Outbox vs. USPS: How the Post Office Killed Digital Mail
insidesources.com
insidesources.com
> So having worked on the Hill they knew of the USPS’s well-documented inefficiencies. As they describe it, they “knew that the USPS would not be able to work out its own problems, so perhaps naively, we hoped to partner with USPS to provide an alternative to the physical delivery of postal mail to a subset of users, hoping this would spur further innovation and cost savings.”
The Post Office is insanely efficient. The only reason it has budget problems is because Congress causes the budget problems. http://thinkprogress.org/economy/2011/09/28/330524/postal-no...
http://www.pionline.com/article/20110627/PRINT/306279976/usp...
It's like the USPS has an insanely optimized implementation but inefficient algorithm for delivering mail. Change the algorithm and you can throw all your micro optimizations out the window.
The important quote from the article is this one:
> ‘You mentioned making the service better for our customers; but the American citizens aren’t our customers—about 400 junk mailers are our customers. Your service hurts our ability to serve those customers.‘
This sure makes it sound like the USPS isn't so much a 'public good' as it is a private, tax payer funded business whose primary business model is advertising.
The reason this revenue stream is so important to the USPS is logistics, overhead vs marginal cost. As long as you're delivering a couple of pieces of mail to each house every day you can price those items marginally. Average Mail Per Address (AMPA) needs to be at least 3-5 for the USPS's pricing to work. If everyone opted out of junk mail AMPA would drop into a range more like 0.5-1.5 and then there's proportionally much less in the way of marginal cost and it's all the overhead of driving/walking from one address to the next. And then the USPS has to change all the pricing to go up by 200% or more and that'll never fly in Congress.
The other problem is that reducing the mail volume by 50%-90% would result in massive layoffs of workers (which won't look good for Congress) and it would reduce influence and power for those in charge of things. Few people ever willingly accept their diminishing importance.
I'm not in favor of the USPS continuing to assault my mailbox with junk mail. But I don't think there's any hope of things getting fixed until they have such an awful year that mail stops for a while and Congress reforms their mandate. I give it maybe 20% odds of happening in the next decade.
The papers that I read detailed the efforts of folks to make OCR software primarily for the USPS for mail sorting machines. The earliest papers I saw were early 80s. You can read more about the history of mail sorting here: http://en.wikipedia.org/wiki/Mail_sorter
I would tend to assume that the advances in mail sorting roughly coincided with bulk mailing but I can't point the causation arrow. It could be that bulk mailing really took off and the USPS got swamped and then people started making mail sorting machines. Or it could be that people invented the machines, the USPS then rolled them out and then you saw presort discounts and then bulk mailing took off. I'm not sure which.
The USPS is the original ad-supported service where you are the customer. Mind blown.
If Congress MANDATED that the USPS charge $1.50 per letter with no discounts the deluge of junk mail would be vastly reduced. When the price goes up 10x the volume would go down dramatically. Maybe only 5x or maybe 50x. It probably wouldn't be linear. But it absolutely would go down.
Even better is that what little junk mail you got might actually be useful because at the $1.50 price the company would have to be statistically pretty damn sure you're interested.
http://en.wikipedia.org/wiki/United_States_Postal_Service#Re...
Forwarding is a negligible percentage of USPS's total mail volume. Like other commenters have mentioned, it's only designed for temporary use while you get settled at a new address.
USPS has machines that read the handwritten addresses on a label, and prints a barcode. The barcode has information that other machines use to bin mail by delivery address, in the order that the mail will be delivered. It's pretty amazing how the system works.
That, in my opinion, is the key takeaway here. The Post Office does not serve the American public; it serves an oligarchal group of junk-mailers.
Maybe we should tell the Post Office to go to them to cover their next shortfall, instead of jacking the price of first-class postage stamps again.
It's somewhat like fax, there are differential legal protections in place that make it a preferred service for certain scenarios.
See previous discussion on this topic:
The article blows right past this like it's insignificant. Junk mailers sort their own mail, drop ship it to the local BMC, and pay the post office for the privilege. This subsidizes the regular mail. If you can get rid of junk mail with a mouse click, it's not worth it.
The post office getting upset about ways to prevent junk mail from being delivered is just like a website complaining about Adblock.
Yeah, they're both the paid subsidies that allow you to use a service for the price you currently do.
http://www.nytimes.com/2012/09/20/business/seeking-revenue-p...
Because there's no earthly reason to take a loss on advertising?
What you're not accounting for here is the cost to pick up individual envelopes from your house, and the cost of dropping a presorted bundle shipped to the BMC into the truck.
http://online.wsj.com/news/articles/SB1000142405297020461250... "Overall, the postal service says it makes money on advertising mail—but it could make more."
The only category of mail it loses money on is things like Magazines & Catalogs which are not 'junk mail'.
However, it isn't like an Ad Company complaining about AdBlock...standard mail: "The postal service said in fiscal 2010 standard mail covered nearly one and a half times its cost."
People complain about the advertising mail because it is cheaper...but it is cheaper since they don't have to sort it, send it to specific, individuals, etc. The cheap price is due to the underlying costs for the USPS being different. Sorting mail and collecting it on an individual basis [rather than in bulk and being delivered] is not magically free somehow.
"The postal service said in fiscal 2010 standard mail covered nearly one and a half times its cost ... Advertising mail had higher volumes but brought in $17.3 billion, or only 26% of total revenue, due to hefty discounts and lower rates."
So only a few types of mail generate a loss, and it is a loss of $1.7B, and advertising mail generates a profit of $5.7B, yet as a whole USPS operates at a loss of $8.5B. This doesn't leave me with much faith in their self-assessment of the profitability of specific types of mail.
