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The New Atlanta Billionaires Behind the Unlikely Tech Unicorn MailChimp
- mbesto 8y ago> $600 million in revenue Napkin math time. Assuming 30% profit (very achievable for a tech biz that size), thats $90M a founder per year (if they want). I would take that over the risk of trying to get to a $1B sale any day of the week. There aren't very many industries that can achieve something like this. What a time to be alive. Note - I understand their are so many assumptions here, but I think my point still remains.
- jogjayr 8y agoIf they have $600MM revenue, then even applying a modest 5x multiplier would give them a $3B valuation right? And 10x might be closer to what they might actually fetch if they were to ever sell.
- traek 8y agoMultipliers are on earnings, not revenue. A “modest 5x multiplier” on Walmart’s revenue would give them a valuation of $2.5 trillion.
- mcbits 8y ago15x is modest for a virtual-product company net earnings, in cases where there are earnings after the accountants are done. A 5x multiple of revenue would value Netflix around $60 billion. And if Walmart had the assumed 30% margins, they probably could be a $2.5 trillion company. Their revenue is more than 2.5 times their almost-$1 trillion competitor.
- qubax 8y agoAlso, standard multipliers are pointless on "unicorns". You have to figure out potential for future growth and the potential of the space itself. Facebook bought instragam for $1 billion even though there was no significant revenue or income. But the potential for growth of instagram itself and the photo sharing social media space was immense. With established companies like walmart in establish spaces like retail, you know what you are getting. With tech unicorns, it's a bit of a gamble.
- jogjayr 8y agoIt depends. For a mature business like Walmart, you'd look at EBITDA, and margins to arrive at a valuation. For a growth business, especially a SaaS business, revenue might be used until there's actual earnings.
- mrnobody_67 8y agoYeah, valuation seems low... Look at marketo for a good comp: 21x EV/TTV - http://tomtunguz.com/marketo-vista-ma/ http://tomtunguz.com/marketo-vista-ma/
- erikb 8y ago30% profit. You might consider a career as fantasy author.
- kondro 8y agoThey only have 500-1000 employees.
- erikb 8y agoMy toilet paper at home has four layers. (Same amount of relevance)
- hazz99 8y agoSaaS can easily get there, and much higher.
- SmellyGeekBoy 8y agoWhat? I know people in brick-and-mortar mail order business who make that kind of margin. SaaS could be much higher.
- erikb 8y agoYou mean you read blogs where people claim that amount of profit over a span of 3-6 months.
- mbesto 8y agoBuffer, who's finances are transparent, would like to have a word with you: https://twitter.com/joelgascoigne/status/1045434059629838336 https://twitter.com/joelgascoigne/status/1045434059629838336
- Cthulhu_ 8y agoI have no doubt they both earn a very decent salary that allows them and their families to live very comfortably.
- bra-ket 8y ago? not a single Forbes 400 tech fortune hails from New York how about Bloomberg
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- pauldix 8y agoAgree, Bloomberg was a tech company long before it was a media company. And Bloomberg himself would probably be in the top five of the richest list if he ever took it public (he owns 88% of the company).
- mrnobody_67 8y agoMatt Cohler should probably be on the list. $2b+ for sure, especially with Benchmark's 30% cut on fund profits and being one of the GPs in the fund that had Uber.
- olivermarks 8y ago'unlikely tech unicorn' ....why is it unlikely? Someone was going to dominate the smb tier of email marketing and mailchimp have executed really well. The whole valley 'unicorn' schtik is what's unlikely, it's just glib VC speak for fast bucks and easy money
- steve1977 8y agoAlso, aren't unicorns kinda unlikely by definition?
- flattone 8y agoAka over stuffed title.
- stephenr 8y agoThe tech industry has terrible, ironic names. A unicorn isn’t unlikely. It’s imaginary. It doesn’t exist.
- wolco 8y agoThe name may apply well. The billion dollar valuations are as imaginary as the profits.
- gumby 8y agoPrecisely the point of Aileen Lee (of Cowboy Ventures) when she coined the term. But like "cloud" it's been gobbled up by people who didn't know what it meant and has been bent into a parody of itself. (not to imply at all that a "unicorn firm" is as profound an idea as not caring how your packets are routed but rather connecting to a resource on the network)
- jamestimmins 8y agoPerhaps I'm alone in this, but when a tech company is solely owned by a small group of execs, that's a huge red flag as a potential employee. In my mind, it says they truly only care about themselves in a very tangible way.
- forgingahead 8y agoTheir employees get a share of the profits (like many regular businesses). They are also quite firm in their goal to stay private, so why would equity be relevant to an employee any way?
