I Was Wrong About Email For Startups. Here’s Everything I Wish I Knew A Year Ago.

FYI: This has nothing to do with email marketing. Not that kind of article, people.

I used to think transactional email was just another boring backend task. A plumbing problem, if you will. Pick a provider, plug in a few API calls, and move on to building the actual fun stuff. How hard could it be?

I was dead wrong.

Password reset emails that took minutes instead of seconds. Onboarding emails that never arrived. Payment receipts lost in spam. These weren’t minor inconveniences, oh no. They were growth killers.

Fast forward a year to today: we survived. We do better. We now handle hundreds of thousands of transactional emails a month for our blogging platform — everything from account verifications and password resets to new follower notifications, comment alerts, and publication digests. These emails aren’t just backend noise — they’re critical for user engagement, retention, and growth.

I’ve seen firsthand what works, what fails, and what separates amateur email ops from battle-tested, high-converting systems.

Here’s everything I wish I had known from the start.

What is Transactional email, anyway?

TL;DR, these are automated emails triggered by a user action.

Unlike marketing emails which blast out newsletters and promos, transactional emails are direct responses to user interactions.

For those keeping track, this would include:

• Account-related emails — Sign-ups, password resets, 2FA codes
• Billing emails — Invoices, payment confirmations, failed payment alerts
• Notification emails — New comments, mentions, app alerts
• Security-related emails — Device login alerts, account recovery

Users actually expect these emails! This is something that directly affects usability, just as much as your UI or backend. You have a major customer experience problem if your users aren’t getting these.

1. Deliverability Is the Battlefield, And Most Founders Lose

I used to assume that if my app sent an email, it would just… arrive? After all, I wasn’t sending cold marketing mails. Not quite so simple:

• Email providers can’t read intent, so they don’t trust you by default. Gmail, Outlook, and Yahoo treat all new senders with extreme skepticism.
• Landing in spam is easy. Getting out is hard. If your domain gets flagged, even valid users might never see your emails again.
• High bounce and spam rates will destroy your reputation. Go above 2% bounces or 0.1% spam complaints, and email providers start silently blacklisting you.

Your beautiful, functional SaaS product means nothing if your emails land in spam or never arrive.

Our first product used a budget email provider (don’t judge; we were operating on zero budget) with shared IPs — which meant our emails were lumped in with spammers. 50% of our sign-up confirmations never arrived, or were stuck in queue hell. We were in the dark the whole time, losing users before they even got started, and not knowing why.

What I Do Differently Now

We switched to Notify, an ESP that specifically made sense to us as a small-scale SaaS that needed to grow quickly. That made the next steps trivial:

a) Verifying Domain Correctly

SPF, DKIM, and DMARC matter and are non-negotiable. If you’re not authenticating emails, you’re basically screaming “I might be a scammer” to every inbox provider.

• SPF (Sender Policy Framework): Tells mail servers which IPs can send email for your domain.
• DKIM (DomainKeys Identified Mail): Adds a cryptographic signature proving your emails are legit.
• DMARC (Domain-based Message Authentication, Reporting & Conformance): Ties SPF and DKIM together and tells email providers how to handle failures.

We just had to add our domain. Notify auto-generated the records we needed to add to our DNS, and that was it.

No-BS Email. Built for Startups.
Notify.cx

b) Avoid Shared IPs if You Care About Reputation

A bad IP reputation is one of the biggest silent killers of deliverability. Cheap shared IPs will drag your reputation down — If you’re on a cheap shared IP, you have no control over what your “neighbors” are sending. One or two spammers in the pool? Your emails, however legit, will suffer.

If you send a decent volume (10k+ emails/month), get a dedicated IP or ensure your ESP uses premium IPs backed by strict reputation management (ours did; that was the critical difference).

c) Monitor Your Bounce & Spam Complaint Rates

Bounces hurt, complaints kill. Anything over 2% bounces or 0.1% spam complaints and email providers start ghosting you.

The solution is active monitoring*.* We use a combination of dashboard monitoring, and custom internal alerts on bounce rates using webhooks — if deliverability drops, we know immediately.

d) Warming up new sending domains.

You can’t go from sending zero emails to thousands a day without getting flagged.

Early on, we ran into exactly this problem*.* With our previous provider, we set up and pushed transactional emails live immediately. Within days, we saw:

• Emails delayed due to inbox providers throttling us.
• Increase in spam filtering (even for simple password resets!)
• Gmail temporarily blocking some of our messages outright.

