US Postmaster General’s Office Claims “Digital (email) is a Fad”

Evan Baehr and Will Davis had a brilliant idea for a new high tech start-up company. They wanted to give customers the opportunity to receive all their (snail) mail digitally. They launched Outbox, a company that allowed customers to have all their regular mail forwarded to the company’s offices. The mail would be opened, scanned, and then images of the mail would be sent by email to the customers. In its first few weeks of operation, the company received rave reviews from satisfied customers and the word started to spread. Even CNBC carried their story nationally.

Then the government stepped in.

Baehr and Davis were summoned to a meeting with the US Postmaster General in Washington. The two believed the Post Office wanted to work with them to better serve the American public and to simultaneously reduce expenses. The two men were naive; that was not the intent of the US Postmaster General.

In a meeting with US Postmaster General Patrick Donahoe and several of his staff members, the two entrepreneurs were told by the Postmaster General that “we have a misunderstanding. ‘You disrupt my service and we will never work with you.’” Further, “‘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.”’

According to Evan, the Chief of Digital Strategy’s comments were even more stark, “[Your market model] will never work anyway. Digital is a fad. It will only work in Europe.”

Digital is a fad? US Postmaster General Patrick Donahoe claims that the American citizens are not his customers? Instead, he works to serve 400 junk mailers?

No wonder the US Postal Service is hemorrhaging money!

You can read the sad details in an article by Derek Khanna in the Inside Sources web site at http://www.insidesources.com/outbox-vs-usps-how-the-post-office-killed-digital-mail/.

17 Comments

Government bad. Free market good. What a piece of trash this article from Inside Sources is. It’s straight out of Wall Street and the Koch brothers. The USPS is not the only organization that resists change. I recently retired from a Fortune 100 company and it dragged its heels for years and years in adapting to change. The issue is vastly more complex than the article makes it appear and your trashing of the USPS (no, I didn’t retire from the USPS!) really irritates me. Once a business model matures and the owners are comfortable, they will resist change. That’s just human nature. All that garbage about a “free market” is just right-wing propaganda. There never has been a free market and there never will be. Furthermore, the government, captured by private business (who writes the laws?), is in the forefront of resisting change by enforcing the status quo ante. I’m real disappointed in you, Dick. Keep your politics to yourself.

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    Yeah, sure. That’s why the Post Office is losing billions of dollars every year while UPS and FedEx prosper. The horrible free market. And it’s those evil Koch brothers that have caused the federal, state and municipal governments to spend themselves into bankruptcy.

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I don’t agree with the last two sentences of Jeff’s comment, criticizing Dick Eastman. Maybe Dick was rushed and having an off day. It happens. But I do agree with the rest of Jeff’s comment. This is clearly slanted right-wing anti-government, anti-regulation, corporate propaganda.

Respectfully, NateS

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Anything to get rid of junk mail…!

I have a PO box and now only check it about once a month because I know it only contains junk mail and bills; after getting my first computer all my important communication is via email. While there, I spend five minutes at one of the extra customer counters in the lobby taking out the junk mail and putting it in the recycle bins the post office has in the lobby. What was an armful of a bundle of mail becomes a small handful of envelopes and I don’t have to carry the junk mail home only to have to put it in my own recycling.

I’m old and don’t have a business, but I can see where Outbox could be a valuable service to busy offices where time is money; who wants to pay a staff person to sort junk mail when there are so many more important things to do?

IMNSHO, the USPS wouldn’t hemorrhage so much money if it didn’t do idiotic things like sponsor a bike rider to the tune of millions of dollars (I understand he’s been sued by USPS to recover that money, I don’t know the outcome of that yet). Even before the doping came to light, just seeing a photo of Armstrong with the USPS logo on it is what made me switch all important communications over to email. I can’t wholeheartedly support any business or company that over-emphasizes sports. If they have enough money to hand over millions to jocks, they don’t need my money, even if my money represents only pennies compared to corporate contracts.

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Rampant deregulation and/or lax regulation of business practices (putting the fox in charge of the henhouse) has cost many citizens their lives, their homes, their pensions or their health. The “free market” does not include built-in protection for consumers against sharp practices by businesses. We need both free enterprise and reasonable government regulation to balance things out; but there will always be examples of imbalance.

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Is anyone nutty enough to have ANY third party (especially a commercial one) have unlimited access to their regular mail? My e-mail was recently hacked and that was bad enough. If someone sends me a check I want to make sure that it winds up in MY hands and doesn’t get siphoned off “by accident”. I also do not care to have things like medical information or SSN or bills or other necessarily private information scanned and possibly sold or stolen by a third party. Some things should stay private, period.

