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Cover Story: Subject: MailChimp

Re: Ben Chestnut and Dan Kurzius sent 70 billion emails last year

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Subject: Have you seen this chimp?


Were you standing in line outside the Moscone Center in San Francisco? Were you walking through the Krog Tunnel in Atlanta? Have you passed through Cleveland or Nashville recently? Or Austin? Or San Diego? Did you glance up at the sky and see a floating chimpanzee's head wearing a hat and winking at you? Did you ask yourself, "Who is this curious ape and why is he winking at me?"

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Subject: Re: Getting started with MailChimp

At the end of last year, Atlanta-based email marketing service MailChimp released its annual report. MailChimp is privately owned, so its annual report has little in common with the annual report on Form 10-K that the Securities and Exchange Commission requires of publicly owned companies. Instead of legalese and earnings statements, MailChimp has a different way of bragging about what it does.

MailChimp's report is arranged in an ascending list of important numbers from 2013 beginning with 0, the number of games won by the company softball team. The modest, jokey numbers (2 new datacenters, 8 new babies, 9 new billboards, 18 new users in North Korea, 72 new employees) grow until they reach staggering heights: 2.5 million new users, 3 billion subscribers added, 70 billion emails sent.

MailChimp's offices occupy two sprawling, former industrial buildings on Atlanta's Westside. The company's employees, which currently number somewhere above 200, are split by department into various rooms. Developers and programmers occupy a dungeon-like basement where a wall of flat screen televisions blinks out the latest daily metrics: 250 million emails sent, 8,000 new users, 25,000 MySQL queries per second. On a natural-light-filled floor three stories above, content creators type away at blog posts, design billboards, scribble on dry-erase boards, and stage elaborate photo shoots with various iterations of a chimpanzee mascot named Frederick von Chimpenheimer IV. Across the parking lot is a medium-size conference room where authors and artists and entrepreneurs are brought in on Friday mornings to give informal talks catered with pastries and coffee. Above that room is a support team that works 24 hours a day to answer complaints, requests, questions, and comments from users basically any place in the world with an Internet connection. Sometimes, these employees take a break to play ping-pong in a room designed like a tiki bar, complete with hand-carved wooden pillars. Other times, they'll have a meeting in the "board room," where the walls have been covered in skateboards.

Wandering through this elaborately designed, robustly staffed maze, you may wonder, "All of this just to send emails? Aren't emails free? Don't we all know how to just tap out a few sentences and hit send by now?" Maybe you can, but this company, co-founded by Ben Chestnut and Dan Kurzius in 2001, has a found a rapidly growing market in helping companies send the right email at the right time to the right group with the right subject line.

How much is that kind of thing worth? Back in 2012, President Barack Obama's re-election campaign raised $2.5 million dollars with a single email. MailChimp has had no trouble finding customers to pay a small fee for its services.

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Subject: Re: The relative pervasiveness of MailChimp

While reading this, open a new tab in your browser. Open your email inbox. Search "mailchimp" and see if you find anything.

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Subject: Re: MailChimp and its peers

There are other companies that do what MailChimp does. A company looking to send polished, professional bulk emails can turn to Constant Contact in Massachusetts or iContact in North Carolina or AWeber in Pennsylvania or any number of others. In a larger context, though, MailChimp is a web-based application for sharing information, which is an elaborate way of saying "an app." MailChimp's biggest customers might be Fortune 500 companies sending out newsletters to millions of subscribers, but it's also a freemium service, which means anyone can sign up and send emails from the platform for free, up to a certain limit. If social media apps like Twitter or Facebook are the Internet's public space, you might think of MailChimp's work existing in the private Internet: our personal inboxes.

The first night that I met Chestnut, whose proper title is Chief Executive Officer of the Rocket Science Group, I asked him to describe MailChimp's position in relation to other email marketing companies. He said, "We just surpassed 5 million users. I don't know of anybody else that has that many. I don't want to dwell on it, but I don't know of anybody else that has that."

