South African Gary Levitt came to New York to play jazz. Nineteen years later he’d built a $5 million email marketing business.
Nineteen years ago Gary Levitt headed for Boston from a remote farm in South Africa with one plan: to become a professional bass guitarist. In fact, the last thing that Levitt, a one-time champion skateboarder who attended high school with Nelson Mandela’s grandchildren, intended to do was launch an Internet startup—or any business at all, for that matter.
But plans change. One thing led to another and, in 2008, Levitt found himself at the helm of his own email marketing business, a New York City–based company by the name of Mad Mimi. Through a mix of smart development, creative customer service and good word of mouth, the business now has 20 employees, about $5 million in revenues, and 100,000 customers.
Here’s his amazing story:
Musician Turned Entrepreneur
Levitt came to Boston to attend the Berklee College of Music on a scholarship. After he graduated in 2001, he moved to New York to play jazz, which, he says, “is synonymous with working as a busboy.” He spent three years toiling at restaurants during the day and playing gigs when he could, at night. By then, however, he’d had enough of the starving musician life, so he and his brother, Dean, who also had moved to New York, started a music production company to write melodies for television commercials.
A website through which musicians could create online press kits and provide a way for club owners to book acts easily.
One day, while fooling around on the Internet at his music studio, he stumbled across the website for a software development framework, Ruby on Rails. He was floored. “It spoke to me,” he says. That revelation got him thinking. Recently married with an infant, he needed a way to find more lucrative employment. His idea: Start a website through which musicians could create online press kits and provide a way for club owners to book acts easily.
Costly Mistakes
With that, he approached a group of family and friends, raised about $100,000, and started doing research online to find “the best Ruby on Rails programmers in the world,” he says. He e-mailed 25 of them and from that crop hired two top-of-the-line—and expensive—developers.
Worse, the project was what he calls a “big tangled mess with programming code that was all over the place.”
Three months later, Levitt had burned through most of his money. Worse, the project was what he calls a “big tangled mess with programming code that was all over the place.” It was an eye-opening experience. His programmers recommended he find an architect—that is, a software specialist able to map out a project and communicate it to developers. With the small amount of money he had left, he hired someone able to help him kick-start the process and begin all over again. He also decided to use an outside development company, instead of hiring individual consultants. Of course, that meant, once again, going out with hat in hand and approaching friends and family for another cash infusion. By mid-2007, he had raised another $100,000.
Thinking about taking a loan from friends and family? Then make sure you read this.
A Better Idea: Mad Mimi
But startup founders often come across a better idea midstream. Levitt was no exception. After a few months, working mostly from “a coffee shop on Seventh Avenue in Brooklyn,” he says, he decided to switch direction—to change his focus from online press kits for musicians to email marketing and newsletter tools for anyone. Levitt, who started teaching himself programming when he was still running his music production company, previously had created email newsletters for friends and felt he knew something about what was needed, so he concentrated on programming the front-end graphics and design, while his developers did the rest.
Eight months later Levitt was ready to launch. Then, about two weeks before the official start date, someone stumbled across the site and purchased a subscription. “I was so excited,” says Levitt, who called his family in South Africa with the news. Two hours later, the person asked for a refund.
Word of Mouth
The day of the launch, however, the site got a positive write-up on Mashable, a well-read blog. That drew a lot of traffic to the site. According to Levitt, subscriptions have increased steadily ever since. But, according to Levitt, that hasn’t happened through any coordinated marketing campaign. In fact, in a crowded marketplace, Levitt has done little in the way of marketing, except for placing on the bottom of every email a “powered by Mad Mimi” logo. Primarily the site has grown through word of mouth and, says Levitt, the application’s simplicity and ease-of-use. “What helps me stand out is an application that’s well executed and simpler, with fewer features,” he says.
Primarily the site has grown through word of mouth and, says Levitt, the application’s simplicity and ease-of-use.