This doesn't include forced money losers as well created by government controls on the USPS [e.g. rural delivery that loses money regardless of what is being delivered and the private corporations refuse to engage in it but instead hand it off to the USPS for the last mile in many cases].
The sad fact is, if the USPS had a level playing field with UPS or Fedex, it would be profitable as soon as the process changes, etc could be put in place. It isn't allowed to do that.
http://www.fool.com/investing/general/2013/03/04/how-the-pos... "That 75-year pre-funding mandate adds substantially to the post office's losses. This is a requirement that no other government agency, let alone a private company, must face. In short, the USPS is paying for people who aren't even employees yet -- in fact, may not even be born yet!
And the USPS has been a model for prudent squirreling. As of Feb. 2012, it had more than $326 billion in assets in its retirement fund, good for covering 91% of future pension and health-care liabilities. In fact, on its pensions, the USPS is more than 100% funded, compared to 42% at the government and 80% at the average Fortune 1000 company. In health-care pre-funding, the USPS stands at 49%, which sounds not so good until you understand that the government doesn't pre-fund at all and that just 38% of Fortune 1000 companies do, at just a median 37% rate. The USPS does better than almost everyone."
Why can't they just raise rates to make postage profitable in the 'bad' categories things: "Now, admittedly just raising postage is an overly simplistic solution, but it gets to a basic truth: lack of sales. Rates are overseen by the Postal Regulatory Commission (PRC), and prices must not rise faster than inflation. A postage stamp has increased just 12% in six years. That's another way that the USPS's mandate to operate like a business is stymied by overseers. Another major type of mail, bulk rate (ads), receives big discounts in exchange for pre-sorting mail, and could withstand higher postage, since they receive much more value than what USPS saves from pre-sorting. Fix: Allow USPS to price correctly.
...
The effects are huge -- costing USPS billions. And new services, it's estimated, could increase sales by nearly $10 billion annually, potentially covering the earnings gap. But Congress would have to agree to those changes after already tolling the USPS bell. In its latest annual report, USPS begs Congress, in the most obsequious bureaucratese possible, to let it raise revenue. The odds look slim."
Other ways they are hamstrung to generate more business: And when USPS tried to take advantage of web shopping? As Elaine Kamarck at Harvard's Kennedy School of Government explains. "But parcel shipments were generated by large organizations and the USPS was not allowed to negotiate discounts and thus lost business. It was forbidden by law from lowering prices to get more business. This resulted in the entirely incredible situation in the 1990s where the United States government negotiated an agreement for the delivery of U.S. government package services with Fed Ex because the USPS was not allowed to negotiate for lower prices!"
> So only a few types of mail generate a loss, and it is a loss of $1.7B, and advertising mail generates a profit of $5.7B, yet as a whole USPS operates at a loss of $8.5B. This doesn't leave me with much faith in their self-assessment of the profitability of specific types of mail.
Because you switched from 'is X subsidized' to 'well...if X is profitable, it must be because they cannot perform accurate accounting'.
They are both profitable categories of mail and neither are 'subsidized'. The 'subsidized categories' are those that are losing money.
Most USPS revenue does come from First Class mail (though it's declining). Furthermore, "standard" mail seems to have a smaller contribution to profits than it does to revenue. http://about.usps.com/news/national-releases/2012/pr12_0217p...
However, allocating costs is a cost accounting exercise that depends partly on how you treat fixed costs. If you assume that most of the costs associated with first class mail are going to happen anyway, then everything you get from standard mail is pure gravy. Of course, there are some costs associated with actually delivering junk mail (and periodicals) but it probably doesn't have a huge effect on how many post offices you have, existing pension benefits, and so forth. In fact, according to the prior link: "Labor costs, which are approximately 80% of total costs, create a fixed cost structure which is not readily scalable in response to changes in volume and revenue."
> USPS declined to provide further comment, or respond to these questions, of any kind, despite repeated requests. USPS did not dispute Evan’s recollection of their USPS meeting in DC and did not comment on whether junk mailers are the Post Office’s customers versus average Americans.
Hell, LightPeak tried to do this with RF Engineering when they wanted permission to obliterate things like satellite SOS communications by using spectrum they knowingly acquired as satellite use only for terrestrial transmissions.
The post office started out as an important public service. "Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds." The post office is mentioned in the US Constitution because at the time it was immensely important.
But after enough time in bed with the junk mailers, they've abandoned all but a pretense of that. And it shows. They shifted from serving American citizens as a duty to serving American citizens on a platter. It happened inch by inch, I'm sure, but now they're trapped.
Let that be a lesson to anybody who's starting a business: choose your business model wisely, because over time it will win out over everything else.
Personally, I get less and less value from the post office. 90% of my physical mail goes immediately in to the recycle bin. At least here, they're bad at delivering packages. And my local post offices are depressing experiences: long lines, dispirited workers, grim surroundings.
The cost of mail has not kept up with inflation, there are some very expensive routes available for 49 cents, and they are one of the very few government services expected to be revenue neutral.
Thus, junk mail.
Which has got to be the biggest scam that management and the union bosses have ever colluded to inflict on workers. "Sure, we'll pay you after you retire, just trust us! Also please don't ask too many questions about where the money's going to come from." The exceptions to this scenario occur when the workers in question are really important to Congress, e.g. auto workers' pensions were "bailed out".
Every business with a pension promise/agreement should be required by law to maintain the monies to properly fund them. Anything else is criminal negligence and/or conspiracy to commit multiple felonies via theft.
