Freddie and The Future of Commerce
Before he was a billionaire, I met Ben Chestnut. I was in the Atlanta offices of Mailchimp, and Ben was guiding the tour around their Ponce City Market location, a spectacular shopping and commercial office destination along the Eastside Beltline. We saw the bike locker, complete with over 45 bike elevators. We saw the “yarn bombs,” art installations made by creatives working in the space.
But the thing that stuck out most to me was when we passed a group of new hires. Approximately eight new people taking a tour of their own, each accompanied by, what I presumed to be, an old-timer Mailchimper. Ben stopped to greet them and as they scurried off, he turned to our group and said “every week we hire 10-20 new people. It’s hard to keep up, knowing where we’ve come from.”
“How do you control the culture here, if you’re hiring so many people every week?” asked one of the members of our group. And I’ll never forget what Chestnut said in reply:
“You don’t. If you try to control culture, you’ve already lost it.”
In case you missed it, Intuit bought Mailchimp for twelve billion dollars. The creator of TurboTax and Quickbooks just spent 12 billies on a monkey... and it wasn’t even a jpeg of the Mailchimp mascot, Freddie (yes, he has a name).
The acquisition comes at the end of a half-decade commerce journey for the SMB marketing services platform. And it is a platform. The largest acquisition of a bootstrapped company in the history of ever is due to its pivot to commerce, and its staunch opposition to building on borrowed land.
Early efforts to make the Chimp commerce-capable were spearheaded by John Beeler, who appeared on the podcast in the early days. These investments in building an agency and technology partner/implementer channel led to a pivot from an “email company” to a commerce-centered platform. It was at an early one of these partner courting sessions when I met Ben and the team, and they unveiled their ecosystem strategy.
But even if they were executing a familiar playbook, they did things their own way. They famously had no phones, and no trash cans; tactics employed to force team members to have to congregate in common spaces, a tactic to encourage collaboration.
Early signs of their control of their fate was in 2016 when Mailchimp changed the terms of service on their popular mailer API platform, Mandrill, to oust mail delivery competitors. Many eCom platform services, including a number of transactional delivery services in the Magento ecosystem, relied on Mandrill. The rug pull resulted in swift migration to AWS for many of these second-tier software providers.
In 2019, the Chimp parted ways with Shopify, due to changes in revenue share agreements and the fact that the Atlanta company was in talks to acquire Lemonstand, a competitive eCom platform. Freddie and Co all but accused the most popular SMB platform for commerce in the ecosystem of being greedy but now faces allegations of greed allegations of its own.
The deal with Intuit, valued at $12B if and when it is finalized, will make an astonishingly small number of people extraordinarily wealthy. The criticisms on Twitter are fierce: a traditional venture backing of this company would have distributed that wealth to many more people in the company, in a much shorter period of time.
In a statement, Chestnut pointed to the fact that they’ve had a profit-sharing agreement for nearly two decades with employees and “contribute the maximum of 25% to retirement accounts, opting to pay employees now rather than at an exit.”
For a man who keeps it fast and loose with company culture, he sure likes to maintain a tight grip on everything else.
What’s next? Maybe Ben Chestnut will join the rich guy space race?
Nah. He does things his own way.
Who needs VC when you have $SHOP? Shopify announced an investment made in marketing platform, Yotpo. This is just one more step in their efforts to create a more unified ecosystem for eCommerce merchants. The move is the latest in Shopify’s late-stage capital infusions to the infrastructure software that makes eCommerce happen. These deals will inevitably lead to multiples when the companies go public, as Affirm and Fastly have done in recent years. Their connection? Shopify’s deep pockets.
More Sights and Sounds:
Canva just raised $200M at a $40B valuation and graphic designers are shaking in their Doc Martens. Casper laid off their CMO, CTO, and COO, as well as dozens of other employees as part of a significant pivot for their business they call “achieving profitability.” Still feeling a bit spicy after Amazon took some inspiration from their product for Halo, fitness tracker Whoop left a message on their circuit board for the notorious imitators.
A guy in Austin wants to fight climate change by manufacturing woolly mammoths. It may sound like a long shot, but they’ve already raised $15M in capital from the likes of Tony Robbins and other positive thinkers.
The subscription economy. Somehow Taco Bell has a whopping 17 locations in Tuscon, Arizona. Even more shocking, the chain is using this chalupa HQ as the testing ground for a clever new way to incentivize their most loyal customers.
Taco-eaters will be able to purchase a monthly subscription that grants them one taco per day. Now you, too, can have daily gastric distress for the low monthly price of $3.00.
It’s coming from inside the house. Popular NFT marketplace OpenSea shared that there was a case of some “insider trading” on their platform after an employee purchased items knowing they’d be featured on the home page later. The disruption of decentralization leaves us with questions about the legalities in unregulated markets. After all, new frontiers quickly become the wild west.
The Wall Street Journal recently published a piece sharing that Facebook and Instagram are having negative impacts on many young girls’ mental health and FB’s own in-house research supports it. While there are certainly efforts by the company to solve these unsettling issues, it’s also true that they’re actively pursuing growth in these demographics and doing their best to keep this ugly data out of the eyes of the public and regulators.