Outbox, The Startup That Digitizes Your Postal Mail, Raises $5 Million Series A
techcrunch.com
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Well, you can't actually get away with this for one reason: the government. Specifically, the IRS, but probably the census too. (And they only allow you to use a PO Box if you certify that you cannot physically accept mail at your residence.) If they send you an important document, there better be a box for the USPS to put it in, or you could end up in hot water.
I wish the USPS & IRS & Census would allow addresses to opt-out of mail entirely. It's time to let people and companies go 100% paperless without paying for scanning services.
The FTC runs a opt-out program for credit card and insurance offers which is mandated by law: https://www.optoutprescreen.com/
I stopped filing tax forms in a state I once employed someone. N.B. up front that I am configured _entirely_ paperless with my bank.
The state (Indiana) made up numbers because, despite 6 quarters of forms filed with zeroes, they had assumed that no more filings meant "tax evasion". They mailed a few angrygrams, then filed a tax warrant. They handed it off to a private processing company who got a lien and sent it to Chase's lawyers. The bank's lawyers notified me by mail, of course.
My first indication that any of this was happening was when the entirety of my business checking account balance disappeared from the web interface when Chase turned it over (less $150 in their processing fees) to the state.
A half-dozen notarized(!) forms printed and certified mailed to Indiana and most of a year later, I've now got a credit on file with them - still no refund, of course - and I'll never get the processing fees back from Chase.
It's not so much about the money (it's less than $5000) as the fact that, due to this insane idea that not calling someone, not emailing someone, it becomes A-OK to involuntarily seize someone's funds BECAUSE YOU SENT A PIECE OF TREE.
Sorry, my little anti-mail rant turned into an anti-bureaucrat rant. (But are there really any others who oppose gutting the paper mail system once and for all?)
Ooh, here, let me give you my email passwords so you can delete all the spam from my inbox too...
Also, it's more than a few seconds depending on your situation. You have to walk to a central mailbox for many newer suburbs. A rarer scenario, when I lived in Tahoe I had to drive down the mountain I lived to a P.O.Box - usually just to throw junk mail in the trash.
The problem is, for added convenience (which might, like if you have to drive down a mountain, be more than minor) you're giving a startup complete control over your identity and just trusting them not to exploit that.
If Outbox decides one day to censor the content, or sell your data, or if a third party pays them to get copies of your mail, what can you do if they acquiesce? If the US Postal Service announced it was going to pre-screen and digitize all outgoing mail, and only send people digital copies of everything but the 'spam', everyone would be screaming bloody tyranny.
Admittedly, though, i've never had to drive down a mountain to get my mail and I might just be too paranoid.
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1. Collect mail door-to-door
2. Scan each page of mail, including envelopes
3. Post scans online
4. Return requested physical mail
5. Charge $4.99 for this service
6. ...
7. Profit?
Looking at their job postings, they have one person per city managing a team of people working probably close to minimum wage going door-to-door. These people most likely scan mail at their homes using a scanner provided by Outbox.
Let's say they pay a City Manager $100,000, or $125,000 after taxes, unemployment insurance, and benefits. An individual can take on 30 customers, is paid above minimum wage (let's say $15 after taxes, etc.), and works 7 hours a day (or 35 hours/week, making them part-time employees). That's roughly $30,000 per worker annually.
At $4.99 per month, none of the economics work. At 30 customers per part-time employee, the break even point is $100 per month per customer. At $4.99 per month each PTE needs to handle around 600 customers each to break even. 100 customers per PTE at $30/month also breaks even. But even 100 per PTE seems unrealistic.
Unless I'm missing something very basic, it just doesn't scale at $4.99 per month. At all. It's not even close.
http://www.theverge.com/2013/2/28/4039990/the-postal-service...
"At the time of its announcement, Outbox suggested it had reached an agreement with the USPS to allow it to intercept mail from ever being delivered to your home, and that it would instead be delivered to its warehouse. This would have made the service less wasteful, to be sure. From its description of the service today, that no longer appears to be the case, and Outbox employs its own "postmen" to pick up already delivered mail from your home mailbox."
The USPS said that they would never do it.
and...
6. make a smart mail box that knows when it has mail in it.
You put it all together and they can make $25/month per customer and only they only have to visit the mail box when your mom sends you cookies.
It is still a big gamble but that's what you do when you are Peter Thiel. Will and Evan are smart guys. This is their 2nd pivot and the bet is that they can find a way to make money in this space.
1 & 2. Online advertising simply cannot make up the difference. Even if they OCR the mail to build targeted profiles of each user, a) I doubt it would come close to the kind of targeting that Google, Facebook, etc. are potentially capable of, and b) we're talking about a very large discrepancy in price versus cost.
3. Last mile services are the most expensive part of mail delivery because they cannot take advantage of economies of scale. This is why many times UPS and FedEx pay the USPS to handle last mile delivery. They are already legally obligated to, they have the infrastructure, and it's the most expensive part. UPS and FedEx charge high prices for the cheapest part of delivery (in aggregate) and give the leftovers to the USPS.
4. How?
5. This seems to be their strategy. I've demonstrated why it's unlikely it can work.
6. I get mail most every day, and I suspect I am not an outlier. Given that, giving away an expensive gadget does not seem to make much sense for most users.
...
