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How Mailchimp became the biggest Bootstrapped acquisition ever at $12B

What’s up! This is Sheldon from The Zero to One. Helping you build and scale your business with proven product and growth tactics from the world’s most successful startups.

I want to start this week’s deep dive with a visualization (bear with me).

Imagine selling your company for $12B. Insane right?

Now imagine that you bootstrapped it. Never raising a cent of investor money. So you and your cofounder have ~50% equity each.

Well, this is exactly what happened to Ben Chestnut and Dan Kurzius, when they became the biggest bootstrapped exit in history, selling Mailchimp to Intuit for $12B.

So strap in - because this is a fun one!

Mailchimp is the oldest company I’ve deep dived yet (24 years old). But it wasn’t always the Mailchimp we know today.

It actually started as Rocket Science Group, a web dev agency for big tech companies. Only problem - it was 2001. So when the .com bubble burst. So did theirs.

But as you will see, Ben, Dan, and Mark (a cofounder they bought out in 2008) were super gritty - you couldn’t get them to stop, no matter how hard you tried.

They moved on to a new type of client. Airlines. But it was 2001 and 9/11 meant that they had to find a new industry again. Which they did - into real estate (luckily by 2008, they were all-in on the email side of their business).

While building for their clients, they started getting requests to also help with email. Which they did. But they hated the tools they had to use - they were clunky and overly-complex.

So they created their own, based on previous code they had built for an e-greeting card business idea they had.

They then took this a step further, allowing people to use the software themselves, on a pay-per-send basis. This was all while running their webshop.

But then one day it all changed. They looked at the revenue streams of both their webshop and Mailchimp. And although Mailchimp was still much smaller. It was growing dramatically. So they went all in. And within a month, their Mailchimp revenue tripled.

This is the story of how Mailchimp went from Zero to One. 🚀

Today’s deep dive at a glance:

  • Mailchimp’s Growth Timeline.

  • How Mailchimp got the ball rolling: Serial belief in their product.

    • Marketing led by their product.

    • Stayed tinkering with many small bets.

  • How they became the Mailchimp we know today: Sticking to what they know.

    • Get users to start using the product as soon as possible.

    • Staying true to the Mailchimp way.

Mailchimp’s Growth Timeline

As I mentioned above, Mailchimp was founded in 2001 as a web dev agency.

Where before going all-in on Mailchimp in 2007, was doing ~$300k in annual revenue. But nothing could have prepared them for the journey to come.

By the end of 2007, they had 10k users and had increased their revenue to around $500k.

The next year Ben and Dan bought Mark out of his shares, before flipping the business upside down in 2009, when they introduced their free forever plan (after 9 years of not having one). In one year, their profits increased 650% and their total users went from 85k to 450k - with paying users increasing 150%, taking their ARR to $2M and hitting profitability along the way.

By February 2012, they tripled their user base to 1.2M (at some points growing over 5k users per day). And so when the end of the year came around, they were at over 2M users, making over $30M in ARR.

From here Maichimp got on their rocketship and took lift off. And in 2016 hit 14M users and $400M ARR. Insane.

In 2021, history was made, when Mailchimp sold to Intuit for $12B - making ~$800M ARR at the time of the sale. This made Mailchimp the largest bootstrapped exit in history.

Short on time? 5 Tactical Insights from Mailchimp

If you only have a few minutes today, here are 5 of my favorite actionable insights from this deep dive:

  • You don’t need to plan for a home run. Look for the singles and when you see the right ball - smash it out of the park. Mailchimp didn’t know that Serial was going to be the biggest podcast in the world or that Twitter was the next big social media. But they were able to be at the forefront of their explosive growth by constantly making small bets and testing things out.

  • Innovation is the best form of viral marketing. Give your users the best experience possible and they will share it. So think of your product as a key component of growth and marketing and find ways to make an ask right after you’ve shown the value of your product (e.g. in the footer of an email written on Mailchimp).

