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Founder Interview

How Mailinator Grew to Hundreds of Paying QA Teams as a Bootstrapped Side Project (Interview with Founder Paul Tyma)

Interview Date
May 2, 2017
Interviewee
Paul TymaFounder
Watch
Watch the full interview

Company Metrics at Interview Time

Pricing (Single User) (2017)

$29

Team Size (2017)

3

Free Site Uniques (2017)

45,000 per day

Emails Received (2017)

9,000,000 per day

Historical Snapshot

These numbers were reported by Paul Tyma during his interview with Nathan Latka in May 2017 and are a historical snapshot, not current figures. See Mailinator’s current numbers.

Key Takeaways

  • 01Mailinator was built 13 years before this interview as a free disposable email side project
  • 02Hundreds of QA teams worldwide are paying for Mailinator's SaaS tier
  • 03Pricing is $29 for a single user and $129 for a team
  • 04The free site receives approximately 45,000 unique visitors per day
  • 05Mailinator receives approximately 9,000,000 emails per day, with peaks of several hundred million
  • 06About 25,000 new inboxes are created every day on the free platform
  • 07Server costs are about $400 a month, which Paul called "ridiculously low"
  • 08The company is bootstrapped with no outside funding and a team of three
  • 09Paul ran Mailinator on a single server for 13 years before expanding to multiple servers for redundancy
  • 10Mailinator generates additional revenue from affiliate links through a tool Paul built called Click Router

Company Metrics at Time of Interview

MetricValueSource
Pricing (Single User) (2017)$29Founder interview, May 2017
Pricing (Team) (2017)$129Founder interview, May 2017
Team Size (2017)3Founder interview, May 2017
Free Site Unique Visitors (2017)45,000 per dayFounder interview, May 2017
Emails Received (typical) (2017)9,000,000 per dayFounder interview, May 2017
Emails Received (peak) (2017)Several hundred million per dayFounder interview, May 2017
New Inboxes Created (2017)25,000 per dayFounder interview, May 2017
Server Costs (2017)$400/monthFounder interview, May 2017
Affiliate Revenue (2017)A couple thousand dollars per monthFounder interview, May 2017
Years as Side Project13 yearsFounder interview, May 2017

Growth Breakdown

Revenue

Mailinator generates revenue from two streams: a SaaS subscription tier for QA teams and affiliate revenue from a click-routing site Paul built. Affiliate revenue brings in a couple thousand dollars a month, an amount Paul said "depends." Server costs are about $400 a month, which Paul called "ridiculously low," with "no capital cost."

Customers

Hundreds of QA teams around the world are paying for Mailinator's premium tier. The free product attracts approximately 45,000 unique visitors per day, creating a large funnel of potential paid users. About 25,000 new inboxes are created each day on the free platform.

Team

The team consists of three people total, with Paul coding whenever he can and the two others working on the marketing, the positioning and the product. Paul describes Mailinator as still occupying the corner of his desk, reflecting its origins as a side project he continues to run alongside other pursuits.

Funding

Mailinator is fully bootstrapped and has not raised any outside capital. Paul has been approached by venture capitalists but has declined, stating that until the QA business emerged he did not see a clear path to the scale of growth investors would expect. He remains open to funding if the right opportunity and growth trajectory align.

Growth Strategy

Organic Brand Building Through Free Product

Paul said Mailinator's brand "became incredibly strong" on its own over 13 years: "Everybody knew about Mailinator," as the place to send test emails. The paid product grew out of that brand rather than out of marketing, and paid ads played very little part ("We've experimented with ads here and there").

Listening to Power Users and Adding Features

QA departments began emailing Mailinator asking for features, and Paul and the people he worked with decided to add features specifically for QA testers, which spawned a SaaS tier for these users, turning an organic use case into a paid product without needing to invent a new market.

Affiliate Revenue via Custom Technology

Paul built another site, Click Router, that looks through five or six affiliate networks and finds a place to send each click. That let Mailinator earn affiliate revenue from its high-traffic free site, even though a disposable email site does not control the links that land on it, bringing in a couple thousand dollars a month.

