MailChimp’s founders built the company slowly by anticipating customers’ needs
nytimes.com
nytimes.com
We have satellite offices for tons of major tech companies, so there are traditional tech jobs too. Earning $200k here while the cost of living is so low is phenominal.
You can comfortably live in the city with a roommate and pay only $500-600 rent. Just outside the city, you can get a 1200 sqft apartment for $700.
Our music scene is amazing, and the local food is fantastic.
I try to convince my friends in SF to come out here and give Atlanta a look, but nobody bites. I think this city is an incredible opportunity, especially for an early stage startup that wants to focus on growth prior to investment. The talent is here, the city is amazing, and the rent isn't absurd.
But seriously the city to country gradient is pretty steep outside Atl. However I doubt if rural Georgia is all that different from rural upstate New York. I know people who grew up in both and it sounds about the same. You can just get there faster in Georgia.
It's pretty similar for every city I've been to (including Atlanta). Drive an hour away and it's a completely different place.
After driving 20 miles, not 20 minutes... Maybe ~20 minutes if it's 3:00AM on a Monday going west on I-66.
The main reason is that the time difference with Europe is small, so that developers on both sides still have some work hours overlap.
It's a shame because there is a lot of potential, but the leaders concentrate on the marketing of the community instead of actually developing a better community. Lots of cargo culting with incubators etc., but not a lot of large wins. There are pockets of awesome in the town, but Atlanta is more about who you know and your image, not the substance that has made runaway successful tech startups.
Not trying to nitpick, just pointing out that Whatsapp didn't start in a crowded market. They actually did something unique that made messaging their friends & family way cheaper and easier.
Different teams excel at different challenges.
Personally I'd prefer a market with competitors. That means the market exists.
https://www.pindrop.com/about-pindrop-security/
https://www.pindrop.com/what-we-do/
We're also hiring: http://grnh.se/iwk5m4
Your description of the startup scene here is literally the startup scene everywhere.
Atlanta Tech Village http://atlantatechvillage.com/ Venture Atlanta (for up and coming startups to get funded) http://ventureatlanta.org/
Nearby there's companies like BitPay https://bitpay.com/ Terminus http://terminus.com/ SalesLoft https://salesloft.com/ YikYak https://www.yikyak.com/home
There's intentionally nothing like Silicon Valley because the Valley has a literal firehose of the most brilliant engineers constantly flowing into it. When Atlanta, or Tampa, ends up with a brilliant engineer with vision and drive, it's mostly out of luck or coincidence.
The rest of the state also has a proud tradition of hating public transit and attempting to defund MARTA (public rail & bus transit) in various ways. Punchline: no operational funding from state, but state historically limited how MARTA could spend its own sales tax revenue on operations. See https://en.wikipedia.org/wiki/Metropolitan_Atlanta_Rapid_Tra... and http://saportareport.com/a-marta-story-why-the-state-never-a... for some hilarious political hijinks.
Cobb County (immediately west of the city) also (a) is unwilling to contribute to MARTA, (b) has a terrible traffic problem, (c) is currently burning money to build an overpass over 30 miles of existing interstate to solve the problem forever (see: http://www.ajc.com/news/local/mile-reversible-toll-lane-what... ), & (d) refuses to even consider rail.
From wikipedia [1] Atlanta has the 3rd largest percentage, but it's 11th for total population. Admittedly those figures are for 2005, but I wouldn't expect Atlanta to make up that much on the top 3 in the last 10 years?
[1] https://en.wikipedia.org/wiki/LGBT_demographics_of_the_Unite...
California probably has more backwards people than Georgia fighting against stuff like this.
[0]http://m.washingtontimes.com/news/2016/may/26/california-tra...
It's the same pattern I see often here... made up story incoming. The original person who spouts nonsense is never hold to account, especially if what they're saying fits with the status quo.
Person1: Trump is literally a lizard person!
> Person2: You're an idiot, and here are some facts that show he's not.
> > Person3: Whoa whoa, you're probably right but be civil!
It was not my intention. The parent did a quick Wikipedia search and came to the conclusion all of Georgia hates LGBT, better not move there. It's offensive to me as a native.
I left ATL for SF last year and I had many similar conversations while I lived there.
ATL Founder > What do you mean you are charging $100/hr? I can pay 5 shitty developers in India for that price.
SF Founder > We are on a pretty tight budget. The best we can offer you is $140k/yr + 0.7% equity.
https://www.glassdoor.com/Salaries/atlanta-software-engineer...