  • Be ready for luck to hit you. There’s this great quote I heard from Scott Galloway (and am about to get slightly wrong): In business and in life you have to ser your sails. You never know when the wind is going to come, but when it does - you want to make sure you’re taking advantage of it. So set a strong foundation and create a backlog of consistency and excellence to put yourself in the best position when Lady Luck comes knocking.

  • Get users to onboard as soon as possible. One of the best ways to predict a user who won’t churn is how quickly the onboard and use your product. So make onboarding enjoyable, simple, and super clear. You want to walk your users through the most important steps to understanding your product.

  • Position your brand as something relatable for your target persona. You want your target persona to feel heard and understood when they come across your brand. So speak like them, dress (your color and designs) like them, hangout where they do, and importantly stay as true as possible to this when growing to keep the same viral customer-led growth.

Keep reading for more on these, plus plenty more tactics you can replicate from Mailchimp.

How Mailchimp got the ball rolling: Serial belief in their product.

⚙️ 1. Marketing led by their product.

Most people reading this are probably aware of Product-Led Growth (PLG). A strategy where the product itself is the driver to acquire, convert, engage, and retain customers.

Essentially creating the best product possible and using it as the main marketing channel. Creating a viral growth loop that leverages product evangelists - someone who will shout about your product to others.

But when Mailchimp was founded in 2001, PLG was unheard of.

Even more so, they were a service, not a product. There was no product to even lead growth.

But actually, when you think about it, the culture of service businesses is often very similar to PLG companies - they try to deliver the best service possible, so that their customers refer them to others.

So in essence, Mailchimp already had a culture of delivering excellence as a marketing tool.

But they needed to transition this into their product - which originally was used as an internal tool to just serve their existing agency clients.

This turning point for Mailchimp came 9 years after launching, when they introduced their Free Forever Plan. Going freemium (again before it was cool).

Although done out of necessity, it turned out to be the biggest driver of their growth - unlocking their PLG. Making their viral growth flywheel crystal clear:

  • User signs up for Mailchimp free plan.

  • User sends an email using Mailchimp’s free plan.

  • Recipient clicks the Mailchimp logo at the bottom of the email (included in every email sent on the free plan), linking to the Mailchimp website.

And so the cycle continues. No need for advertising. Mailchimp was promoting itself.

And to incentivize this behavior even more. Mailchimp added referral bonuses which could be used as credit towards paid plans - giving free users a reason to brag about the platform.

Ben said that they viewed innovation as marketing. Building became their growth.

And because PLG wasn’t really a thing back then. They didn’t think about it like this. They just wanted to give their users the best experience and they knew they would then share it.

In their first year of being Freemium, profits went up 650% and their user base rocketed from 10k to 85k. They had poured the fuel on the fire of a great product.

What I love about this is that it aligns the incentives of Mailchimp and their customers. Mailchimp only makes money when its users have over 500 emails on their list (the boundary of their free plan). Meaning it’s in Mailchimp’s best interest to help you grow.

If you grow, so does Mailchimp.

What this led to, was Mailchimp providing tonnes of content to help you grow. They introduced guides, educational video content, how-to’s, emails dedicated to it, and much much more.

Mailchimp became a leader in email marketing education. They knew it was the best way to increase their revenue, but also to help retain their customers for longer - reducing churn.

But all of this relied on one thing. Having a great product.

If you want to use a PLG strategy, make sure your product is worth sharing.

🧪 2. Stayed tinkering with many small bets.

We, as mere mortals, have this obsession with overnight success and hope that luck smacks us right in the face.

But the reality is that these things are like unicorns. And not the overvalued startup type, those are everywhere.

I mean actual unicorns. They don't exist (or at least I’ve never seen one).

Now I do want to clarify before I get into this, that luck of course still plays its part. But what separates those who benefit from luck from those who don’t is the backlog of work and preparation that gets forgotten when you become an “overnight success”.

