How MailChimp Cured Its Growing Pains
This is an episode of our podcast Problem Solvers. Each week, an entrepreneur reveals how they overcame an unexpected problem in their business -- and were happier and more successful as a result. The show is hosted by Entrepreneur’s editor in chief, Jason Feifer. Listen below, or subscribe on iTunes, Google Play, Stitcher, or wherever you get your podcasts.
MailChimp’s tiny staff could once fit around a table, so they often did -- gabbing over coffee, and dreaming up new directions for the business. By 2014, though, that team had grown to 300 people. At a company cookout, co-founder and CEO Ben Chestnut looked around and realized he barely knew anyone. So he called a meeting, hoping to reclaim the intimacy of those early days.
Hundreds of employees gathered. When it came time for questions, someone raised a hand and asked about MailChimp’s future plans. The CEO shrugged it off. “I’m giving this answer like, ‘We don’t need no stinking strategy -- we’ll cross that bridge when we get there!’ ” Chestnut recalls. That, after all, had been his longtime philosophy: The company worked best when it improvised, trying things on the fly. But while half the room nodded in agreement, the other half seemed alarmed. One raised a hand and asked, “Why are you being so secretive?” The room got tense. Afterward, another employee told him he needed leadership training.
Every entrepreneur who scales a business will have some moment like this, when they discover they aren’t the leader they need to be. The future of the company hinges on what comes next -- and whether, like Chestnut, an entrepreneur is able to evolve to meet their company’s needs. But it isn’t easy. “I got through it after many months of lots of pain and suffering,” he says. “And then it was a few more months of pain and suffering.”
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Like most pain and suffering, Chestnut’s began with a self-evaluation: What kind of leader am I? The answer went back to MailChimp’s earliest days, when he wanted to attract great new talent. The people who are crazy enough to join a startup want a crazy challenge -- they don’t want structure, he recalls thinking then. So he hired rebels and encouraged them to, in his words, “run with scissors.”
As MailChimp grew, however, hundreds of employees joined who had no connection to Chestnut. All they saw was a leader with no articulated vision, and that left them feeling lost and frustrated. That’s what created the split in that contentious meeting. His older employees loved his anti-structure attitude, but new ones despised it. Chestnut had to pick a side. And, he realized, he was on the wrong side; it was time to treat MailChimp like the big company it was.
To start, he hired consultants from Emory University to help him craft a mission for the company. It was humbling, he says, to be a leader who needed help identifying what he was leading -- but he’d come to realize how necessary it was. The consultants also built “MailChimp University,” a training program that the company’s employees still go through today. He then hired a layer of middle and senior management, which MailChimp had been missing, so that these leaders could help spread the mission throughout the company.
As Chestnut became comfortable with his new leadership role, he started repeating a phrase around the office: “Startup to grown-up.” He wanted to acknowledge the transition; the entire company, including him, was going through the corporate version of awkward teenage years. “It’s supposed to be hard,” he’d say. It’s natural.
MailChimp survived. Today it has 800 employees, more than 10 million users, and $525 million in annual revenue. But not every employee lasted through the transition. Many early hires left -- the ones “running with scissors,” who nodded when Chestnut said he doesn’t need no stinkin’ strategy. As that happened, the company found new superstars. They were the ones hired more recently, who wanted structure and a plan. “It was almost like they were just waiting to be activated,” Chestnut says.
And, he now knows, they were waiting for him to become the leader they needed.
Listen to the podcast with Chestnut below: