Um, 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, uh, 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 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 when it's tough but not over? Any best advice from these doom experiences?

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

Don't pause.

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

So I've heard you say that, don't pause, pivot. 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 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. They're still a restaurant, you know? So that's all I mean. And 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 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 unemployed right now and trying to sell their hot sauce, grandma's hot sauce recipe, 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. So we're pivoting ourselves a little bit there and focusing on some of those landing pages with buy buttons. Will be launching real soon. So that's what I mean. 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 Bind, doing this whole suite to help even more, even though you've been e-commerce since day one, which I hadn't thought about until 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 think I would answer any other way?

It does help.

Constant 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 don't know how to do this, right? And anyways, they're the customer, right? At least they're the initial customer. You have two customers, don't you?

Yeah, you know, you take those, take your clients out for dinner and then, 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 them 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, ah, I gotta go talk to the agency now. Yeah.

Yeah. And do you have, like, 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 too nuanced?

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

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, uh, you know, see us and recognize we are transitioning from Act 1 to Act 2. So, uh, 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 want to, I want to track the next 10 years for fun as a, as a fan and as a case study, right? It's going to be a fun case study to see how Mailchimp evolves on these two vectors. 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 tremendous, and thanks to everyone for tuning in.

Yeah, a lot of fun. Thanks.