Three Takeaways: How MailChimp Provides a Blueprint for Startups

MailChimp changed the face of the email marketing service and now, it appears, it has changed the face of how start-up companies ascend in the market.

The New York Times Farhad Manjoo’s recent article “MailChimp and the Un-Silicon Valley Way to Make It as a Start-Up” on MailChimp’s growth shows a way to reach scale without VC money, a valuable lesson for other companies.

With more than 12 million people and businesses using MailChimp to send an estimated 1 billion a day, Manjoo highlights MailChimp quickly became not just a competitor in the email marketing industry, but how their method of ascension made them a real threat.

Here are DMN’s five takeaways from “MailChimp and the Un-Silicon Valley Way to Make It as a Start-Up” and the Atlanta based company’s impact on the Silicon valley industry.

VC free is possible

MailChimp has not accepted a cent of venture capital funding. Why? The answer is more personal than strategic.

Start-up companies fueled by venture capital often need to grow exponentially to satisfy their funders, which can lead companies towards a path of unsustainable growth. The tech economy is littered with companies that raised too much money and suffered the consequences.

MailChimp wanted to grow at its own pace and keep to its core business. Doing so hasn’t hurt at all. MailChimp recorded $280 million in revenue in 2015 and is on track to top $400 million in 2016. It now employs about 550 people, and by next year it will be close to 700.

And it’s still headquartered in Atlanta, far away from the VCs of Silicon Valley.

Focus is key

“Everybody we talked to said, ‘You’re sitting on a gold mine, and if you pivot to enterprise, you could be huge,” Ben Chestnut, co-founder of MailChimp told the New York Times. “But something in our gut always said that it didn’t feel right.”

Chestnut told the New York TImes that MailChimp had a proximity to its customers that its competitors lacked. “Because MailChimp was itself a small business, it understood what those businesses wanted out of their marketing tools.”

Its offerings were cheaper, it added features more quickly, and it allowed greater customizations to fit customers’ needs.

Evolve smartly

While the organization has found great success in the email marketing service industry, MailChimp is intent on remaining a focal point for all things small business marketing needs.

Its future is far from assured — new modes of communication like voice and text messaging could undermine email, and there is always the threat of some large platform like Facebook or Google building a rival to MailChimp.

To ensure its space in this marketing service industry, MailChimp has begun to create social media services. However, wherever the evolution takes the company, the founders are convinced outside investors are not the company’s best interest.

“Every time we sat down with potential investors,” said Chestnut, “they never seemed to understand small business.”

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