How is Parcel doing?

Before Parcel, there existed solutions like Litmus to see what your email would look like across many different kinds of inboxes, but there didn’t exist an email-specific IDE built for these email developer workflows.

Some ESPs like Braze contain rich text/HTML editors for working with code, but they lack key functionality to make them useful beyond small tweaks. For example, Braze’s code editor doesn’t have any mechanism to alert you of errors in the code you’ve written. Most don’t have any embedded code editor at all—to e.g. add a button with a color gradient, you’d have to write the code for it in your own IDE and then copy and paste the HTML into the raw source code in the ESP.

There are also email developers who don’t work on marketing but are instead building out emailing features on SaaS platforms that their features use to send out messaging to their fans, customers, and users. From our conversations, most of these kinds of email developers are using tools like Litmus to generate inbox previews of the emails their code will help users generate—they’re writing their code in their existing IDE rather than switching to a tool like Parcel just for writing email code.

Product

Parcel is fundamentally a collaborative cloud IDE, ala Codepen or Replit, designed specifically for email. Key features that differentiate the Parcel email writing experience from writing in a Codepen or Replit include:

Parcel’s recently launched “components” bring the React/Vue/Svelte model of components to email development.

Instead of dealing with writing new HTML for every new email and element, users can represent complex structures using simple component tags. With components, repetitive structures or elements can be defined once and reused across multiple emails. This not only streamlines the email creation process but also ensures consistency and reduces errors.

Parcel's components can also incorporate logic and conditionals, enabling more dynamic content rendering based on certain criteria or attributes.

While Litmus offers "Partials," which are essentially blocks of content that can be inserted into emails, Parcel takes this concept further. Unlike Partials which are more static in nature, Parcel's components allow for attributes to be passed and processed, providing a richer and more flexible system.

Workflow

The editor is the central interface in Parcel, where developers write their emails. Teams can collaborate, working on the same file at the same time. A preview pane on the right reflects those changes as they’re made in real time. A source panel shows the compiled source code of the email—also updating in real time as transformations are applied to the HTML/CSS in the editor.

Typically, an email developer will start by pasting their code into the Parcel editor or working from an existing template in Parcel.

While writing, doing a mouseover on any tag in the editor will give an indication of how well that HTML or CSS feature is supported across email clients.

Personalization can be added by wrapping dynamic variables in {{ }} tags and adding a reference for those variables in the Personalization tab—Parcel has support for Liquid as well as Customer.io dynamic variables, Handlebars, and Iterable.

Once done, the developer can either export the completed, compiled code of the email as a ZIP file or directly copy and paste the HTML in the Source tab into their ESP or other development environment.

Usage

Roughly 50% of all users of Parcel are in individual contributor roles as email developers where there’s no need for them to invite any team members into Parcel with them.

They’re taking requests from other members of their company, coding up emails, and either importing them into an ESP or otherwise handing them back.

About 25% of users are working with and inviting 1-2 other email developers or marketers into Parcel with them.

That workflow might look like 2 developers or technical marketers working on emails together, or it might be one technical marketer sharing a workspace of template files with a non-technical marketer for them to duplicate, update, and export as they need to create subsequent emails.

The last roughly 25% of users are at agencies working with three or more colleagues, either managing multiple clients or each owning an individual client’s work.

They’re less likely to be in Parcel every day, and more likely to be coming into the tool anywhere from once a week to once a month to work on something.

Revenue

As of June 2023, Parcel was at $9.5K MRR, growing about 10% CMGR3. Gross churn has averaged 9% over every month in 2023, with net churn at 11%.

Per Parcel team interviews, the primary driver of customer churn over the last year has been the cutting of marketing budgets that has been happening across SaaS during this market  downturn. CMOs are instructing their email teams to use the email builders available (and for which they’re already paying) inside their existing CRMs and ESPs like Customer.io, Braze and Salesforce.

Business Model

Parcel is a subscription SaaS company that prices based on the number of seats that a company needs as well as how many inbox preview renders they use.

The core value metric of Parcel is the email. A generous free tier allows non-paying users to use most of Parcel’s core feature set—test sends, email previews, accessibility testing—up to a limit of 50 emails, which can be deleted and replaced with new ones as needed to stay below the threshold. That limit was extended from 10 emails to 50 emails with Customer.io’s acquisition of Parcel in 2022.