He paused for a second and added, "I don't really care. There's satisfaction in helping a lot of customers. That's all we want."

Modest statements like that are not uncommon from upper-level executives and CEOs. Oddly enough, the demands of managing large groups of people and massive sums of money seem to encourage reflection about the small, basic functions of business: helping people, solving problems, making customers happy. In practice, those of us who are not upper level managers or CEOs may regard such reasons with a kind of skepticism. Does a CEO have an insatiable desire to make a large number of people happy? Or, does a CEO simply want to make a very large sum of money? We usually assume the latter.

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From the outside, Chestnut and Kurzius seem to have a lot in common with their peers. Their company is experiencing unprecedented growth and success, perfectly in time with the rising tech bubble. The business model is based on scalable economics, where a relatively small number of employees can facilitate business with millions of customers without much friction. That combination of factors is essentially what every startup today is working toward. WhatsApp, which was acquired by Facebook in February for $19 billion, had 450 million users and 55 employees. When http://www.forbes.com/sites/bruceupbin/2012/04/09/facebook-buys-instagram-for-1-billion-wheres-the-revenue/Instagram was bought, also by Facebook, for $1 billion, it had 30 million users and 13 employees.

While those app-developing peers seem to be infected with a venture-capital infused IPO fever, MailChimp's business plan looks very, very different. For starters, MailChimp is actually profitable, though Chestnut won't give an exact number. The company has no investors and isn't courting any. Chestnut and Kurzius have said no to all acquisition offers. They aren't offering stock options to their employees because they aren't going public.

Next year, MailChimp will move its offices to Ponce City Market, which has the largest single-floor footprint Chestnut and Kurzius were able to find in Atlanta. By the time it relocates, MailChimp expects to have around 300 employees. And, if what Chestnut says is to be believed, he'll keep running it "kind of like a family business." All of which leads to a simple question: Why?

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Subject: How do you manage your inbox?

Do you like checking your inbox? Do you delight at a full inbox or dread what you haven't opened?

When was the last time you ate a Spam sandwich? How often do you open your spam folder? Have you ever bought performance-enhancing drugs? Do you need to lose weight?

When was the last time you emailed your mother?

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Subject: Fwd: Re: I want my MP3

In 1999, dot-coms were hot. The market was bullish. Companies were being acquired left and right for wildly high sums: $3.6 billion for GeoCities, $5.7 billion for Broadcast.com, $10 billion for Netscape. The public was finally catching up to the new, strange language of the Internet: HTML, ISP, MP3, HTTP.

In April of that year, Wired magazine ran the headline "I Want My MP3" on its cover. The demand for shareable, digital music was slightly ahead of the technology. The most popular portable MP3 player at the time, the Diamond Rio PMP300, could hold 32 megabytes of data, or about an hour of music. The first iPod wouldn't be released until the fall of 2001.

A few months later, Cox Interactive announced its partnership with MP3.com for a startup project they were calling MP3Radio.com. The idea was to create websites for Cox-owned radio stations around the country that would allow listeners to download music and buy concert tickets from another Cox investment, Tickets.com. Cox hired Chestnut as a manager for the startup. In turn, Chestnut needed to hire someone to help write code and design websites. Kurzius applied.

According to Chestnut, Kurzius "lied his way into the job."

Kurzius confirms that with a laugh. "I didn't even know what HTML was," he says. "I was a DJ at the time, so I thought this music website was going to have me write about music. Apparently, I applied to write HTML instead."

Prior to MP3Radio.com, Chestnut had spent four years at Georgia Tech myopically focused on his studies and work as a freelance Web designer. When his girlfriend's family visited his senior year and asked him for directions to the football stadium, he had to admit that he didn't know where it was exactly.

Kurzius had been a sponsored skateboarder, talented but not quite professional material. He bounced around, taking jobs or college classes here and there without much focus. His work as a DJ led him to start the techno label Late Night Essentials. At the time Kurzius applied to MP3Radio.com, Late Night Essentials had released a grand total of one record in two years.