Market Advantage: Great Customer Service
He focused on providing out-of-the-ordinary customer service. The plan: for customer service to be more than simply helping users with, say, help resetting a password. Instead of directing a customer looking to improve a newsletter to an instructional tutorial, a customer service rep might take a more active role, suggesting improvements. Now, one employee regularly examines customers’ newsletters to see if, for example, they need new designs, then inserts the changes for them. “It’s all about sweet surprises that people can then share on Twitter and Facebook,” he says. To that end, most of the company’s employees work in customer service.
“It’s all about sweet surprises that people can then share on Twitter and Facebook,”
Homeland Security, Thieves and Spammers
Of course, there have been unanticipated setbacks. Take the Nigerian credit card thieves. In 2008, Levitt was surprised to find hundreds of subscriptions had been bought. As it turned out, the customers weren’t legit. Instead, they were just spammers using stolen credit cards. The result: AOL and Gmail blocked the site, and American Express shut down the ability for customers to pay through their Amex accounts.
Levitt promptly contacted American Express to explain what had happened. And he started developing technology to detect spammers. In the meantime, he manually researched cardholder identities for each new charge that came in. About a month after the incident, AOL and Gmail accepted the site back into the fold.
“Six guys from the Department of Homeland Security burst into my studio and took me down to Federal Plaza…”
Then there were unexpected difficulties with his visa. In 2006, while he was still running his music production company, “six guys from the Department of Homeland Security burst into my studio and took me down to Federal Plaza,” he says. It seems he had let his visa expire, and a letter rejecting his new application had been sent to the wrong address. The next morning he had appeared at a hearing, where the mix-up was cleared up.
Then, six months after launching Mad Mimi, it happened again, after Levitt returned to New York after a visit to South Africa. Levitt had to appear at another proceeding, this time facing the serious possibility that he would have to leave the country with his wife and go back to South Africa. He ended up hiring an immigration lawyer who, after about two months, “got me out of this mess,” he says.
A Virtual Team
That’s all behind him. Now he has a team of 20 full-time employees, along with eight contractors, who all work virtually, with Levitt in New York and the others scattered in 10 cities throughout the United States. Everyone, including Levitt, works from home.
Using his Foreign Advantage
That virtual team also includes three South African developers he found through connections in his native country. That has a few benefits. For one thing, salaries for engineers in South Africa, according to Levitt, are considerably less than in the United States. And there’s the added benefit of a “real cultural comfort” in working with developers from his native country, he says.
Growing Quickly
Levitt hopes to continue his company’s growth—he gets about 150 new customers a week—this year by striking partnerships. Recently, he signed a deal with “a really big educational institution,” he says, making Mad Mimi email and newsletters mandatory for all students to help them learn how to market effectively. For now, despite his lack of business training, he feels he has the company under control, at least until it reaches $10 million in revenues. That’s the stage many small-business experts regard as a tipping point, when company founders need to install more professional management. “I look forward to getting to that tipping point,” he says.
Advice and Insights from Gary Levitt
We talked to South African native Gary Levitt, founder of Mad Mimi, an Internet email marketing company in New York, about his experiences and what advice he’d give other immigrant entrepreneurs.
How did you use your foreign advantage in building your business?
“I was able to hire engineers who are based in South Africa. Their salaries are a lot cheaper. Also, I networked through the South African Chamber of Commerce in New York and made connections with people at the South African consulate. That gave me a sense of confidence, and it was very important to me.”
Were there any advantages to being an immigrant?
“At the time I started building my business, I’d been in the U.S. for eight years, from when I was 18 until I was 26. It was pretty much my entire adult existence. At that point. I identified myself more as an American, than as a South African.”
What about any advantages to doing business here in the U.S.?
“It’s much more pleasant doing business in the U.S. Interacting with Americans is professional and not overly aggressive. In South Africa, well, it’s a tense culture. I’ve also spent a lot of time in Israel, although I’ve never opened up a business there. But in Israel the society is extremely high-decibel. People scream a lot. And it’s very tense. “There are many regulations in the U.S., but setting up a business is relatively easy. There are protocols and controls. It’s not arbitrary.”