To bring this to Mailchimp.

Mailchimp went from relative obscurity to a household name in a matter of seconds. Literally. The catalyst to the giant we know today largely came from a three-second clip of a 14-year-old mispronouncing Mailchimp in a sponsorship.

But how did we get here?

One of Mailchimp’s core beliefs was to constantly make small tests (or bets). A new social media popped up? Well, they were on it and posting. So when the next Facebook (or in their case the first Facebook) hit the big times, they were riding the wave.

They constantly did this. And were early adopters of Facebook, Twitter, and Instagram. And here’s the first thing that many would put on luck - they were on the right social platforms at the right time. Not because of luck. But a result of constantly placing small bets on all new potential growth channels - many of which failed.

But the biggest homerun in their journey came at the dawn of podcasting. With the player that made the whole industry: Serial.

Now I could make some joke about those of you living under a rock who hadn’t listened to it. But that was me until a 16-hour road trip a few weeks ago…

Now for those of you lost like me, Serial is probably the most popular podcast of all time. With over 300M downloads of Season 1. Which if you haven’t listened to, go for a walk and put it on. It is GRIPPING.

And guess who was the opening sponsor for every episode? Mailkimp.

Again, you may say it was luck or that they had a big budget already. But you’d be mistaken. They definitely didn’t have a big budget back then and this wasn’t their first rodeo, Mailchimp was already testing sponsoring podcasts. In particular, with This American Life, the developer of Serial.

And they had left such a positive and unique impression on This American Life that when they were looking for sponsors for their new show, Serial, Mailchimp was the first name they reached out to.

Another example of luck meeting preparation.

The ad went on to become one of the most iconic of all time - when in a street interview asking people about the company, a 14-year-old girl mispronounced it as “Mailkimp” (now the typo above makes sense I hope).

Mailchimp thought it would be funny to use the ad and ran with it. Buying the domain and redirecting to their landing page. And what a decision it was.

National media shows picked up the ad. It went viral on different social media. And it made it memorable for listeners to search.

Soon Mailchimp went from something only nerds (like you and me) knew, to a mainstream name.

This culture of tinkering didn’t stop at marketing. It was in their product as well.

Once Mailchimp started to look to expand from solely helping people send better emails to running better businesses and selling more, they thought about what products they could add to the mix and tested them in small doses.

One of their first ideas was landing pages. Something they didn’t really think would move the needle - but it fit with their repositioning.

Boy were they wrong about it moving the needle. With Ben later saying that it was one of their biggest inflection points in growth.

Again, it wasn’t luck. They had built a great foundational product and tinkered with multiple different features to add. So when they saw a potential home run, they could lift their arms up and hit it into the crowd.

To tie this all together. Don’t try to be an overnight success. They don’t exist. Don’t confuse a horse with some glitter and a horn glued onto it with a unicorn. They might look the same - but no matter how you dress it up, a horse is a horse. And that’s what makes it great. Because it’s strong, fast, and agile.

Prepare for the moment luck comes flying at you - because if you’re not ready to catch it, it’ll fly right past you.

How they became the Mailchimp we know today: Sticking to what they know.

🚨 1. Get users to start using the product as soon as possible.

The best way for Mailchimp to predict a customer’s success with the product is how quickly they use it.

I mean think about it. How many Freemium SaaS products have you signed up for that you never end up using? You keep promising yourself you’ll get to it on the weekend. Then the next weekend. Then the next weekend. And before you know it, you never think about that product again.

It’s even true for some paid products - you quickly jump into a monthly subscription (because it’s only $11.99 right), but you don’t onboard straight away and next thing you know, you’re billed again for it. And you never used it once. So you go and cancel it.

Mailchimp wants to avoid this abyss. So they try to get you to use the product as soon as possible - guiding you with everything you need to design and send an email, grow an email list, and what to write about.