Neither is very scientific but I don't think it's such an obvious win.
I'm only a few years out of school and almost at the 72k level with much room to grow in salary at my current job and grade level.
You gotta compare apples to apples. I'd rather not have the majority of my paycheck go to housing. I'd rather buy than rent and I don't see that happening anywhere I've looked in Cali.
Whether these things are sustainable is one thing, but NYC and SF have always been expensive areas to live and at the same time among the best chances to grow a career in most fields. Otherwise, there'd be little growth in cities. It's not like the millions of people in urban areas are all stupid or too young to think about families and renting v. buying.
When I moved just a little further out the car was absolutely needed.
That said, I don't live on one of those routes and don't really encounter much trouble cycling or boosted boarding on the roads.
Uber is pretty good though when you need it.
Tons of opportunity
Hell the non-tech founder of it said at one point that Ruby is really easy and with a small amount of training a founder should have the skills necessary to create a startup. That is not someone who values tech or the skills that go into it. So if your an engineer why would you go somewhere where there is a good chance that a marketing/business type will take the credit for your work and ideas, probably try to take more of your equity than they would in Silicon Valley? And with all of that Atlanta companies do not have exits that are even close to what we see in the valley.
I grew up nearby, in Greenville, SC, and Atlanta was "The City". But, I've never liked it. Even with family there, I'd never consider it a place I'd want to live (and I really like my family!). I also don't choose to live in SF, but I'd pick it long before Atlanta.
That said, it is a growing city with a ton of opportunity. I know some folks who've moved there from other cities and they almost immediately found good work in their industry of choice (film, where they'd been struggling for years in Austin, having to have a second job in retail just to make ends meet). So, sure, cost of living isn't bad and the economy is definitely booming. But, it's not a nice city, IMHO.
I wouldn't choose to live "just outside" of Atlanta either, for all the terrible traffic/commute reasons you mentioned -- I live ITP and a 5 minute walk from a train station with a 10-minute hassle-free commute. Somehow I can survive here as part of a one-car household.
Also please don't paint an entire city (let alone one with Atlanta's demographics) as full of "casual racism." C'mon.
Grew up in the suburbs, hated it. Moved into Atlanta and fell in love. It's perfectly proportioned for cycling. The food everywhere is amazing (I still miss Atlanta's food, now that I'm in SF).
It's the only major city I've been to where a white person dropping the word "nigger" (and used in a clearly negative way) not only happens in conversation, but it doesn't elicit gasps or any negative response. To be fair, it's also among the more diverse major cities, with tons of black-owned businesses, and that's awesome. So, it may be the clash of cultures (shitty old poor white southerners surrounded by successful black folks leading to resentment) rather than Atlanta being more racist. But, the south, in general, has such a long history of segregation, red-lining, private clubs that mysteriously have no black members, neighborhoods with no black residents, etc.
So, I'm probably being overly harsh based on surface level stuff. Opportunity is an important part of the power of racism, and Atlanta seems to have shown itself capable of providing opportunity to black folks; at least enough to lead to lots of black folks choosing to live there. Cities like Austin, Portland, San Francisco, etc. may actually be more harmful (or at least less welcoming) to people of color than Atlanta, without any overt signals of racism.
Yeah, we've got problems, but I would actually point you to our BLM protests as an example of our racial tolerance. They were almost completely nonviolent, well-organized, and incredibly diverse. Atlanta has a "we're all in this together" kind of spirit, at least in my experience. Casual racism is, for the most part, not tolerated.
Look at St. Louis and Baltimore. Much more brutality on both sides and riots. Atlanta isn't the old Atlanta and we don't tolerate that crap.
I'm sure it's getting better over time; most places in the US are. But, it's only been a few years since I last saw someone behaving in an overtly racist manner in Atlanta. I can't imagine it's changed drastically in that time. I'd appreciate if you'd read everything I've written on racism in Atlanta in this thread (and the other child thread). I'm not trying to paint it as a black and white thing, or suggest that Atlanta is the only city that suffers from racism.
Maybe you should find new friends.
I was born in ATL and lived there the first 20 years of my life and then for 18 months after college. I can say unequivocally that I've never been in a situation where it would have been acceptable or "just felt normal" to encounter that.
As a counterexample, I have lived in Atlanta for the past 7 years and never once heard anything like this. I'm not saying it doesn't happen, but it feels like you're painting the city with an overly broad brush.