But as for the points,
1 & 2. It's a better marketing proposition than Facebook is today if done right. There is $17B spent on postage and maybe about $30B spent on printing in direct mail today in the US alone. Once you get penetration, the ads will come to you digitally and would know what people want (because they will tell you by opting out what they don't) and you have rooftop location which Facebook doesn't have or doesn't expose.
Trust me -- this is my business. A good replacement for direct mail is giant opportunity.
3. Yeah, I don't like the last mile part either. Will and Evan do. However, it is clearly a place to extract value if they can saturate the dense zip-codes and have a good relationship with the individuals. It is no different than JetBlue taking traffic on major routes. The USPS is burdened with Rural delivery. UPS and FedEx prove that Urban delivery can be profitable.
4. Bill Pay. The existing services in this market charge the biller $0.75 to deliver. The biller saves on printing so both sides win. This is a proven market with PayTrust being the pioneer. At scale, it is clearly a good revenue source. Outbox is a natural to capture business from the existing services.
5. Saturating zips. I don't think you've demonstrated that the costs won't work. You assume a certain ratio of FTE to customers and then say it is impossible. That same type of logic is why everyone said UPS and FedEx would never work. I don't know if you are right. But these VCs are not dumb money -- they probably have better numbers on this than you do. This is exactly what they are testing in Austin and SF today so, internally, they have some decent estimates of the costs.
...
6. How often do you get mail that you care about? For me, it is once per week at most. Using Outbox lets you change what you get in the mail. People will opt-out because it is easy. Thus, people are likely to wind up with only a few items being delivered per month once Outbox builds relationships with the billers and stops the paper advertisers.
ps - I don't think they are talking about a smart mailbox. I just like the idea.
Welcome to the information economy, where your startup is the commodity. Silicon valley is the spy capital of the world. I wouldn't be surprised of a lot of VC firms were actually funded by the intelligence agencies at a net loss. The more people use the internet through centralized services with shitty encryption, the more the NSA & privatized surveillance complex benefits.
Even if you don't believe this theory, you must believe that intelligence agencies would pay handsomely for a subscription to technology that can parse and categorize people's mails.
Two important take-aways:
1) Your physical mail is destroyed eventually - not stored for perpetuity.
2) This doesn't have to be an alternative to your home-address mail; it can also be used as a P.O. box.
[0] https://www.postdanmark.dk/da/Privat/Modtag%20Post/Sider/e-b...
Being able to search my archive of mail would also save me a bunch of time though I can imagine I would be deleting the majority of it.
I'd prefer it if the service was based outside of the US.
However, if they can get some traction, it would drive a lot of direct mail advertising digital. I hope they make it work. There are still 80+ billion pieces of junk mail sent in the US each year.
My company (http://www.exemplartech.com) is working on this from the advertisers side but we need companies like Zumbox, Doxo, Manilla, and Outbox to get the consumers to change behavior.
http://about.usps.com/who-we-are/postal-facts/#H2
89.5 letters * $0.20 = ~ $17B.
Basically, it is hard enough to opt-out that only the few people who really hate junk mail do it. This improves the efficiency of the channel from say 0.9% to 1.1% response rates (just guessing).
Until someone like Outbox starts taking the responders out of the channel, the advertisers won't change behavior.
I think you're wrong about the appeal of this service. I wish we had something like it here.
Also, "laziness"? What does that even mean? There's a finite number of minutes in every day. Make a case for why I should spend any of those minutes dealing with paper mail. How many other goods and services do you use that we could interrogate as a facilitator of "laziness"?
But: a) my 3 year old has fun grabbing it out of the box and pretending it's from various people. b) it takes literally a few seconds to just throw it out.
Now, if we were getting so much junk mail that it was making us miss our actual, important mail, that'd be a problem.
But we don't get any actual, important mail. It's 99% junk.
Anywho. The Postal Service is going to disappear in my 3 year old's lifetime anyway.
Perhaps if you're young and single you may only get a couple of pieces of mail. Try having some kids, owning a house, etc, and you'll see the amount of crap that get's stuffed into your mailbox skyrocket. Then you've got to deal with shredding huge amounts of credit card and other offers, and trying to sift through piles of junk everyday just to see if there might be one important piece of mail out of the dozens.
I would rather the post office did this for me (i'm suprised they're still not riding around on ponies), but I would most certainly pay for this service if it were available here.
P.S. If you do the math, a median software developer salary is 90K, which is about $40 an hour. I could spend at least 10 minutes a day going through and shredding snail mail. That works out to 4 hours a month or $160 of your valuable time. $4.99 is definitely worth it.
There's the short-term clutter that forms when I let piles of mail kick around, waiting to be dealt with. If all of that was digital instead, it wouldn't be cluttering up my environment. And I am demonstrably better at processing my digital inbox than my physical mail, because I can do it from any random waiting room or park bench.
And there's the long-term clutter of things that need to be filed away. I would much rather not spend the space. I have already experimented with scanning workflows, and none of them really hit the minimum convenience threshold for me yet.
I wish I could find a good automatic-feeding document scanner that works standalone (no PC), does OCR onboard, automatically handles rotation/sizing/two-sidedness, and pushes the resulting PDFs to the network drive or cloud of your choice. If it exists in a consumer-size device, I haven't found it.
This is way cheaper of an option than using earth class mail, and allows for any super-important stuff to still get home quickly.