Business
5:25 am
Tue February 26, 2013

The Austin Startup That Says You’ll Never Touch Snail Mail Again

A new digital mail service is making the USPS nervous.

Update (Jan. 21. 2013): Outbox has announced it is ceasing operations. Read more here.

An Austin company is expanding its concept of undoing the work of the United States Postal Service. 

Outbox picks up its customers’ mail, scans it, and makes it available online. The company announced today that it will start serving San Francisco and parts of Silicon Valley, after testing its service in Austin since 2011.

Outbox workers open and scan letters, catalogs and flyers. Customers log in to Outbox’s website to see their – now-digital – mail. You never have to go to your mailbox. The cost? About 5 bucks a month.

Founders Will Davis and Evan Baehr came up with the idea after graduating from Harvard Business School. Davis says they started talking with people about their mail service, and heard the same complaints, mostly about the volume of junk mail. "So really the problem is, going to that mailbox and getting this pile of crap that you have to take back to your house that has been thrust and forced on you by the USPS," Davis said.

They focused on women, and on households that don’t get their mail delivered to the front door: apartments and newer home communities served by what the USPS calls “clusterboxes.”

Customer Marcia Navratil heard about Outbox from a friend, a former letter carrier for the post office.  Navratil says she hated getting the mail – especially the junk mail. "It works great," said Navratil. "I love it.  I don’t know why anyone wouldn’t get their mail this way, unless you just really like having paper delivered to your house."

But all that love is not sitting well with the Postal Service.

Early on, Outbox’s co-founders had a meeting with U.S. Postmaster General Patrick Donahoe to pitch their idea. Davis remembers the moment: "He looked at us and said we have a misunderstanding.  'You disrupt my service and we will never work with you.'"

Co-founder Evan Beahr says Outbox works with permission from the customer, and at a point where the USPS' job is done: "USPS is protective of the mail stream.  We exist at the end.  We’re doing it not on behalf of the postal service but on behalf of the user."

The post office didn’t want to comment on tape for this story. And it wouldn’t say whether it thinks “undelivering” the mail is legal.

The agency did issue a statement saying it's “focused on providing an essential service in our mission to serve the American public and does not view Outbox as supporting that mission.”

Washington Attorney David Hendel worked for the U.S. Postal Service, in the General Counsel’s office.  Now he works with companies that want to do business with the USPS.   In our conversation, Hendel ticked off a few laws that don’t apply to what Outbox is doing.   

Hendel thinks that turning hard copy mail into electronic mail is an important trend, one that the Postal Service should embrace. "I think it’s really in the long term interest of the Postal Service’s interest to work with these companies to find a way to make this work for everybody involved," Hendel said.

Outbox says they’re losing money only charging $4.99 a month.  And the more customers they have, the faster they’ll lose it.  But they’re playing a long game. They want to connect people directly to companies that are now sending paper bills and statements. Baehr thinks those businesses will pay Outbox to send bills digitally – avoiding the cost mailing them.

Eventually – he hopes – that would cover the cost of their “undelivery” service.  "We’d like to make it free to be a customer of Outbox. Just like it’s free to be a customer of the postal service."

There are a few other companies in the business of changing paper mail into digital mail. Doxo and Zumbox are the best-known. Both of those companies have big financial backers, while Outbox is burning through its initial $2.2 million investment with its admittedly money-losing business model. But with the post office losing billions every year – even forcing it to cancel Saturday delivery later this year – the market for digital delivery services like Outbox might be growing.