FastMail sale to Opera: the story from one of the owners

This started as a post to hacker news, which has now been expanded to cover some history and give some background to the FastMail company and the sale to Opera. I’m one of the main developers and was one of the (now previous) owners of FastMail. This post is partly for historical interest, and also to give the FastMail community some insight into the future of the service.

Starting FastMail

FastMail started around 1999 when Jeremy Howard prototyped the first version and brought me on board to help develop the website. While both of us were reasonably experienced programmers, neither of us had done any web development. When we looked at the way to develop websites - CGI scripts in those days - we didn’t really like the way they worked, so I ended up developing a web framework to help make the application development easier. We still use that framework today. While it’s a bit esoteric, it has served us well and includes some features that are fairly unique, even to this day.

Jeremy had come from a management consulting background, and so had spent a lot of time onsite with customers. While email was a very important part of getting work done, he found the options available very limited. In those days, people could either get basic POP email from their ISP, or free but slow and ad-laden webmail sites (eg. Hotmail and RocketMail) that had less features (no POP, SMTP and certainly no IMAP). So we decided to concentrate on being a premium email provider that targeted users that wanted a professional service with lots of features (multiple personalities and signatures, aliases, plus addressing, sub-domain addressing, filing and filtering emails, etc), a fast interface (no ads, no graphics), open access to their email (POP and IMAP support) and solid customer support - and were willing to pay for it.

Building and growing the service

The original implementation started on one server at rackspace.com, and we started to let friends use it. We then started to publicise it more widely, mostly via word of mouth and on the forum Edwin helped us set up at www.emailaddresses.com (now www.emaildiscussions.com). We offered the service as free while building out the application, but from day one we told users that it would be targeted as a paid service.

With only myself and Jeremy as developers, customer support, system administration and forum support, it took us a while to get to the stage where we were happy with the service and ready to bill users, which started in 2002.

One of the things that the founders tried to avoid was taking on external debt, and Jeremy used his savings to fund the initial development. Initially I was just employed as a programmer, but with the successful launch and growth of the service and the work that required, it was decided to form a company, and bring myself and another person (Bruce Davey) in as the owners. Later on, another person would also buy in to the business, creating an equal partnership of four people.

Over the next decade or so, FastMail continued on a fairly simple path. We kept building up the service, adding features and trying to scale to more users. We tried a few times to bring on more programmers, though we had mixed success with that until we finally built a small and core group that has been stable for the last 5 years or so.

As a side note, a few years back a friend lent me a book called The Beermat Entrepreneur. If you’re thinking of starting a small business, especially IT related, I think this book is a great read. It may have first been written almost two decades ago (an eternity in Internet time), but even with my single data point, the advice in it really resonated, especially the parts about people.

It talks about the 5 core people, the entrepreneur and the 4 cornerstone people you need to cover technical skills, delivery (operational side of the business), sales and finance. I can really see how each of those roles is important to a business. Jeremy was definitely the driving entrepreneurial force, always pushing the big idea. Bruce was our financial controller who made sure that we sold things for more than it cost to run them (important if you want a business to survive!) and I was the technical lead.

I think initially we lacked the delivery cornerstone, and were lucky to find Bron who brought a structure and repeatability to our setup that allowed us to recover from our small disaster in 2006 (2-3 day outage for a big chunk of users) to build the incredibly reliable and solid infrastructure we now have to deliver our service. The one thing we should have done from the start was to have someone in charge of sales. After the initial success from word of mouth, I think we expected sales to keep accelerating. In hindsight, it’s clearly the thing that we never executed well.

Instead of trying to do sales our self, we tried to get other people to do it for us. We did that by creating a co-branding system that allowed people to resell the FastMail email service under a completely different brand with a customisable look and feel. Unfortunately that was a failure. Setting up a new co-brander took too much work, and every co-brander we tried was worse at sales and marketing than we were. They often expected to be able to just set the brand up, and gain users with little or no effort.