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“All politics is local,” so my reply is all about me. I would rather receive a regular paper letter in our mailbox than have it copied to my e-mail; I definitely would not pay for it. But then, I’m in the over-55 group (77 years old to be exact). I predict this service will come to be when everyone is online.

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The more one thinks about it, the clearer it becomes that this was really a dumb idea for a business startup in the first place, and these “geniuses” are blaming the government for their own lack of business sense, using what I suspect to be distorted slanting of what they were told by USPS. (I’d like to see proof of these alleged quotations – the original reports used the term: “What they were supposedly told was…”

Furthermore, while we may all hate junk mail, does anyone really think that a first class letter could be delivered for 49 cents if junk mailers lost the incentive to use the USPS because their adverts were going directly into the trash without ever reaching postal patrons, a certain percentage of whom obviously read these ads? These advertisers are presently subsidizing the cost of delivery of the first class mail we do want to receive.

A few excerpts from the other side of the story can be found here at http://postalnews.com/postalnewsblog/2014/01/22/outbox-fizzles-ceo-blames-usps/
Outbox fizzles, CEO blames USPS
“Outbox was founded by a pair of Harvard Business School graduates with little or no actual business experience, Evan Baehr and Will Davis. CEO Baehr’s resume consists almost entirely of time spent on the federal payroll, or at right wing lobbying organizations.”

“The would-be “entrepreneurs” seemed mystified that the USPS didn’t want to support them, despite the fact that their ‘business model’ was basically that of a parasite- using the USPS as a revenue stream, while actively trying to damage the postal service’s advertising mail product. But that didn’t stop the two whiz kids- they plunged ahead anyway, shifting their “model” to one that required their employees to drive around and take mail out of their customers’ mailboxes. What could possibly go wrong with that?”

“…our density numbers remained consistently flat, causing us to spend about double our projected cost to service each customer. Even our most dense routes cost us approximately 20 percent more than our break-even target.”

“So, after blaming the PMG for screwing up their business model, it turns out that the real problem with Outbox was that its founders vastly overestimated the demand for their product, and grossly underestimated their costs. So Outbox crashes and burns after two years, while the USPS carries on after more than two centuries.”

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Thank you for taking the time to delve into this further, NateS. Here is what passes for Evan Baehr’s resume. I apologize for criticizing you, Dick, but I have a very, very thin skin for attacks on government. For the last 40 years, government has been the subject of attacks by right-wing billionaires, who see it as an obstacle to further lining their pockets. They’ve been very, very successful. So successful that tens of millions of Americans struggle mightily just to eat while these barons dine on caviar every day. I’m not having any of it and I’ll call out anyone who wittingly or unwittingly furthers their agenda. Enough is enough!! Has government done things wrong? Sure. Can government be improved? Sure. But hobbling the USPS with pension rules that would cripple any private sector business in a heartbeat and then slamming the USPS for providing inferior service just isn’t right. The right-wing wants to eliminate government so that they can ruthlessly exploit people, just as was done in 17th century England and in this country from the 1850s until unions put a stop to the most egregious wrongs in the 1930s. We’re going back to the 1850s and schemes like Mr. Baehr’s are leading the way. We need a revolution in this country – a revolution against the oligarchs who have turned government into a tool to line their pockets.

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    Government is evil, systematically destroying individual freedoms of AVERAGE citizens, turning us all into wards of the Nanny State.

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I am all for streamlining the USPS. However, if you read the story carefully, you will see that the founders of Outbox at first claimed they were “summoned” to meet the Postmaster General. Later, it became clear that they were the ones who initiated the meeting. Also, the idea the Postmaster General would refer to marketing organizations who use the USPS as “junk mailers” does not ring true. That would be akin to Constant Contact referring to their large corporate customers as “spammers.” Finally, all of the alleged statements by the Postmaster General including the “fad” comment were hearsay reported by the founders of Outlook. And by the way, companies that market through the mail are no less entrepreneurial than technology start ups. Both are part of our free market system.

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I don’t get it. Why would I pay money to have junk mail scanned when I can dispose of the paper in a nanosecond? And what about the other stuff? Do they scan my magazines? Wouldn’t I still want to receive physical checks, Christmas Cards and letters from Aunt Millie? And as for bills, I can already opt-in to have them delivered electronically and paid automatically. There’s just something fundamentally off about their business model – which doesn’t say much for Harvard Business School. Even I can’t blame the Post Office on this one.

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I never used Outbox but I do use a similar service because I spend a lot of time living in a motor home and travel a lot. A fixed mailing address doesn’t work very well for me. I am very happy with the service.

