Doxo, Backed by Bezos and Mohr Davidow, Comes Out of Stealth, Wants to Help Businesses Go Paperless

5/10/10Follow @gthuang

Score another one for the “Qpass mafia.” A Seattle technology company called doxo, founded by former Qpass employees Steve Shivers, Roger Parks, and Mark Goris (see photo below), has emerged from stealth mode—sort of.

The company has started talking publicly about its background and team, its basic idea, and its funding, but no specifics about its product yet. Let’s start with the funding. Last November, doxo raised a $5.25 million Series A venture round co-led by Seattle-based Bezos Expeditions (the venture organization of Amazon.com founder and CEO Jeff Bezos) and Silicon Valley-based Mohr Davidow Ventures. The financing was previously reported in the media, but until today, no one had reported the names of the company’s investors.

Here’s what I know so far about the startup. The idea is to help companies and their customers “go paperless” with their mail transactions—things like insurance policies, bank statements, newsletters, and credit card bills. The founding team comes from Qpass, the Seattle mobile commerce firm bought by Missouri-based Amdocs (NYSE: DOX) in 2006. The company describes itself, depending on whom you ask, as either “kickass” or “smartass” (I know which one I’d pick). And its lower-case name is sure to irritate copy editors in the media, on par with Yahoo! and iRobot.

Asked to boil their company culture down to one word—as I am wont to ask—Shivers and Parks came back with “sesquipedalian.” (See “smartass” allusion above.)

Shivers co-founded doxo in late 2008, after leaving Amdocs, where he had served as a senior vice president (at Qpass) and general manager. Parks had expertise in products and business development, while Goris was the senior architect and technology lead. The company started out being self-funded, with some support from angel investors. (The $275 million acquisition of Qpass by Amdocs surely helped the founders bootstrap this operation.)

Doxo is “focused on business relationships conducted through paper mail,” Shivers says. He cites a statistic that 55 billion “transactional documents” are mailed each year, and that this amounts to $35 billion in annual expenses for U.S. businesses—not counting the costs of things like follow-up customer support. Meanwhile, only 12 percent of household accounts have switched over to be entirely paperless. So maybe you pay most of your bills online, but you still get a monthly statement in the mail, or receive other types of policy information via paper.

doxo founders (from left to right) Steve Shivers, Roger Parks, Mark Goris

The goal of doxo is to get rid of all that paper, and save companies money and time in their transactional communications with customers. (Note: this is not related to junk mail, which is an entirely separate category, Shivers says.) It does this by providing a Web-based service that handles transactional records for companies. The startup is in beta trials with about a dozen customers (ranging from small regional firms to big national companies), which, all told, send out around 100 million documents a month, Shivers says. These beta customers include utility firms, insurance companies, and providers in banking, Internet, satellite, phone, travel and cable.

“We’re out there working with enterprises to get a new channel for paperless adoption,” Shivers says. “If there’s anything that’s going to make doxo successful, it’s that we solve a common-sense problem.”

Which is all well and good, but hasn’t this problem been solved already? Apparently not. For consumers, dealing with new logins and passwords for every account is a pain, Shivers says. And lots of people still prefer paper records and monthly reminders. Related companies like Paytrust and Earth Class Mail “haven’t been anywhere near having a model that could be ubiquitious. Paper is a least common denominator…To get mass-market adoption, we need a new least common denominator,” Shivers says. One example of a big success in online payments would be CheckFree, which lets people pay their bills through their bank account, he says. (PayPal also comes to mind.)

So, to get widespread adoption of its technology, doxo will need to get buy-in from businesses first. The way it works is companies will pay doxo a small fee per online transaction. That kind of communication, done online, is an important customer interaction that becomes real-time instead of being a piece of paper that goes through the mail for a few days each way and might sit on someone’s desk for a week. Unlike lead-generation or advertising business models, Shivers says, “We’re taking a business relationship and cutting costs out of it and improving it.”

Some observers might erroneously think that doxo is just about solving the problems of paperless billing. That’s a piece of it—and the founding team’s expertise in mobile commerce as part of Qpass certainly helps—but I get the sense that the company’s bigger opportunity is to own all paperless transactions. Shivers says the company’s full product release is “a few quarters out,” but he didn’t want to be more specific just yet.

For now, doxo has fewer than 20 employees, mostly on the product development and technology side. I asked Shivers about the company culture, and what he learned specifically from his time at Qpass. “We’re very candid, pragmatic, and somewhat debate oriented,” he says. “We have a very, very low BS quotient. These things get harder and harder as you grow. At Qpass, it was exciting and fun to be part of a renaissance that turned into a great outcome. Once you’ve been through that, you say, ‘Let’s do something that’s worthwhile and not niche-y. Something that applies to almost every household. Let’s do something that’s a swing for the fence.’”

He continued with some lessons learned from Qpass. “We were really good at Qpass at building a great team,” Shivers says. “When we got bad apples that didn’t have the skills, or were really talented but just didn’t fit, we constantly pruned the tree. We were transparent, respectful, and [everyone] knew where they stood, and where the company stood. So the people who leave are not out there feeling angry about it.” One important relationship the doxo team has retained: former Qpass president Sterling Wilson, now CEO and co-founder of Seattle-based Ground Truth, is an advisor to the company.

As for its venture investors, Shivers says he wanted a Silicon Valley firm and a Seattle firm. He particularly likes the fact that one very important investor, Jeff Bezos, is just a short drive away. “Being based here, and being part of the startup community here, having a key Seattle investor is ideal for us,” Shivers says.

Even more important, it seems, is the scale of the business problem the team is tackling. “What’s nice about doxo is every single person in the United States, 18 years and older, has this problem” of transactions by mail, Shivers says. “It’s a must-do. There are things you can do to make it easier. Enterprises and people get the magnitude of it.”

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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