People need to stop judging others on how they want to live and pretend theirs is better.
Know why people move to the burbs? It's because most of the schools ITP are shitty, I can buy a bigger and newer house for my family to live comfortably. My small, 1974 home in Decatur is worth almost as much as my new home and the schools are not as good.
I work in Alpharetta, and probably will always work there so my commute is reasonable.
Historically, most of the technology companies in the metro area were located in office parks in the northern suburbs. But momentum seems to be shifting back to in-town locations. When my firm moved to its present location in NW Midtown in 2007, we were the only tenant in our building. Since then, we've been joined by a marketing agency, Uber, Square, Worldpay, and a few others.
Imho, Marietta/Cobb County (NW of Atlanta) and Alpharetta/North Fulton (N of Atlanta) especially tend to have... less than cosmopolitan perspectives. DeKalb (NE & E of Atlanta) can go various ways.
My rebuttal to Atlanta being casually racist is always "Have you lived in the NW/NE?" We're absolutely still racially stratified (see: https://en.wikipedia.org/wiki/Demographics_of_Atlanta ), but compared to the other places I've lived and visited you run into a wider variety of people in everyday life. Which is important to me.
Hell, when I was younger I once worked a service gig at a beach restaurant in CT and could count on two hands the number of non-white customers I served the entire summer.
I have to fly into Atlanta from the West Coast 3-4 times a year and it is also my least favorite major American city.
There are nice places there (Top Golf, Bourbon Bar, tons of good restaurants)... But there are nice places everywhere and they certainly don't make up for Atlanta's other shortcomings. I can't articulate all the reasons for my distaste, but it just looks dirty and depressing. The traffic is horrible, the weather is usually bad. We refer to it as Shitlanta (which is an exaggeration, but not much of one).
clever. Come up with that all on your own?
And I'm guessing you're being sarcastic, which is fine as a response. It's a strong word, and I'm sure plenty of people love that area. We just emphatically do not.
There are 2 truths I've found, having lived outside Chicago, Manhattan, Atlanta (in 3 different areas), Orlando, Tampa, and Los Angeles:
1. Wherever you are, people think the drivers there are worse than other places.
2. Wherever you are, people think the weather changes more frequently there than other places.
I have NEVER lived, and rarely visited places (including Europe), where someone hasn't used the "if you don't like the weather, wait an hour" joke, non-ironically.
As to your point I quoted, the drivers in Orlando are orders of magnitude worse than Atlanta. And I'm wondering if you've ever been to south Jersey or Boston, if you think Atlanta drivers are rude.
Your other points about McMansions and SUB-urban sprawl are spot on. And, everything IS 30 minutes away, and unreachable by mass transit.
re: casual racism... Dunno, maybe. At least it's not overt racism like I've seen in many other places, but I'm guessing that's not what you were getting at.
That can't possibly have been a common occurrence in LA... Our weather changes about half a dozen times a year.
Seattle has a few months of near-uninterrupted sunshine and a few months of near-uninterrupted drizzle, but the intervening months interpolate by changing the weight of their random switches between the two.
1. Wherever you are, people think the drivers there are worse than other places."
I have lived in an RV and traveled full-time for six of the past seven years. I've driven a bus-sized house through more cities than most folks have visited. I feel like I could write a (very boring) book about traffic. I agree that everyone complains about traffic, and everyone does say the same tired old line about the weather changing. But, there are differences in the character of drivers and traffic in various cities.
I will agree with you about Orlando (and Florida, in general); those are some shitty drivers, too. But, Atlanta really takes the cake. I was on the road for seven months in the RV before going to visit my folks for the first time (the first time in the RV, not the first time ever). I got cut off more, and had more people ignore my turn signals, in the hour it took me to drive across Atlanta than I had in the entire seven months prior in dozens of other cities, including Los Angeles (which has surprisingly polite drivers, given its reputation). I really don't get road ragey...except in Atlanta.
I have driven in both Boston and New Jersey. While they are crowded and the drivers (particularly cabs and buses) can be somewhat aggressive, and there are some ridiculous behaviors you wouldn't see in most other places (double-parking delivery trucks, honking and even yelling a lot more than you see in most places) I wouldn't categorize them in the same league of hatefulness as Atlanta drivers. Driving in Atlanta felt downright dangerous because of how aggressive drivers are.
