The Bootstrapping Journey of Mailchimp

How does this sound?

3 founders running a startup for 20 years without a dime of investors’ money and selling it for $12B.

Sounds like some fantasy dream, I know. But it’s not. This is Mailchimp’s story.

Ben Chestnut along with his 2 friends Mark Armstrong and Dan Kurzius started Mailchimp as a side project. Now it has close to $1B revenue.

So how did this become so big? This makes for an interesting case. Let’s dive in.

Creativity

As it started as a side project, the founders were having fun with it. In an interview with The Drum, Chestnut said, “Mailchimp was sort of our creative outlet.”

I would build a website and the marketing materials and just have fun with the monkey jokes. I would drop monkey business puns everywhere. I still remember a zoologist called and said ‘chimps are actually apes.

This creative and fun endeavour helped Mailchimp to go a little viral. People got something fresh and unique to use. This prompted Ben and his two co-founders to focus full time on Mailchimp.

Freemium Model

The biggest growth of Mailchimp came from the decision to introduce a Free-forever plan. They became one of the first companies to capitalise on the freemium model.

Customers were able to use it for free until they got to 2000 email subscribers.

This single move turned their ‘cute little’ startup into a future behemoth in the email marketing industry.

Users grew exponentially- from 85000 in Sept 2009 to 450000 in Sept 2010. And profit grew by 650%.

Signature

A tactic that has been common nowadays to create a viral effect is putting a promotional signature on everything that was made using your product. Again Mailchimp was one of the first ones to do this.

They put their logo at the footer of each email sent until the user upgraded.

This move turned their customers into their marketers and their emails as customer acquisition channels.

Of course, Mailchimp did a lot more than this as many startups do, but these three strategies stand out.

This sort of bootstrapping growth stories are rare but they really make you believe what’s possible when you

• Are early to an emerging market
• Narrow down your focus
• Keep reinventing yourself