They don’t overwhelm you with making money and scaling to thousands of email subscribers (yet). This would do the opposite of getting users to start as quickly as possible. Because while it can be encouraging to see how you can make money, it often feels too far away.

Let’s take their signup flow to illustrate this. They already try to learn as much as possible about you.

What are your goals with Mailchimp?

 What are the most important features to you?

How many subscribers do you have? And even making a brand integration from your URL - so that you can keep your brand consistent as easily as possible.

Then once you go through this signup process. Boom. 3 recommended steps based on what you chose.

Basically creating a super clear to do list for you to get started on Mailchimp. Layer this on their user-friendly product and you have a recipe for quick adoption.

And quick adoption means a sticker user. And a user who’s more likely to grow - and thus upgrade to a paid plan.

Another example is with one of their previous email marketing campaigns:

  1. Guide on how to get started with Mailchimp.

  2. Blog on how to grow your email list.

  3. Blog on setting up your first campaign.

The three necessities for success on Mailchimp. Delivered straight to you. Right after signup.

Notice what these three things had in common?

All are super useful pieces of content marketing.

And this is another tactic Mailchimp uses to get quick adoption of their products: They have an almost endless supply of useful content to make you feel more comfortable and confident in using Mailchimp. From YouTube, to blogs, to how-to-guides, to email campaigns, Mailchimp do it in whatever way you prefer to learn.

They even have a bunch of non-English videos on YouTube, catering to their global audience.

Content is a great way to build trust with your audience. But it also helps to increase conversion and retention. Making more successful users (and faster).

🐒 2. Staying true to the Mailchimp way.

I’m sure this was one of the more difficult things Mailchimp had to do while scaling the way they did. But it was also one of the most intentional.

From its early days, Mailchimp had a very unique brand. Fun, quirky, vibrant, colorful, and not-too-serious. So basically everything email usually is…

They were open about not being for everyone. They didn’t want to make complex, custom enterprise products. They wanted to help the small guys and girls win. Your mom-and-pop shops. Brick and mortar and online.

And this is why people loved Mailchimp.

Mailchimp was like them. A few friends with a dream to create something special. With no funding, bootstrapping their way to glory. They were fun and quirky - as are most entrepreneurs. And could talk like SMBs (Small-Medium businesses), nailing their consistent voice and tone, using fun images and GIFs in their emails.

Their Founders were bought into it all the way. Take a look at Ben’s old Twitter bio - he was even making fun and playing along with the whole “Mailkimp” Serial ad from above. And it didn’t feel forced, because the brand grew out of the fun experience of building Mailchimp and the experience they were delivering already - fun, creative, and independent work.

Mailchimp wanted to stay for the people.

The symbol for this?

Their beloved Frederick von Chimpenheimer IV.

Even to the point of creating an online visual diary for users taking pics with Freddie (sorry, Frederick von Chimpenheimer IV) merch.

The fact that they got people to wear merch with their mascot and logo, when it’s a chimp, just shows the deep connection they have with their customers.

The foundation to all of this though is two-fold:

  1. Having a specific target persona. Mailchimp knew they were not for everybody. They were for small business owners who were a bit quirky and willing to take a bet on a fun brand that was easy to use and affordable. Particularly, founders who wanted to get their marketing going without any engineering resources (important to remember how technical email used to be).

  2. They kept their word with this persona. Mailchimp had plenty of chances to go upstream into enterprise, but they chose not to - in fact, they even lost Uber as a client because of this. They were committed to building a product that made sense for their core user, and focusing their support on them as well.

They were relatable to their persona. The Mailchimp founders were their persona before the company shattered what they thought was possible. They were a small business for years. So they could talk and act like their customers. Their customers felt this and could relate to them.

Do you like the new structure of the newsletter?

I slightly changed the structure of the deep dives. Splitting it up by how they got off the ground and then how they scaled that. And added a summary of the tactical insights. I would love to get your thoughts on it!

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