Adam Robinson: After hiring agencies to try do Facebook marketing, none of them worked because our product wasn’t good enough. It was only good enough for this uncompetitive channel. We had to do stuff that MailChimp isn’t doing. I didn’t want anything like the freemium model because they’re doing that.
The company which I cannot name got acquired. The acquirer chopped this partner business they had. They spent $50 million in building it. I wasn’t quite sure about the economics of it. After it got chopped, the guy who put it together reached out to me.
He said, “This is a good channel for our brand. They’re just letting it go. I think you could probably pick up the scraps from this thing.” It was a novel idea to me because it was a human selling software which MailChimp is not doing. I had some apprehensions about, it but I talked to a lot of people who help me make decisions in the tech world.
Overwhelmingly, the consensus was, “There’s not too much downside to just see if you can scoop up all these people and get a network of people out on the street even if you only get a couple of million dollars a year.” I was worried about this.
The reason they cut the business was because it was more of a brand-building effort than a true profit center. They were wonderful people and I got to know them really well. The non-compete ran out in February.
In July, they sent out official communication about how it was getting chopped. The guys were like, “We need to jump now. I’m a California employee. Non-competes are totally unenforceable.” There were a bunch of product improvements I wanted to make. February was perfect timing. I wanted to do a little up-market than that company.
But I let him talk me into hiring him. Lo and behold, this company sues me five months later over nothing. It was just absolutely nothing. They wanted me to stop doing this I guess. It was the most agonizing lawsuit. They would say something. I’d write back and they’d respond four weeks later with a different thing.
They dragged it out over a year. By that time, I was onto something else. I’m sure that was mission accomplished for them. There is a great lesson in there. It doesn’t matter if non-competes are unenforceable. People can sue you for anything in this country.
Sramana Mitra: Yes, and it just keeps up legal fees.
Adam Robinson: Totally. I had never contemplated that it was going to cost around $190,000 of legal fees. I had to pay for employees royalties too because in California, you have to indemnify your employees.
Sramana Mitra: Legal fees are a terrible thing. It can tank your company.
Adam Robinson: I know. Thank God we were in this position where we set it up to be a nice cash flow thing. It wasn’t going to kill but writing those checks was devastating.
Sramana Mitra: What year was that?
Adam Robinson: It ended in 2017. My life during all this was pretty chilled. We got great customer reviews for Robly. We have this nice inbound and a nice organic flow that offsets our user attrition.
There’s no cause for alarm whatsoever and the employees were really happy. On the other hand, it’s not like so much of a cash-generating machine that I just want to hire a CEO and find something else to do. I felt like I haven’t used the knowledge that we’ve learned about email marketing quite enough yet.
January after that, I was listening to this podcast by Nathan Latka. I don’t really understand why people go on there. I guess if you’re trying to get acquired or raise money, it makes sense. People go on there and they just say everything about their business. It’s fascinating.
I heard this company in our space. The guy started a few years before I did. He went after a different part of the market. He was getting $9,000 per customer. We started at $15 and got to $50 over time. He had 375 customers. He had a pretty lean organization. This was the next rabbit hole.
At the same time, I hooked up with this domain guy. He had this great domain called lead.com – that he proposed we either change Robly’s branding to that and go after the SMB market or I proposed that we create an up-market product.
I studied the market a lot. I just felt that MailChimp was 10 times better than any email marketing at any other part of the market.