Competing in the world of email marketing

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How does an email software company compete in a world of Mailchimps and Constant Contacts?

Steffen Schebesta is the co-founder of Newsletter2Go which was acquired by Sendinblue.

In this interview we’ll find out how he built Newsletter2Go and the interesting thing that happened after he sold it.

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Steffen Schebesta

Steffen Schebesta

Sendinblue

Steffen Schebesta is the co-founder of Newsletter2Go which was acquired by Sendinblue.

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Full Interview Transcript

Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they built their businesses for an audience of real entrepreneur. Joining me is, um, Stephan Besta. Stephan has got the most beautiful video I’ve ever encountered in over 2000 interviews.

It’s like the nice blurry background. And even though he blurred out his background, everything is taken care of in the background. By the way Steph is that representative of who you are, like, what are you using to make this look so good?

Steffen: Um, I, well, I repurposed my, my good digital camera since I’m not able to travel anymore at the moment. Uh, and I repurposed. As a, as a webcam. So that’s why I have such a nice

picture here,

Andrew: What’s the camera using?

Steffen: it’s a, it’s a Sony, a seven R Mark four.

So it’s a really nice camera. It’s totally over engineered to be due for the webcam, but I feel like doing it.

Andrew: Aye. I love that attention to detail. Steffen, whose voice you just heard is the founder of newsletter to go. It’s email marketing software that he created, um, and sold to a company called send in blue and send in blue does. Okay. Uh, it’s an intuitive platform that does email marketing automation, and frankly, to even say, email alone is to under cut what it does.

It also does, uh, text messages. It also does live chat. it.

does a lot of the things that we. Come to expect from, from email marketing and so much more. I invited him here to talk about how he founded his company, how and why he decided to sell it and what he’s doing now as the head of their North American operations at Cendant blue, and frankly how consented blue compete in a world with so many other email marketing software out there.

Right? We can do this. Thanks to two phenomenal sponsors. The first, if you need a website hosted, go to hostgator.com/mixergy. The second, when you’re hiring people and you want to actually know. Not just what’s on their resume or LinkedIn, whatever, but can they do the job? There’s a tool tool called Vervoe that will help you test them and make sure that they can do the job that you’re hiring them for.

But I’ll talk about those later first, Stephan. Good to have here.

Steffen: Thanks. It’s a pleasure.

Andrew: Give me an example of how, uh, this attention to detail I told you, we’re not even publishing the video, but you still paid attention to the video. Detailed. Give me an example of how that expresses itself outside of video conferencing, maybe in your business.

Steffen: So actually my background, when, when I started my company was really focusing on the product and. Our number one goal of, of creating newsletter to go back in the day when I started with 2010, 2011. So about 10 years ago, we really wanted to provide a software to small and medium businesses that anybody could use.

So we’ve really focused on building features that were very, very intuitive, and basically nobody could go wrong. And one of the features, maybe that one, one of the favorite features we put a lot of. Effort. And then a lot of attention to detail was called the one-click product transfer. We were basically a first in the market who allowed customers to connect to a, to a web store and really transfer product into their mailings, into their templates with one click.

And it was extremely easy. Our customers loved it and it brought us a lot of business. And if we can, we perfected it over time. I think that was one of the nicest features we ever built.

Andrew: I heard you started this because you were doing consulting and this was part of a project you did for a client. What type of consulting were you doing?

Steffen: So back in the day, I was still in university studying and in my teenage years already, I started programming. My, my father is, or was a college professor. And we had, uh, an old computer, you know, and back in the nineties, I started programming a bit in turbo Pascal, and then later Delfi. So, uh, maybe some of you might remember, and that kind of led into a small web programming agency with one of my school friends.

And one of the projects that we took on. Um, it was paid by us by a company back in Berlin, in Germany. Where, where, where come from, um, that wasn’t in your own marketing, a desktop application, or maybe email marketing is even said too much. It’s basically a newsletter application where you have, where you had to upload your contacts.

You have to bring your own templates already coded in HTML. You have to bring your own IP to send out

Andrew: you created this Stephan just for one client couldn’t you have used any number of other email marketing software that was out there like a Weber was out there.

Steffen: yeah, back in the day, you know, there weren’t really that many software as a service, email marketing, uh, companies out there that really provided a good user experience. Plus the customer, you know, paid us and offered, offered, uh, offered to, to, you know, pay for this product. So we actually, we didn’t really propose anything else.

We were like, okay, let’s meet. I mean, that’s, that’s a good project for us.

Andrew: there. Weren’t a lot of companies out there, but the client just said, Hey, creative for me. And there was no incentive for you to say, well, what if you use one of these other things We could look for something online.

Steffen: no, the customer, I mean, the customer had done his research and he wasn’t happy with any solution out there. They needed a simple solution that anybody in their team could use. So we created a very, very simple application that they have to install on the desktop only worked on windows. You know, you can upgrade it or it was not very scalable either, but yeah.

From there, the idea of creating a software as a service and make it, making it accessible to a larger audience arrive. And this is where really new. So to go. And the idea when you started to go listen to stuff that

Andrew: Who inspired you back then? When it came to SAS, there were a few voices back then that were strong. Um, who did you listen to?