Recent status and changes in the email market

FastMail has always been a small company. Today there are still just 3-4 main developers (myself, Bron, Richard and just in the last year, Kurian), and a couple of support staff (Yassar, Vinodh & Larry) scattered around the world. Despite (or possibly because of) those limited resources, I think we’ve managed to build a great product with lots of niche and powerful features as well as loyal users. We’ve also been incredibly reliable, especially in recent years, as we worked hard to make sure that we learned all we could from the shortcomings that led to the outage event in 2006.

FastMail has been nicely profitable for many years, but not spectacularly so. As the above paragraphs show, we’re mostly technical and support people, and we don’t have a marketing or sales department that can grow our customer base significantly. We did try recently, and I have to thank Jack Miller for the hard work he put in in that area, but unfortunately it didn’t work out. Realistically only business accounts can have a reasonable return on any sales investment, and we really should have developed our business product 3-4 years earlier than we did. We were slow to enter that market and behind the leaders.

Again I think this relates back to the lack of a sales cornerstone again. Rather than having someone testing to market to see what profitable areas we should be attacking, we probably preferred to spend our time building neat technical stuff, fixing that edge case bug, or doing that fun thing… we’re really just geeks that like working with technology.

In retrospect, I think we had to face facts a bit; we were a small fish with limited resources in a market that has become vastly more competitive in recent years. We also needed to invest a large chunk of time and money in updating our interface and adding new features, especially better mobile synching, if we were to take that next leap.

Approach by Opera

Coincidentally, it’s around the time that we were considering our options that Opera came along and started a conversation with us. Despite being half a world apart, there turned out to be a lot of fit between our companies. They use a lot of perl, as do we. They’re a company run by technology people, creating a product that’s loved by geeks, is highly customisable, has a loyal fan base, and despite its small size, punches above its weight. I think that summary pretty much describes FastMail as well.

So the timing was right, and Opera have an interest in picking up email as a core competency as well as a number of ideas about what they want to improve and what they want to build. As the other FastMail staff are also interested in new opportunities, we are all making the transfer and becoming Opera staff and are committed to working there for several years at the very least. There’s already plans for some staff to move to Norway to work, a change of life after 5 years of just the 3 of us in a single office (apparently the Norwegian lessons are paying off… Jeg vil gjerne et øl til).

Looking forward to the future

It will be an interesting change, and something new which I’m looking forward to. I’ve been working for FastMail for 10 years now. It’s been a great time. I’ve loved building the product and the company. Like anything, there’s been ups (it’s fun developing a site that customers really love and tell you about) and downs (some people are addicted to being able to access their email at all times, and running a 24/7 email service means that if people can’t get to their email for even just 1 minute, you’ll start hearing about it). After 10 years, it’ll be strange having a boss again. I’ve met a bunch of the Opera people, and it’ll be really great working with them. I know the other staff are also looking forward to working with the Opera team.

It will also be great to be able to work with Neil Jenkins again, who is also going to work for Opera having nearly finished his university studies. He worked for us over a couple of summers, and basically designed the entire “new” web interface, all the HTML, CSS and JS. We’ve already got 80% of a whole new AJAX interface done (remember in programming though, the first 90% takes 90% of the time, the remaining 10% takes the other 90% of the time), and I’m looking forward to completely finishing that work.

Of course there’s lots of other work that we’ll be doing with Opera, some of which I can’t comment on at this stage, but some of which we’re already working on.

Over the past few years, Bron has probably become the worlds expert on cyrus, the IMAP server we use. Recently he’s been refactoring large sections of the code to make it even more stable and RFC compliant, and adding new code to reduce the amount of IO required (eg. make it faster), and radically reduce the amount of bandwidth required for replication, which will be very useful in a multi-data-center setup.

Richard has been working on making sure every part of FastMail is Unicode compliant, which will allow us in the future to translate the interface to different languages, and will finally mean that non-english folder names can be displayed correctly in the web interface.

As mentioned in the original blog post about the sale, FastMail.FM will continue to run and grow as the reliable email service you’ve known for over 10 years. Opera have clear plans for the future, and can help provide significantly more resources to build a bigger and better infrastructure and provide even more features.

Rob Mueller <robm@fastmail.fm>