No venture capital, no Bay Area presence, no crazy burn
rate: MailChimp’s founders built the company slowly by
anticipating customers’ needs and following their instincts.As a private company, MailChimp has long kept its business metrics secret, but Mr. Chestnut wants to publicize its numbers now to show the road less traveled: If you want to run a successful tech company, you don’t have to follow the path of “Silicon Valley.” You can simply start a business, run it to serve your customers, and forget about outside investors and growth at any cost.
.. “One of the problems with raising money is it teaches you bad habits from the start,” said Jason Fried, the co-founder of the software company Basecamp, who has written frequently on the perversions of the venture capital industry. “If you’re an entrepreneur and you have a bunch of money in the bank, you get good at spending money.”
.. At the time, MailChimp faced a host of larger and better-capitalized rivals, including Constant Contact, which went public late in 2007. But Mr. Chestnut said 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.
.. The next phase of MailChimp, he said, is to become a one-stop shop for the entirety of a small business’s marketing needs.
.. “Every time we sat down with potential investors, they never seemed to understand small business,” Mr. Chestnut said. Venture capitalists always wanted MailChimp to serve “enterprise companies,” large businesses with thousands of employees and, potentially, thousands to spend.
“Everybody we talked to said, ‘You’re sitting on a gold mine, and if you pivot to enterprise, you could be huge,’” Mr. Chestnut said. “But something in our gut always said that didn’t feel right.”