We had done a 9 day trip across the US and Canada, through mud, ice, through a nasty storm, down mountains with hot brakes and transmission, but no part of that more stressful than the merges in Atlanta.
I also happen to live here, and what you say about aggression (I wouldn't call it hateful) is pretty accurate. Not only do people typically ignore signals, some will close gaps _because_ of your signal. As a result, way too many people (police included) never signal. It's lord of the flies.
I've driven in Manhattan before and it's not that bad. Nobody will let you in but nobody will actively try to prevent you from merging either. You have room or you don't, figure it out. Driving in south Jersey is like driving in a maze of cars who are actively trying to prevent you from changing lanes or getting where you want to go. Between the Crown Vic going 10 under the limit or the WRX going 110, it's a wonder anything lives past the first six months driving in the Cherry Hill area. Orlando was the same way but the places I was in it just wasn't crowded enough to be that much an issue.
They drive hard, but there's a very clear & consistent code/system everyone abides by, drivers are attentive and bewilderingly polite: signal, and—more often than not—someone immediately makes room for you. Makes for stress-free, predictable driving despite being 20 over at all times.
… or maybe that's the norm, but I'm from Seattle where drivers are timid, indecisive, unpredictable, and passive-aggressive.
I spent the first 24 years of my life in south Jersey and never perceived the drivers as particularly rude, especially compared to Boston ... can I ask where specifically?
I think there is a cultural bias at work here somewhat, too. Wherever you learned to drive seems normal, even if it is way different than other places.
I think this is why Orlando and Atlanta are perceived as the wild west of driving; very few people are FROM there. Everyone brings their driving norms from wherever they learned, and they don't often mix well.
That whole region, in general, has nicer people than their reputation would indicate, in my experience. New Yorkers and New Jerseyans (is that the right word?) were all pretty nice and helpful. I spent a month parked in Ridgewood, NJ (it was the closest I could park the RV to NYC for that long), and was struck by how friendly folks were across the whole area, given the reputation for rudeness. Riding the train was fun, asking for directions was rarely problematic, etc. Driving the house around sucked, but the people were fine.
Also, I don't know anyone in the South Bay (SF is different) who thinks the weather changes more frequently than other places. Here the joke is "Walk outside. It's sunny. It'll be sunny from April until November."
There have also been more shootings on the road in Houston than anywhere else I've lived. So, yeah, that seems scary, but it's not something I worried about when I lived there. In the instances where someone got shot that I know of, the person was kinda asking for it (they initiated violence and the person they were beating on happened to have a gun under the seat or in the glove box).
I've NEVER lived anywhere anyone has made that joke, ironically or otherwise. That may have to do with the fact that the last 2 places I've lived (Portland, OR and Phoenix, AZ) have very long stretches of monotonous weather. But 2 certainly doesn't seem nearly as true as 1.
When I was younger my friends and I would drive way more aggressively whenever we saw out of state plates. We thought it would be funny if they went home with horror stories.
It's the South.
Between 7 and 11 rain days per month. We actually get more rain than Seattle, but on fewer days.
Any complaints of "bad weather" generally equate to "it's too hot" or "I don't like it". For general human living, it's quite moderate.
Also although I like Atlanta, the casual racism comment is not unfounded. For example, we have bunch of white only elementary schools and then we have some with black majority ones. Also putting my son through this system convinced me schools like to keep this segregation.
Does London not have school districts? If you have a neighborhood that is predominantly black then that's going to be represented in school demographics. I believe that's how it works everywhere in US.
Sounds like you all up and down this comment section
I understand to some degree the reasons startup people want people within 20 miles of them. But if somebody is happy living in Anchorage, AK, why should I convince this person to move where I am, as long as GH issues are being punched out?
That said, I love SF, motorcycling to Marin, and I don't think I'll move anywhere else for the distant future.
Having said, don't come to Minnesota. Any of you. It is not nice here at all.
I like my little slice of paradise.
If you're looking for a larger company, Salesforce Pardot and Cox have a huge presence here. NCR is moving their headquarters to Midtown.
"Murder Kroger" has that nickname for a reason, and the fact that so many Atlantans are used to it is quite telling.
The author, Farhad Manjoo, is romanticizing a bootstrapped business as "good" and (via his prosaic examples of restaurants and dog walking) dismissing the VC-backed businesses as "bad."
It should be obvious that the opposite can be true: a bootstrapped business can also be dysfunctional and a VC-backed firm can be disciplined with its money.