Also, the USPS kicks everyone's ass in time and cost when it comes to delivering small packages. For a 12-oz package from NY to SF, USPS delivers in 3 days for about $2 while FedEx and UPS start at ~5 days and $10.
The price comparisons aren't fair. UPS and FedEx either turn a profit or go out of business. You can see this when you compare the two groups on tracking, customer service, innovation in logistics, etc. If a business depends on paying customers who have choice, despite the disadvantages they have when compared to the USPS, they find ways to improve their services and cut costs.
Meanwhile, the USPS can tap on the government's shoulder and artificially remain in business.
This sounded much lower than anything I've paid recently. I just tried pricing this on the USPS website and got $3.94.
http://postcalc.usps.com/MailServices.aspx?m=6&p=0&o=12&dz=9...
Arguably a bargain, but considerably more than $2.
Separately, I disagree with your implication that the USPS has an obligation to deliver to your house. Do you know what the exact law or statute is?
I'm familiar with several places where this is not true, where Fedex and UPS will deliver to the door but USPS will not. Some of these are very rural ranches in the Southwest, but others are just small towns that do not offer delivery services and instead hold all mail at the post office.
That's the thing, though; some websites will let me pay them directly for an ad-free experience. The post office won't.
I would be happy to pay the post office $5 a month just to say "resident doesn't live here" I'm always afraid a check or bill or something will get tangled up in the 'penny saver' - hell, you could probably get me to pay more for more sophisticated filters, but even $5/month has got to be a hell of a lot more than what the bulk mailers are paying to get into my inbox.
And it's probably an even bigger win; I'm not the sort of person who reads the penny saver; the post office is making more money /and/ saving the penny saver people money if they let me pay them not to deliver said periodical.
The fremium "Pay me money, or watch ads and the advertisers will pay me, your choice" model is an old one in internet terms, and one that most people seem to be pretty happy with.
I also suspect your wrong in saying that advertisers will completely give up if the number of deliverable boxes shrink. I mean, sure, they will want to pay proportionally less, but I suspect post office revenue from advertisers would decline smoothly with the rise in revenue from the paid opt-outs, assuming you got the price right.
My understanding is that fourth-class "to resident" mail is usually targeted at the most price sensitive customers; people for whom clipping coupons is often a good use of time. Exactly the people who are unlikely to pay money to sort their mailbox.
Most of the higher-end mail, like those goddamn pre-approval notices from AmEx, are lovingly personalized, and ship out 'pre-sorted first class' or something. I'm only talking about opting out of the fourth class "penny saver" type junk.
That being said, the problem is that third class mail is a lot more revenue than most people realize. For example $5/mth is not enough to cover the loss revenues. In fact I would suspect that $20-$50/mth is not enough. Think how much mail you get on a daily basis, multiplied by x amount times 30 days. You're probably looking at closer to $100/mth...
I find that hard to believe.
Think about it for a moment. How much do you think the coupon vendors actually make per customer? Even (or maybe even especially) the type of person who clips coupons isn't going to spend that kind of money on discount toilet paper and 'invest in mail-order gold' scams or whatever is being flogged. The people targeted by that garbage don't have a lot of money to begin with.
$1,200 per year per postal customer would indicate that postal spam results in nearly an order of magnitude more revenue per user than google, who makes on the order of $130/user/year.
Yeah, I doubt very much that the post office is getting $1,200 per year in advertising revenue per user.
references:
http://www.businessinsider.com/googles-ad-revenue-per-user-2...
So even if the Post Office were to operate digitization and digital delivery themselves, and access all of the revenue from hosting digital advertisements, if the assumptions above are correct, it would be the "same slice of a smaller pie," since conversions could drop in aggregate. They serve an orthogonal segment of the advertising market from the Googles of the world; it would be like leaving your own perfectly-huge sandbox untended to go play in another kid's, and only get a small corner of it. Even if they weren't federally mandated to have the capacity to deliver mail to any address, it wouldn't be in their interest business-wise UNLESS those assumptions above are changed dramatically.
Look at the photos that Congressman Anthony Weiner sent on his cell phone. You'd think that a repeated error in judgement like that would be damned near impossible... but there you have it.
Actually, some evidence shows quite the opposite, that first class mail costs are subsidizing the junk, because the price paid for junk is less than the savings by having the junk dealers do the auto-sorting and drop shipping.
See:
Title: Junk Mail's Endless Summer URL: http://www.huffingtonpost.com/todd-paglia/junk-mails-endless.... Quote: "Our standard postage subsidizes junk mail. "
Title: Why Do We Subsidize Junk Mail? URL: http://shuthimup.mitzenmacher.net/?p=252 Quote: "So why do we pay 45 cents to mail a first-class letter while direct-mail advertisers pay only 18.5 cents? Can you say “crony capitalism?” Can you say “union busting?” This amounts to nothing more than a very costly subsidy given to the direct-mail industry, at the expense of first-class mailers,"
Title: Snail Mail Spam Subsidies Stuttering Towards A Stop URL: http://blogs.the-american-interest.com/wrm/2011/09/08/snail-.... Quote: "the USPS loses billions of dollars each year so that advertisers can send out billions of pieces of spam at below market costs."
Junk Mail's Endless Summer: http://www.huffingtonpost.com/todd-paglia/junk-mails-endless...
Second link, seems to simply have disappeared.
Snail Mail Spam Subsidies Stuttering Towards A Stop: http://www.the-american-interest.com/wrm/2011/09/08/snail-ma...
Found another link in searching for the new URL's of these three: Subsidizing Junk Mail in the Great Recession: http://www.huffingtonpost.com/todd-paglia/subsidizing-junk-m...