Minimal Paid Advertising

Mailinator has experimented with paid ads but relies very little on them. The primary acquisition channel remains the free product itself, which drives tens of thousands of daily visitors and creates a natural conversion funnel into the paid SaaS tier.

Private Domain as Paid Differentiator

A key feature of the paid tier is the ability to have a private domain pointed at Mailinator, making all inboxes under that domain private and queryable. Paying teams also get an upgraded UI and an API to pull the emails, which lets them make email delivery part of the integration tests in their build process.

Best Quotes

“Mailinator was a side project I built thirteen years ago for to scratch my own itch, which is basically a free disposable email service. It is a receive only email service. It can't send. It can only receive.”
“Hundreds of QA teams now are using this service.”
“The pricing on the on the current model, although we're always working on this sort of stuff, and a lot of stuff's coming down the pike is $29 for a single user and 129 for a team.”
“The free site gets about 45,000 uniques a day. Interestingly, it gets about 9,000,000 emails a day, which we've seen up to several 100,000,000 emails a day.”
“Well, 25,000 or so new ones are set up every day.”
“We ran until last November on a single server for thirteen years, even when we got 300,000,000 emails in one day. And this is just because this was always my test bed for testing server architectures and building fast software.”
“The interesting thing is, like, this was absolutely a case of me doing nothing in all seriousness and the free product gaining its own brand, gaining a great representation, and creating the pay product all on its own.”
“This is not a DAU product. I don't I don't use the site every day.”

What Happened Next

At the time of this interview in May 2017, Mailinator was a bootstrapped side project with a very new paid SaaS tier serving hundreds of QA teams, run by a team of three with no outside funding. Paul said they were adding marketing and new features to "turn it into a business," while it remained "a side project to me as it always has." These figures represent a point-in-time snapshot of where Mailinator stood in mid-2017. Visit the Mailinator company profile for current numbers and developments.

View Mailinator’s current profile and metrics

Full Transcript

Nathan Latka

00:00This is the top where I interview entrepreneurs who are number one or number two in their industry in terms of revenue or customer base. You'll learn how much revenue they're making, what their marketing funnel looks like, and how many customers they have. I'm now at $20,000 per talk. 5 and 6,000,000.

00:19He's hell bent on global domination. We just broke our 100,000 unit sole market.

00:24And I'm your host, Nathan Latka. Hello, everybody. This is episode seven zero three. I love doing these. You know I love this. Right, guys? It's unbelievably fun. Tomorrow morning, episode seven zero four, we talked to Eric Dolan, and I... He breaks down a son saving his mom. That's really what's happening. He's a son. He is saving his mom with a health tech product that recognizes seizures, and it's big, big financially. Tune in to find out, especially

Introducing Paul Tyma and Mailinator

Nathan Latka

00:50if you're interested in the health tech space. Good morning, guys. My guest this morning is Paul Tyma. He's the founder and creator of a tool called Mailinator. It's an email system. He's also the startup veteran... A startup veteran is focused on four Silicon Valley startups, including Preemptive Solutions, Manybrain, Inc, which owns Mailinator, Home-Account.com, which was later acquired by Bills.com. You guys might remember we had the Bills.com CEO on about a week and a half ago,

01:16and Refresh Inc, which was acquired by LinkedIn. He's a frequent speaker and writer and as author of one of the original books on Java called Java Primer Plus Dr. Tyma received his PhD in computer engineering from Syracuse University focused on Java and .NET performance. Paul, are you ready to take us to this off?

Paul Tyma

01:33I sure am.

Nathan Latka

01:34What a bio, man. Congratulations.

Paul Tyma

01:37Yeah, thanks.

Paul's Background: PhD, Google, and Early Startups

Nathan Latka

01:38Tell tell us first. So you obviously studied computer engineering at Syracuse right out of that. Did you go right into one of these startups? Or did you work for somebody else?

Paul Tyma

01:47No, actually, I started my first company during my PhD and actually incubated it at Syracuse. Eventually moved back to Cleveland where I was from. Right out of PhD, I ended up working for Google.

Nathan Latka

01:47Got it.

