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Mailchimp - One Idea, 17 Years of Hard Work


You know how almost every startup’s story begins with a couple of guys (founders) with an idea nobody wants to invest in? Then the founders keep it as a side gig for a while, lose their fate as nobody believes in the idea of their success, and finally restore their fate after some venture capital investment giant recognizes the potential of their project. After a few funding rounds, they manage to acquire customers, employ more people, and maintain and develop their product further. Sounds familiar, right?

Well, this is not that kind of story.

First, we’ll tell you a couple of words about the founders of Mailchimp - Ben Chestnut and Dan Kurzius, and then explain how Rocket Science turned into Mailchimp.

Small Business DNA

Ben was born and raised in a Thai Buddhist family, in a small town in Georgia. His father worked for the army, while his mother was a Thai cook in Bangkok, where they met. After the Vietnam war, they moved to the states with two out of four children from his mom’s first marriage, while the other two stayed in Thailand.

In the States, Ben’s mother opened a hair salon, where the future entrepreneur helped out as a child. This was pivotal, as he developed a strong sense of running and maintaining a small business even as a young lad.

Today, he’s reconnected with his Thailand brothers and they are even supplying some of the knitted monkey hats that Mailchimp hands out to their employees from time to time.

That’s what we call an intrinsic sense for small business cooperation!

Now, you may be wondering how our main protagonist met Kurzius, and that’s a great story too… During the late 90s, after finishing Georgia Institute of Technology, Chestnut started a job in the Cox media group - perhaps you know them for their early MP3 devices, whose moment in the light was very brief and easily forgettable.

Cox needed a coder, so Chestnut asked some friends for recommendations. Dan Kurzius, a failed DJ at the time and working in the real estate industry, thought it was a DJ-set programming job. He began working anyway, and step-by-step learned how to code on a computer and became Chestnut’s life-long business partner. Ben wasn’t the only one coming prepared, though - Dan’s parents were small business owners too, as his family used to run a bakery.

Perhaps you’re connecting the dots here - running a small business is something both Ben and Dan simply had in their DNA. Small businesses raised them to become people they are today, and creating a new small business to ‘pay it back’ was almost an instinct.

At First, It Was Rocket Science

As we all know, MP3 players weren’t exactly the most useful thing in the world, but they were very popular at the time, so in 2001, Ben and Dan took off. They decided to take their friendship to a higher level: opening a company together.

Well, two companies.

The Rocket Science Group and a bit later, its sidekick: Mailchimp. To draw the best from their projects, Ben and Dan needed some reinforcements, so they invited the former’s college friend, tech specialist Mark Armstrong, to join their cofounders’ team.

The Rocket Science web design agency was mostly about acquiring big corporate clients, while Mailchimp, an email marketing service, was a side gig, aimed at small business owners.

But one detail is really important - context. In the early 2000s, email software tools were expensive and oversized, and as such, completely unattainable to small businesses. Mailchimp was designed as an affordable alternative to this type of software.

Mailchimp acquired their first customers by following the needs of the market - they noticed how some of their clients had trouble sending newsletters and updates, so they figured that easing email marketing should be Mailchimp's primary purpose.

Over the first six years, everything was running smoothly. They were selling the Rocket Science Group’s services to tech companies, then to airlines and travel agencies. When 9/11 happened, this niche was disrupted, so they ended selling their services to the real estate industry.

There were many ups and downs, and if it wasn’t for their wives with their steady jobs and salaries, Ben and Dan probably wouldn’t have made it.

However, they were both uncomfortable cooperating with corporate giants. It simply wasn’t their cup of tea. So, the decision came: it was time to end the Rocket Science Group.

In 2008, Ben and Dan bought out Armstrong’s share of the company and decided to focus on what really made them happy: helping small businesses. Before this moment, Mailchimp was generating small amounts of money, but now it was time to turn it into a startup.

Mailchimp was no longer a side gig, it was a lifestyle. Here’s why.

The 17 years long road

Waiting for the venture capital investment story? Well, we’d love to tell it, but Mailchimp never received a single dollar from venture capitalists. Ever.

Chestnut says this was rather due to ignorance than principles. They simply knew nothing about finance!

In 2007, when their direct competitor Constant Contact went public, venture capitalists came knocking on Mailchimp’s door. They wanted to turn them into an enterprise software service, but luckily, Ben and Dan weren’t easy to fool - they were on that road already, and there was no way for them to go back.

They kept adapting their email marketing tool to serve those they cared about the most - small business owners.

The customers asked them to spread the Mailchimp magic to channels other than email - so they did. Today they have a ton of new functionalities and channels: Instagram, Facebook, Google ads, postcards, landing pages, CRM, website building, and so on.

Mailchimp saw its boom in 2009 when it launched the freemium plan. Until that moment, all services had to be paid, however, this was a game-changer. In one year they jumped from a couple hundred thousand to a million users!

Without ever turning to VCs, the company recorded $280 million in revenue in 2015, followed by some $400 million in 2016. By 2020, their company valuation reached $4.2 billion, with a $600 million revenue, and an employee count exceeding 800.

What an unexpected road towards Unicorn status!

It turns out that you don’t have to sell your soul to Silicon Valley venture capitalists - if you’re willing to be patient for 17 years!

We are joking, as success doesn’t have to mean millions. A profitable startup that doesn’t turn to others for funding is a successful startup - and Mailchimp is certainly among those.

But money and success didn’t corrupt the magical duo. Today, Mailchimp is involved in many socially responsible campaigns, and the team is helping art communities gain strength and visibility. They’re also trying to equip their employees with all the skills necessary for success in the digital marketing branch, connecting them with programs such as Launchpad - a leadership academy at Clayton State University, or Mailchimp Community College, a local leadership program in Atlanta.

Where is Mailchimp Today

Today, Mailchimp hosts more than 11 million active customers in more than 200 countries. In 2019, 340 billion emails were sent through this platform, meaning that on average, a little under 1 billion emails are sent every day.

The platform is no longer just an email marketing tool, due to its many integrations and functionalities. Mailchimp helps businesses go online successfully for the first time, and all kinds of small businesses are eligible to use their services: start-ups, restaurants, app developers, e-commerce, retail - you name it!

It took 17 years, but Ben and Dan are living proof that patience pays off. You don’t have to sell your soul to venture capitalists. You don’t have to accept others’ charity. It’s possible to stay true to yourself and make it - all you need is luck - and a background in running small businesses.