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MailChimp’s founders built the company slowly by anticipating customers’ needs

nytimes.com

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Re: MailChimp’s founders built the company slowly by anticipating customers’ needs

#11

Post by crdb »

hitekker wrote: post #2

I'm curious if there's interesting data, information, or anecdotes about bootstrapped, well-intentioned, well-executed startups being utterly floored by VC-funded competitors. Particularly if the "average" or most common reason behind a bootstrapped failure diverges significantly from the 'common sense' reason, i.e., "bootstrapped startup couldn't move fast enough/expand quick enough/hire great talent because bootstr…

In the particular case of MailChimp, their main competitor (AFAIK), Campaign Monitor, decided to raise VC funding after about a decade of slow grind a la MailChimp.

They hired a CEO with experience in 5 other VC funded startups (and with burning cash) and moved into the most amazing penthouse, the last two floors of a giant tower in the heart of Sydney with a 360 degree view on the harbour and ocean and city, and a great kitchen with full time chefs, and of course a marble-covered lift lobby.

In other words we have an A/B test.

Re: MailChimp’s founders built the company slowly by anticipating customers’ needs

#12

Post by fideloper »

Interestingly in the marketing space (in particular, email-based marketing), all the tools I gravitate towards have been bootstrapped rather than funded:

Mailchimp, ConvertKit, Drip (altho lead pages bought it, and is actively funding it's growth), curated.co (I'm not 100% sure on Curated - is that funded?), Edgar

These types of apps can actively and easily translate into $$ for businesses, so it's no wonder they can bootstrap rather than take on funds - individuals and businesses are willing to pay to make money!

Re: MailChimp’s founders built the company slowly by anticipating customers’ needs

#13

Post by peterevans »

hitekker wrote: post #2

I'm curious if there's interesting data, information, or anecdotes about bootstrapped, well-intentioned, well-executed startups being utterly floored by VC-funded competitors. Particularly if the "average" or most common reason behind a bootstrapped failure diverges significantly from the 'common sense' reason, i.e., "bootstrapped startup couldn't move fast enough/expand quick enough/hire great talent because bootstr…

I don't think it matters as much as you suspect that one company is bootstrapped and the other is VC-funded. I'm sure you can find dozens of examples of VC-funded companies being floored by other VC-funded companies.

Re: MailChimp’s founders built the company slowly by anticipating customers’ needs

#14

Post by ttul »

taf2 wrote: post #7

It's called doing something kinda boring, consistently and doing it well. It's hard to say in software when you really need huge capital if you can start with the following: 1. Some financial understanding of how to invoice, pay taxes and write contracts - the business side 2. Manage people, setting expectations and holding people accountable, while empowering them to be successful in there job as clearly defined whe…

It always helps to do all this AND have amazing market timing.

Re: MailChimp’s founders built the company slowly by anticipating customers’ needs

#16

Post by replicatorblog »

crdb wrote: post #11
hitekker wrote: post #2

I'm curious if there's interesting data, information, or anecdotes about bootstrapped, well-intentioned, well-executed startups being utterly floored by VC-funded competitors. Particularly if the "average" or most common reason behind a bootstrapped failure diverges significantly from the 'common sense' reason, i.e., "bootstrapped startup couldn't move fast enough/expand quick enough/hire great talent because bootstr…

In the particular case of MailChimp, their main competitor (AFAIK), Campaign Monitor, decided to raise VC funding after about a decade of slow grind a la MailChimp. They hired a CEO with experience in 5 other VC funded startups (and with burning cash) and moved into the most amazing penthouse, the last two floors of a giant tower in the heart of Sydney with a 360 degree view on the harbour and ocean and city, and a g…

Constant Contact was another competitor, providing basically the same service, they recently sold for a billion dollars while MailChimp grew alongside them. If the market is big enough, it can support multiple companies.

Re: MailChimp’s founders built the company slowly by anticipating customers’ needs

#17

Post by ilamont »

“MailChimp’s path was circuitous, and it came without the glory of enormous funding rounds.”

It’s time to retire the idea that raising money equals “glory.” It’s not a measure of business success as much as it is a measure of founders being able to convince rich people to back them. As we know from the "XX is shutting down" stories that regularly grace HN, many if not most tales of massive fundraising success will eventually become business and investment failures. Yet the TechCrunch/Fortune/BI coverage angles—pushed relentlessly by the investment community and hired PR people—almost always emphasize the former over the latter.

Re: MailChimp’s founders built the company slowly by anticipating customers’ needs

#18

Post by geori »

hitekker wrote: post #2

I'm curious if there's interesting data, information, or anecdotes about bootstrapped, well-intentioned, well-executed startups being utterly floored by VC-funded competitors. Particularly if the "average" or most common reason behind a bootstrapped failure diverges significantly from the 'common sense' reason, i.e., "bootstrapped startup couldn't move fast enough/expand quick enough/hire great talent because bootstr…

Yeah. I'm a big fan of MailChimp, but this is a clear case of survivorship bias. We have a ton of detailed reporting (CrunchBase, edgar.gov, startup accelerators, Mattermark, etc) on VC backed companies but very little on non VC. How do you get a detailed list of bootstrapped companies? Even if you did have a comprehensive list (Sec of State in each state), how are you going to differentiate amongst tech startup, lifestyle business, traditional new business, and service business? Angelist has some info, but it is a platform for fundraising.

Re: MailChimp’s founders built the company slowly by anticipating customers’ needs

#19

Post by gallerytungsten »

You know what word doesn't appear in that story?

Spam.

Mailchimp is a company that provides lots of unsolicited commercial emails. In other words, spam. You can dress it up and call it "marketing software for small businesses" but that doesn't change the essential fact: Mailchamp is a spammer. Is it any surprise that spamming is profitable?

I've received hundreds of Mailchimp emails. Not once did I sign up for any of those lists.

Does Mailchimp make it easy to unsubscribe? Sure. But that doesn't change the fact that they are spammers, and that if you want to send spam with some semi-plausible deniability that you're a spammer, Mailchimp is probably a good choice.

Of course, this story, like nearly all "business news" stories, is very likely the work of a highly paid public relations agency. That is one more reason that the word "spam" does not appear in this story.

Re: MailChimp’s founders built the company slowly by anticipating customers’ needs

#20

Post by samsolomon »

gallerytungsten wrote: post #19

You know what word doesn't appear in that story? Spam. Mailchimp is a company that provides lots of unsolicited commercial emails. In other words, spam. You can dress it up and call it "marketing software for small businesses" but that doesn't change the essential fact: Mailchamp is a spammer. Is it any surprise that spamming is profitable? I've received hundreds of Mailchimp emails. Not once did I sign up for any of…

I've got to disagree with you. I'd say MailChimp has elevated the perception of email marketing.

MailChimp has pretty strict standards when it comes to sending emails. If you send emails to a list that has a 20 percent or more bounce or unsubscribe rate, they'll freeze your account.

Other providers let you upload a CSV with emails and blast out campaign after campaign to purchased lists without repercussions.

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