Steffen: honestly. We when we started, we, we, we didn’t really do that much of research. Yes. We looked into the, into the space of a human marketing software as a service a bit. There were some German companies that we looked into. There was MailChimp already, but they were all very, very small and not very good. Um, so.

Honestly, if I think if we had researched maybe more and had put more effort into market research, we might’ve never started the company. It’s a, it’s a little paradox, but sometimes it’s good enough to know a hundred percent. Right. And, uh, sometimes it’s good if you’re a little naive when you, when you start a startup and I, I feel this was the case for us.

So we just, you know, we were like, okay, well, we have this one customer who obviously needs the solution. Um, We’re sure they’re like hundreds or thousands of customers out there that have similar needs. We actually wrote a business plan on that and was perceived well by the university as well. Not that it matters so much, but you know, that gave us more confidence to just go ahead and start and, you know, Nike claim just do it.

This is pretty much what we, what we did. And, um, it actually, for us, it helped not to do too much research and know too much about the market back in the day.

Andrew: And your client allowed you to take the code that you created for them and turn it into something that you sell to other people.

Steffen: No, that that code was not reusable. Uh, honestly we just started from zero because that was what we built. There was a, was a desktop application and very limited in functionality. So we started. We started new from scratch and we built, um, well, simple application at first, uh, but which was hosted by ourselves.

So, you know, anybody could use it, didn’t have to install anything. Um, we could, we could, uh, updated whenever we liked and so on. So that the typical advantage itself is software service, obviously. Um, so we, yeah, we, but we had to start completely from scratch.

Andrew: I heard you raised 10,000 euros to start the business. What was the money for, from, from family?

Steffen: That was, yeah. Uh, you know how you say it in the family, friends and fools, and in our case it was a family. Um, so my dad invested 5,000 and, um, my, my friends suddenly as well, and we use it to, to pay off first troll grammar. Well, we didn’t pay ourselves anything, but we have one software developer. Uh, so we we’ve paid him the 10,000 euros and be programmed ourselves.

I’ll say, uh, the first version of new is to go, and this is how we got the product started. So very hands-on.

Andrew: how’d you get your first customers?

Steffen: The first customers, you know, I think with a lot of w with a lot of startups, it’s the same. They come from from a network. And in our case, we had, um, we had the opportunity to be in, uh, an office building that our, uh, university. Uh, subsidized basically gave us a free, and we had a lot of other startups in that, in that office space.

And, you know, email marketing is a very universal online marketing channel. So sooner or later, No, we were approached our, our, uh, friends on the, on the, or they needed the same solution, any know solution. So we started working with them and we’re really close to the customer. And it took a while until we got the online marketing, our own online marketing.

Right. And, um, and got the first customer said we actually didn’t know on a personal level.

Andrew: And what you had at first was the ability to, I guess, was there form, or did people have to use their own forms and add it to the database and then send out a message? What was part of the first version?

Steffen: So the first version was really you, you were able to upload your, your contacts as a, you know, an XL format format, or a CV format. We had this online editor, which, and the first version was okay, but then really evolved into a very easy to use drag and drop editor later. Uh, so you were able to create the mailings.

You were able to schedule the mailings. And as we had some reporting and that, that was pretty much it, you were, you were able to see, you know, how many people opened the email, what was the click rates? What, what links were clicked and so on. That’s very basic, but it would cover most of the needs, the basic needs of, of, of our customers.

And from there, of course, we evolve the product over time. And add a lot of features, much more sophisticated. I like marketing automation and SOS and, uh, you know, the life tab, landing pages and CRM, uh, somethings you already mentioned before.

Andrew: I heard that you weren’t sure if you’re going to continue you weren’t sure. If this would take off, you decided you were going to set a revenue target. If you could hit a revenue target, then you would stick with the business. If not, you just move on to something else. What was the target that you set for yourselves?

Steffen: I think it was 130,000 euros and year three or so. I don’t remember exactly. Well, we, yeah, we, we, we were able to make it

fortunately,

Andrew: if you wouldn’t hit a hundred thousand Euro in, was this recurring revenue or in the beginning, you didn’t even have recurring revenue.

Steffen: we didn’t really have a recurring revenue model in the beginning. It was more pay as you go. And then later changed that in the beginning. We weren’t really sure that our business model would work in the longterm and customers would actually return. And, um, and it took us a while to figure that out, honestly, and a lot of startups have go through this phase, right.

Where you try to find the product market fit. And it’s always, it’s so hard to know when is the right time to either quit or to pivot. Um, or to continue. And for us, um, it took a couple of years to really understand our business model and to get the traction where we could really project the outcome of the coming month.

And to see that, that the trajectory would be positive. Um, five, yeah. In our case, we set this hard target and we’ve we reached it. And after that, we were very confident that our business model

Andrew: seven though, three years to get to $130,000 in revenue. Sounds like a lot, but it’s. Two people who are co-founders of the company, plus at least one developer that you had at the time. Right. So it’s not that much to go around. And then you had costs. Why did you stick with it for three years when you were making so little money?