- paxys 8y agoWhat share of profits though? The most recent article I can find (https://mailchimp.com/culture/investing-in-people-through-profit-sharing/ https://mailchimp.com/culture/investing-in-people-through-pr...) boasts of contributing "up to 19%" of annual salary to employees' 401k. While obviously not a bad deal, it's a far cry from options/RSUs and other standard annual bonuses offered at other tech companies.
- manigandham 8y agoThe other tech companies are vastly outside the norm and have severely affected the entire industry with inflation. And if people cared and wanted to work at those other companies, then they would. Don't assume to know what's best for everyone else.
- tomschlick 8y ago> What share of profits though? The share that goes into your yearly salary, bonuses, raises, and benefits (like the 401k match you disregard). They owe you nothing else, and each employee is free to ask for more or leave for greener pastures if they are unhappy.
- C1sc0cat 8y agoShares are often a much more tax efficient way of rewarding employees and having an actual share has numerous advantage's in term of morale retention and so on. Also shares keep on producing income after you have left a company.
- new_here 8y agoAlways been a fan of MailChimp, kudos to them for bootstrapping all the way to this point. Few can say the same. They started out building a product for their website customers and brought some wit and life to an unsexy market.
- sixQuarks 8y agoI tried Mailchimp a few years ago and left in frustration. I found their tools and admin to be terrible, and know a few others who feel the same way.
- msie 8y agoThank goodness, not another overnight success story: Mailchimp, named after their most popular e-card character, launched in 2001 and remained a side project for several years, earning a few thousand dollars a month. Then in 2007, when it hit 10,000 users, the two decided to commit full-time.
- techsupporter 8y agoGood on them. Now, as someone who deals with end users and e-mails with links on a regular basis, could they--and all of the other mail sending services out there--PLEASE invest some of that money in making click-tracking links less terrible? It is so, so, so very difficult to get my users to stop clicking on phishing links when they, correctly, point out that legitimate links in real e-mails look virtually identical. Why does www.ecommercesite.example/products/brown-boots/buytoday have to turn into ecommercesite19.ie.randomdomain.otherstuff.xd/lists/email/4910/598gjweo5g8er7485hwog8u3eo8whfo8wc2o38fh38f/totallynotphishing/9384gjh34fgoiu34hgffh/noreallywepromise/?utm_stuff=2928&utm_things=morewords&utm_whyareyoustillreadingthis=lolmoney At the absolute minimum, these e-mail campaigns should only contain click-tracking links that originate under the recognizable domain of the sender. emails.ecommercesite.example/products/brown-boots/buytoday/4918ac7 would be so much easier to understand and use as examples when showing my users.
- jerrre 8y agoWhile I agree these links look dumb (to those who take the time look), I'm quite happy as a user I can see I'm very indentifiably (?) being tracked. Also your solution you could do yourself by providing traceable links for every campaign, and not using mailchimp's stuff?
- voltagex_ 8y agoThat'd involve subdomain delegation to Mailchimp, or some kind of server-side thing installed on a customer's site - not possible for a lot of small businesses (and a lot of large ones, too).
- antsar 8y agoWhy is creating a single arbitrary DNS record not possible (or even difficult)? SMB’s already have to do this when validating ownership of their domain for e.g. Google services, SSL certs, etc.
- sopooneo 8y agoI don't know, so please correct me if I'm wrong. But isn't DNS record creation now handled automatically, and in the background, with the standard one-stop-shop site systems like Wix, Weebly, and SquareSpace? If so, and they decided to further support integration with senders like MailChimp by auto-creating subdomains as needed, and it worked perfectly, that would make it all easier. But anything less than perfect, and users (ie small business owners) would be hopelessly lost.
- choot 8y agoI've used it and i find it expensive. Aren't their services which use our AWS SES account (with automatic setup) and offer same features as MailChimp but much cheaper?
- elrobinto 8y agoI use mailchimp at work, it's feature full, but seems to be struggling with our list size, and isn't the cheapest. Are there any cheaper solutions out there that have similar feature sets (including split testing campaigns), and are designed to scale to list sizes greater that 1m?
- whitepoplar 8y agoI'm curious--If you were in charge of rebuilding Mailchimp from scratch, how would it function and what would it do differently?
- huhtenberg 8y ago> our list size What's order of magnitude is it?
- fbelzile 8y agoYes, I use one called Sendy (https://sendy.co/ https://sendy.co/). Subscription-free, one time payment of $59 and emails sent through Amazon SES. As a small business owner, I have no idea why someone would use MailChimp over this.
- arbuge 8y agoYou can get even cheaper than that by using phplist instead, which is free, and setting that up with your AWS account. Hard to beat $0.10 per 1,000 emails...