However, it provides some incredibly valuable services. Mail scanning is great, but check deposit is better. However, it's only worth it if you really need a US address, move a lot, or have enough mail or check volume to justify $80/month.
1. It can take up to a month or two for mail to switch over in USPS routing 2. It can only be used for short periods of time (consumers have to renew once a year) 3. It's a terrible user experience and obviously Outbox focused on that immensely
"It was around this point that they became vulnerable by their own success. The local Austin, TX and San Francisco, CA Post Offices allowed individuals to sign forwarding contracts to have their mail forwarded to Outbox with the intention of it being opened and scanned – without these agreements Outbox’s market model wouldn’t be possible. In practice there are many types of forwarding contracts that the Post Office allows, so these contracts were not necessarily unusual. Further, there were no reports of complaints by customers. These were all customers who wanted their mail to be forwarded, opened and scanned by Outbox."
"The monopoly is well enforced. The USPS can conduct searches and seizures if it suspects citizens of contravening its monopoly. For example, in 1993, armed postal inspectors entered the headquarters of Equifax Inc. in Atlanta. The postal inspectors demanded to know if all the mail sent by Equifax through Federal Express was indeed "extremely urgent," as mandated by the Postal Service's criteria for suspension of the Private Express Statutes. Equifax paid the Postal Service a fine of $30,000. The Postal Service reportedly collected $521,000 for similar fines from twenty-one mailers between 1991 and 1994."
http://www.aei.org/papers/economics/opportunities-for-antico...
Background: I used to work for a research lab which got a majority of its funding from USPS. Worked there for ~10 years. Interacted with the USPS engineering folks in Merrifield, VA very closely. I can assure you: the USPS has some very good engineers (in the true "engineer" sense of the word). None of them would call digital "a fad". Not one.
Now, to the article: "but the American citizens aren’t our customers—about 400 junk mailers are our customers." .... wrong! No postal employee will call it "junk mail". They all call it "bulk mail". I know, because I was corrected myself. :-)
"Digital is a fad"... wrong again. At one time, the USPS was the largest user of Linux; all of their mail sorting machines were running OCR on Linux boxes (they also were a huge SGI shop, with racks and racks of Octanes and O2s). Today, when mail cannot be sorted automatically, its image is sent to a remote data-entry site, where operators enter the address by hand. See the fluorescent barcode at the back? That's used to tag the mail and barcode it later, all digitally.
And finally: we, in our research lab, actually had proposed this "Outbox" style electronic mail forwarding to them back in 1998 or 1999 (the Internet was new). I don't remember the details, but there were some legal issues surrounding it that prevented it from taking off. Remember: the USPS is governed by laws (passed by Congress) that were written around the time of Ben Franklin. Fun fact: the average speed of letter sorting by hand (800 pcs/hour) was established by Ben himself, and is still the target for manual sorting.
Plus: I doubt the PMG would become personally involved in such small nonsense.
I know everyone wants to make fun of USPS; but for the price, they do a phenomenal job. People want them to compete with "the market", but don't realize that the USPS' hands are tied: they can't raise rates without approval from the Postal Rate Commission; they can't close post offices that have no customers; etc. etc. After the Civil War, when Congress wanted to give the veterans jobs, where did it send them? To the Post Office! I've heard (rumor) that even today, the USPS cannot use your discharge status against you for a job.
Right. Any other private company that would claim a monopoly on first-class mail would be shut down. Not the government!
The reporting here attempts to paint a picture of a slow, outdated USPS (and they surely are, to some extent) by way of obviously false comments ("digital is a fad"? Really? I'm supposed to believe someone at the USPS actually said this, in context? Let's critique the USPS, but let's not fabricate silly positions.)
Too bad, really, it sounds like a great idea and excellent technology, but marred by a shameful ideology.
"digital is a fad"? Really? I'm supposed to believe
someone at the USPS actually said this, in context?
Haven't all the senders caught up already? All my bills etc are electronic these days, and very few people send letters in the age of e-mail. Amazon purchases I don't want digitised. Maybe christmas and birthday cards?
Mail that can be digitized will eventually be digitized by its senders, whereas stuff that can't, well, that isn't changing.
I know in Australia the bulk of the mail I receive these days is ebay orders from overseas - my bills are digital, my statements are digital. The physical things that go in regular envelopes tend are stuff like new credit cards or registered mail like my passport of things.
So yeah, it does seem like an implicitly shrinking space.
> Our records indicate that this address is a commercial mail receiving agency (CMRA). If you are forwarding your mail to a CMRA, please enter your private mailbox number (PMB) below.
So what did Outbox do to upset USPS?
Becuase what I fear is that my mail scanning service will suffer the same fate as Outbox, and suddenly leave me without a way to get mail. I don't live in the US anymore, but I'm still a citizen, I still pay taxes, and I still own property there. Without mail scanning there is no feasible way for someone in my position to receive my mail. How is the water company going to let me know that my bill is past due? How is the city going to let me know that my property taxes have changed? This isn't just a nuissance, this makes it impossible for me to do business in my own country.
Sounds like Outbox wanted to divert mail being delivered to one physical address to another for individuals.
The article leads me to believe that the USPS took issue with mass-unsubscribing from junk-mail, not with having mail diverted before reaching the addressee.
The USPS has a legal obligation to provide universal service to every physical address. They unsuccessfully tried to hack around it, while ignoring the multitude of solutions available to do so in a real (but perhaps inconvenient to them) way.
Adopted a "laws are for other people" business model.
