The abuse that comes with freemium can change your company dramatically. Here's how MailChimp prepared for our transition to freemium.

1. Sunday, March 28, 2010
MailChimp’s an email marketing service that’s been around almost 10 years. 7 months ago,
we decided to go freemium. This presentation is about the abuse that came with freemium.

2. Founded in April 2000
Web 1.0 dot-com IPOs skip intro era “application service
providers” Web 2.0
the
ERA
Sunday, March 28, 2010
We weren’t always freemium. We started as the complete OPPOSITE of freemium. Mostly
because we started our company right at the dot-com crash. We bootstrapped and grew to a
profitable company very organically.

3. Late 2008
Sunday, March 28, 2010
We watch our numbers closely. In late 2008, we noticed “the cloud” was dropping a lot of our
hosting and computing expenses. We budgeted to spend all that money anyway, so we
figured we could pass that on to our customers by “going free.”

4. Sunday, March 28, 2010
It took us a year to prepare. On September 1st, 2009, we went free with our “Power to the
People” campaign.

5. 240%
User growth in 7 months
from
Sunday, March 28, 2010
85k to 290k
It worked. Our userbase grew fast. Observation: it took 9 yrs to organically get to 85k users.
Then only 7 months to go to 290,000 users.

6. 225%
Increase in monthly email delivery volume
from 200 per month
million emails
450 to
Sunday, March 28, 2010
Our email delivery per month grew too. BTW, this increased our server costs again. D’oh.

7. 200%
projected revenue growth over last year
Sunday, March 28, 2010
This is good too.

8. 354%
ABUSE RELATED ISSUES PER MONTH
Sunday, March 28, 2010
But we’re talking about the bad stuff, so here. Abuse related incidents per month more than
tripled.

9. 200%
abuse staff headcount
* which is better than 800%
Sunday, March 28, 2010
Our abuse desk staff is projected to grow 200% this year. Coulda been worse, had it not been
for some technology we’ll discuss soon.

10. 245% ANNUAL LEGAL COSTS
(projected)
Sunday, March 28, 2010
Legal costs are also expected to rise dramatically, all because of abuse.
(that’s Rob. He’s our lawyer. He likes MailChimp right now.)

11. 245% ANNUAL LEGAL COSTS
(projected)
Sunday, March 28, 2010
Legal costs are also expected to rise dramatically, all because of abuse.
(that’s Rob. He’s our lawyer. He likes MailChimp right now.)

12. Abuse?
We’ll cross that bridge
when we get there.
Sunday, March 28, 2010
The point I want to make today is, we all say the same thing about abuse whenever we’re
building our startups. “We’ll cross that bridge when we get there.” I think that’s the right
mentality, but...

13. (actually, this is the bridge.)
Sunday, March 28, 2010
the bridge looks more like this.

14. Sunday, March 28, 2010
on the other side of this bridge, you’ll be dealing with a lot of abusers.

15. penny-stock traders
affiliate marketers
Sunday, March 28, 2010
on the other side of this bridge, you’ll be dealing with a lot of abusers.

16. (their lawyers)
Sunday, March 28, 2010
and their lawyers.

17. inevitable.
Sunday, March 28, 2010
and so i just want to help you avoid this.

18. (I’m like your asian shorty)
Sunday, March 28, 2010
in a weird way, i’m like your little asian guide, protecting you from danger

19. Sunday, March 28, 2010
Abuse is inevitable. Every popular, successful website has to deal with it.

20. Sunday, March 28, 2010
Even the WSJ!?

21. ALL UR GOATSE
ALL UR GOATSE
ARE BELONG TO
ARE BELONG TO
MORTIMER!
MORTIMER!
LOLZ
I TOTALLY CLICKED
THAT RANDOLPH!
Sunday, March 28, 2010
Yes, even old fat cats are out there trolling around in the commments

22. Types of Abu...
•
•
•
•
•
Sunday, March 28, 2010
I was going to do this detailed list of abuse types, but...

23. help.twitter.com
“report abuse”
Sunday, March 28, 2010
...just go to twitter. They’ve got ‘em all spelled out for you. I’ve had to pay our lawyer to help
with almost every one of these abuse types.

24. help.twitter.com
“report abuse”
Sunday, March 28, 2010
...just go to twitter. They’ve got ‘em all spelled out for you. I’ve had to pay our lawyer to help
with almost every one of these abuse types.

25. Fuzzy Spam
(as opposed to spammy spam)
Sunday, March 28, 2010
One type of abuse not listed there is Fuzzy Spam. This, IMHO, is the worst type of abuse for
the email marketing industry. It’s not like spammy spam (Nigerian 419 scams, appendage
enhancers, etc). Fuzzy spam is business email sent without permission. It’s a gray area that’s
hard to detect, but can ruin our servers’ sending reputation and get us blacklisted.

26. USER GROWTH
Sunday, March 28, 2010
So go back in time. In 2008, at the red arrow, we had the idea to go freemium. We had no
idea how crazy things would get when we launched (the green arrow, a year later). But we
knew we couldn’t train enough abuse desk staff in time.

27. PROJECT OMNIVORE
• Genetic optimization algorithm
• nVidia Tesla Supercomputer
• Amazon EC2 cluster ran for 20 days
• 61 trillion data points compared
Sunday, March 28, 2010
So we built Omnivore, which is an automated, self-learning abuse prevention system that
runs 24/7 and stops abuse before it happens. Involved scanning 10 yrs of email history on
our system for common traits among bad emails. It crashed our own computers after running
for 6 days straight. Needed an nVidia Tesla to run the algorithm, then passed it on to EC2 to
process all our data.

28. OMNIVORE STATS
• 35,539 Warnings
• 4,233 Account suspensions
• 1,193 Shut-downs
Sunday, March 28, 2010
In 7 months, it’s done the work of about 30 humans. What if we launched freemium without
Omnivore? Assuming we could detect the abuse, adding 30+ humans in 7 months is no small
task for a small, 38-person team like us. Wouldn’t have killed us, but probably would’ve
changed the culture dramatically to have our largest dept. in charge of shutting down
customers.

29. Sunday, March 28, 2010
But our fascination with abuse has led to interesting byproducts. Omnivore can predict the
GOOD outcome of a campaign, too! In this report, Omnivore is predicting my open and click
rate for a campaign I sent last week. After I sent, the actual results are in parentheses.
Astoundingly close. This is, at the very least, a very cool new feature we can launch.

30. Sunday, March 28, 2010
Or, maybe a whole new startup?
And if you think about it, Omnivore, if it fell into the wrong hands, could itself be abused.
Which is scary.

31. Sunday, March 28, 2010
But it’s early. We’ll cross that bridge when we get there.

32. @benchestnut
mailchimp.com/blog
[Rob] internetlegal.com
Sunday, March 28, 2010
The end. Contact Rob if you need an internet law expert.

33. @benchestnut
mailchimp.com/blog
[Rob] internetlegal.com
Sunday, March 28, 2010
The end. Contact Rob if you need an internet law expert.