In 2018, investors told Rebecca Shostak that email was dying. Every door she knocked on stayed shut. Y Combinator — the accelerator that minted Airbnb, Dropbox, and Stripe — passed on her pitch. By every conventional measure of the time, Flodesk was a bad bet: an email marketing tool, in a category "everybody knows" is a museum piece, built for an audience VCs don't invite to demo days — small business owners, solopreneurs, and creative entrepreneurs.
Fast-forward seven-plus years. Flodesk just crossed $36 million in annual recurring revenue — roughly $3.1 million a month — serving 100,000 users. It has never taken a dime from institutional investors. It has been profitable since its second week of existence. And Shostak, 40, the designer who once created stage visuals for Rihanna and Linkin Park, is now the company's CEO, with Inc. naming her to its 2026 Female Founders 500.
This is not a story about email. It's a story about what to do when the smartest people in the room tell you your idea is dead — and the unglamorous, almost embarrassingly manual MVP process that proved them wrong.
When Shostak, Martha Bitar, and Trong Dong started fundraising in 2018, the objections came from the same place every time: email is obsolete. Texting and social were "sweeping it away," investors argued. Why build a better tool for a dying channel?
Here's what's funny in hindsight: the investors were right about the trend line and wrong about the verdict. Email didn't die because email was never really a technology — it's an identity layer. You can quit Instagram. You cannot quit your inbox; it's how receipts, logins, and confirmations reach you. The channel's user base is projected to hit 4.73 billion people in 2026, according to data compiled by Constant Contact. The corpse everyone kept burying kept cashing checks.
What the investors actually rejected wasn't email — it was a market they couldn't pattern-match. Flodesk wasn't chasing marketing departments with six-figure budgets. It was chasing people like the ones Bitar met while working in partnerships at HoneyBook: small business owners with six-figure Instagram followings who could not get a single newsletter out the door. The problem was never content. It was design. The dominant tools were built to solve the problems of 2005 — deliverability, HTML editing, subscriber tiers — not the problems of a ceramicist with 40,000 followers and no design team.
And Shostak had already seen this pain from the other side. A designer whose resume included work for Rihanna and Linkin Park, she ran a small shop selling gorgeous email templates. Her number-one support ticket, over and over: customers bought beautiful templates that broke the moment they were loaded into existing email platforms. That support queue was better market research than any pitch deck. She'd been quietly carrying the idea for three years.
The lesson for anyone collecting rejections right now: investors didn't say no to a fact. They said no to a frame. The frame was "email is dying." The frame that mattered was "the fastest-growing class of business owners is being ignored by every tool in the category." If your pitch can be killed by a trend headline, reframe it around an ignored customer before you reframe your ambitions.
What happened next is the part I want every founder-in-waiting to study, because Flodesk's pre-product discipline is worth more than its current revenue figure.
1. Talk until the pattern is undeniable. Bitar booked 12+ customer calls a day, sourced from Facebook groups where her future customers already hung out. Not surveys. Conversations.
2. Prototype in pixels, not code. Every call ended with a revised Figma prototype. Hundreds of iterations happened before a single line of production code was written.
3. Fail fast, on purpose, in front of users. The first prototype was a disaster. Showing it to a user named Kelsey, they watched her physically sink in her chair: "I have no idea what I'm supposed to do." The product had replicated the exact clutter it was meant to kill. Instead of patching, they deleted — stripping features until only the essentials remained, then restructuring everything into simple, step-by-step "flows." Simplicity didn't just fix usability; it became the brand.
4. Ask for the "no." Instead of fishing for approval, Bitar asked prospects, "Why wouldn't you use Flodesk?" It's a brutal question that invites brutal honesty. When people still said yes — despite explicit permission to say no — that was demand you could trust.
5. Set a pain threshold for writing code. The team's bar before building: make a customer so happy she cries. A prospect named Mary teared up at a prototype. Then they started building.
6. Ship embarrassingly little — then over-deliver by hand. The MVP that launched in August 2019 was, by the founders' own account, "really barebones." It sent emails. That was it. No editable templates. No automation sequences. So Shostak personally hand-designed custom emails in Photoshop for all 30 beta users, then walked each of them through sending. Thirty handmade deliverables from a founder. That's not a bug in the MVP process — that is the MVP process. Software scales what works; the founder's job is to personally discover what "works" means.
7. Charge early. Flodesk tested willingness to pay before launch — with fake charging — and never flirted with a free-only model. Revenue from week one was the proof no pitch deck could have provided.
The results of this discipline, post-launch:
The company the YC panel passed on hit a million in revenue before most accelerator batches ship their landing page.
Let's do what the 2018 investors didn't: look at data instead of vibes.