Kurzius' lack of experience apparently didn't hinder him. He crammed day and night on how-to books, including HTML for Dummies. Chestnut and Kurzius went on to design dozens of websites together, fueled by that classic startup combination of epic ping-pong matches and all-nighters.

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None of that effort mattered, of course. By early 2000, the market had suddenly turned bearish on dot-coms. Startups either laid off everyone or closed or both. More than 41,000 tech workers lost their jobs that year. After less than six months, the partnership between Cox Interactive and MP3.com was dissolved. The whole team was laid off. Using severance pay, Chestnut, Kurzius, and Mark Armstrong, another former MP3Radio.com employee, founded a small Web design and marketing firm they called the Rocket Science Group. Judging from Kurzius' experience, the name seems fairly ironic.

The Rocket Science Group got its first bit of press in the Atlanta Journal-Constitution in December of 2000. The first line was, "The party's over."

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__From: "Alvin Diec" XXXXXX at gmail.com?
Subject: Re: How do you manage your inbox?

"CURRENTLY HAVE 137 (136 SINCE OPENING THIS ONE) UNREAD EMAILS AND I THINK MY ONLY OPTIONS ARE 1. PRINT ALL AND BURN OR 2. DIE"

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Subject: Re: A brief history of MailChimp

The history of MailChimp can be explained with a simple story about scalable economics:

A couple of carpenters build houses for a living. Every morning they get up and bang hammers against boards. After a few years, they've built 10 houses. Then, one day, they look down at the hammers in their hands and say, "Why don't we just sell hammers instead?"

Think of MailChimp as a hammer. A hammer is useful for putting nails into boards. MailChimp is useful for putting emails into inboxes.

In 2005, Chestnut noticed a strange trend at the Rocket Science Group. Most of his and his partners' time and energy was spent designing websites, but MailChimp, a little application they'd designed to help their customers send newsletters, was bringing in steady money with almost no effort. "When you design websites you might make $10,000 or $30,000, which seems like such a big number, but the business was up and down. MailChimp had lots and lots of $15 customers and was steadily growing," he says. What would happen, he wondered, if they just focused on MailChimp instead?

By 2007, MailChimp had grown enough to start hiring employees. In 2010, the year after MailChimp decided to become a freemium service, users multiplied by a factor of five and profits grew by 650 percent. Today, the company hires about 10 people a month.

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__From: "Kate Kiefer Lee" XXXXXXX at gmail.com
Subject: Re: What is it like to be hired by MailChimp?

"I seriously prepared for the interview. I thought I would be able to anticipate the questions they would ask and I was right about that, aside from Ben. I went through several rounds of questions with different people and I felt like I was doing great. Then, finally, Ben showed up and asked me, like, two or three questions that I knew nothing about. I tried to come up with good responses, but his questions just really caught me off guard, so I don't even know what I said. He got up from the table after only a few minutes, and I was sure I had just bombed my interview with the CEO.

As he was walking out the door, he turned to me and said, 'Just making sure you're human.'

I got the job."

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Subject: Re: email

In John Freeman's book The Tyranny of E-Mail, one of the few works of social or cultural history to be written about email, the ascendency of email is described in terms that might be fitting for an insatiable dictator. "We check it on the subway, we check it in the bath. We check it before going to bed and upon waking up. We check it even in midconversation, blithely assuming that no one will notice. We check from our loved ones' deathbeds," he writes. He is concerned that we are losing efficiency due to information overload, concerned that we are looking directly into the light coming from our computer screens, rather than at the indirect light reflected on a page of paper, concerned with the prevalence of advertising in our inboxes, concerned that, "We are approaching a world in which every letter we write home, every love poem we read, every condolence note, political petition, and letter of apology we type is framed by a penumbra of automobile ads, perfume pitches, entreaties to enter online gambling emporiums."

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Subject: The chances of you finishing this story without checking your email

Slim.

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__From: "Blake Butler" XXXXXX at gmail.com
Subject: Re: How do you manage your inbox?