Paul Tyma

01:47And that was just a happenstance that I happened to move out Silicon Valley and talk to Google and there I was.

Refresh Inc: Consumer App, $10M Raised, LinkedIn Acquisition

Nathan Latka

02:03And so which one of these companies was your first kind of big win? Preemptive Solutions, Home-Account.com, or Refresh Inc?

Paul Tyma

02:09I think they've all been interesting in their own way. Preemptive is actually still a going concern. I'm still on the board of the company. It's about 30 employees. Refresh was was a little bit more of a sort of, I'd say, advertiser, very visible, exit because LinkedIn purchased them. You can now see the Refresh technology in what LinkedIn calls its icebreakers, in their application, their their mobile app right now. I'm not sure if it's on on their

02:32web or not.

Nathan Latka

02:33What year was that at... Refresh acquisition?

Paul Tyma

02:34The acquisition was one year ago.

Nathan Latka

02:36Okay. Got it.

Paul Tyma

02:37Right now, two years ago. I'm sorry, two years ago, and I left LinkedIn a year ago.

Nathan Latka

02:40Okay. And what was the what was the acquisition price on that?

Paul Tyma

02:44Well, obviously, it was confidential, but I think everybody was pretty happy.

Nathan Latka

02:47What was the business model of Refresh? Was it a SaaS business?

Paul Tyma

02:51That was absolute... No. That was absolutely a consumer application that had... It was, you know, it fascinated me to pitch investors who didn't ask how you're gonna make money. And we never at any point had a... Anybody asked us and nobody cared. The goal was to absolutely get users and build technology and we raised enough money to do that.

Nathan Latka

03:08How much?

Paul Tyma

03:09We raised 10,000,000 total.

Nathan Latka

03:11Okay. And was that... I assume you got into a series that priced round that wasn't on note. Right?

Paul Tyma

03:15No. We started... Our first round was was $2,000,000 on $4,000,000 pre, which was a priced round we started priced. And then the second round was priced also.

Nathan Latka

03:23So just everyone understands, again, Paul started out doing a equity round. In other words, he didn't do a KISS or a SAFE for one of these YC notes that you're you're hearing about, he got, you know, he raised $2,000,000 and his valuation was $4,000,000 pre money, dollars 6,000,000 post money. So he sold what about a third of your company, Paul?

Paul Tyma

03:40Yeah, that's about right.

Nathan Latka

03:42Got it. And were you the sole founder of Refresh? Or do have partners?

Paul Tyma

03:44I had another Founder, Bob and Shaw.

Nathan Latka

03:46Okay. And then what did you grow that to in terms of number of users where it be... Suddenly became so interesting to LinkedIn?

Paul Tyma

03:52You know, it was only a couple 100,000 users at the end of the day. It was the first startup I've ever had though. And, know, you could think of it sort of as people search on steroids. It basically found everything about you from GitHub, LinkedIn, pay... Facebook, Pin... Pinterest, Foursquare, YouTube. We hit all these networks, and it was the first startup I never had to explain to anybody. I simply showed them their dossier, and their

04:12jaw would usually drop open.

Nathan Latka

04:13Were you paying access to the data pipelines of companies like Return Path and Consumer Insights product or Clearbit or FullContact or DiscoverOrg? Or was it... Were you just scraping the web for unstructured data?

Paul Tyma

04:26None of the above. Clearbit didn't even exist. We tried FullContact. Honestly, we didn't like the data, and we built our own identity engine from scratch.

Nathan Latka

04:34And then what was the technology? What was it built on? Was it again, just scraping unstructured data online?

Paul Tyma

04:40You know, I would I'd be a little more careful to say it was sort of semi structured, you know, to be fair. But it was a heck of a lot of work. And yeah, it was it was real time. So you walk in a coffee shop, type in someone named, we looked up all up in real time and provided the results.

Nathan Latka

04:54That's amazing. So was Refresh your... You know, give me inside of your quote money brain. Right? Was Refresh your first big win or was the Bills exit, enough to, like, basically have you set free for life?

Paul Tyma

05:06You know, there's the exits that are the the car, the house and the plane. And I don't think I've had the plane yet. So I'm still I'm still working. You know, there's no question about it.