Per Rebecca Shostak in Inc.: a social media post typically reaches 2–5% of the followers it was aimed at. A well-run email campaign can post 30%+ open rates — and the industry-wide average across all sectors is 32.55%, per Constant Contact's 2026 benchmarks. Her line is worth framing: "Email marketing is not dead — it's ubiquitous. How many times have you checked your email today alone?"
On returns: Shostak cites $30–40 back for every $1 spent on email marketing. Independent 2026 benchmarks land in the same range — an average of $36 per $1 (Statista, cited by Constant Contact and Forbes Advisor), with retail and e-commerce at $45 per $1. Compare that to paid search ($2 per $1) and social advertising ($2.80 per $1) figures that circulate in the same benchmark reports, and email isn't just alive — it's the highest-leverage channel most small businesses have.
And then there's the ownership argument, which has only gotten louder since 2018. "The only way to truly own your audience as a small-business owner is to have an email list," Shostak says. "It's something you can take with you anywhere." Social audiences are sharecroppers' audiences — subject to algorithm changes, account bans, platform bans by governments, acquisitions by billionaires, or the platform simply going under. In a 2026 Constant Contact survey of 1,500+ small business owners across five countries, 41% said email will be their most valuable marketing channel this year, and 64% of small businesses already use it. In 2018, betting on email looked contrarian. In 2026, it looks like the consensus the VCs arrived at seven years late.
Rejection didn't just fail to kill Flodesk — it accidentally designed the company. Locked out of the VC playbook (raise big, buy users, figure out economics later), the founders had to win customers one recommendation at a time. What emerged is a masterclass in alignment.
Flat pricing that feels like a covenant. Flodesk is $35/month (billed annually) or $38 month-to-month — unlimited subscribers, unlimited emails. The full "Everything" plan with checkout runs $59/$64. No per-subscriber fees, no "you've outgrown your tier" ambush. Bitar calls per-subscriber pricing a "dark cloud" — a tax on the exact success customers are chasing, since every new subscriber raises the bill. Flodesk has raised prices once in its entire history (at public launch). Compare that to incumbent pricing pages that read like tax code.
No free tier, by design. While competitors run 80%+ of their users on free plans subsidized by enterprise accounts, every Flodesk customer pays. That means revenue per user actually covers unlimited usage — and the company can afford to be generous without a freemium pyramid scheme underneath.
A footer that pays customers. Every email sent through Flodesk can carry a "Made with Flodesk" footer — and roughly 83% of users leave it on. Early on, the founders wired that footer into an affiliate program paying $19 per referral. One customer's first email exposed 16,000 people to the product. The result: customers literally earn money for advertising the tool, every time they send a newsletter. Today, over 75% of Flodesk's referrals come from individuals, not influencers. Zero ad budget. Distribution built into the product.
Customer success as the org chart. Flodesk famously ran with no sales or marketing team, pouring that headcount into customer experience instead. When pandemic lockdowns dented usage in March 2020, the founders noticed within days, called customers directly, learned people were frozen on "how do I talk to my customers about COVID," and shipped a COVID response template collection — which became the most-used templates in company history and turned a soft month into their biggest usage spike yet. When the site crashed for four hours on Black Friday 2019, customers didn't rage-tweet; they posted Instagram stories telling people to sign up as soon as Flodesk was back. That's not customer satisfaction. That's fandom, earned in Photoshop, one beta user at a time.
Watch the trajectory, because the shape of this curve is the anti-hype argument:
| Year | Milestone |
|---|---|
| 2018 | Every investor says no, including YC; founders pool their own money (~$90K, per the widely shared report of this story) |
| Aug 2019 | Barebones MVP launches; profitable within two weeks |
| Dec 2019 | 5,000 paying customers vs. a 500-customer go/no-go target; ~$5M ARR run rate |
| 2024 | $25–27M ARR, ~80,000 paying customers, ~51 employees |
| Mar 2025 | $30M+ ARR, 100,000+ paid customers, ~75 employees |
| Jan 2026 | $36M+ ARR (~$3.1M/month), 100,000 users; Rebecca Shostak named CEO |
A few hundred thousand dollars pooled between three founders — the reported figure is about $90K — produced a business doing $36M a year, with the founders still owning essentially all of it. The same outcome through the VC path would have cost three rounds of dilution, a growth-at-all-costs mandate, and probably a pivot by now.
Now, the honest risk factors, because mentorship without caveats is just cheerleading:
The 2018 rejection wasn't a verdict on email. It was evidence that the room was asking the wrong question — "is the channel dying?" — when the right question was "who is this channel failing?" Three founders without a term sheet found the answer, hand-built it for thirty people, and let 100,000 customers finish the pitch for them.
So if you're sitting on a rejection email from an investor, an accelerator, or anyone whose "no" felt like a life sentence: print it out. Shostak calls her YC rejection a badge of pride. Seven years and $36 million in recurring revenue later, so would you.
This story was researched and reported from verified English-language sources, prompted by a Chinese-language feature on Toutiao. — Peter