Bootstrapping is great strategy especially if you're company that doesn't benefit from "network effects" such as Mailchimp/Sendgrid. You acquire customers one at a time and offer a good enough value proposition for them to subscribe or pay. A lot of SaaS/enterprise companies and lifestyle businesses can grow that way.
Venture capital is really helpful when you need to deliberately grow exponentially faster than bootstrapping will allow because you're trying to build a giant footprint for the network effects. Snapchat is a good example of this. It wouldn't make sense to try to sell the Snapchat app on App store for $4.99 each so it can be cashflow positive and pay for programmer salaries. The first users of their apps were teens in high school and they can't just purchase an app like that without their parents' permission. If Snapchat charged money for the app, they wouldn't even know that teens were the leading edge of that trend. In that case, you need to wisely use vc funding to pay the bills while you grow the audience. Hopefully, Snapchat will end up profitable like Facebook instead of losing money like Twitter.
If you're a "network effects" startup that insists on bootstrapping as the only funding, you will be beat by the competitors that are willing to live with $0 revenue for a few years while their equity financing allowed them to build their user base faster.
as a founder you do have a choice of the kind of business you start. I think he just points out that debt-driven is not the only way to grow a successful company.
But it cannot continue to be so for half a decade.
I have met absolutely incompetent business owners who just happened to stumble into goldmines and through their own incompetence have locked in customers.
Start looking at software for an unsavoury infrastructure industry and you'll find this stuff abounds. Particularly in industries that were early adopters of computerized databases.
At least, enough of them have value to pay for the ones that don't.
This is basic economics.
"The market can stay irrational longer than you can stay solvent".
I started feeling Murray Gell-Mann amnesia (https://seekerblog.com/2006/01/31/the-murray-gell-mann-amnes...) reading him a while ago and sent him a tweet about an important thing not discussed in some article, and his sarcastic response made me realize that he doesn't care very much about getting stories as right as he can: https://jakeseliger.com/2015/07/03/why-you-really-cant-trust....
Whatsapp did charge for the iOS App and also a 99 cent subscription but it's not clear if they were break-even or profitable from November 2009 to April 2011. Since they were a private company, I'm not sure if they have ever disclosed their financial details before the 2014 Facebook acquisition.
[1]https://www.crunchbase.com/organization/whatsapp/funding-rou...
Yes, I've seen that video. Increasing the price to slow growth is a separate tool from weighing pros/cons of VC money to grow huge. At the time of Sequoia's 2011 investment, WhatsApp was estimated to have ~30 million users. It seems that Jan Koum felt it made more financial sense to get $8 million from Sequoia rather than from his customer base. If JK could raise subscription prices higher ($2? $5?) without his customers complaining to "self-fund" that $8M, that would have been financially better than giving up 10-15% of company ownership to Sequoia. He must have liked the first vc financial deal because he went back to Sequoia again for another $52 million.
If JK is ever on stage again, maybe somebody can ask him why he didn't get that $60 million from his user base. It would be interesting to hear his thought process.
1. Some financial understanding of how to invoice, pay taxes and write contracts - the business side
2. Manage people, setting expectations and holding people accountable, while empowering them to be successful in there job as clearly defined when hired
3. Take action to address the immediate. Reds of the customer while always keeping an eye on the longer term needs - always be available and responsive to needs of the customer - email, phone, chat
4. Have a solid foundation in the technical aspects of what you are building and operating
If you have these 4 things and a product that is a good fit in an emerging market than raising capital is probably not necessarily needed because you have the resources and skills to make it happen. I think probably a 5th requirement is you have enough personal capital to pay for your living expenses until the business is making enough money. Also avoid hiring until you can pay for double the salary of the first hire... this way if you are wrong you have some padding and it's proved you can work through hard times. I remember thinking before our first hire that this was way too much stress and it would be so much easier when we have more people. Now at 16 employees, it's an order of magnitude harder but I'm much more prepared than I was back then. The children analogy is good I think. When you first have a child you think this is going to be hard but they grow with you and so it's not so bad it's even kind of fun
It’s time to retire the idea that raising money equals “glory.” It’s not a measure of business success as much as it is a measure of founders being able to convince rich people to back them. As we know from the "XX is shutting down" stories that regularly grace HN, many if not most tales of massive fundraising success will eventually become business and investment failures. Yet the TechCrunch/Fortune/BI coverage angles—pushed relentlessly by the investment community and hired PR people—almost always emphasize the former over the latter.