Steffen: Yeah. So, you know, we were very lean startup. We have this 10,000 jurors and funding from femme, from a total family, and then we had one other investor. Um, I’m the co-founder of, of Ableton that’s music software, which is pretty popular. Uh, and he invested 50,000 jurors back in the day, but that was really little funding.

If you compare that to a typical funding nowadays, and back in the day, um, the startup scene and back in Berlin, Germany, wasn’t, you know, very developed. There were very little VCs that was very little money in the market. Uh, so we were really an extremely lean startup back in the day. And we even had, in the first three years, we took on a couple of external projects, like to cross finance, uh, our, our developers that we hired.

So that’s the reason why it’s like, maybe took a little longer, but, uh, it, it

Andrew: but why, why stick with

Steffen: to efficiently work on the product and also how to efficiently.

Andrew: but by then, by then there were competition. You were smart enough

to

Steffen: it because we, well, we ended up.

Andrew: Why stick? I should say we’re, we’re trying Riverside FM for the very first time to record interviews. And I’m seeing that there’s a little bit of a lag with it and that’s unfortunate because. It’s such good software for recording interviews, but, uh, I want to acknowledge that’s where some of the lag is coming from.

So you were starting to say why you were sticking with it helped me understand that. What was it about the business that you saw, especially when there were already clearly competitors in the space? What did you see? That was so promising?

Steffen: Well, we’ve really thought that we should make or build a better software. Yeah. There were some competitors out there. Especially in the market where we operated though, we didn’t really like any of the software that was out there. And we saw that our customers like our product and they were, you know, in the beginning of our, of our startup, we did everything ourselves from programming, the software bug, fixing customer service, sales, marketing, we did everything, right.

So we were really close to the customer and we. We understood that we provided a good value to our customers and that customers like our product. Uh, so, you know, there was no reason to quit other than, uh, not making enough money from it really.

Andrew: got it. And so the vision that you had was what, what were you going to do that was so different from what existed?

Steffen: So the vision was, and still is for, for sending blue is to give access to power ful, online marketing tools, to small and medium businesses who wouldn’t be able to afford and use these kinds of tools. Um, before, you know, you started to go or send them to existed. And really when we started, there was no software that was easy to use, um, that you could to just sign up, use for free, even in the beginning and be successful and compete with the big players in the market.

And this is, you know, that was the original in the beginning and still is, and maybe more important than ever with, you know, the big players and Amazon or Walmart, you know, um, they’re all in businesses going it’s growing and growing. And it’s really important that, you know, the small and medium businesses also have a chance to compete with them.

Andrew: Yeah.

I’ve got to say, I remember trying out different email back then, and if we wanted something stupid, simple, it existed. Stupid, simple with the nice paint job existed also. But if we wanted features, it was so complicated. And so needlessly difficult that I remember it wouldn’t even work in Chrome. I would have to switch over to Firefox for one of the players.

It was a infusion soft would only work in Firefox. And then you would have this like random stuff that you’d have to do in order to send out messages. It was either stupid, simple. Or incredibly complicated and out of reach and not worth getting distracted by. So I get the vision, I guess I get where you were when you started reaching outside of your friends.

Talk to me about how you got other, other customers.

Steffen: So basically we always focused on performance marketing channels. So from, from an early day, right? We, we started with Google, Google ads. We were extremely strong as well in organic search. Um, that was one of the biggest. Channels that drove business to us and we created good content. And I think that’s still a very, very successful way to promote your business nowadays.

Right? Of course. Now you also have so more and more social media. Of course. Uh, back in the day was mostly, our business was coming through Google and, um, and, and content generation. And later we also went to a lot of trade shows. We partnered with. A lot of e-commerce, uh, shops and providers, and that helped us.

That’s also at the time where we started creating this one-click product transfer features and integrating into a lot of shop systems and that made life even easier for our customers.

Andrew: I saw that, um, one of the things that you did was you had integrations fairly early on, right. Integrations to email marketing makes so much sense because people want to take the email address that they collect somewhere and add them to the list. That was a big thing. You added texts. Text messages earlier than other people had, you know, about text messages being so important as it as an aspect of an email marketing company.

Steffen: well, it kind of comes natural. I mean, we want to provide. Um, communication platform in a way. Right. Do you want to, as a customer, do you want to stay in touch with, with your customers again? And what better way to do this on a digital level than email and SMS, especially, um, think about like five to 10 years ago, right?

So text message was very popular at, I mean, it still is kind of popular. Now we have a lot of messengers and Instagram and take talk and so on as well. But back in the day, text messages, um, were more popular than today. Text messages being pretty intrusive as well. You have to be careful once you use them, they have basically a hundred percent open rate, right?

So they are very powerful, very,

Andrew: But was that something that, that your customers asked for? Or was that something that you offered because you just assumed that they would need it?

Steffen: So I think we assumed that in the beginning, but then it shows that the customer is actually, uh, also needed it. And where. SMS and other channels become really powerful is when you can start to combine these channels together and share the data that you have on one customer and, and, and combine it for example, in market marketing automation, right?