Instead of forwarding mail from current addresses or physically picking up mail from peoples' mailboxes, they'd get a new address managed by the digitization service.
The true benefit of a service like Outbox is that I don't miss important paperwork like auto registration and home insurance renewals. But the more important the service, the more stringent the requirements of proving you live at the physical address on file. I own a rental property and it is a pain to make sure all the bills and paperwork related to the property come to my primary residence. Yet I keep finding mail from different companies going to the rental address even though I have set the Billing / Contact address to my primary residence. Companies just do a "SELECT address, city, state, zip" when doing a mail merge, which usually brings up the physical address instead of the billing / contact address.
I occasionally have to use my physical address, but since my most recent move haven't had provided proof of my current address to anybody nor received a single piece of post there. The one item I could use to prove my address has left my safe deposit box exactly once in all 16 months, but the DMV was OK with a PO Box on my drivers license and didn't scan the lease (like they did when I used my old place as the address).
It would be a limitation to the services that Outbox could provide with a PO Box system but practically speaking the vast majority of mail for the vast majority of users is a very good start. Just because the USPS isn't handing you your ideal business model on a silver platter, that's not a reason to give up is it?
I have my ECM address on my drivers license (I didn't even ask the DMV to do this for me: I simply listed ECM as my mailing address, and that's the address that their policy puts on the card; I verified with them afterwards there was no mistake or misunderstanding), and have had no issues with moving my bank accounts and credit cards to my ECM service. The only people who know my physical address are utilities (though my bills actually do get sent correctly to ECM), health insurance (as the pricing is dependent on your location), and the US government (voting registration and DMV filing, though neither ever sends mail to anything but ECM).
That all said, your specific use case is somewhat different: you need the utilities to also send you bills, and they are some of the few people who actually care about having your physical address. But it isn't like Outbox could really solve this in a sane way for you either... that would involve them going through the mail of the people who are renting from you, only once every three days (so assuming your renters didn't reap the mail first), and pulling just the mail being delivered to "you" as opposed to them. If I were renting from you I'd frankly find that kind of sketch. For what misterbwong and forgottenpass are talking about, however: ECM is specifically the service they are looking for ;P.
In Australia a simple "No Junk Mail" sign on the mailbox makes it illegal to deliver junk mail. Mail that has gone through Australia Post that is individually addressed is legal (however now must include a way of opting out).
I imagine it might be a little different however seeing as most of the junk mail here is delivered by 15 year olds walking the block as opposed to the postal service.
There's a reason why the post office is going broke, and it's not necessarily bungling on their part. Blame Congress for this one.
I'm kind of shocked with how stark the PMG was though.
Instead, Earth Class Mail is a service that has been in business since 2006 and they operate within the existing legal framework of mail: they are effectively the kind of service that is required to live in an RV, where a third-party receives your mail on your behalf. To make this work, you sign forms from the post office that you send to Earth Class Mail, which are then kept on file to demonstrate they can legally open your mail. Maybe Outbox used the same process, maybe they didn't, but this article made it sound like Outbox is responsible for this legal framework: wrong, the ability to assign "open my mail" rights has existed for a long time.
Rather than having to have cars driving around attempting to "undeliver" your mail with some ludicrous three-day delay as Outbox did (at extreme cost to the service that calls into question whether their business model would even succeed, a fact mentioned in this article linked today, and limiting them to only even being able to think about operating in high-density regions of the country), you simply have your mail delivered to them. You can initially set this up with your local post office as you work on "moving" to ECM, and you can even do it temporarily if you just want to try it out (the post office will happily forward mail for as little as 15 days: again, this is a use case they actively support).
But frankly it is so amazingly relaxing once you "commit" and outsource your physical address. I have a lot of friends that move every couple years, and the idea that they have to change their address at the same time is silly: that is the most stressful moment to be trying to move mail delivery and you can't usually overlap the old and new addresses to buffer mistakes. In the most extreme situations, people who are traveling a lot (for whatever reason; maybe they have a job that requires them to be in random locations for weeks on end a lot, or maybe they are just kind of nomadic and stay with friends a lot as they travel the country) will tell you to send things to their current location. Outbox sort of helped with this, but the three-day delay sounded really irritating: ECM just solves this problem outright; you don't even need a real physical address at all.
Indeed, I seriously have now switched to using my Earth Class Mail address for everything: my drivers license even has that address on it (and yes, I verified with the people at the California DMV that there was no issue with this, and they technically do have my physical address on file; but their policy is to print the mailing address of the driver on the card), which makes it really easy for me to never get into an argument with anyone about what my address is: I effectively now live at Earth Class Mail in Los Angeles. The only people who know my real address are the US government (DMV and voting registration, though they happily send my voting materials to ECM), the power/cable/phone services to my apartment (again, bills go to ECM), and my health insurance company (they base pricing on where you physically reside).
They offer multiple locations around the country, so you can get an address vaguely near you or opt for one that "looks good" for your purpose (maybe you want your startup to look like it has an office in San Francisco, for example). With some of the addresses they are legitimate "street addresses" that can receive packages on your behalf, and you can either have the package forwarded to you or you can go pick it up from them if you need it now and live near enough to the location. (Though, with packages, I normally just one-off deliver those to my apartment.) (I wonder if you can have them open the package and take a picture of the contents... I never asked ;P.)
There was a show pilot on them on Mojo TV (now defunct?) - http://www.mojohd.com/mojoseries/startupjunkies/about.jsf
That said, I decided to take the time just now to evaluate this service vs ECM. To start with, ECM feels like a more "established" option, having existed for just over twice as long; it also has many more locations, and the fact that it is more expensive is reassuring to me: they have managed to operate this business at a higher margin shows solidity.