Nathan Latka

05:16Now everybody got though on the Refresh, you raised $10,000,000, everyone made money on that, right?

Paul Tyma

05:20I believe so. Yeah. Yeah.

Nathan Latka

05:21Okay. Okay. Well, I mean, you wouldn't know because you would have been one of ones making money. Alright, good. So that one well, and then we're working backwards. So Refresh was your most recent exit? What was the Bills.com exit right before that?

Paul Tyma

05:36No, it was a good five years before four years before.

Nathan Latka

05:39Okay, but in terms of your company prior to Refresh it, you were building Home-Account.com. Correct?

Paul Tyma

05:44That's correct.

Nathan Latka

05:44Okay, so you built that for for how many years before you sold that to bills?

Paul Tyma

05:51I was there for the first year of the company and left at the company went on for another two years or so.

Nathan Latka

05:56So home account wasn't your company?

Paul Tyma

05:57I was a I was a minor founder.

Nathan Latka

06:00What's a minor founder mean?

Paul Tyma

06:02Well, if I didn't get 50% of the company, I got it, you know, more than the option thing out of the option pool and less than, you know, 50%.

Nathan Latka

06:10Yep. And for those folks that don't understand or they never heard the term option pool before, describe to everyone what that is.

Paul Tyma

06:16When you take investment, you you do the calculation of how much equity you just gave up and then the venture capitalists say, oh, no, by the way, you need to give up 10% more or 15% more that you're gonna put aside for future employees. And typically, when you hire, you know, first employees, you know, all depending on on their their skill set, what they're bringing to the table, but it's typically, in the early days, one to

06:39one to two to three, four, 5% of the company and in the later days, point two five, point five, you know, that sort of thing.

Nathan Latka

06:45And those of you listening right now that are thinking about raising, you wanna watch out for that conversation because many of these, venture VCs or just investors will ask for you to set that up before they invest. So it doesn't dilute their share that they're buying into. Was that your experience, Paul?

Paul Tyma

06:59I I don't know if any would do it any other way. They absolutely are not gonna get diluted by the option pool that I've ever experienced. And and, know, 100% watch out for that, but it's also pretty standard. You know, you expect it.

Nathan Latka

07:11Yeah. Okay. Let's fast forward to where we are today. So these companies are going well, you're doing well, you you sell to LinkedIn, you stay there for a while, why'd you leave the company, you just get bored?

Paul Tyma

07:21You know, I think it's almost a Silicon Valley cliche to say you sell your startup to a large company and you stay precisely one year and you go. And, you know, I'm not sure I ever never understood that, but, you know, keep in mind when you come in through an acquisition, nobody hired you. Nobody championed you for this role and and that sort of thing. So it is... And you come in as part of a big

07:42group of people. So it's it's a very different, you know, situation. There's nothing wrong with the situation, that sort of thing, but, you know, I'm always looking for bigger and better opportunity, and it was I was that was fine there, but it was time to go.

Nathan Latka

07:56Did you have a one year earn out as part of the deal?

Paul Tyma

07:59Yeah, sure.

Nathan Latka

08:00Okay, guys. So part of the part of the exit deal was an earn out. That's really what kept you even a year. That's why you didn't leave immediately.

Paul Tyma

08:05Yeah, well, I don't know if I would have met left immediately. Anyway, I remember my mind, you know, my thought process back then. But yes, definitely earn out was a factor in the in the decision.

What Is Mailinator and How It Works

Nathan Latka

08:14Okay, so take us through today. What is Mailinator? And how do you support yourself? How's it make money?

Paul Tyma

08:19So Mailinator was a side project I built thirteen years ago for to scratch my own itch, which is basically a free disposable email service. It is a receive only email service. It can't send. It can only receive. That being said, you know, I I have trouble explaining to people, there's no such thing as accounts. There's only inboxes. Every inbox is public. Anyone can chain... Can check any inbox and read any email. Every single inbox you can

08:43think of already exists. So the real trick to it is, I've... At one point, went to a website, maybe it was New York Times, they wanted my email address in order for me to read an email and I didn't wanna give them my email address because I felt like we could put on a spam list. So with Mailinator, you would just put in something... Pick it out of the pick it out of the air, [email protected]. New

09:03York Times then emails that email address, the account or the inbox is created on the fly. You then go to Mailinator website. Second, read the email, click the link, read your article. Never use that email again if you don't want to. New York Times puts that in their spam list, spams it forever. And it's just a... Like it said, it's disposable email.