Somebody maybe didn’t read an email and then you want to make sure that they got the notification and you send a text message after these are the kind of scenarios where. No, of course you can get a lot more sophisticated by the second, the kind of simplest scenarios where it already makes sense to use SMS.

Andrew: All right. I want to know about growth, but let me take a moment to talk about my first sponsor. It’s a company called Vervoe. I’m assuming Stephan, you haven’t heard of Vervoe. Am I right? I’m going to blow your mind. Here’s what it’s about. You know, when you hire people you want to know, are they going to do the job well?

And what you do is you try to look at their resume to understand that, well, what Vervoe does it says. Let’s just test them. Let’s give them a way to go and get an assessment. And then as a business owner, as the person in charge of hiring, you could decide if it’s a good fit. So let me assume this Stephan.

Imagine if I was hiring someone to take over my email marketing, right. I wouldn’t want to know what companies they work for. I wouldn’t even necessarily want to know. I wouldn’t necessarily want to see what they wrote for other companies, how they used other company’s software, because I don’t know how much interaction they got from other players at the company.

Right. Here’s what I could do with Vervoe. I could have a form that they would fill out to apply for the job. And then the form I might have, um, maybe a video of myself explaining the message I want to send out. I might say, you know what? I just interviewed this guy, Stephan, and I want to tell people about how he got started.

And I want to talk about how he understood the power of SMS.

And I want to talk about that. And then I do that as a video. And I say, you now as the person applying for the job, right? The email that would come from me based on the video that I just spoke, I just told you what you go in the, in the email, you write it below and now they get to write the email as part of their job application.

And then underneath that, I might say, I’m thinking about using email marketing software to send this out. What software would you recommend and why? And now they answer that based on their experience, right? So you get to see how they think you get to see how they would do the job. And then when they submit their application, it’s not, here’s where I worked in the past.

Here’s what I did in the past. And you don’t even know what I, how much of it. I didn’t how much someone else did, but it’s, here’s how I would handle real world problems that your company has. Here’s how I can do the job that I’m applying for. And what that allows you to do is hire people based on what they could really do for you.

And also, frankly, it eliminates some of the, some of the bias that we have. We sometimes assume, all right, somebody who’s younger, somebody who’s from a certain part of the world is more dynamic, more capable of doing the work that we’re looking for. Someone that looks more like us is more capable of doing the work.

But if you see their results before you even talked to them and you see that a person does well, who cares what they look like? All right. And finally, Stephan, what it does is it allows people to hire faster. A lot of what we do is just a waste of time when it comes to hiring. Alright, I could talk my head off about, about this.

Definitely. Instead, what I’m going to do is I’m going to let people use this software for free. As soon as you use it, it’s going to make a hundred percent sense to you. And so the company name is Vervoe it’s V E R V O e.com. And if you go to vervoe.com/mixergy, they’ll let you use it for free. So here it is again, V E R V O e.com/m I N E R G Y.

Vervoe.com/mixergy for anyone who wants to go use this for free. And see how effective it is. It’s speeding up your hiring process, reducing bias, and actually helping you hire people who could do the job right now. You know about them. Stephan. You’re gonna be able to

Steffen: Wow. So it’s interesting.

Andrew: I’m telling you. It’s good. All right. I get, I get a sense of how you got started. I remember that one of the milestones for you was hitting $10,000 a month. And now I understand why I’m looking at early versions of your site. What you used to do is say here’s how much it would cost. Like here it is for 10,000 emails, it would be six Euro 50 for CPT.

I don’t know what CPT was. I could get a package price for 65 Euro. It was so confusing, but this is what you charged for the first, like four or five years.

Steffen: Yeah. So that was the CPM, basically the customer mil for 4,000 without emails. Yes. Um, that’s um, yeah, that was the beginning, you know, always evolve.

Andrew: and then you switched to subscription when you switched to subscription, what was that switch? Like? How did you make that switch? And then what were the results from it?

Steffen: So we, we, we saw already that, I mean, customers who are returning to our, to our platform and Dave would, you know, use our tool, but they wouldn’t always use it on a regular basis. And they would go with, you know, they would buy, um, I dunno, 10 million, um, email package, and then they would use it over the next 24 months.

All right. And that’s, that’s fine, but it really made it difficult for us to project and, um, to plan ahead. So when we switched over. To like a subscription based service. And, you know, that was from our side, that made a lot of sense, um, to just from a, from a business perspective. And we really, you know, at the same time we introduced like three different plans and depending on the feature sets that we, that we offered and we, we migrated these customers onto these plans, it was a very soft transition for them, mostly for the new paying customers.

But then after a year we, we moved, like we forced everybody to. Yeah. And yeah, it was quite a, quite a bit of work work, but it made a lot of, you know, made a lot of sense and the customers understood. And actually, you know, we were afraid that we would lose a lot of customers, which was not the case at all.

And, uh, and really helped our business after all.