For the most part, this was user error. We didn’t know all the lifehacks yet, so to speak*.* After switching, Notify helped by essentially preventing us from screwing up.

• Gradual volume ramp-up. Our scheduled mails were started off with low sending volume and scaled up methodically to establish trust with inbox providers.
• Engagement-based sending. Auto-prioritizing warm-up emails to active, engaged recipients first — users more likely to open and interact, based on available engagement signals (such as click tracking) — to gradually increase volume to less-engaged recipients over time.
• Real-time reputation monitoring. If any inbox provider started throttling us (sudden spike in soft bounces or deferrals) or filtering emails (potential blacklisting or poor list hygiene), Notify detected it and slowed down volume to those inbox providers, and used progressive backoff.

With all of this handled automatically for us, no config, we reached 90% deliverability practically overnight, and 98%+ deliverability within the first few weeks of sending.

2. Pick an Email Provider That Works For You

So, more on our earlier provider. I went for the cheapest option, but my mistake wasn’t as simple as getting what I paid for.

Regardless of pricing, not all email services handle transactional email well anyway. Some are great for newsletters but fail at real-time transactional messages. Others seem affordable (and probably are for a weekend project) but nickel-and-dime you with hidden fees as you scale in a real-world use case.

Key Factors I Now Prioritize:

• Speed — Pretty self-explanatory. I read a study by Mailgun that detailed how password reset emails that take over 10 seconds see a 15–20% drop in completion rates. For our platform, we actually found a 20% drop-off in completed signups when confirmation emails took longer than 15 seconds to arrive.
• Reliability — This is really a sanity check, but we now run backups through our own private SES implementation to get as close to the 99.99% uptime magic figure as possible. A blogger missing an important update (e.g., “Your article was featured” or “Your subscription is about to renew”) is not a customer experience compromise we’re willing to make.
• Analytics — Our previous provider that gave us zero visibility into why emails were failing. After switching, we now have real-time monitoring of bounce rates, engagement metrics, and inbox placement.
• Developer Experience — This is going to be a matter of tolerance, but some APIs are just a nightmare to integrate, and setting up your own SES is a pain because of their dense documentation. SDKs, webhooks, and good-to-great docs save engineering time.
• No BS Pricing That Punishes Growth — Some services (looking at you, SendGrid) are cheap at first but get brutal at scale. Always check how pricing is actually calculated, and how it changes with volume.

With our previous provider, costs jumped 4x after hitting 25K recipients (aka “contacts”) even if some were permanent bounces. Notify’s pricing saves us about ~$8,000/year, because we can now send to as many recipients as we want and just pay for raw email numbers sent.

One last thing; we picked Notify because of the simplicity, transparent pricing, and great DX — but it’s lean by design. If your use case involves SMS channels too, try something like OneSignal.

Customer Engagement Platform for Email, Push Notifications, & SMS
OneSignal

3. You’re (Probably) Writing Awful Transactional Emails.

Early on, my transactional emails were hot garbage*.*

• Cold, robotic subject lines like “Account Verification Notice” (this screams phishing attempt)
• Walls of text burying the actual call-to-action.
• Generic, lifeless emails “designed by developer” that looked nothing like our brand.

And it wasn’t just an aesthetic problem either, it was killing our activation rates.

• A whopping 28% of users who signed up never verified their emails — meaning we essentially lost them unless we compromised and kicked our security down a notch.
• Early on, about 12–15% of our password reset emails went ignored*. This one was way worse* (and those who didn’t reset their passwords often churned anyway).
• Across the board, users who didn’t engage with our transactional emails were far more likely to churn within the first 30 days.

Here’s What Actually Worked:

• Clear, action-driven subject lines — A/B testing showed that “Hey {name}. Confirm Your Email to Get Started” had nearly a whole third better open rate than “Email Confirmation Notice.”
• Speaking of which, emails that used the recipient’s first name in the subject line saw much higher open rates than alternatives.
• Short, focused content — Our best-performing transactional emails are under 50 words, and emails with just a single CTA have 40% higher click-through rates.
• Mobile-first design — Nearly two-thirds of all our transactional emails are opened on mobile. Emails with cluttered layouts always cause a drop in engagement*.* Simple, big buttons won every time.
• Personalization & branding — Users should instantly recognize the email is from you. If your ESP has template builders, learn to get good at them.