09:22As far

09:22as I know, was the first one that sort of did that. A lot of copycats came out later.

Nathan Latka

09:25I say this is a... It's a very interesting concept, and I could totally understand why you'd have trouble... Issues describing this because it's so not norm... Not the normal way people think about email inboxes.

Paul Tyma

09:35That's right. The the fallacy we discovered early on was people associated email with identity. They still do. Yeah. And it's such not a truth.

Nathan Latka

09:35Yep.

Paul Tyma

09:35And, you know, so at Mailinator, you've got a couple trillion inboxes at your disposal.

Nathan Latka

09:47Yep. And they're created on the fly. You can type in anything. It's like picking your domain name almost.

Paul Tyma

09:51Yeah. Any... Anything you want. As soon as the email arrives, the inbox will be populated. But you can check anything to your heart's content right now. Go check check Joe or Fred or Bob one two three. They're all they're all there.

Early Revenue: Ads and Affiliate Marketing

Nathan Latka

10:01And talk money to me. How do you generate revenue?

Paul Tyma

10:03Well, you know, like I said, for a long time, this was this was a side project for the last thirteen years. So I've been at Google, I've been at LinkedIn, I've been in four startups in the meantime. So just just to emphasize that. And in the early days, of course, it was like, let's try some ads, which actually, I can't complain. The ads paid for the servers and more.

Nathan Latka

10:20Mailinator. Where would you put the ads?

Paul Tyma

10:22On the sidebar or something. Never never terribly obtrusive.

Nathan Latka

10:26But in the sidebar when somebody goes to read the New York Times article that they were spammed with?

Paul Tyma

10:30No. They go to read the the New York... The email that they wanna get from the New York Times.

Nathan Latka

10:34Got it.

Paul Tyma

10:35You know, it's a webmail site, right, at the end of the day. So the ad would be on the side. And, you know, let's not pretend the ad made a ton of money, but they certainly paid for the servers and and that sort of thing. So then from there, you know, and I have to say it was always a side project, it was always something I wanted to work on. And what occurred to me was there

10:53was a lot of traffic going through that was affiliateizable. But the problem is you get a lot... If you have a running blog, you go ahead and you write an article about some shoes and you put an affiliate link and that makes sense and you hopefully get some revenue from that. If you held something like, say, a forums or a disposable email site, you don't control the links that are put on your site. So it's hard

11:15to affiliateize them. And actually, what Mailinator has always done is sort of give me this test bed to create new technologies. And I built actually another site called click router that looks through like five or six different affiliate networks, finds a place to send a click and then affiliate ties. Now Mailinator makes a couple thousand dollars, it depends a month just on affiliate revenue. So again, this is not this is not like a business, but boy,

QA Teams Discover Mailinator and Drive the SaaS Business

Paul Tyma

11:39it's a great side project.

Nathan Latka

11:39Yep.

Paul Tyma

11:39Take the evolution farther and what we started to see was, Mailinator's brand became incredibly strong. Everybody knew about Mailinator, you know, that it was this place to just test... Send test emails. And what we started to see was a high usage from QA departments who wanted to test their sign up process, who wanted to test their welcome email. Right? And the fact that they could create thousands of inboxes immediately was

12:07extremely appealing. Right? They could just test like crazy. So they started sending us emails asking for features. And this is where I started having conversations with some of the people I worked on, Jack specifically, early on in the history of Mailinator of where we should go with this. And we decided to add some features specifically for QA testers, which that's what spawned the SaaS business. So QA teams, I could arguably say around the world, and it's

12:34a very new business, it's the new

Nathan Latka

12:35Hold on, you can't say around the world without giving me a number. Mean, we talking hundreds of QA departments paying you or thousands or what?