Andrew: How big did the company get before you sold it? Revenue

Steffen: the company we grew the company to about 70 employees. Um, and in terms of revenue, I’m sorry that I can’t

Andrew: ballpark. Are we talking about, about low millions? Are we talking about tens of millions in revenue? Give me a sense of where, where you were.

Steffen: so back in the day, it was under 10 million a year, but it was, uh, in the millions. Um, so we, we had, we had grown a nice business. We, you know, like I said, we had very little funding, so we had to be profitable. And then, you know, having 70 employees on the payroll. You more or less can figure it out yourself.

Uh, but that’s that’s, that was basically back in 2018 when we reached the 70 employees and then decided to, uh, join forces with, send them to.

Andrew: Why? Why did you decide to sell your, you were rolling finally,

Steffen: Yeah, we were rolling and you know, we’re still rolling. And,

Andrew: then why, why

Steffen: we were growing nicely.

Andrew: yeah.

Steffen: the, the reason was that the landscape has had changed a bit over the years. Um, so there was more competition. There were like the MailChimp and constant contact in the Wells had grown pretty large. And back in Europe, we had kind of smaller players in each European country. And we have tried to internationalize for year, year and a half back in 2018.

We hired country managers out of Berlin. Berlin is a very international city, so that wasn’t the issue, but it was really hard to get traction on other European markets. That’s where we focused on first. Um, and the reason was that there were other smaller players in each of these European markets. Um, and for us looking at the, at this situation, didn’t really make a lot of sense for us to.

You know, go against these and everybody was competing with the MailChimp and constant contact at the same time. So we looked around and talked to a lot of players on the European market. Who had the same vision as us and ended up with sending blue join, join forces with them made a lot of sense for us because we were building a similar project.

We had similar vision, we had similar company culture and by, you know, merging the companies, we instantly became the European market leader and now we’re, you know, stronger, stronger than ever before. So we’re kind of the Airbus of email marketing in a way.

Andrew: with newsletter go. Before you sold, did you try to raise money beyond the 50,000 that you raised in the 10,000 that you raised from family?

Steffen: we tried very early on and then decided not to raise any more money because we, we thought we could throw the business nicely with, without external money, which was true, I guess, not too, like not to that degree that we were becoming, um, A hundred or 200 or a thousand employee company back in the day.

But we, we, we had some talks. We had also some inbound, you know, we’re one of the fastest growing companies in the digital digital space, couple of years in a row, uh, top, top 25. So we had a lot of inbound as well, but it never really appealed to us that much. And then when, when the send them through opportunity came

along, um, well, We thought we could pull it off ourselves.

And we also heard some, some stories, you know, where it wasn’t that much fun to work with a VC.

Um, so we, we really thought we w it’s just better and we have more control of the company if we do do it ourselves.

Andrew: Yeah All right. And then you started talking to other companies. What was it that sent him? Blue had send him blue, had, uh, they raised a big round right before the acquisition. How much did they raise?

Steffen: about, uh, I think it was 37 million us dollars.

Andrew: Okay. So they had funding. They had, how big was their business compared to yours revenue

Steffen: About three times, three times our size.

Andrew: And did they expand beyond what was their original market? France? I think.

Steffen: Friends. And then they were, they had some traction in the South European market and the bit of traction in UK as well. Um, and then the U S market really started developing in 2018 to 2020.

Andrew: Got it. So the thing that you were trying to do beyond grow, you were trying to expand to other countries. They were already doing it themselves without doing a roll-up of local businesses. Oh, wow. I would think that that would make the most sense to do a roll-up to say, look, there’s all of these European companies, they’re all doing the same thing, but each one is catering to their own market.

Let’s just go and acquire them all. Keep their brand for a while, until we integrated with one big brand. Did that ever happen?

Steffen: it didn’t, it didn’t happen on, on the European market. Yeah,

Andrew: Why did, why do you think it didn’t.

Steffen: honestly, it’s, it’s hard. It’s hard to say. Um, there were some acquisitions in that space. There’s an Italian company that is already public on the Italian stock exchange. Um, so maybe I honestly, I think it was more the founders that were really willing to do that. Um, we had some German competitors either, uh, as well that were, you know, they were not interested in any M and a activities.

We talk, we talked to some German, um, you know, competitors makes a lot of sense to, you know, roll up in Germany first, but there was really no big interest on the side of things.

Andrew: were you selling for equity or cash or both?

Steffen: Both. And I’m still, um, a major shareholder in send him blue. So, um, you know, Still belief in the project. And I think w well numbers and our pros justify that as well. And we did raise a large round in October, uh, series B 160 million us dollars, which was one of the biggest Browns that was ever raised in our industry.

So I think we, you know, there’s still a lot of potential for us to, to grow. And we’re, we’re doing a lot of things. Right. And you know, for me, um, as in a new role, as, as leading the North American team, there’s so much potential here as well.

Andrew: Yeah, so the business, and then it was, uh, first two different brands. Did you assume that the two different brands would stay separate? I know that there were some challenges in the acquisition.