An email in Parcel is the rough equivalent of a Repl in Replit or a Pen in Codepen—it is a single enclosed development environment that gives developers the ability to preview, export, share, and edit that bunch of code.

Developers would create a new email in Parcel for each new email they have to send. In the case of a recurring weekly newsletter, that might just mean copy and pasting last week’s email and modifying some of the text inside the HTML tags, checking for link validation and accessibility, and exporting into an ESP.

In the case of a one-off email or a new type of transactional email, it might mean building an entirely new email from scratch or by reusing components from their Parcel components library.

Parcel also charges for email inbox previews. Parcel’s inbox previews charge on a mostly pay-as-you-go basis—it’s $49 for up to 500 previews, and then 8-9 cents per preview after that.

That’s in contrast to Litmus, which charges $99 per month for 1,000 previews, $199 per month for 2,000 previews, and for more than that, requires a custom enterprise plan.

Most of Parcel’s ~10.5K users are on the free tier. There are three core groups of customers that pay for Parcel:

Key in-app features that require upgrading to a paid Pro or Business plan include:

Customer Acquisition

Parcel's primary acquisition channel is word of mouth, bolstered by a wide network of advocates inside the email community. Avi’s participation in the #emailgeeks community and other online email communities has been critical here, with early beta users of Parcel coming from these networks, and Avi regularly soliciting them for feedback and feature suggestions.

Events have been a strong source of new users and leads. A two-day conference named 'Parcel Impact' held in January drew 700 participants, with 60% being fresh emails not previously in Parcel’s database. The content was developer-focused, covering topics from team dynamics in email to 'AMP for email' and interview techniques for email marketing roles.

A similar event, focusing on email-specific topics, is planned for August, emphasizing discussions over presentations. Preliminary signs indicate its traction, with 60% of the early sign-ups being new to the platform.

Some more upmarket sales to companies using Parcel’s free tier—Intuit, DoorDash—have been stymied by the platform’s lack of enterprise features like SOC-2 compliance.

Parcel vs. Litmus

For email developers, Litmus is primarily seen as an email preview tool, with its main strength being that it allows them to preview how emails will appear across 100+ different platforms and devices.

Litmus has a coding environment as part of its platform, but it isn't its primary function—and Parcel customers that we talked to were unanimous in preferring Parcel’s editor, particularly for the Chrome Dev Tools-like “inspect” experience and the inline feedback & approvals workflow elements.

Parcel is the flip of Litmus—where Litmus is seen as an email preview platform with an email coder incidentally built in, Parcel is an email coding platform with a preview platform built in. When it was initially introduced, it didn't even have inbox previews, highlighting its primary role as a coding and collaboration platform for emails.

Most of the Parcel customers we talked to have completely replaced Litmus with Parcel, mainly due to the high cost of Litmus—Zapier was quoted $20,000 per month—with the previews within Parcel proving sufficient. The exception was Figma, where the marketing operations team has moved off Litmus entirely but the product team—responsible for transactional emails, but with no real need for an email IDE like Parcel—still uses Litmus for email previewing and testing (they share a login).

Tailwinds

A decade ago, a company’s entire email production process might have taken place from end-to-end inside an ESP like Mailchimp.

Today, different silos across the company from marketing to product, research, and sales are all sending their own emails. In many cases, they’re all using different tools. Inside the same company, Marketo might be used to send out marketing newsletters, HubSpot might be used to send text-based emails following up with leads, and Customer.io might be used to send out transactional and product-based emails.

They’re also not necessarily keeping a comprehensive view of the customer in any one of these tools. Instead, they’re piping data in and out using a CDP.  With this proliferation of tools used to send email and the increasing complexity of the tech stack behind them, there’s a need for tools for creation that are decoupled from the data and sending side—like Parcel.

At the same time, companies are becoming more aware of the fact that customer messaging is about more than blasting a newsletter to their entire customer list once a week. Lifecycle marketer is becoming a more commonly hired-for position, and that’s creating a need for technically capable marketers who are able to create and continually iterate and test the triggered emails that they send for the various touchpoints in the customer journey, from onboarding to re-engagement.