Paul Tyma

12:41Hundreds of QA teams now are using this service.

Nathan Latka

12:44Okay. Paying you.

Paul Tyma

12:46Yeah, paying us. That's right. And this this gives us, you know, what functionality can we add there? It gives us an API to pull the emails and now you can, you know, have email delivery as part of your integration tests in your build process and many companies do that. There's just, you know, all these different use cases that QA tests or sometimes they just wanna have 10 inboxes to test right off the bat and there they

13:08go. So we give them an upgraded UI, we give them a private domain so they, you know, every email in Mailinator by default is public, but if you pay, you can get a private domain and then you can check an inbox. You get... If you pointed say, nathan.com@mailinator, you can basically query every inbox that starts with the letter j and have one UI that shows you every inbox the letter j that starts with letter

Nathan Latka

13:08So

Pricing, ARPU, and SaaS Revenue

Nathan Latka

13:33Paul, what do these guys pay you on average per month? What's your ARPU?

Paul Tyma

13:37The well, the pricing on the on the current model, although we're always working on this sort of stuff, and a lot of stuff's coming down the pike is $29 for a single user and 129 for a team.

Nathan Latka

13:48Yeah, we don't we don't have time to go into like all the different cohorts and stuff. If you just take an average, so, like, is the average customer paying you what? $35 a month?

Paul Tyma

13:55Or Yeah. I'd say the... Yeah. That's probably about right.

Nathan Latka

13:57Right? I guess that right? 35?

Paul Tyma

13:59I think that is right. About 10... 15% enterprise or 15% team and and the rest is single person.

Nathan Latka

14:05Okay. And and you said you've got you still have the ad revenue coming in, which you said what is $3 or $4 grand per month?

Paul Tyma

14:11Yeah, somewhere around there.

Nathan Latka

14:12Okay, but it fluctuates.

Paul Tyma

14:13Sure.

Nathan Latka

14:14Okay. And you said you had 300 QA, how many how many QA customers do you have?

Paul Tyma

14:19Yeah. About 300 QA teams.

Nathan Latka

14:21Okay. I'm guessing, like, right on the money today. This is good. It must have been that juice shake I had for lunch. Alright. So if... I mean, I can do the math. Right? $35 average ARPU per month times 300. From there, you're making what about ten, eleven grand per month from the SaaS model?

Paul Tyma

14:33That sounds... Yeah. That's about right.

Nathan Latka

14:33Yep.

Paul Tyma

14:33I mean, you know, the interesting thing is, like, this was absolutely a case of me doing nothing in all seriousness and the free product gaining its own brand, gaining a great representation, and creating the pay product all on its own.

Nathan Latka

14:33Yep.

Paul Tyma

14:33It it was really interesting to watch. And now, you know, we're adding this engine behind it of actually doing marketing, of actually, continuing to build out features and actually

14:56turn it into a business now that we have, you know, it remains a side project to me as it always has. I still love to code whenever I can. And this gives me a place to do that. And we have other folks working on the marketing and the positioning and the product.

Nathan Latka

15:08Yep. Okay, that makes good sense. Walk us through like some of the other metrics here. Now, you've kind of let this go organically. So I'm curious to see what these look like. Churn, right? Churn is always tough in a SaaS business. How many customers have started paying you and stopped?

Paul Tyma

15:21Yeah, churn is pretty high. I don't know the exact number, but I'd say probably 20%, 10 to 20% every couple months. So we sort of turn over pretty hard. I don't... I definitely don't have the exact numbers on that.

Nathan Latka

15:36On the high end, maybe 10% of your customer base is churning every month. Yeah. Worst case?

Paul Tyma

15:43Yeah. Something like that.

Free Site Traffic: 45K Uniques and 9M Emails Per Day

Nathan Latka

15:44Okay. And this is all organic. Right? You're not spending any money to get new customers. They're all just finding you?

Paul Tyma

15:48Very little right now. We've experimented with ads here and there. You know, keep in mind the free site gets about 45,000 uniques a day. Interestingly, it gets about 9,000,000 emails a day,

16:03which we've seen up to several 100,000,000 emails a day. So clearly, have a lot of users using the site and it's Free. Classic model of turning them into, you know, paid users.