I've toyed with the numbers in my head and I can't make them work; I think they would have been much better off not raising any money.
(I'm just an outside observer.)
It's hard to grow a business without going the conventional SV route and getting VC funding. Unless you have a revolutionary product, the bigger competition will likely stomp over you unless you have resources to grow your team and product and marketing. Or if you are comfortable with a small market share but a profitable one.
Not saying it is impossible, but just hard. I know a few SaaS out there like Roninapp and Reamaze that like Mailchimp are not VC funded and are growing well and are run by a small but effective team, but the question is would startups like these benefit from funding and be in a better position with regards to growth and user base than without vc funding?
More often than not when startups receive funding they move away from satisfying the customers to making investors happy. As the company starts to hire, get a nice office, increase spend on things like office perks, ads, marketing etc while it might contribute to growth it doesnt necessarily work well for the end user. You go from lean to bloat more often than not. I guess that depends on how you manage resources but it isnt exactly easy with investors breathing down your neck
I have a company that is bootstrapped and while there are well funded competitors out there, i'm perfectly fine with my startup running lean and being profitable, albeit slowly. At least I am my own boss and I answer to myself, and that in my world is 'making it'.
Making it = profitable and no debt.
As odd as that may seem, a great many companies don't do that. E.g. Uber (for now).
I do like the question on whether Mailchimp would be a lot more successful had it taken on more funding and debt.
Case in point, me. I started FreeRADIUS in 1999. Started making money in 2007. Incorporated in 2008. I now have multiple offices, multiple employees, and good growth. No investment. No debt.
The "bigger competition" in my case are AMdocs (previously Bridgewater), Cisco, Juniper, Alcatel. I compete by offering a technically superior product, at a lower price point.
I do zero marketing. Zero sales people. Pretty much zero RFPs. My customers call me, and ask to buy my product.
I have a small market share by revenue, but a huge market share by installations. My guess is that the total number of FreeRADIUS installs is 10x that of all corporate installs combined.
> More often than not when startups receive funding they move away from satisfying the customers to making investors happy.
Exactly. My pitch is simple: We make you happy. You need customization? We do customization. You need to integrate with a 10 year-old system? No problem, we do that. We're about expertise, and keeping the money in our pockets, instead of doing gimmicky "enterprise" stuff.
A counterpoint is one of our competitors. Their product relies on an "enterprise grade" DB. Which means that for every dollar they make on a sale, the DB company makes ten.
Uh... if that money is available, why leave it on the table? Drop an open source database in (yes, it would have worked. They need the marketing label, not the technical capabilities). Give the customer a 50% discount. Your cut goes from $1 to $6, and the customers price goes from $11 to $6. Everyone is happy.
Nope. They couldn't make it big, so they got bought. And the new owner flogs the crap out of the product, "end of life" the product every 2 years, and forcing expensive upgrades. Which means that their customers call me.
It's all good.
It sounds like you did essentially take venture capital, and you were the investor.
Let's not pretend that hobbyist tinkering is the same as VC investment. It's not, by a long shot.
Do you make money selling consulting services for FreeRADIUS or do you license the software?
Losing to a competitor would mean you're not failing because you didn't find a market need. So you would screw up managing it, or by not spending to market/hire/add capacity fast enough. The only other reasons I can think up seem idiosyncratic (maybe well-funded competitor got regulatory approval or a big partnership from a VC intro?).
They had many competitors that were earlier to market, but ultimately lost out to YouTube.
Edit: here's the source[0]:
> Youtube acquired traction over it's competitors by their funding strategy, product strategy (growth rate) and a liberal interpretation of the DMCA. As illustrated and extensively researched by Mr Jaffari,, YouTube tried many tactics to gain differentiation over it's competitors. In the end, YouTube's growth hack was the only metric that mattered, conversion of viral buzz into users.
> When YouTube debuted it was already late to the party with numerous competitors growing quickly. The company copied and experimented with the interfaces of it's rivals to establish a baseline. Then they applied liberal amounts of Venture Capital to organize a star development team that would iterate product faster than it's rivals. Finally they adhered very loosely to the DMCA laws leveraging primarily copyrighted content to build viewership against more generally viewable Flash player technology.
