12 Leadership Lessons from Mailchimp Co-Founder and CEO Ben Chestnut
How he grew the email marketing platform into an enterprise valued at more than $4.2 billion.
My ongoing series in partnership with Entrepreneur, If I Knew Then: Leadership Lessons, is a unique platform for hosting virtual fireside chats with high-profile CEOs of major brands, from Indeed and Nextdoor, to GoDaddy and DocuSign. These insightful sessions spotlight the minds of successful leaders as they share one-of-a kind advice and lessons for both current and future entrepreneurs.
For our 16th episode, I spoke with Ben Chestnut, the CEO of Mailchimp, a company he co-founded with Dan Kurzius in 2001 as a side project to their web design agency. Together, they designed Mailchimp to be a delightful, yet powerful email marketing tool that gives small businesses access to technology that was once reserved for larger enterprises. The company has now evolved into a platform that helps small businesses with everything from buying a domain name and setting up a website, to creating an online store and setting up eCommerce marketing automation.
Headquartered in Atlanta, where Chestnut received his bachelor's degree in industrial design from Georgia Tech, Mailchimp has impressively scaled in growth over the past two decades, but its mission remains the same: to empower the underdog. Chestnut leads a team of 1,200 employees across six offices, including in Atlanta, Brooklyn, Oakland, Santa Monica, Seattle and Vancouver. Mailchimp helps empower millions of businesses and entrepreneurs globally with savvy marketing, commerce tools and award-winning customer support.
After 20 years in business, the co-founders continue to each retain 50 percent of the company, despite offers north of a billion dollars from outside investors (a unicorn feat in itself). Mailchimp remains privately held and highly profitable, with $700 million in revenue in 2019, 60 percent industry market share and a valuation of $4.2 billion.
When asked what inspired him to become an entrepreneur, Chestnut recalls the story of his mother running a hair salon out of the kitchen and brainstorming business ideas on car trips with his father:
"My mom gave me this entrepreneurial model," he says. "She didn't call herself an entrepreneur or a small business; she called it "making ends meet.' It was her talent. I saw entrepreneurship as just breathing, a thing you do in life. It was a service business; clients came into our kitchen. I learned about customer service this way. My father was in the military and dreamed about starting a business, but he could never make that break, because he had to support the family. I have memories of brainstorming businesses to start one day with him on car trips when I was growing up. It inspired me to finish what we started. In 2000, we all got laid off at this dot com, and I remembered all of those stories I brainstormed with my Dad. I knew that if I didn't try to be an entrepreneur, I would never be one. I might get a great cushy job, but I might regret it. I thought, let me try this."
Read on for more of Chestnut's insights from his journey of building a sustainable, evolving and enormously successful business. Here are 12 takeaways from my conversation with this incredible leader:
1. Do what works and repeat
There is no playbook to build a successful business. Starting a company is not always perfect, and you'll make plenty of mistakes. Chestnut recalls a time in the early Mailchimp years when he was searching for a playbook or mentor who could flip the switch so the light bulb would come on. Chestnut soon realized there is no playbook, so he asked himself what was working and moving the needle — even something as small as getting 100 customers. Chestnut's mentor at the time asked how he was able to get those 100 customers and advised him to use the same strategy again, which worked. Stop focusing on the negatives or the mistakes made, do what works and repeat it until customers stop buying it.
2. Find the communication style you're good at, then find the channel that will inspire you to use it
Founders are good at one way of communicating. For Chestnut, it was writing, so he fell into blogging, which was how he marketed Mailchimp. He calls it the "3 Cs": What's the channel? What's your communication style? What's the channel that's going to give you the highest cadence?
3. Listen hard, change fast
Chestnut believes the world would be a better place if CEOs listened more. Talk and listen to customers, connect the dots and live up to your brand promise. "We had an extreme customer focus from the beginning, but I'd be lying if I didn't acknowledge that we started at a time when the economy was horrible and everybody needed an affordable marketing channel," he says. "SaaS was kind of new, and we had a SaaS offering right off the bat. It was a good one for a channel that was neglected for a long time. I still remember a customer from Dayton, Ohio said, "Sprinkle the magic in all of the channels and make it easy.'"
4. Diversify your customer base
Imagine an inbox with 1,000 requests from customers. That is enough to overwhelm three people in a rented office space. You need to find the trends within those requests and build for those trends; if you build something, it should solve for millions of people, not just a small handful of really big customers. By diversifying your customer base, you are not relying on retaining your fewer bigger accounts.