Nathan Latka

16:12How many free users do you have, you must have a significant number to get that volume of emails coming at you?

Paul Tyma

16:16Well, I said 45,000 uniques a day.

Nathan Latka

16:19But but but but those are just website impressions, right? I imagine you have some kind of sign up process, how many people are just using you for free? Or how many inbox have you been? How many inboxes have been created with you?

Paul Tyma

16:30Well, like I said, first of all, there isn't a sign up process, you can check any email in any box without signing up completely.

Nathan Latka

16:36Let me re ask my question, how many email inboxes have been set up with you? I know you can set them up on the fly. But how many have actually been set up?

Paul Tyma

16:43Well, 25,000 or so new ones are set up every day.

Nathan Latka

16:47Got it. I mean, that's impressive. Right? So about 50% of your website impressions convert into someone creating a new public inbox.

Paul Tyma

16:56But that's the whole point they came here for. This is not a DAU product. I don't I don't use the site every day.

Nathan Latka

17:01Stands for daily active users.

Paul Tyma

17:02Right? Yeah.

17:03Right. I use this product every week or every other week. I need to sign up for something. That's when I use it. That's when I come to the mail. It's a very high intent usage. I'm coming to read a specific email.

Nathan Latka

17:03Yep.

Paul Tyma

17:03Because I know I sent it there.

Bootstrapped: Why Paul Has Not Raised Capital

Nathan Latka

17:15Yep. What did... Bootstrapped so far? Have you raised capital for it or no?

Paul Tyma

17:19No. We keep... I keep getting asked by venture capital, but this is a wrong type of business to raise at this level. And I need to make sure I see this. What's that?

Nathan Latka

17:27Why do you say that?

Paul Tyma

17:30Well, until this QA business came up with again, which is semi recent, I didn't see the model to take this, you know, to a significant height. I I, you know, I've been in Silicon Valley long enough that I really wanna be able to show a chart that shows a $100,000,000 after five years of growth. Right? That's what I wanna be able to show. And I didn't see that path for this product. That being said, I'm not

17:51saying it can't be a good business, it absolutely can. But to take funding is a whole different level of commitment. And I wanna make sure it's the right one. And in every turn, I've had better opportunities to take funding or to build something like Refresh was a good example.

Team Size and How Revenue Is Split

Nathan Latka

18:04Yep. What's your team size? Just you right now working on this?

Paul Tyma

18:06Not... Well, again, I'm like corner of my desk at best, and we have two others.

Nathan Latka

18:10Alright. So three And you guys just split the revenue each month?

Paul Tyma

18:15Yeah. Something like that. You know, the revenue is there. It's not it's not huge. We got salaries or they have I don't. And we we go from there again.

Server Costs: One Server for 13 Years, $400 a Month

Nathan Latka

18:23Your your gross margin on this product must be pretty high. Right? Are there are there significant server expenses?

Paul Tyma

18:29You know, we ran until last November on a single server for thirteen years, even when we got 300,000,000 emails in one day. And this is just because this was always my test bed for testing server architectures and building fast software. We finally rolled it out to several different servers for redundancy and and this and that. So no, server costs are ridiculously low. There's no capital cost.

Nathan Latka

18:53So what is your gross margin? Mean, did you break 90, 95%?

Paul Tyma

18:57Well, I guess it servers, think are $400 a month.

Nathan Latka

19:00Okay, on about $13 or $14 grand of total revenue between ads and SaaS.

Paul Tyma

19:04Yeah. So there you go. And some, you know, what else? Some salaries and you're done.

Nathan Latka

19:09Okay. Top tribe, I have to tell you many people go, Nathan, you came out of nowhere. Your website's growing so fast. How'd you do it? The answer is simple. So I use HostGator. Don't know if you guys know that, but I use HostGator. And the reason I do, they have like about 4,500 free templates I can use because I don't code. They've got a great e commerce plugin and guys, I bug the heck out of their

19:28support. They've got twenty four seven support, which I love. So what I've done is I've worked with them. You guys know I make great deals. If you go to hostgator.com/nathan, you can sign up, get your own domain for 30% off and a forty five day money back guarantee. Okay? Again, I make great deals for you guys. Go to hostgator.com/nathan to grab that now. Yep. That's impressive. Great. Oh, this is good stuff, man. Let's wrap up with

Famous Five: Books, CEOs, Tools, and Life

Nathan Latka

19:54the famous five. Number one, what's your favorite business book?