…
> The first and largest strategic advantage for YouTube was their investors, Sequoia Capital. Other Start-Ups were already in this space with more traffic, but with a major investment the sector had validity. This created coveted Bay Area buzz, while larger more established start-ups were largely ignored being outside of the echo chamber. For example VideoEgg.com (Who chose to move to the bay), Break.com (Then Big-Boys.com), Revver.com (Also LA Based), StupidVideos.com and Vidiac.com/StreetFire.net (Atlanta Based).
> On top of the buzz Youtube leveraged VC investment to land a major blow to it's rivals. They went Ad-Free. It took YouTube over 12 months to pass Vidiac's traffic but with an interface clean of ads and a cost no object design team, YouTube's competitors could not iterate on designs quick enough. The development staff would see a feature on other sites, copy it, improve it, release it. An example of this behavior is the Flash embed video players that could be placed in MySpace that was already being employed by other services. Youtube let their competitors figure out the hard problems such as UX flow, user requirements, feasibility, copied it and spent more. With better funding of development, servers, bandwidth Youtube offered their users better site performance and quicker adoption of technology. For example an early metric of success was the acquisition of content contributors. Expensive encoding solutions could process an uploaded video into a streamable format but sometimes this process could take hours and the users had to wait for their video to be ready. YouTube could buy more encoders and cut this time down to 15 minutes offering bloggers quicker video to market times. Using Flash over QuickTime and Windows Media, embed code was more universally able to deliver a consistent if inferior video experience. Inferior until the delivery of Flash 8 when the On2 CODEC was introduced giving Flash full screen and high quality videos.
0. https://www.quora.com/How-did-YouTube-gain-its-initial-tract...
They hired a CEO with experience in 5 other VC funded startups (and with burning cash) and moved into the most amazing penthouse, the last two floors of a giant tower in the heart of Sydney with a 360 degree view on the harbour and ocean and city, and a great kitchen with full time chefs, and of course a marble-covered lift lobby.
In other words we have an A/B test.
https://news.ycombinator.com/item?id=11170713
I'll never trust them or use them again, after that. No way no how.
I've had extremely negative experiences in their customer support, but also extremely positive experiences through their community engagement as I'm local to them.
But they fucked over more than the free tier. We (work) had 15 clients that all had accounts that we managed for them. We probably spent upwards of $1200/mo on emails through those accounts.
We only got ~50 days of notice that we had to change over to another provider before we would get cut off.
Switching e-mail providers is not something you can do overnight if you send large volumes (large volume does not mean spam: I send purchase receipts, contact forms, notifications, password resets -- transactional mail not ads). Even if you have a team of coders that can drop everything to start integrating alternatives, you need time to warm up your new IP space at a new provider, or your mail ends up in spam folders.
MailChimp screwed a lot of customers, and customers' customers when they gave only 60 days notice.
Customers I know who were ultimately stuck by being heavily integrated in the Mandrill API still suffered issues and downtime with the flawed account migration process. Just about every paying (and non paying) Mandrill customer got screwed in one way or another.
We then switched to Amazon SES but still have a bitter feeling about MailChimp and will move our services that are using the full MailChimp product. Some of the change was indeed to control spammers, but when you are forcing over enterprises sending 100's of thousands of emails without complaint, that starts crossing the line where you want to better monetize your product. Giving your customers 60 days to engineer a different solution after they invested in your product is not good business.
1. Startup with a clear revenue model created by generating tangible value for businesses.
2. Startup without a clear revenue model that is doing something interesting and will probably be acquired if successful.
The first is a successful business like MailChimp that can grow itself from it's own revenues and doesn't need funding. The second is the type of business that needs funding because they are essentially investing in building technology to sell to a larger company OR are building a large pool of users to sell to a larger company.
Mailchimp, ConvertKit, Drip (altho lead pages bought it, and is actively funding it's growth), curated.co (I'm not 100% sure on Curated - is that funded?), Edgar
These types of apps can actively and easily translate into $$ for businesses, so it's no wonder they can bootstrap rather than take on funds - individuals and businesses are willing to pay to make money!
and I believe before that it was mumble-mumble-innovator's-dilemma-mumble
"You mean to say that it's possible to build a business without millions in VC investment!?"
I feel Mailchimp is missing the boat by focusing entirely on email and not offering a way to contact customers via:
1. In-app messages 2. SMS 3. Push notifications
It's also difficult / impossible to set up advanced automation sequences with it. For example, if Customer X does Y on your site, direct them to another branch with a different sequence.