- josefresco 8y agoSendy looks cool (thanks for the link) but you have to install it, host it, maintain it and from the looks of it, purchase it again every new major version. Most small biz owners (from my exp) are not looking for that sort of involvement. If you're a startup/small tech co. it makes sense.
- puranjay 8y agoMailChimp is perhaps the most "on brand" B2B startup I can think of. It's also perhaps the best case example of what a brand mascot can do for your business. I can't make out the difference between all its competitors - Aweber, ConstantContact, iContact. But I can figure out MailChimp from a mile away.
- sexy_seedbox 8y agoWho could forget the Mandrill screwjob? https://news.ycombinator.com/item?id=11203056 https://news.ycombinator.com/item?id=11203056
- beager 8y agoGood on them, but they’ve completely flubbed their absorption of Mandrill, and these days Mandrill suffers frequent production outages unbecoming of a serious email provider, and their support is abysmal. I guess part of building a big business is squeezing your customers to boost your margin. Has anyone migrated off of Mandrill in the past few years? Where’d you go, and how was the transition?
- adrinavarro 8y agoWe choose SendGrid long time ago to unify all our mail infrastructure under one provider and it was a significant mistake. Now, we're heavily relying on SendGrid but some systems still depend on Mandrill and we're slowly migrating those as we make changes to them.
- beager 8y agoWas it the migration strategy that was a misstep or having a single point of failure for transactional email? If you're looking to support multiple transaction mail providers, any best practices you've come across to ensure that your app has a common interface to different providers?
- medmunds 8y ago> support multiple transaction mail providers One potential pitfall is keeping your blocked-email list synced between ESPs. You definitely don't want to repeatedly send to an address that has bounced or reported your email as spam, as that's a good way to get yourself into an ISP's spam filter for all its recipients. When using multiple ESPs, the best approach is maintaining and enforcing your own block list. But if you're relying on your ESPs' own block list functionality to prevent additional sends to invalid/complaining addresses, you'll either need to sync their block lists, or somehow partition things so that the same recipient email always goes through the same ESP. Nearly all transactional ESPs offer webhook notifications on bounces and complaints, but not all have an API where you can add an email to their internal block list.
- kernx16 8y ago
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- countryqt30 8y agoI love MailChimp and introduce it as one of the first things of all the startups and companies I've started. I think I also resonate with the interviewees there that many of them wouldn't be alive without simple 1-click email marketing, that just works.
- CSMastermind 8y agoI'll never hate on another company's success but I remember one of their engineers speaking at an event back in like 2013 and it was really politically incorrect. Made me uncomfortable and I'm not exactly squeamish. Doesn't seem like the type of company I'd like to work for.
- arbuge 8y ago> Chestnut and Kurzius have worked to keep that lifeline affordable: Mailchimp’s customers pay nothing for the first 2,000 subscribers or 12,000 emails sent, and then $10 a month after that. The low cost translates potentially into a big upside. Hardly. Only the first part of that statement is true. It's $10 a month AND UP... and it goes up pretty fast: https://mailchimp.com/pricing/ https://mailchimp.com/pricing/ We switched to phplist + Amazon SES several years back after calculating what our MailChimp bill would be for our list size, and are glad we did.
- nacs 8y agoIt's low cost for people who don't want to mess with AWS / SES, Apache + PHP server setup, etc..
- shostack 8y agoLonger-term, you may need to consider things like, "how easy is our email setup for Marketing to own" because it makes a lot more sense for an experienced email marketer to own things than an engineer at a certain level of scale, both from an experience and head count cost standpoint. There's also the consideration of "should all emails live in one platform?" It may very well be that high-volume, low-impact transactional mail should absolutely go through something like SES, whereas higher value emails go through an actual marketing ESP like Mailchimp or something more robust. It isn't a black and white situation.
- criddell 8y agoI wish they made it easier to manage the lists I'm subscribed to because I didn't ask to be on most of them. In their defense, unsubscribing works, but I wish I had a view where I could see all the lists I'm on and be able to unsubscribe from there. Cory Doctorow asked about this once: https://twitter.com/doctorow/status/641642822286753792 https://twitter.com/doctorow/status/641642822286753792 And they basically said no. I wonder if now that GDPR is a thing if they have to provide this information?
- _RPM 8y agoI just got started using the mailchiml api for a custom sign up form. It took about 5 minutes.
- wprapido 8y agoMore power to them! MailChimp is more deserving of unicorn status than vast majority of unicorns. It solves real world problems and helps real world businesses communicate with real world market. A happy MailChimp user here!
- mortond 8y agoMy understanding of unicorn is that it's worth 1 billion+ without generating profit?
- ai_ia 8y agoMautic is pretty good opensource replacement of MailChimp.