On features, I use ECM for both my personal mail and for my business; with business mail I have multiple recipients (as mail might come to one of my business partners at the company's address), and we all have separate logins to view mail. (In practice, though, we don't really ever use these features, and I'm the only person who checks the mail.)
ECM is definitely more expensive than Mailbox Forwarding, though: to get the exact service I want (which involves a street address in Los Angeles) I'd need to pay $30/mo with Mailbox Forwarding and $50/mo with ECM. But frankly, $20/mo is not the kind of difference I am going to spend time optimizing: that's like one day of one server on Amazon EC2.
I then have to wonder "is there some difference in how they run their business that helps account for the price difference", and in fact Earth Class Mail offers tech support with live people, both over the phone and in person. If you have an issue with Mailbox Forwarding you must use an online ticket system, and then get an answer a couple days later.
https://www.earthclassmail.com/Contact
http://www.mailboxforwarding.com/support/knowledgebase.php?a...
FWIW, I am really not trying to say to anyone "ECM is the best competitor in this space", just "ECM is a much better option than Outbox ever seemed to be". When I first saw Outbox I was surprised anyone paid any attention to it at all: it wasn't a drastically new idea, and there were tons of competitors that seemed to be working off a better model.
Even now I'm somewhat surprised: people are responding to this article here on HN talking about how they are confused as to why Outbox didn't just offer an address to which people could deliver, and expect that there must be some reason they didn't do that as otherwise it seems obvious... well, that's what other companies were doing for a long time before? ;P
For consultants/contractors/freelancers, this is heaven. We can be away from home for weeks on end, and we don't have to worry about when client checks come in.
If USPS declined to honour re-routing rules to Outbox, then why not just give customers an 'address' at an Outbox depot? USPS would have no choice but to deliver to Outbox (with no other address available), and it would also cut down on spam which isn't directly addressed to the customer.
Seems like a much more sensible solution than 'undelivering' mail.
[1] https://news.ycombinator.com/item?id=7668877
I imagine, then, that it primarily comes down to this attempt to minimize the perceived pain of the signup process: specifically, the idea that you have to move all of your mail senders to a new address is really off-putting to potential customers; it is effectively like moving from your current home "to" the other provider. I was myself a little against doing this at first, and in fact only came around when I finally physically moved to a new apartment and realized "omg, this is so annoying, and I am not even certain I like my new place, so maybe I'll move again in a few years... I'm going to do this once to ECM instead and maybe then I won't have to do this for another decade".
At that point you first look at mail forwarding, and then fall back to "undeliver" while you attempt to argue people into submission that mail forwarding should let you do what you want, or try to get the government to pay you to replace their existing service with yours ;P. But to try to say "our service is so easy: all you do is contact anyone who ever sends you mail, and have them all send mail to us instead! then, if you ever get tired of paying us to receive your mail, you get to do this all over again!" is a really difficult sell, especially for a "hip" "web 2.0" company. I almost want to say they had no other option but the path they took (and no other option than the resulting failure).
What's really silly, frankly, about Outbox is that they clearly didn't do any due diligence before trying to start that company: somewhere around 2007/2008 is when I was first interested in getting a service like this for my mail. At the time, I thought "hey, maybe I could just forward my mail to this service". I saw you could forward mail, but it seemed like it was for temporary use. My response was not "well, let's see how long I can get away with this": I called the USPS, and within the hour of talking to various people, I was forwarded to the office of the Postmaster General. Now, I didn't talk to "the man himself", but I talked to one of his assistants. I seriously think I started this call path using 1-800-ASK-USPS, the phone number my friends and I would tell jokes to each other about how awesome it would be if the USPS were willing to answer entirely random questions ;P.
I explained my use case, and they explained to me that they were not able to offer this service for me, told me the reasons they did offer forwarding, explained why my use case did not fall into this, and was willing to brainstorm with me other options. I actually remember them suggesting hiring a personal assistant to undeliver my mail ;P. In the end, I finally decided (though I didn't get around to it for a long time later) to just "commit" and move all of my mail to ECM and forsake my address: frankly, this was the better option for me. I can see how this creates "market friction", though, for a service that is trying to "convert everyone" like Outbox. I thereby understand why a "hip" "web 2.0" company is instead going to look for something really really easy, like doing the mail forwarding path. What I don't understand is the "disruptive" attitude, however, towards getting what you want.
In this case, rather than call the USPS like I did as a mere user in 2008, they seemed to have just started signing up customers with mail forwarding for their new business idea. Well, that kind of sucks: the USPS doesn't want to offer that service. Now, some might think "those meanies don't want to do this" and paint a picture of corruption and bribery, implicating services like bulk mail as the cause of the problem, but if we try to think from the USPS's perspective for a moment: they are designed around this goal of moving mail to the address on the envelope... 99.99999% of their customers need that service, not a service that uses addresses as routing codes to redirect mail to some company. Their mail forwarding infrastructure is thereby expensive to use and maintain: why should Outbox get to use that service for free to make their business easier to operate?
So, yeah: I don't think anyone is concerned about the service ECM is offering. They seem to be offering a service that has been supported in some fashion for many decades now (again, it is reasonably equivalent to services that collected mail for people who lived in RVs, traveling the country without any kind of fixed or firm address), they aren't adding cost to the USPS in the way Outbox was, and they don't seem to have ever "made an enemy of the USPS" as Outbox seemed to consider core to their mission statement. I mean, even in their dying throws, they seem to feel like a Derek Khanna hatchet job against the Postmaster General is an appropriate next step... I will claim that this is a kind of "disruptive" attitude that makes it very difficult to actually "disrupt" anything ;P maybe there was some way to work with the USPS, maybe involving paying the USPS (as opposed to licensing stuff to the USPS, as if it had inherent value) would have worked for them? It sounds like they didn't even really try to go in that direction :/.