"I remember feeling each time I opened my email that I was about to read an email that would change my life: waiting for good news, for some strange contact out of nowhere from someone who wanted to give me something, something from an actual person out there otherwise unreachable. Now I know email is for bills, favors, and bullshit."

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Subject: Re: Fwd: Beautiful Singles – IN YOUR AREA – looking for reply

MailChimp doesn't send spam. At least, it tries very hard not to. Early on, Chestnut and Kurzius realized that any spammer could pay 30 bucks for a bulk list of email addresses and use MailChimp to send the kind of thing that no one wants to find in his inbox. Unable to think of any other way to stop it, they went out and bought any bulk list of email available for sale online and created a filter that would block any user who tried to send to a similar list of subscribers. For the most part, that approach, among a few other safeguards, worked.

The vast majority of emails MailChimp sends are newsletters people have signed up for, which is different from saying it is all email that people necessarily want. It's what we get after agreeing to receive "updates" from online retailers. It comes from publications we subscribe to. It follows the campaign donation to a politician. It appears from that artist we met one time at an after party for a gallery opening. How much do we want any of this stuff? Hard to say. We give out our emails because we don't want to miss out on a deal or a party or some crucial bit of news. We regret it when we see it too often or when our inbox looks clogged, but we thrill at it when we get the one thing we've been waiting for.

For the senders, email is a unique opportunity. If trying to market your business on social media is akin to yelling in a crowded room of other people yelling, email marketing is much more like a one-on-one conversation, a rare chance for intimacy. That is, of course, if you can convince your subscribers to actually open the thing.

The ambivalence we may feel about email marketing is the ambivalence we may feel about any email in general. We're overwhelmed by it, we might even hate it, but we feel that we can't live without it. We delete it and we ignore it but, strangely, we don't unsubscribe from it that often. The fundraising push for Obama's re-election in 2012, which was perhaps the most discussed email marketing campaign of all time, raised the better part of $700 million dollars in a matter of months by sending emails. When Bloomberg Businessweek looked into how Obama's team did it, one insight from the campaign stood out:

"Most people have a nearly limitless capacity for email and won't unsubscribe no matter how many they're sent. 'At the end, we had 18 or 20 writers going at this stuff for as many hours a day as they could stay awake,' says Obama campaign e-mail director Toby Fallsgraff. 'The data didn't show any negative consequences to sending more.'"

It is remarkably easy to unsubscribe from a MailChimp newsletter. As if the link at the bottom of every email wasn't enough, most inbox providers, including Gmail, give you a button you can push at the top, too. There's even an app that will search your inbox, identify every newsletter, and unsubscribe you from everything with a few simple clicks. Yet, we rarely do. The strange truth may be that we complain most about the things we aren't willing to change.

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__From: "Paul Boshears" XXXXXXX at gmail.com
Subject: Re: How do you manage your inbox?

"I have a colleague that has trained me to write emails that are less than five sentences long so as to combat the never-ending inbox.

Here's a site about it:

five.senten.ces"

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Subject: Re: Re: A brief history of MailChimp

MailChimp's offices currently are located in the exact building that MP3Radio.com was in 15 years ago. That company lasted less than six months and lost every dollar invested in it. In the years that Chestnut and Kurzius have spent building MailChimp, the business has outgrown that office space exponentially, sprawling from one floor to the next.

At the time of those layoffs in 2000, Chestnut told the AJC that "everything came and went too fast" to even finalize the stock options offered to employees. Like a lot of tech workers at the time, he saw the fortune he'd been promised disappear into thin air. "I didn't even know what a stock was, I just thought, 'Oh, I'll be rich some day!' And it never materialized. So Dan and I, we never wanted to dangle that in front of anyone," Chestnut says.

When MailChimp shows up at events like Georgia Tech career day looking for the next generation of programmers to join its team and tells young applicants the company won't be going public or offering stock options, some scoff. They're only interested in heading to California to chase IPO offers. MailChimp's bonus and 401k programs have both been publicly noted for their impressive generosity. But MailChimp isn't promising a pot of gold. In this way, it's created a filter for the culture of the company. "You have to be somebody who just loves your craft. We only want a programmer that loves to program or a writer that wants to write," Chestnut says.