Of course, their main target customers are small businesses so they may not need these advanced features but these customers would benefit tremendously from being able to for example text certain messages to customers instead of only being able to email them.
[1] https://pando.com/2014/10/14/anti-burn-how-bootstrapped-zoho...
We are bootstrapped like MailChimp, have never taken any venture capital, and we won't. We have focused on building what we call "the Operating System for Business", because we envision that all the business applications will come together. That's why we have so many engineers to build that vision. By the size of the engineering workforce, we are probably already bigger than Salesforce.
Read Blitzscaling by Reid Hoffman - https://hbr.org/2016/04/blitzscaling
But why does this article have this tinged negativity toward SV? Why not just highlight MailChimp's success without the jab on VCs? Clearly both VC or bootstrapping approaches can work for a company (though both approaches fail in the majority of cases and journalism is in love with survivorship bias).
I'm not in SV, but it's obviously the place important innovation has/is/will be coming from (and some crap too). Innovation and growth is needed and should be encouraged in this economy.
Just frustrating to see big journalism knock SV for no reason.
Better story: "Chimps and the Un-Silicon Valley Way to Make it as a Primate".
VCs are easy to hate: they're rich, successful, powerful, and mostly straight, white men who had privileged upbringings.
Lol. This was a great read. But yeah, don't take money unless you literally cannot finance your growth. A real business builds itself.
"There is perhaps no better example of this other way than MailChimp, a 16-year-old Atlanta-based company that makes marketing software for small businesses."
This just kind of proves the point. If you have a company with great product/market fit and lots of VC in the bank you would either reach their numbers much quicker or have higher numbers after 16 years of operation.
Most tech startups are funded with equity, not debt.
(And yes, Mailchimp is a spammer, based on the Spamhaus definition of spam.[1] It may be legal, but it's still spam.)
Cory Doctorow had this exchange with them: https://twitter.com/doctorow/status/641660268720689152
I think Doctorow's request was entirely reasonable.
Spam.
Mailchimp is a company that provides lots of unsolicited commercial emails. In other words, spam. You can dress it up and call it "marketing software for small businesses" but that doesn't change the essential fact: Mailchamp is a spammer. Is it any surprise that spamming is profitable?
I've received hundreds of Mailchimp emails. Not once did I sign up for any of those lists.
Does Mailchimp make it easy to unsubscribe? Sure. But that doesn't change the fact that they are spammers, and that if you want to send spam with some semi-plausible deniability that you're a spammer, Mailchimp is probably a good choice.
Of course, this story, like nearly all "business news" stories, is very likely the work of a highly paid public relations agency. That is one more reason that the word "spam" does not appear in this story.
MailChimp has pretty strict standards when it comes to sending emails. If you send emails to a list that has a 20 percent or more bounce or unsubscribe rate, they'll freeze your account.
Other providers let you upload a CSV with emails and blast out campaign after campaign to purchased lists without repercussions.
Without giving you a chance to do anything to correct that? What if it is a genuine case of non- spam? e.g. 100% signed up, soon after, 20% decide this list is not for them. Sometimes that might happen.
If your account is locked, then you have to call MailChimp and explain that your intentions weren't malicious and that you won't send anything else to those emails from your account.
I had a small email list that I had not sent anything in about a year and had my account locked after sending a campaign. People just forgot they were on the list, because it had been so long. Their support team unlocked it and suggested that I send an email at least every 6 months.
I've been signed up for them implicitly after making a purchase, etc., but I consider this spam and flag it as such.
[1] OSS mailing lists don't count.
Mailing lists in the Mailchimp sense are just unwanted advertising in what I view as a communication medium - the equivalent of IRS scammer robocalls.
I have no doubt that some people do use MailChimp to send spam, but it seems to me that the majority of MC's customers are just sending to legit lists.
I think places like MailChimp are pretty easy to abuse for that reason. Compare that to an enterprise service provider where I need to commit to tons of upfront money in order to access the service and I need to manage my own reputation of my sending domain.
My "ive-done-nothing to-any-settings" email prevents me from spam in my IN box. So I suppose I never get any MC email.
Edit. Spam does not bother me any more. I only open email when I expect something. The only "interruptable" technology for me is a text. I have to look at it in my mind.
I directly reported this to Mailchimp itself, and based on both the response I got from Mailchimp and the angry response from the company owner I got a great feeling that Mailchimp took the abuse report quite seriously.