My Top 10 Learnings From Ben Chestnut, CEO of Mailchimp

So the recent SaaStr Annual 2020 at Home was a smashing success.  3 days, 100s of roundtables and sessions, and 1000s of 1-on-1s.

I was fortunate enough to lead two discussions, the first with one of my favorite CEOs, but one I hadn’t been able to do a deep dive with before, Ben Chestnut, CEO of Mailchimp.

I’ve been a 3x customer and watched Mailchimp over almost 20 years grow to be perhaps the first SaaS company to hit $1b+ in ARR being 100% bootstrapped.

My top 10 learnings:

1. Yes, bootstrapping really does take 3-4 years longer.  We’ve talked about and written about this many times before, but Ben vigorously agreed.  Mailchimp took years to transition from an agency to a software business, and then years until it finally took off when they added freemium.  In fact, really, it took 2 years to get going and 4 years to hit Initial Traction.  Bootstrapping is less a lifestyle than something we just do when it’s the only or best option.  More here.

2.  You may not need a moat. Maybe let them go if they aren’t happy. Happiness is a moat.  I’ve had a lot of discussions over the years on what constitutes a “moat” for many SaaS products.  Ben confirmed there is no moat at Mailchimp.  He said in fact, he doesn’t want moats.  If a customer wants to leave, he wants them to leave.  And hopefully earn them back later.  “Customer happiness is a moat”.  You don’t get that if you make it hard to leave.

3. Phase 2 might take 12 years to get to. It’s OK. Talk to more customers to know when you are ready.  Mailchimp in the past 2 years has grown from an email company to a marketing automation company.  That’s a big change, and their own version of finally going upmarket.  But boy — they waited!  Almost 20 years.  They waited until $1b in ARR to go upmarket more, to add a much richer and broader product suite that took them out of “just” email.  So do at the right pace. A bit more here.

4.  It can take 24+ mos. to get to real Product Market Fit. Mailchimp didn’t really have product-market fit until it went Freemium a full 2 years in.  We’ve talked for years on SaaStr on how you have to budget 24 months to really get something off the ground in SaaS.  Here’s another case study.  It also took Mailchimp 24 months, and a tilt to freemium (which they initially resisted), to even get to $1m in ARR.  A bit more here.

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