For the past two years, we’ve been tinkering with our first AE skunkworks project, ElectricSMS, and today we’re thrilled to share that we’ve sold the platform to ReCharge. You read that right. We built something and sold it! This marks the first time we’ve created an internal product from scratch and sold it to somebody else—but we have a hunch it won’t be the last.
Many incredible folks have helped us along the way, and the sale of ElectricSMS is a hugely significant milestone in the growth of AE Studio. Today, we’re humbled, excited, grateful, and energized for the journey ahead. To celebrate, we thought we’d share how this all came to be and thank those who helped see it through.
When we started AE Studio back in 2016, we believed a few things to be true.
- We have the talent and drive to build best-in-class technology products for all sorts of clients, from first-time founders to big enterprise companies.
- We could revamp the standard agency structure by hiring incredibly talented developers, designers, product managers, and data scientists to work on client projects, while also giving them time and space to incubate their own internal startup ideas using AE’s resources.
- The technology we build, be it for our clients or ourselves, should always increase rather than decrease human agency.
Back then, nobody believed we could do it all. Our consulting practice, people said, would always out-compete our ability to develop internal products or vice versa. “You’ll never be able to execute both at a high level” or “You’ll do whatever your client asks of you, whether it increases agency or not,” were familiar quips from friends and advisors. To be successful, we’d have to pick a lane.
Fast forward to today, we’re still building technology products for clients. We like client work a lot, and we’re great at it, in part because we hire incredibly talented individuals from diverse backgrounds and give them the support structures they need to do their best work. And, as we envisioned, those support structures also empower our team members to develop agency-increasing ideas of their own, which they bring to life through our skunkworks model. This framework allows our team to learn, grow, and embark on the founder’s journey without the live-or-die pressure of early-stage startup life.
Still, whether we’re developing something for our clients or ourselves, increasing human agency remains central to every idea. We’re proud that our vision from the earliest days continues to guide us now. In many ways, it’s the genesis of ElectricSMS.
How We Built & Sold ElectricSMS
One afternoon in 2019, one of our product managers, Wesley Magness, proposed an idea for our skunkworks program. Wesley had been with AE Studio for six months and was already leading some of our most promising client projects. He worked hard to deliver outstanding results for our clients, who in turn loved his collaboration and innate ability to lead projects successfully. We listened closely.
Wesley described that his friend (and roommate) was on the front lines of customer service for her startup, a fast-growing, direct-to-consumer women’s vitamin subscription service. As Wesley watched her working late into the night, handling a nearly endless string of customer requests, he noticed his friend’s customers had very little agency over their subscriptions. Ironically, his friend also had little agency over her own time, as she was constantly bombarded with small but time-consuming customer service requests day and night. Wesley wanted to help her out, so he explored creative ways to introduce automation into the company’s customer service stack.
Already familiar with messaging bots, Wesley thought he could leverage them to give customers agency over their subscription preferences in real-time, allowing them to skip, revise, renew, and reschedule their orders through a simple SMS chat. He brought us an early framework of what would eventually become ElectricSMS, and we were all in.
Wesley worked on his idea while maintaining his post as a product manager at AE, and we provided him with the time, space, team, and resources to pursue and scale his startup. Why? Because it was a really great idea.
The truth is, most customers forget they’re subscribers until they’re surprised by a credit card charge or receive a box of eight new deodorants when they’re only halfway through last month’s box. If you’ve been there before, you know this makes customers unhappy and slams customer service agents with complaints and requests for account changes or cancelations. What’s worse is that to make those requests, customers need to call a service line or exchange a chain of emails back and forth, which is both frustrating and time-consuming—and not very agency-increasing.
Customers who use ElectricSMS can skip an order or swap to a different product or flavor via text. They can update their billing address and essential account information without logging into a website. The platform also pre-emptively asks customers if they want their next delivery—before they’re billed.
Unfortunately, many companies believe that giving people more control over their purchases equates to decreased revenue and retention for merchants. But Wesley thought this view was short-sighted, and we agreed.
“If we treat people well, and we build technology that allows people the transparency and the ability to act on where their money's going, they're going to have a longer relationship with the brands that they're purchasing from,” Wesley said. He was spot on.
Only two years into the product’s deployment, ElectricSMS has already helped 220,000 unique users manage their subscriptions and processed over $25 million in revenue for 56 merchants. The platform reduces customer service needs through automated customer engagement and saves both merchants and customers thousands of hours. We’ve seen churn rates drop and key metrics like retention and lifetime value (LTV) increase. Plus, customers are happy, and Wesley’s roommate can get some sleep.
So, it was no surprise when we got a call from ReCharge about a possible acquisition. Being one of the largest platforms for Ecommerce subscription management, they saw for themselves how powerful ElectricSMS is for merchants and customers alike. Given their expertise in the subscription space, we felt humbled that they were interested in our product and shared our vision. Shortly thereafter, ReCharge acquired ElectricSMS and has since made it their own.
Of course, we’re thrilled to have sold our first major skunkworks project, and we’re especially proud to have sold it to an industry leader like ReCharge. But, the thing that really gets us going is that this entire experience has validated our model. We’ve learned many meaningful lessons about the power of agency-increasing software, our commitment to empowering our people, and humble truths about following our own path, even when it looks too different for others to see.
It Takes A Village
We think it’s essential to take a step back and reflect on all of the hard work, grit, and passion that has gotten us to this exciting moment. Without it, none of this would have happened.
True success can’t be achieved without recognizing the impact and efforts of others. Therefore, to celebrate the sale of ElectricSMS, we want to acknowledge the folks whose ideas, guidance, creativity, and gumption brought us here.
With that, a very special thanks to:
JM Arnoult, Jon Darbyshire, Semyon Dukach, John Ela, the GEM team, Bubba Gramkow, Ted Howell and everyone at Howell Legal, Eugene Kim, Bong Koh, Hank Leber, James Rajaratnam, Mark Rosenblatt, Amit Runchal, Ravi Sadasivaiah and the entire team at Cohn Handler Sturm, Ajay Shah, Walker Williams, all of our incredible team members at AE Studio whose amazing work and dedication make everything possible, like our awesome client work and the ability to build skunkworks projects just like ElectricSMS, everyone who contributed big and small with advice during the building and acquisition of ElectricSMS, and finally all of our friends and family who supported us through this journey.
Judd, Greg, Ed & The Entire Team at AE Studio
Have a brilliant idea for our next startup? Interested in our work? Let's talk: email@example.com