Paul Tyma

19:59I would... I don't know if it's a business book. I'd have to go with Cialdini's Influence.

Nathan Latka

20:02Yep.

Paul Tyma

20:03That book really changed how I thought.

Nathan Latka

20:05Number two, is there a CEO you're following or studying right now?

Paul Tyma

20:09Studying... There's a there's a bunch of them I really, like to... I'm not sure I'm studying them. Amy over at, Madison Reed is is... I I pitched her once as a VC, and she turned me down. So I followed her ever since, and now I'm excited what she's doing actually in a hair coloring business. So I find I find that fascinating. Brad Cam over at Talkable really turned that business around. So I'm not sure I'm studying

20:30anybody. But I like to I like to follow a few folks.

Nathan Latka

20:32That's great. And guys, if you use that, that you said talkable was the name of that company.

Paul Tyma

20:37Yeah, great.

Nathan Latka

20:38Number. Number three, what's your favorite online tool like HostGator?

Paul Tyma

20:43You know, I would have to say Linode. That's where I host everything. And they're... It's incredibly simple. I'm I'm much more of a technology guy than a desktop tool guy. And I use them all the time. I love what they're doing.

Nathan Latka

20:55Number four, Paul, how many hours of sleep do get every night?

Paul Tyma

20:58Oh, definitely eight and a half. I can't cannot. I'm worthless without it without that.

Nathan Latka

21:03And what's your situation married single? Do you have kids?

Paul Tyma

21:07Married?

Nathan Latka

21:07Married?

Paul Tyma

21:07No kids?

Nathan Latka

21:09No kiddos? Alright, and how old are you, Paul?

Paul Tyma

21:1150.

Nathan Latka

21:11Alright, last question. Take us back thirty years. What do wish your 20 year old self knew?

Paul Tyma

21:17Well, how to talk to girls, I think would have to be the real answer. I was really good at computers. But that was that was the end of the story.

Nathan Latka

21:24There you guys have it from Paul, founder of Mailinator. He wishes he knew how to talk to girls better back thirty years ago. In the meantime, he's had so many exits. Refresh to LinkedIn, raised $10,000,000 there. Everybody made money. Also sold his company prior to that to Bills.com, which did very well. He's had many exits now building Mailinator almost by accident as a side project. Over 300 folks, q... Really QA teams, paying him on average $35

21:49a month for about $10,000 in SaaS revenue. Add on top of that another another $3,000 or $4,000 in advertising revenue. Churn's a problem, but, again, he's focused on testing right now in the middle of building something interesting. Team of three. Paul, team up, thank you for taking us to the top.

Paul Tyma

22:03Thanks, Nathan.

Nathan Latka

22:04If you enjoyed Paul today, go back and listen to Catherine yesterday. With just 5,000 left in her bank, she launched a company called The Muse. Now they get 50,000,000 visits annually and over 600 companies payer, but it'll surprise you what they're paying for. It would mean the world to me if you guys got any value from this episode if you would go leave a review on iTunes right now and then subscribe. You know, I hustle like

22:28heck to get these episodes out every freaking day for you guys. And trust me, I love it. I would do it with no listeners, but boy oh boy, it makes my day and it makes my team's day when we see great reviews and get your feedback. So thanks so much. Okay, Top Tribe. I love giving away free money. I feel like Oprah giving away cards, and I have something special for you today. How many of you

22:49have heard our super sharp guests talk about success they've had with Facebook and Google Ads? Well, all of you listening right now... Yes. If you're listening, you get a $100 in free AdWords. Here's how you get it. K? Again, thanks for listening. Get the free $100 from Google right when you sign up with my website host provider, HostGator. Go sign up now to get your free money. Hostgator.com/nathan. Again, that's hostgator.com/nathan.