The Long Decline of Snail Mail?

TechCrunch reports that Outbox, the digitizer of snail mail, just raised a $5MM Series A investment round. When you sign up for Outbox, for $4.99/month, they swing by your house three times a week, pick up all your mail, scan it and send it off to you. If it is a package, they deliver it to your door. It is in early Beta in two cities, but undoubtedly a good part of that $5MM is for expanding coverage.

Another mail digitizing company has been around for a good several years, EarthClassMail. I use them for my business mail, they are quite good, used to be a bit slow but have sped up in the last two years, although they have gotten quite pricey.

These two services take diametrically opposed approaches to digitizing mail. Outbox is clearly after personal mail. I am sure that, over time, if they are successful, they will target small businesses (large business already have mailrooms, usually managed by large service providers such as Pitney-Bowes, which offer scanning services), but the primary target is clearly residential. EarthClassMail supports individuals, but their primary targets are businesses and business-like individuals, e.g. expats who spend a lot of time overseas. Unsurprisingly, their prices are higher, and they support additional business services like check deposit.

Outbox scans your mail three times a week, which is pretty impressive at $4.99/month, unless they get significant density in a particular block of streets. If I were advising them, one of the key metrics I would be after is the density target: how many customers per square mile do I need to get in order to be profitable. I hope their CEO and founders know it. EarthClassMail, on the other hand, waits for your mail to come in, and so will scan it any business day of the week. They also have a crucial metric, but it is straight volume: how many customers do they need per address? They don't care about where you actually physically are, since all the mail comes to them.

One company says, "use us as your virtual address, and your real address becomes irrelevant." In technology parlance, you add them as an alias, a layer of indirection, so that no one needs to actually reach you at your real address and you can change it at will. This is the basis of the entire DNS system that lets you type in blog.atomicinc.com instead of the unwieldy (and forgettable) 74.208.5.172. The other company says, "that works for technology, where the address has near zero cost to change, is impossible to remember, and changes very frequently; it is less relevant in the world of mail, where moves are expensive, one address is as easy to remember as the other, and changes very infrequently."

The interesting part of both businesses is their attempt to capitalize on transitions. Every day, less and less gets sent by snail mail and more and more by email or other electronic means. The US Postal Service reports that total first-class mail volume has dropped by more than 30% in the last decade. Some things will always be sent physical, but postal mail, for most items that need to be read (as opposed to physically handled, like gifts or DVDs), is in a long decline. Nonetheless, both EarthClassMail and Outbox see an opportunity to capitalize on the transition.