Steffen: Yes. Um, that’s true. I mean, both, both sides send him blue and he started to go all the founders. It was the first time we were merging two companies and you know, it’s not, not easy to merge two companies that obviously we have similar values and similar DNA, but, uh, after all. It’s still to, to completely, um, you know, entirely different companies and you have different processes, some tools that you use different mindset, different background as well.

So yeah, of course we went through some, um, some issues, which I think is also normal in a post-merger integration. And, and in terms of the brand, we kept our, the new side to go brands in the beginning and then switch it over, uh, to send them through, I think, uh, Year and a half almost later. Um, and that was of course a big transition as well.

Andrew: How was that for you? Emotionally

hard from what I heard.

Steffen: So on one hand, you know, we always have this vision of becoming the routine market leader and. Growing the company into a global company w where we are nowadays. Uh, but of course, on a personal level, it’s, it’s not easy. Um, you know, no knowing you’re selling your company and all the work you’ve you’ve put in, of course you expect things to change.

But, uh, in a way, you know, taking, uh, taking down the old, the old logo that I had, uh, that I had drafted on a piece of paper in 2010. And so it is kind of emotional as well. Right? So it’s, it’s, it was definitely not the easiest time and in my founders career. And it kind of felt like I’m, um, you know, instead of creating something, I’m just drawing a little bit.

Well, we did, of course, you know, use some of our features. We put into the sending blue software as well. And a lot of things offered to employees from citizens and a lot of tools that we use. And a lot of product features that we develop they’re still in use. But, uh, nevertheless, uh, was, yeah, it was definitely, um, it felt, it felt, it felt awkward at times.

Andrew: All right. Hi. I want to switch to talking about sending blue and what’s going on there, but before I switch away from newsletter to go, let me just understand. Why it worked? What was it that, that allowed you to succeed? If you could give me a few bullet points, what would they be?

Steffen: Yep. So the first one is definitely being very. Customer centric and product centric. And I think that’s, that explains like 90% of our success. Right. And of course it’s a lot of work, right? You have to be hard working. And sometimes nowadays founders think, you know, it’s, it’s almost this startup third culture, or everyone wants to raise millions of money and they think it’s so easy, but it’s actually a lot of work.

Um, and. Our work was really funneled into this, uh, into the product and product

Andrew: What do you mean? Everyone says product is most important. Feels like what is it that you are doing to actually live that what’s different about you?

Steffen: well, you know, we really were extremely close to the customer. Like I said, we did everything from answering all the customer care calls to back, fixing, to selling the product and, uh, and working on the product itself. Right. So it was extremely helpful to understand what the customers actually needed and it helped us to find our product market fit and.

Uh, and, and I think that’s that that’s the most important thing that you have to learn when you, when you start your business is what do your customers actually need and

Andrew: And so how did, how did you do that? You did bug fixes. That doesn’t seem like it’s, it’s the magic, what’s the magic that allowed you to get close to your customers?

Steffen: Customers would call in if they had an issue. Right. So, and since we, in the beginning, we were not only the customer care team, but also the programmers, we would just fix the issues ourselves. So ideally like we were level one level, two level, three support at the same time. Right. And, and that helps

Andrew: meaning the founders would be the people who U2 were the people who would also answer the phone. If there was a problem with the customer, instead of saying we’ve got customer support people,

Steffen: Yeah. And like the first couple of years. Yeah. And my

Andrew: what, And then.

Steffen: my co-founder, would work in the customer care team, uh, for a couple more, more years. So very close to, you know, he knew exactly what, what the issues were.

Andrew: Got it. All right. And I think at first it was available to everyone and then eventually telephone support became part of what the standard and pro plans. Right. And so got it.

Steffen: We even, we even sorry, but there, there was one interesting detail. We even had a toll free number even for, for free customers. So you can imagine a free customer. We have like this freemium plan, right? So they, they were able to send a thousand emails per month, completely for free and they would call it.

And then mostly most of the time, these customers are the ones who actually tend to call in most more than the ones that pay for it. Right. So really when there was something broken, something not working in the product, you know, we would get annoyed because we have to answer all these tickets. So we would rather fix the problems right away.

And that’s really, that really helped in creating a flawless user experience. I would say.

Andrew: what else did you do to get so close to the customer that you could improve the product?

Steffen: Well, I think on the other hand, you want to want to build features that the customer wants, but doesn’t really know about again. So that’s when we started looking around and around our product and, you know, building text messages and SMS marketing, uh, building these e-commerce integrations, which. Um, initially one of our customers had asked for a similar feature and then we thought basically went further and went to trade shows and talked to a lot of customers on these trade shows.

Uh, and then we started developing features that we thought would be very beneficial for these e-commerce soft, uh, users. Um, and that really helped our product also to, to evolve over time and make it more sophisticated and bring innovation to the market actually.

Andrew: Yeah.

And I do see how you were doing content throughout the, throughout the years, there was a period there where I’m looking at the internet archive. There was a whole section of infographics back when infographics did really well. You guys were big on those white papers. Of course, an email marketing company should be big on those because they, uh, they often get an email address from people who want the white papers.

