MailChimp’s founders built the company slowly by anticipating customers’ needs • Hacker News Board

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

#71

Post by lgleason » Wed, Oct 05, 2016, 2:54 PM UTC

bendmorris wrote: post #62

echelon wrote: post #37

The Atlanta tech scene is blossoming, just like our film industry. We have a couple of incubators, including a few that are funded/supported by Georgia Tech. The cost of living here is super cheap, and there are brilliant and talented people everywhere. We have satellite offices for tons of major tech companies, so there are traditional tech jobs too. Earning $200k here while the cost of living is so low is phenomina…

Earning $200k most places is pretty nice, but most sources show that in Atlanta almost no one is making that much. The average is less than half that. For most of us, moving to Atlanta would probably coincide with a sharp pay cut. If that wasn't the case, I'd do it in a heartbeat.

You would take a pay cut and there are many in Atlanta who would still complain that you are making too much and be thinking about how they could move your job to a low cost country. I've had conversations with startups "leaders" in Atlanta where they have expressed this sentiment.

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

#72

Post by rsp1984 » Wed, Oct 05, 2016, 2:56 PM UTC

What a lot of people miss (including the author) is the time factor. Yes you can bootstrap a business and grow things organically once you have found decent product/market fit. The problem is that it will just take a much longer time until you reach certain milestones than with a VC-based approach.

"There is perhaps no better example of this other way than MailChimp, a 16-year-old Atlanta-based company that makes marketing software for small businesses."

This just kind of proves the point. If you have a company with great product/market fit and lots of VC in the bank you would either reach their numbers much quicker or have higher numbers after 16 years of operation.

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

#73

Post by 55555 » Wed, Oct 05, 2016, 2:58 PM UTC

adekok wrote: post #69

ohnoesmyscv wrote: post #36

Depends on what you mean by 'making it' as a startup - is it the revenue growth? burn rate? profit growth? Number of users? Number of employees? A SF office? How well funded you are? It's hard to grow a business without going the conventional SV route and getting VC funding. Unless you have a revolutionary product, the bigger competition will likely stomp over you unless you have resources to grow your team and produ…

> Unless you have a revolutionary product, the bigger competition will likely stomp over you unless you have resources to grow your team and product and marketing. Or if you are comfortable with a small market share but a profitable one. Case in point, me. I started FreeRADIUS in 1999. Started making money in 2007. Incorporated in 2008. I now have multiple offices, multiple employees, and good growth. No investment.…

> I started FreeRADIUS in 1999. Started making money in 2007.

It sounds like you did essentially take venture capital, and you were the investor.

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

#74

Post by s_baby » Wed, Oct 05, 2016, 2:59 PM UTC

hehheh wrote: post #61

echelon wrote: post #37

The Atlanta tech scene is blossoming, just like our film industry. We have a couple of incubators, including a few that are funded/supported by Georgia Tech. The cost of living here is super cheap, and there are brilliant and talented people everywhere. We have satellite offices for tons of major tech companies, so there are traditional tech jobs too. Earning $200k here while the cost of living is so low is phenomina…

How's the political climate? It doesn't look so great from my initial Googling: Georgia is one of the states suing over the transgender bathroom issue. Per Wikipedia Georgia doesn't include sexual orientation in their laws against employer discrimination. Anything else folks from SF might be concerned about?

Atlanta has the 3rd largest LGBT population behind SF/Seattle and is pretty diverse in general. It's the other parts of Georgia that can seem backwards. Same goes for North Carolina. A person from SF would feel at home in Asheville or Raleigh despite everything going on in the news.

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

#75

Post by adekok » Wed, Oct 05, 2016, 3:00 PM UTC

55555 wrote: post #73

adekok wrote: post #69

Earlier quoted context omitted.

> Unless you have a revolutionary product, the bigger competition will likely stomp over you unless you have resources to grow your team and product and marketing. Or if you are comfortable with a small market share but a profitable one. Case in point, me. I started FreeRADIUS in 1999. Started making money in 2007. Incorporated in 2008. I now have multiple offices, multiple employees, and good growth. No investment.…

> I started FreeRADIUS in 1999. Started making money in 2007. It sounds like you did essentially take venture capital, and you were the investor.

Only in the same way that every hobbyist is an "investor" in their hobby.

Let's not pretend that hobbyist tinkering is the same as VC investment. It's not, by a long shot.

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

#76

Post by davewritescode » Wed, Oct 05, 2016, 3:01 PM UTC

replicatorblog wrote: post #16

crdb wrote: post #11

Earlier quoted context omitted.

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.

They target totally different markets. Constant Contact is a superior product for the less technically literate crowd. The hacker news crowd probably isn't their target customer. I think live support is their key differentiator.

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

#77

Post by 55555 » Wed, Oct 05, 2016, 3:02 PM UTC

ilamont wrote: post #17

“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 ev…

moz.com is a good example of raising bad money. They had an excellent core product and thus a business worth millions, then raised money to try to take over the world. It turns out they couldn't take over the world, so now all they have is the same core product and business they had prior to raising money, except now they also have dozens of millions of dollars of VC preference in the event of an acquisition.

I've toyed with the numbers in my head and I can't make them work; I think they would have been much better off not raising any money.

(I'm just an outside observer.)

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

#78

Post by qwrusz » Wed, Oct 05, 2016, 3:02 PM UTC

The article seems to acknowledge Silicon Valley is good and prolific at startups to the point of metonymy. SV is the standard way, and so you get descriptions like "Un-Silicon Valley Way" instead of say the "Atlanta Way" (another startup from Atlanta called Coca-Cola appears to be doing OK too ;))

But why does this article have this tinged negativity toward SV? Why not just highlight MailChimp's success without the jab on VCs? Clearly both VC or bootstrapping approaches can work for a company (though both approaches fail in the majority of cases and journalism is in love with survivorship bias).

I'm not in SV, but it's obviously the place important innovation has/is/will be coming from (and some crap too). Innovation and growth is needed and should be encouraged in this economy.

Just frustrating to see big journalism knock SV for no reason.

Better story: "Chimps and the Un-Silicon Valley Way to Make it as a Primate".

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

#79

Post by lgleason » Wed, Oct 05, 2016, 3:04 PM UTC

verbify wrote: post #67

metafunctor wrote: post #65

Earlier quoted context omitted.

Doing something that someone else is already doing is not necessarily a bad thing.

Yup, it amazes me that WhatsApp, an instant messaging app, was founded in 2010.

The difference was that WhatsApp was about execution with a small team. The Atlanta way would have been to hire 2 engineers and then a army of marketing people to sell it.

It's a shame because there is a lot of potential, but the leaders concentrate on the marketing of the community instead of actually developing a better community. Lots of cargo culting with incubators etc., but not a lot of large wins. There are pockets of awesome in the town, but Atlanta is more about who you know and your image, not the substance that has made runaway successful tech startups.

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

#80

Post by [deleted] » Wed, Oct 05, 2016, 3:04 PM UTC

jonstokes wrote: post #30

And then somehow they managed to totally disregard their customers' needs and screw everyone with the Mandrill changeover. Seriously, has everyone forgotten that fiasco? https://news.ycombinator.com/item?id=11170713 I'll never trust them or use them again, after that. No way no how.

[deleted]