We pulled inspiration from Really Good Emails to make sure our emails actually looked like something people wanted to open — not a system-generated notice. Here’s a good example:

Subject: Hey Alex! Confirm your email to get started.

Body:

Hey Alex,

Welcome aboard! Click below to verify your email and get started.

[Verify My Email]

[Company stuff here]

This is 100% a learnable skill. You’ll pick it up quickly as long as you pay attention to your analytics. Optimizing transactional emails isn’t just about aesthetics — it’s about driving action and reducing churn. Small tweaks, like better timing, clearer CTAs, and personalization, all have noticeable impact.

4. You’re (Probably) Leaving Value on the Table

Most companies treat their ESP as a dumb mail cannon — fire and forget. That’s actually leaving huge value on the table.

Here’s how we now squeeze every drop of ROI from our email provider:

1. Webhooks for real-time tracking — We automated Slack alerts using webhooks. We know the second a password reset email bounces, lands in spam, or gets ignored. If a high-value user doesn’t open, we take action.

2. “Micro-Segmented” Win-Back Emails — Most SaaS platforms send generic win-back emails to churned users. We do better. Using engagement data on our analytics dashboard, we classify users into:

• “Almost There” (opened multiple times but didn’t convert)
• “Ghosted” (never opened a single email)
• “Power Users Who Left” (high engagement before churning

Each group got a totally different win-back strategy, and we saw almost a ~30% higher reactivation rate compared to generic email blasts.

3. The “Time Zone” Tweak — We analyzed open rates and noticed we were often sending at the wrong local time (1 AM — 7 AM, mostly, which is totally understandable). With Notify’s scheduled sending, we now batch emails to hit inboxes at peak hours for each region. About a ~15% higher engagement, with minimal effort on our part.

4. Misc. engagement tracking — If a user ignores three consecutive transactional emails, we trigger alternative outreach (SMS, in-app messages, push notifications). This single change recovered 15% of our abandoned onboarding flows.

5. Don’t Treat Email as an Engineering Problem

This is more of a problem with technical founders. When all you have is a hammer, everything’s a nail. This worked when we were small. But at scale? It became a bottleneck.

• Every email update required a developer. A simple copy change meant a new PR, a review cycle, and a full deployment.
• Designing responsive emails was painful. We spent hours wrangling <table> layouts just to make sure things looked decent across Outlook, Gmail, and mobile. React Email could’ve been a solution; except our stack wasn’t React-based.
• We were constantly reinventing the wheel. Every time we needed a new email — like a password reset or invoice — we built it from scratch.

We didn’t realize how much time we were wasting until switching ESPs streamlined everything:

• We went all-in on AI-powered, no-code template editing. Our product, marketing, and support teams could all tweak and optimize emails visually without touching a single line of code with Notify’s template editor — and we could use built-in email rendering to make sure it looked great everywhere.
• Pre-built templates saved us hours. Instead of designing a receipt or welcome email from scratch, we grabbed a proven template and customized it in minutes.
• The graveyard of ‘email ideas we never tested’ disappeared. We used to have so many ideas: What if we personalize subject lines? What if we add a post-signup upsell? What if we try emojis? None of them ever shipped because the process was too slow. Now, experiments actually happen — driven by anyone on the team, technical or not. And some of them are game-changers.
• No vendor lock-in. Every template we created was ours to keep, edit, and export however we wanted.

We stopped treating email like a development problem — and started treating it like the growth channel it actually is.

TL;DR Transactional Email Is a Competitive Advantage.

I used to think email was just infrastructure. Now I know it’s a growth channel, a security layer, and a user retention engine — all in one.

If I could start over, I’d:

✔ Lock down deliverability from Day 1 — SPF, DKIM, DMARC, and a provider that actively helps maintain reputation.

✔ Pick a provider built for SaaS scaling — Hidden limits and surprise costs are growth killers.

✔ Write emails that convert, not just notify — Clarity, branding, and mobile-first design matter.

✔ Use email data like a product signal — Engagement tracking, A/B tests, and event-based triggers drive real impact.

✔ Plan for scale before it’s a problem — Because migrating your email infra under pressure can and will kill you.

Transactional email isn’t just infra. Get it right, and you’ve given your SaaS a fighting chance for growth. Get it wrong, and you’re fighting churn, complaints, and lost conversions you never saw coming.

Comments

[Andrew Baisden]

Agreed, good emails can help businesses grow and gain new users. It's also a great way to get people to join newsletters, which is another lead generation funnel.