22/09/2021
Want to Prove Patience Pays Off? Ask the of This 17-Year-Old, $525 Million Email EmpireBen Chestnut and his team at MailChimp built an amazing business and became Inc.'s of the Year. It took them only 17 years.
In 2007, when competitor Constant Contact filed to go public, "VCs started knocking on our door," Chestnut remembers.
"We were just utterly confused by them." (Eschewing venture backing enabled MailChimp to focus on its small-business base; investors always wanted Chestnut to pivot to enterprise software, he says, because customers and immediate returns would be much larger.
MailChimp's tipping point came in 2009, when Chestnut made a somewhat counterintuitive decision: "Let's just make the whole thing free." If your customers are small , make it easy and cheap for them to try you out, his thinking went. That means they'll be happy once they have to pay for your services, because it means their business is growing.
The freemium plan was the first time directly tied its fortunes to those of its small-business customers. And in terms of sheer volume, it was a swift success. "We had about a few hundred thousand users on the system, and within a year it was a million," Chestnut recalls. "Within another year, it was two million. And it just kept growing from there." Freemium--and focus--had worked.