All right. I’m with you. Let me take a moment to talk about, um, my second sponsor. It’s a company called HostGator. Anyone out there who needs an email website, not an email, a website hosted should go to hostgator.com/mixergy. They’ll give you the lowest price. If you use my URL, hostgator.com/mixergy. All right, let’s talk, send in blue now.

What’s the. What is it that separates sendin blue from all the other companies that are out there. And by show, by the way I should say, send in blue is a, is a sponsor. Um, occasionally I don’t even know if you guys still even have sponsor ads left, but you were a sponsor. You are a sponsor. Um, So I’ve gotten a sense of it, but what is it that makes you guys different?

Steffen: So if we have over 180,000, um, customers, mostly from the small and medium business side of things. So if you have 180,000 customers, You have a lot of different requirements, right? So every, every business has slightly different needs and expectations. So our, you know, what we do better really ranges depending on the, on the business needs.

But what I hear most from our customers, you know, we have very fair and affordable pricing on one hand, you know, for us, you pay paper, email that you actually send out, not by. Contact that might be inactive and you’re actually not in touch anymore.

Andrew: Yeah. You know what? I wonder if I feel like most people sign up for email marketing. When they don’t realize why that that’s an issue, what you just said, they realize it’s an issue, maybe three, five years into their business. When they suddenly have a big list of people they can’t mail to anymore. because they unsubscribed those people are still in the database and they’re being charged by the email marketing company for those email addresses, even though they’re not mailing to them.

And I wonder if that’s a feature that matters to customers when they’re signing up, or if it’s just a nice discovery later on.

Steffen: Well, absolutely. I believe, you know, in fair and transparent pricing and I, I don’t think, uh, charging for, for a contact list that you can even reach anymore makes, makes too much sense. So yeah, some customers discover that later in and, uh, after a couple of years of using a software. Um, but yeah, we, we see a lot of, you know, a lot of incoming requests, um, and a lot of, lot of prospects switching over because of this reason.

Andrew: all right. So is that another thing that you guys do is you still do customer support phone numbers? So I think I saw his phone number on the website. Does that matter to get new business? I’m trying to understand why you guys are growing in a market that has so many other entrance. It felt, it felt for a while there, like email marketing was.

Was locked up. There are a handful of companies that already had it, and that was it. And then you saw a few players like Nathan Barry come in with his, uh, with his email marketing company. And I thought, all right, he’s going after them, niche creators find smaller business. Doesn’t have to compete with the big guys cause it didn’t raise much money.

And then I started to see that there are still other players coming in, send in blue, continues to grow. And I. I wonder, what are you doing to grow in a business that in an industry that felt like it was locked up already? I would be, frankly, Stephan, if I were you, I would be too scared to come into this space.

I would say, okay, this is done. Let’s go somewhere else. Let’s go to a place that nobody is nobody’s competing and start fresh instead of trying to compete with these big guys who have established brand names and so on, what is it that you’re doing that allows you to actually grow there?

Steffen: Well, I think we do a lot of things, right. Um, on the, I mean, on the. You mentioned the customer service and we do offer a 24 seven, you know, customer customer service. We, we have customer service available in six different languages. So that definitely sets us apart, but also on the, on the feature level, you know, Email marketing is still the, the online marketing channel that has the highest return on investment.

Every dollar you invest, you get about $40 back. Right? So email marketing is still very strong. It’s still growing, right. That’s, that’s always important to remember because we always, a lot of times I talk to somebody and like, okay, email marketing is dead, but really far from that, And then combining it with, with other channels, um, and you know, having really powerful marketing automation set up where you, when, when you really targets your customers better and, and are able to get the, like the last 5% of, out of your marketing activities, that’s where, where these other channels can be very powerful.

And, you know, we offer. Uh, SMS marketing. We already mentioned that landing pages to CRM feature and inbox feature and the, and the chat feature. So we’re really trying to combine not only the marketing team on our platform with more and more the sales team, the customer care team as well. So then you have the one platform that can do it all for you and you, you have your customer profiles on the, you know, what happened to them in the past, and you can really use that information to.

Uh, to be very specific, very personalized and very personalized and very targeted messages that are performing just a lot better than if you have all your data up in cluster, in different locations.

Andrew: All right. So you went to, I think it was Toronto, right? To open up the, uh, to expand the North American operations. You went to open up an office there right last year,

Steffen: exactly.

Andrew: and then everything got shut down because of Corona virus. What happened to the office? Are you working from home right now?

Steffen: Yeah, I am working from home, but, uh, I I’m hoping we can go back to the office very soon. So the Toronto office, we already, you know, we, we had an office in Seattle before, and so we, that was touting 2015. Uh, so up and running, we have almost 40, 40 employees in Seattle and we needed, you know, Uh, uh, sales, business development, marketing PR, uh, office, um, uh, in the North American market as well.

And, and for us, uh, we are a truly global company with offices in three different time zones. Um, it, it made a lot of sense to have another office on the East coast, just to, to kind of, um, coordinate with, with Europe. And we also have an Indian office and it’s very difficult. To do that from, you know, from Seattle.

