How We Launched a New Product in 2 Days

Last week, MailChimp announced that they would be discontinuing their existing Mandrill service and incorporating it into MailChimp as an add-on. People freaked out.

That’s understandable because a lot of people have built businesses around this service.

We were surprised by MailChimp’s announcement, but understand it from a business perspective. However we can’t thank them enough because it created a great opportunity for us. At CakeMail, we’re a small but very versatile company. We can respond to market changes quickly. When we decide to work on something it’s as an entire team. That’s what we did.

News and initial idea

Thursday, we heard about the Mandrill news first from one of our product experts. He told Francois Lane our CEO.

Francois called a meeting with the key people from each department. We met and discussed the opportunity. The decision was made to call a developers brainstorm to figure out what we can do to help the existing Mandrill clients.

Development Brainstorm and Feasibility

At 8am on Friday, the developers were together discussing the possibility of of releasing a transactional email service, evaluating the existing Mandrill documentation to figure out how each can be associated with CakeMail’s existing API in a short amount of time. The goal was to provide something unique and painless to existing Mandrill clients.

The result of the developers brainstorm: allowing Mandrill clients to use the existing Mandrill endpoints by just changing their API url and generating a new api key with CakeMail.

Business Feasibility

The cost of operating a transactional ESP is vastly different from operating a email marketing ESP. From a customer perspective, transactional email is really seen as a commodity. It comes down to cost and redundancy. If you’re competitive and delivering, you have a business.

The idea would be to keep the price of the service as low as possible and building a reliable infrastructure to ensure deliverability while still turning a profit.

We used this equation to establish our baseline cost:

(L + I + S)*X

L — Licensing; our license for mail transfer agent software

I— Infrastructure; new stack for transactional that ensures redundancy

S — Support; Delivery, developer and IT support

X — Volume multiple; as the volume of emails increase so does the licensing, infrastructure and support costs.

Profits are really seen at the lower end volumes. As volumes increase, so does cost. While Mandrill had $12 million in revenue, they sent 88 billion emails. Which makes an average profit per thousand emails sent of $0.136. Their high volume cost to customer cpm is $0.10, margins become razor thin with high volume clients.

Our solution is to roll out customers based on volume and feature usage, this way we can ensure a competitive price and a strong infrastructure to build on.

CakeMail for Developers

CakeMail has been an email marketing company working in the shadows since 2007. CakeMail’s primary product is a white label solution that our customers have been reselling to their customers for 8+ years.

Now we have an opportunity of reinventing ourselves by pushing into the transactional email market with CakeMail for Developers.

Developer-to-developer

Most of our team at CakeMail are developers, they know the inner workings of email products the best. We didn’t want to add an abstraction between that knowledge and the product we want to deliver. For that reason, all CakeMail for Developers customers will be working directly with a developer from our team to implement and support CakeMail’s API integration.

The smooth transition

As I already mentioned, we were really interested in providing a painless transition for existing Mandrill clients. The steps to switch to CakeMail’s API are simple:

Generate a CakeMail for Developers API Key
Switch your existing API url to: http//www.cakemail.com/api/1.0

The price

Pricing will be consistent with Mandrill’s current pricing. Pricing starting at $9.95 but with a 25% discount for accounts that are reserved via our request for access form to our private beta.

Availability

April 7th, 2016 is the magical date.

We will be rolling out the service as quickly as we can, to as many customers as we can. The current approach will be first-come-first-serve and based on the customers send volume. We will start servicing clients as early as April 7th, 3 weeks before the end of Mandrill service.

To sign up to our private beta and take advantage of a 25% discount for the first 3 months of service: http://developers.cakemail.com

Thanks for reading, if you have any questions feel free to respond below or @miwhitham