This service is very popular for people who live in recreational vehicles, military personnel, people working on the oil lines, people who work on cruise ships, long-haul truck drivers, and others. I think Outbox had a good idea, although the founders were a bit naive. However, they were not the first to offer such a service and they certainly won’t be the last. Mail forwarding services have been available for many years, long before the appearance of the World Wide Web. The use of email and scanners is a rather new addition, however.

Pick up any magazine for people who own motorhomes and you will see ads in the back for several mail forwarding companies. Some offer scan-and-send-by-email services, some others only forward paper without digitizing anything.

Go to google and search for “mail forwarding service” to see listings for a few hundred companies offering similar services.

The one difference is that the service I use has its own address. I changed the mailing address for all companies that still send me paper bills (which is very rare) and a few other things to the new address. I don’t depend on the post office to forward anything.

First, junk mail is not a problem as the post office never forwards junk mail. If junk mail is ever sent directly to the forwarding service, they throw it away. There is no junk mail to digitize. I rather enjoy the freedom from junk mail and consider that to be an advantage of the service.

Next, the service I use scans all the ENVELOPES of the UNOPENED received mail and sends me the images. They don’t open the envelopes unless I tell them to. They store the mail until I go on their web site, look at the scanned image of each envelope, and click on an icon to say “throw this item away” or “forward this piece of mail via post office mail” or “please open the mail and scan the contents.” Any pieces of mail that I say to forward are sent to me wherever I am this week or to anyone else I specify using old-fashioned mail. As a result, checks are never destroyed.

I don’t remember ever receiving any magazines but, if I did, I still have the option to either have them forwarded to me or to have them destroyed. I think the scanning service will only scan the cover of a magazine. Again, I remain in control.

Christmas cards, personal letters, and anything else remains under my control: I can have them forwarded to me or have them destroyed, as I choose. That is rare, however, as my friends and relatives all know my lifestyle and what I am doing so nobody sends Christmas cards or letters to me at that address.

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Dick, Thanks for your elaboration. The services that you describe and/or use sound well-conceived for situations like yours, but if they are all operating without interference from the USPS, then why are the Outbox founders blaming their business failure on the government?

From your description it sounds like the distinquishing feature was Outbox’s concealment of the forwarding feature, preventing advertisers from culling futile mailings from their list, but I am not entirely clear on that. As you say, your service uses its own address. Is that the difference?

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    —> As you say, your service uses its own address. Is that the difference?

    I have no idea. I haven’t paid much attention to the successes and failures of mail forwarding companies. All I know is that I found a few listed online, found one that sounded like a good service, signed up with that company, and have been satisfied with the results for almost three years. I know there are others but I haven’t spent much time investigating their failures or successes. There may be even better services than the one I use but I haven’t invested much time in finding out.

    In the above article, I was much more interested in the alleged comments of the Postmaster General and his staff then I ever was in the success or failure of a mail forwarding company. I also have taken steps to have almost all my bills, insurance documents, and other important “mail” sent to me by email. I probably average only about one piece of “snail mail” per month being handled through the mail forwarding service. Everything else comes electronically.

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I think my suspicions about the Outbox founders making up quotes is now supported by the latest article:

http://postalnews.com/postalnewsblog/2014/05/02/usps-says-outbox-founders-lied-about-meeting-with-pmg/

USPS says Outbox founders lied about meeting with PMG
“Postal officials deny PMG Pat Donahoe ever told two “entrepreneurs” that “the American citizens aren’t our customers”. The so-called entrepreneurs, actually a pair of Republican political operatives with no business experience, made the outlandish charges in a story written by an associate of Darrell Issa, and published on a web site operated by a former aide to Mitt Romney. Evan Baehr and Will Davis presented themselves as “active, humble geniuses” whom were going to “save” the US Postal Service, only to be stymied by the wicked Postmaster General.
Now, Linns Stamp News reports that the USPS has denied the pair’s story:
A Postal Service statement issued May 1 rejected the quotes attributed to Donahoe, saying: “Outbox’s representations regarding the substance of the meeting, particularly the quotes attributed to the Postmaster General, are simply untrue.”

“The Postal Service is focused on providing an essential service in our mission to serve the American public and does not view Outbox as supporting that mission,” David Partenheimer, manager of media relations for USPS told Khanna.

“We do have concerns regarding the destruction of mail — even if authorized by the receiver — and will continue to monitor market activities to ensure protection of our brand and the value and security of the mail.”

http://postalnews.com/postalnewsblog/2014/05/02/usps-says-outbox-founders-lied-about-meeting-with-pmg/

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Did I miss someone mentioning that this in no way reduces USPS’s income? The mail is still being sent, just to a different recipient. I’m not interested in the service, but that’s my choice. Calm down folks!

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