I think this poorly-written hack job article is also a nice cover for a failed business model.
And just to drive home the point, here's a comment I made a year ago about the (un-) feasibility of their business model:
https://news.ycombinator.com/item?id=5822869
Now it's true that these economics came after the Post Office "forced them" to do house-to-house "undelivery", but failing to anticipate these contingencies is simply a lack of adequate planning.
To be clear: I have no issue telling people my physical address; I'm not trying to hide from people ;P. I just don't want to have to think about updating addresses ever, and I really don't want to receive mail at my physical address. Most providers that do ask for physical addresses also ask for a mailing address, and almost no one mails to the wrong address. I don't mind having my physical address with my bank, as long as they aren't sending me critical mail here.
In fact, I think about physical mail so infrequently I seriously just don't check it at this point. It seriously just occurred to me that I haven't checked my physical mail in a very long time (well over a month). Let's go check it! ;P (I actually got a little concerned that I'd fail to find my mail key, but thankfully I found it without issue.) BTW: I'm pretty certain my local mail carrier hates bulk mail so much that he just refuses to deliver it to my address now.
1 piece of mail for someone who doesn't live here
3 cable service bills (autobilled, waste of paper)
2 heath insurance bills (I pay these online already)
1 power bill (keep forgetting to autobill... :()
1 rental insurance bill (I guess, didn't open it)
2 lawyer bills (they also e-mail these: *sigh*)
1 notice from AT&T of their new privacy policy
I also received:
Google Wallet card -- I asked them to send this to me a few days ago, gave them my apartment address as I wanted to get it sooner. I did guess it would arrive in an envelope like this, but it could also have arrived in a package. I also only ordered it "for fun" and so promptly forgot it would arrive here: receiving this in another few months would not be an issue.
Trademark Scams -- I have some things that are trademarked; occasionally, I get official-looking mail that tries to convince me to pay large quantities of money to random companies to "complete" or "secure" my trademark. In this case, I received two messages requesting EUR 970 to get listed in the database ipts-register.com. Fine print: "The registration on our database has not any connection with an official government organization."
So yeah: I don't use physical mail anymore :/.
I think receiving physical mail is insane.
I do all of this for my US businesses, and it's essential to do it this way as I don't live in the US so I would never be there to collect the mail in any case!
In any case there are lots of alternatives to outbox!
It does help that my virtual address is in the same state as my real address, so things that depend on states work correctly. Without that, I'd probably have to give my real address to more places and encounter more confusion.
The most annoying thing in general is having to fill in separate billing and shipping addresses whenever I buy something online, because of course my billing address is the virtual address. I've had a couple of stores require a phone call to complete an order with separate billing/shipping addresses.
No problems with the post office or anyone else.
I admit I don't understand why Outbox didn't fall back to this model rather than shutting down (though obviously it's more of a hassle for customers switching all mail to them); though admittedly they would have competitors.
Especially in the case when I ask for something to be shipped via UPS, and they "outsource" is to the USPS for the last part of the delivery?
But I sure hope not. They provide a very reliable service for me while I'm spending the years travelling abroad.
FWIW, the trick to how their service works legally is USPS Form 1583 ("Application for Delivery of Mail Through Agent".) This means that you still technically need another address for USPS itself to know as your "real" address, even if mail actually gets delivered to ECM or another service. To be clear, no mail forwarding takes place, my mail goes directly to ECM.
Not talking about outbox and usps specifically so much as the fetishization of "disruption" the OP author buys into without question, as if the only reason to be scared of "disruptio " is a cultural misunderstanding, you're not with the program. Rather, quite obviously its bad for some existing business interests -- but also it's certainly possible to challenge the religious belief that disruptionof markets always leads to better outcomes for consumers or society as a whole.
Different classes of mail have different security and other business requirements, and involving some random "disruptive" third party has many potential consequences.
I'm not sure that I understand why this was necessary for the company anyway. I subscribed to a service in 1999 that did this -- you had bills sent to a PO Box and they would scan/PDF everything for you (even ship copies on CD-ROM). They would also pay your bills for you if desired.
Funny, that's just what the USPS is constitutionally mandated to do (Article I, Section 8, Clause 7).
"The Congress shall have Power To . . . establish Post Offices and Post Roads"
The constitution permits congress to establish post offices and post roads, but it certainly does not mandate it.
The Post Office Department did not begin delivering mail to city addresses until 1863. Rural Free Delivery did not begin until 1893.
Before free delivery, you went to the Post Office yourself and asked for your mail. ("Caller service" or "General delivery", both of which still exist.)
Since the 1970s, the Postal Service has been delivering to clusterboxes. Grandfathered areas get to keep their individual mailboxes, but new greenfield development must be built with clusterboxes.
If mail volume keeps decreasing, we'll see greater contraction in free delivery. It all depends on how the politics go.
If I was Postmaster General I would like to see a post office ISP that only accepted mail from government departments, local authorities, banks, hospitals, doctors, schools and other agencies. From there people could setup a forwarding address - if people wanted to just check their mail from one account, e.g. gmail, they could have the 'important stuff' rolled into it. Or they could setup POP/IMAP.