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Perhaps more than anything else, it is this culture of craft that distinguishes MailChimp from its peers. That culture is palpably present in its office, in the website's design, in the odd billboards that have appeared in recent years, mostly without the company's name. It is difficult to build a brand that people like, that amuses people. It's even harder when that brand deals with something as emotionally complicated as email. Perhaps with that in mind, MailChimp has tried to be likeable and succeeded. People simply seem to like MailChimp. It has something. Something like the feeling of being winked at.

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__From: "Dan Kurzius" XXXXXX at mailchimp.com
Subject: Re: How do you manage your inbox?

"Because I hear from the customer side, perhaps more so than Ben, I have to work under a zero inbox mindset. I have to be very organized about filtering. I use certain emails for certain tasks. I try to not let email consume my day, but I do work back to zero on a daily basis."

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Subject: Re: IPO IPO IPO IPO

Just a few weeks ago, one of Atlanta's most prominent startups, Scoutmob, announced that it would be pivoting its business to ecommerce and away from daily deals. That news coincided with a round of layoffs and the revelation that Michael Tavani, one of Scoutmob's co-founders, would be leaving his role in the company's daily operations.

On Medium, Tavani wrote a long statement about his decision: "All I ever want to do is start companies. ... My Evernote file on future projects is gigantic. The goal is to start a lab where I can quickly crank out new products — it's so cheap to get to launch nowadays." This mentality has become the mantra for the current tech boom: Start a company, attract investors or buyers, and get out the front door with a bag of loot to start another company. Whether the previous company has any meaningful longevity is irrelevant. The only thing that matters is the next startup.

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At a dinner months earlier, Chestnut told me that the idea of serial entrepreneurism bothers him. "It's this formula, the idea that you can pull an all-nighter and get someone to fly in to be an investor and do this or that and magically you're done. The goal of that formula is money. I'm not like some Zen Buddhist who doesn't like money. Money's great, but you can't chase only money. Money is like the sun. You can't look at it directly. It'll burn you.

"We support the startup community and we sponsor a lot of their events, but I don't get along well with it, well, because–"

He paused.

"Back when we were getting started, I would go to a party or some event and be the guy giving out like five business cards to each person, hoping that person would give four to their friends. It's obnoxious, but I was that guy. So, I think back to the early days and the old me, the startup me, and I just cringe. Gross. I hate that. At every startup event today, there are like 50 to 100 people like that. I don't fault them. It's just a mirror reminding me of the old me. I don't want to be reminded of that person."

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__From: "Ben Chestnut" XXXXXX at mailchimp.com
Subject: Re: How do you manage your inbox?

"I'm at inbox 25,000 right now. I figure every few years you need a new computer, why not get a new inbox, too?"

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Subject: Re: Have you seen this chimp?

Most of us need a goal in life, a thing to be working toward. Part of what makes the current tech cycle so compelling is the presence of an end goal, the promise that enough hard work and late nights and dedication can lead to a big pay day. I asked Chestnut what his five-year plan was and he just laughed at me. Five years was too far in the future to plan, he told me.

"But a goal," I insisted. "You must still have a goal of some sort, right?"

He said, "The only goal I've ever had — I've only shared this with my wife, you're the only person I've ever told because it's embarrassing — I found it when I was at Borders one day. I was going through the dollar bin, like cheap throwaway books, and there was this book about a Buddhist. I read the author bio on the back and it told the story of this woman, she worked all of her life, ran her own company, worked all of her life to save up enough money to then focus the rest of her life on Buddhism. I said, 'Wow, that's really cool. I want to do that.'"

"You want to retire and focus on Buddhism?" I asked.

"Not Buddhism, but work and then just focus on what I want to do," he said.

"What else would you want to do?" I wondered aloud.

He said, "I don't know. It's a weird idea, but at least it'll throw people off my scent."__

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