5. Avoid regrets by taking risks
Early in Chestnut's journey, he picked up a book, Regrets of the Dying, about a home care nurse who detailed everything she learned from taking care of people on their deathbeds. Chestnut lives his life to avoid regret and says "This book was my motivation to take a leap and do new things. I don't want to be on my deathbed having not taken risks."
6. Have a unique story to tell
Even if your business is doing something that's been done before, share how your take on it is unique. Entrepreneurs should remind themselves, I am an entrepreneur. I have a story to tell.
7. You need to know the goal. But don't stop there
Chestnut takes this concept a step further, asking himself, What are the habits I need to achieve my goals? What do I need to change to get there? He then forgets about his goals and chooses to focus on the change of habits, knowing the goals follow. "You need the sun, you love the sun, but if you stare at it, it will burn your eyes out," he says. "I hire people to watch the goals now, and my job is to think of the next level because I am the role model. How do I change to achieve this goal? I need to behave this way, the culture of the company has to behave this way."
8. Look for leaders that can adapt to any scenario.
Chestnut has a strategy to help him assess whether a candidate is a good listener and can focus. "Maybe it's more of a pet peeve," he says. "But I have a fork test." He purposely takes prospective hires to lunch or dinner at a loud restaurant. If they are unable to drown out the noise and get distracted by the sound of a fork dropping, it's a sign that they can't stick to a goal or focus on the person in front of them. He also shares another trick he has, which is to take on the persona of Gomer Pyle when he asks people to tell him about what they know. This shows him if they can explain the subject simply. "It is a test to see if they truly understand the topic or subject matter and are humble enough to dumb it down for a simpleton. If they get defensive, that's a bad sign. If they are curious, that is a great sign."
9. Make sure the leaders on your team are brave enough to tell you when you are wrong
Hire people who are smarter and better than you, because you're not always going to be right. Not everyone will feel comfortable telling you when you are wrong. It's important to interact with and listen to your leaders in a way that is open and encouraging of honest feedback. This must be practiced, but over time your people will trust that they have the ability to tell you when you are wrong.
10. You don't need to read books on time management, just hire great leaders (and stellar executive assistants)
Running a tiny squad is very different from running a team of 100 or 1,000. Understanding organizational behavior is helpful, but you can't understand it by reading leadership books you get at the airport. Great leaders know what they are doing, and they save you the time you need. Have a great executive assistant, and get other executive assistants for your executive team as soon as possible. This helps everything grow. Chestnut confesses that he never reads growth hacks or time management books, because he believes with growing a business, everything changes every couple of months. Patterns never stick, because he's always having to prepare for change. "We are on a rock hurtling through space on an ever-expanding universe," he says. "Something will change. Everything will change. It's all about adaptability and resilience."
11. Design your product or service for the life stage of the customer versus the industry
Avoid comparing your small business clients to other companies in their industries. Instead, look at the evolution of their competitors. To sell to people who are just starting their businesses, Chestnut and his team create a persona of the young entrepreneur. At the five-year mark, they noticed a trend where their customers were hiring another person handle the marketing. As a result, Chestnut's team gives these businesses another persona at this stage of their growth.
12. Don't listen to your ego; build for your customer
Let your customer always be your North Star. You will mess up a little bit every day. Something is always broken, but you keep on marching. Look at and care for your customers, not yourself.
"I think about our customers and how they are becoming global," Chestnut says as he reflects on the future of Mailchimp. "They sell things that are small and shippable. Our customers are the future of commerce, and our global potential is to serve all entrepreneurs all over the world. The majority of our revenue comes outside of the US. Mailchimp is on the cusp of 1B in ARR. That is a good rite of passage that I want to celebrate."
Mailchimp's mission to empower the underdog by building powerful marketing technology and democratizing it for small businesses has not only survived two decades and a pandemic, but it is thriving. Mailchimp is also giving back, providing free six-month memberships to qualified organizations that are helping with Covid-19 vaccine distribution.
It is no wonder Chestnut has been called a combination of Mr. Rogers and Bruce Wayne, even though he likens himself more to the great American author Kurt Vonnegut. In the words of Kurt Vonnegut, "We have to continually be jumping off cliffs and developing our wings on the way down." I look forward to hearing how Chestnut develops his wings.
To learn more about this incredible leader's journey and the lessons he learned along the way, watch the full webinar.
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