How MailChimp Became A Leading Email Marketing Service: The Story Of Its Founders

MailChimp's founders didn't set out to build the world's leading email marketing company. When Ben Chestnut and Dan Kurzius launched MailChimp back in 2001, their primary goal was to assist the customers of their web design business. Many of these clients were searching for a simple way to send marketing emails about their products or services. Chestnut revisited some old code he'd previously written for a different project, which laid the foundation for what would become the MailChimp email marketing service. Fast forward to today, and both founders have recently made it onto the list of the richest Americans, each boasting a net worth of $2.1 billion!

The journey of MailChimp was not an immediate success; in fact, it remained a side project for many years. It wasn't until 2007 that Chestnut and Kurzius decided to shut down their web design business entirely and dedicate themselves to MailChimp. They realized that while web design wasn't their true passion, helping small businesses thrive was. However, entering the email marketing sector in 2007 came with its challenges, particularly due to the surge in spam emails that year, with studies indicating that 95% of all emails sent were spam. Major players like Constant Contact, which had raised $107 million in an IPO, were already dominating the market, but the founders persevered.

Ben Chestnut's roots trace back to Hephzibah, Georgia, a small town with a population of just 3,900. Growing up, he experienced a unique cultural background, as his father, an Army code breaker, had met his Thai mother during the Vietnam War in Bangkok. They moved to the U.S. with two of his mother's children from a previous marriage. Chestnut faced bullying in school for being one of the few Asian students, prompting him to take up karate. During high school, he met Teresa Urch, who would later become his wife. He pursued his education at the University of Georgia and the Georgia Institute of Technology. After completing college, he worked at Cox Media Group in Atlanta, where he initially aimed to develop an early MP3 service.

On the other hand, Dan Kurzius grew up in Albuquerque, New Mexico, where his father's bakery-deli faced tough competition from a larger chain, leading to its closure. This financial strain contributed to his father's untimely death when Kurzius was just 12 years old. Despite facing challenges, Kurzius found his way into the tech world, where he eventually partnered with Chestnut.

After Chestnut's layoff from Cox's MP3 business in 2000, he founded Rocket Science Group, focusing on web design. Alongside Kurzius and another tech colleague, Mark Anderson, the trio initially served tech companies until the tech bubble burst. They shifted their focus to travel agents and airlines, but following the tragic events of 9/11, they pivoted again, this time to real estate. However, they found that their true passion lay in helping small businesses, which frequently sought email marketing solutions.

As they transitioned to email marketing, Chestnut revived the old code from the digital greeting card business, refreshing it for their clients. By 2006, they began seeing financial returns from this side project, leading them to make email marketing their primary focus and rebrand it as MailChimp. They did not actively seek investors, partly due to their lack of understanding of financing and a desire to remain focused on small businesses, despite the offers that came in after Constant Contact's IPO.

The pivotal moment came in 2009 when they decided to offer their email marketing product for free, implementing a freemium model that aligned their revenue with the success of their clients’ campaigns. This strategy paid off. MailChimp quickly grew from a few hundred thousand customers to one million within a year, and then to two million the following year. Today, MailChimp remains free for users with fewer than 2,000 contacts.

Email marketing, though not the newest trend, has proven to be a stable and effective marketing strategy. In 2017, U.S. businesses invested $2.8 billion in email marketing, benefiting from its cost-effectiveness and higher returns compared to Google Ads and Facebook ads. Currently, MailChimp boasts a workforce of 700 employees, serves 16 million customers, and sees around 14,000 new sign-ups daily. The company continues to thrive, generating an annual growth of $120 million, with projected revenues of $525 million in 2017, and both co-founders enjoying billionaire status.