Hello, and welcome back to Inc.'s 1 Smart Business Story. Starting off strong this week, today’s story looks at an entrepreneur who turned rejection into a growth engine. 

After being turned down by investors, including startup accelerator Y Combinator, Rebecca Shostak, CEO of Flodesk, and her co-founders bootstrapped their email marketing platform for small businesses. They turned what others dismissed as a dying communication tool into a $36 million ARR business, now serving 100,000 users, and building for the future with AI tools that make branded marketing emails effortless. 

In this piece, Inc. senior writer, Jennifer Conrad highlights:

Let me know how a rejection ultimately became your greatest success story at [email protected]. 

Newly appointed Flodesk CEO Rebecca Shostak is defying the odds again, using AI to help business owners vibe code their email marketing.

BY JENNIFER CONRAD, SENIOR WRITER 

Email marketing may be practical, but it’s not particularly glamorous. Rebecca Shostak, 40, knows that well. In 2018, when she was fundraising for her company, Flodesk, a platform that allows small businesses and solopreneurs to create branded emails without hiring a professional designer, no one wanted to give her money.  

Email, people then argued, was an obsolete format, destined to be swept away by text messaging, social media, and other forms of connection. Y Combinator rejected her pitch, something she sees as a badge of pride now that her company has surpassed $36 million in annual recurring revenue.  

But Shostak, who was just named Flodesk’s CEO, and her co-founders, Martha Bitar and Trong Dong, felt strongly that their business was filling an important need, so they pooled their money to get the company off the ground. The product was an immediate hit—and they never needed to take a dime from investors.  

In the more than seven years since San Francisco-based Flodesk first approached investors, email has not gone extinct. In fact, many business owners consider it a vital direct line to customers. Companies that build their following on social media, in contrast, are subject to the whims of the algorithm and run the risk that a network could be shut down by the government, go out of business, or be acquired by a billionaire whose politics you disagree with.  

“The only way to truly own your audience as a small-business owner is to have an email list. It’s something you can take with you anywhere,” says Shostak. Social media posts, she adds, generally have a 2 to 5 percent chance of being seen by their intended audience. Email marketing can have a more than 30 percent open rate, if done correctly, she says.  

“Email marketing is not dead—it’s ubiquitous,” she continues. “How many times have you checked your email today alone? For every dollar spent on email marketing, on average, you get $30 to $40 back in return on investment.” 

Flodesk set itself apart by…

To get the full scoop read on at Inc.com