There could also be a webmail where you would be able to have highest accessibility standards. Clearly the cryptography would have to be in place so only the sender and the recipient could read the mail - a 'virtual envelope'. Naturally there would be tracking tags so they knew if someone had read that 'final demand'.
As a competitive service for banks etc. wanting to send out statements it could work very nicely. Good for trees, too.
I would then go and tell the post office what address that identifier maps to, and I would never have to worry about forwarding mail when I move or updating my address whenever I buy something. You need the post office involved here so you don't end up shipping packages twice, like with traditional forwarding services.
Once you have THAT infrastructure, creating a service to digitize mail becomes much simpler - whether done by the post office or third parties.
The Post Office tried to become a sort of "digital hub" for rural areas (bill paying, faxing, etc.). That got quashed.
Congress is not interested in a good Post Office. Quite the contrary. They want the Post Office to go bankrupt so that they can get their hands on all of the really expensive real estate it is sitting on.
There's a separate one run by the Swedish IRS, and I've gotten a few letters from them to it http://minameddelanden.se
There's also a private service, but it also suffers from poor support - I think I've only gotten mail from a credit reporting agency there https://www.kivra.com
Do you still have a mailbox at your home? If so, do you still check it regularly? If so, do you still receive bulk mail drops from postal carriers in that mailbox? I'm talking about the ones that typically are addressed to "Current Resident" and such.
Unless you are in a position that you can confidently forgo ever checking that mailbox again, it seems that you would still be receiving those and be forced to deal with them. That would take a lot of the potential out of the service for me.
Although, I'm a bit skeptical that they couldn't "undeliver" mail profitably in a city-density area like Austin. Focusing just on businesses and apartment complexes, $640/mo + mileage gets you a person twice a week, for 8 hours a day, at $10 an hour. At $5 per month per subscriber you need to collect about 150 subscribers per month to make your nut.
Really? They couldn't get 150 subscribers serviced by 1 person over 8 hours? Sounds like they didn't control their rollout density or price correctly.
This sounds more like "Waaaaaah, we're only going to be a $20 million company rather than a $2 billion company. I'm going to have to hang my head in shame at the next Skull-and-Bones barbeque. We should shut down."
Yup, I used to work for one of the country's largest mailers, doing direct mail strategy. Outbox, if it became widespread, would have killed this marketing channel.
Sounds like some details are missing here.
I lived in an apartment for about 18 months, but never asked for a key to my mailbox as there really was no reason for me to open it.
The only packages I ever need to receive at my place of residence are via FedEx/UPS.
Seriously.
Its been obvious for at least a decade that the customers are direct mail advertisers and we're the product and we can't really opt out (I've signed up for a several opt-out services and I still get junk mail).
I change address fairly regularly, as a student, and it'd be great if I could cut out paper mail entirely.
They believed that their technology could actually save the Post Office money. If consumers started to opt-in to Outbox, or other services like Outbox, then the Post Office could receive the full benefits of the stamped envelope but never have to deliver those packages, which is one of the biggest costs for the Post Office. In fact, if properly implemented, when a customer sends a letter from Austin, TX to Alaska, if the Post Office knew that they weren’t going to receive the letter anyway, then the Post Office could forward the letter from Austin directly to Outbox, and never have to ship the letter across the continent.
This, for example, is just laughably wrong. Marginal cost isn't the bugbear of the USPS; universal service obligations are. As long as there's one person in Alaska who doesn't want to sign up for digital mail (possibly because they can't reliably connect to it in Alaska), then the USPS has to fly planes or sail boats up there to deliver the mail anyway. And as Outbox themselves discovered, moving mail around for individual customers is hideously expensive. It can be made efficient in cities where there is sufficient population density, but something like 1/3 of US addresses are on rural routes and of course delivery to those is more expensive. Even if half the customers on rural routes sign up for a service like Outbox, there's no promise that they'll be the ones farthest away from sorting offices, so mail carriers will need to travel more or less the same routes even if they are serving a lower number of customers, plus all customers will want packages delivered because packages have physical rather than purely informational content. Unfortunately, the profit margin on Package elivery is only about 1/3 that of first class mail delivery, which continues to decline in volume at about the same rate that demand for package delivery increases, leaving the USPS in a now-in situation which requires it to balance the books through cuts rather than investment and growth for the foreseeable future: http://about.usps.com/strategic-planning/five-year-business-...
I loathe junk mail with a passion and it really irritates me that I have no way to opt out from it, that the USPS is required to inefficiently front-load all its fiscal obligations as if they were payable tomorrow, and a whole bunch of other things. But by ignoring the legal operating constraints imposed by Congress on the USPS and the resulting necessity of dealing with bulk mailers, the author is doing his readers a huge disservice by offering trite solutions to knotty problems, essentially arguing that the USPS should pick up the costs of mail forwarding on behalf of a service which reduces the utility (and thus revenue) of the USPS's largest income stream (bulk delivery).
In 2014 Derek was selected for Forbes' top 30 under 30 list for law and policy and as a 2014 Global Leader of Tomorrow, for thought leadership and activism on NSA surveillance and innovation policy.
I'm pretty sure that if the USPS had been offering to open, scan, digitally archive, and destroy your physical mail for the last decade as Derek says they should have been, he'd be writing a similarly indignant rant about big government overreach and the crowding out of private competitors, regardless of assurances about strict siloing or privacy controls.
Any postal service should deliver mail to the addressee, unopened and unchanged. Any deals that put that mail in the hands of third parties should be a no-go to start with.
And they also shouldn't be offering this themselves. Closed envelopes stay closed. If that means postal services are not profitable, so be it. That was never the reason they existed in the first place.