So we, we decided on opening the office here in Toronto, which yeah, there honestly entered their easier things and then moving a household during a pandemic and establishing in your office at that time. But you know,

Andrew: So, what did you do? Did you not even, did you not even open up the office or did you start to open it up and then lock downs happen?

Steffen: We started it up. We were in the office until I think October, basically full-time and then we split the team and you know, everybody’s doing. Uh, currently it’s completely shut down and we’re hoping that we’ll open again. I think the lockdown here was extended until May 20th and I hope afterwards we’ll be able to go back.

Um, and I, I do believe, you know, for a small team where we’re, um, six people in Toronto only at the moment hiring two, two more at this time, we’re a small team, like a startup inside of a scallop. Right? And we, I do believe for a small team. It makes sense to, to be together as well, and to learn from one another.

And it’s good for the team spirit in general.

Andrew: Yeah, I think as we’re all talking about how great it is to work remote, and it is great to work remote, there’s a lot there. I miss about an office, like having the dedicated space, where everything is set up just right. Uh, having people there to handle things like sending out packages, you know, I don’t want to go out to, to the mail.

Um, What else is it that makes an office environment. Great. I guess it’s also, if you had six people it’s having lunch together, it’s just chatting from time to time, right?

Steffen: Exactly. And I think the exchange of information, that informal information flow, that’s very, very, very important. You just chat about something, having a coffee, or you overhear a conversation in the background, or you hear somebody else maybe pitching the product on the phone, right? These are the kinds of things that we’re missing.

Uh, if we’re working from home and it can really help, uh, forming a team and, you know, getting to know the other person better and also helping on a professional level, just understanding the product better and

Andrew: Any interesting discoveries for remote work that you found over the last year, what’s worked really well For you.

Steffen: um, Ooh, good question. Good question. And, well, I think it’s nice. Uh, to, to have dedicated sessions where you can have these informal talks and. Can always be just business. So, um, you know what we’ve done, we schedule calls where we don’t talk about work and we, we just talk about, you know, personal matters.

We didn’t have, you know, we have a daily kickoff and I would say. Yeah, we talk about how we’re planning to do the day, but most of the meeting is just to catch up and like have a small coffee chat basically. And that’s really nice. And I think it can connect people and give gives you the sense of belonging as well.

And then for. I mean, I’m married. I have a kid. So for me, home office is very diff diff very different experience from somebody who’s single alone in a condo in Toronto, for example. And, um, for, for, if you, if you’re alone in singles and you know, it’s, it’s really nice to have this personal connection at least.

And if it can’t be in person, at least virtually

Andrew: And you just do virtual coffee sessions where you talk about anything other than work, how long they last.

Steffen: Um, it’s usually between 15 and 30 minutes, we have a, you know, we use Slack as a communication tool. We have a plugin that, you know, randomly select people together. And then we have, uh, we have,

we set up

Andrew: it’s one-on-one coffee.

Steffen: No, it’s three people actually.

Andrew: people coffee. Got it. So it’s three people. They don’t know who it’s going to be. And then they get together for coffee and they talk about anything other than work.

Steffen: Yep,

Andrew: Oh, great idea. All right. I did that. All right. For anyone who wants to go check it out, it’s a send in blue.com for the site, by the way.

I don’t know if you’re still a sponsor. You guys got three pack, three ads, and I think we finished them a while back, but the URL should still work for anyone who wants to go try it for free. It’s sendin, blu.com/mixergy. And I want to two sponsors who made this interview happen. The first is HostGator for hosting websites, go to hostgator.com/mixergy.

And the second is a company that you probably don’t get. Remember because they’re brand new to me, but they’re going to help you hire better by, you know, checking in with your people on what skills they actually have as they’re coming into you. To, uh, as they’re applying for a role it’s called Vervoe and check them out at Vervoe.com/mixergy.

I’m sorry, Stephen. I’m going to, I’m going to spell this out cause I know people are gonna want to write this down. It’s V E R V O e.com/mix E R G Y. vervoe.com/mixergy. Thanks Stephan.

Steffen: Thanks Henry for the pleasure.

Andrew: All right. And the bottom line is on this, uh, Riverside. Here’s what I think. I love that I’m watching as they’re recording your side while I’m recording my side, the experience for you seems fairly straightforward. I think you might’ve had a little bit of trouble logging in. Do you think that was a Riverside issue or not?

Let’s let the audience here are the issues that we’re going through. Riverside is the email, uh, the software we’re using to record this interview. What do you think of it?

Steffen: I know I had a, I had a slight technical issue. That was, um, that was not Riverside. That was my own laptop. But then, uh, then, uh, at work. Yeah. W it’s nice. I mean, it’s nice to see the team to see you. Um, I think a pretty good, good experience in general. I like it.

Andrew: for me too. And I like, I’m watching it. It’s recording your side of the conversation from your computer as soon as you and I are done, it’s going to spend like another five seconds uploading the last of our conversation. And then I’ll have your side recorded from your computer, my side, from my computer, and we’ll be able to edit it so far.

Thumbs up for Riverside. I dig it. Thanks. Thanks. Stephen. Bye.

Steffen: Thanks. Bye-bye.

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