Earth Class Mail CEO Sarah Carr on the Revamped Business Model and What Had to Change in Her First 10 Months

7/7/10

[Corrected: 1:15 pm, see below] Earth Class Mail was built on the notion that businesses which receive a lot of important documents through old fashioned snail mail may benefit from the services it has to offer. The Seattle-based company, founded in 2004 by former head and board chairman, Ron Wiener, develops software that digitizes incoming mail, allowing companies to manage their post electronically and avoid being inundated with envelopes and packages. For those of you out there who think this sounds a whole lot like e-mail, it’s a little more complicated than that. Postal items handled through Earth Class are imported into a digital database where customers can access it and choose to have items scanned and saved for company records. Once in the database, the documents can be forwarded to another address, securely shredded and recycled, stored in a digital lockbox, or opened and visually streamed on the spot. [An earlier version of this story said that Wiener is now chairman of the board. In fact this seat is currently held by Carr.]

New chief executive officer Sarah Carr, who joined Earth Class as COO in 2008 and took over the top job last September after Wiener had stepped down, says the software is essentially a “business process outsourcing” service. She describes it as both a convenient filing system and time-saving tool for companies looking to save time. And it hasn’t been without support. Earth Class Mail has been backed by well-known local investors, including Ignition Partners, Keiretsu Forum, and Alliance of Angels (which is no longer an investor in the company). There was only one problem, according to Carr: Earth Class Mail’s initial business model wasn’t profitable.

Earlier this week we checked in with Carr to see how she—and the company—are doing 10 months into this next phase with new leadership. Earth Class, she says, has undergone a “seismic shift” in that short period of time. We posed five questions to Carr, and she shared with us via e-mail a little bit about the effort to restructure the company’s revenue model, the future of Earth Class a few years down the line, and her merit-based approach to leadership.

Xconomy: You’ve done a lot since taking up your post as CEO less than a year ago. What is your new vision for the company? How are you going about implementing this new vision?

Sarah Carr: When I am figuring out how to make a business successful, I start with the customers that are most loyal to us. In examining the data about our customers it was clear to me that Earth Class Mail (in our retail business) is actually a business process outsourcing company. We have some really creative customers that are leveraging our solutions as part of their workflow in order to save time, money and scale their businesses without adding headcount. Given this, I reoriented the company to support this model. Our tag line has been changed to “making time for business” to reflect this new focus.

My vision for Earth Class Mail is to serve three markets: the small business customer through our retail channel; corporate enterprise mailrooms and mailroom service providers with our enterprise offering; and postal partners with our postal platform. All of these segments can be supported in a Software-as-a-Service (SaaS) model, or we can build a custom environment in the data center, as we did for our postal licensee, Swiss Post.

Evidence of how we are implementing this vision abounds—from our new product offerings, updated pricing plans, and revamped website, to our continued service improvements and product innovations.

X: What have been the biggest obstacles you’ve faced since coming on board (both as COO and CEO)?

SC: Unfortunately, the funds that were raised to support Earth Class Mail were spent before I took the helm. So we have had to re-build the company while at the same time cutting our burn rate by more than 80 percent. We were able to secure a small amount of additional funding from our very supportive and patient VC, as well as a few of our investors, but it has been a constant tradeoff around innovation and profitability. I have a really creative team. We have used this talent to build many things in-house such as the product demo on our website. We even built our own teleprompter for the filming of the demo!

X: Has there been a big shift in Earth Class Mail’s revenue model and/or customer strategy?

SC: There has been a seismic shift. The original vision for Earth Class Mail was … Next Page »

Thea Chard is a correspondent for Xconomy Seattle. You can e-mail her at theachard@gmail.com or follow her on Twitter at http://twitter.com/theachard. Follow @

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  • Able Green

    I was an initial customer. The fees have gone up 500%. So much for the bull that she looks to long term customers. Sell out. Bring back the founder.

  • Marcelo

    Several packs are returning with information that Earth Class mail have moved on. Like customer would be nice to get a advice first…It seems that Earth is going too bad

  • Divine

    It is troubling that when faced with a profitability issue that ECM’s response is to raise the prices. Customers are fleeing in droves or bracing for the next price hike (err, so called “revamped business model”). I don’t think this is a sustainable practice.

  • Tarzan

    We have been doing some case studies in my business classes on ECM and viewed it somewhat from startup, and this article was discussed in class one day. I see much more focus on the customer now, at least there seems to be from this article, than from startup. We started discussions with “what is it that they are actually providing and what is the unsatisfied customer need?” and the responses tended to end with confusion on how they thought this would work at scale.
    I never like seeing businesses go under, but we all thought it would if they didn’t get their act together.

  • http://www.youngpreneur.com John Carlson

    I am an instructor for a education company focused on teaching young adults the fundamentals of business. I have followed the origins of ECM from its infancy and even watched there short-lived television series Start-up Junkies. Conceptually, speaking there seems to be a solid rational for a service like ECM. It honestly could be a billionaire dollar business theoretically, but without a substantial cash injection it seems unlikely to go the distance. They are dealing more with changing a culture of how people receive and deal with their mail, then just making the process more innovative. If they want to increase customer acquisitions they must start with provide exceptional customer service without dramatically increasing the cost. Since, they have had a lot of VC and Angel backing in the past they have been pressured into getting fast paced results. Now, this pressure has translated into them increasing the price for there services. This may be a serious mistake that will alienate their existing client base. If you want to know more about my position please visit some of my lectures at http://www.youngpreneur.com. I hope some of my insights seem reasonably logical. Ultimately, no one can know with absolute certainty the future of any business, but it always helps to use a litte common sense. They are a great concept but they also need to be a good business. Good Luck ECM

  • David

    I work overseas and use Earth Class to handle all of my mail. For me, the service has been fantastic. I now have a solution for handling my mail, including banking and IRS. I really appreciate this service, and hope the business model can be sustained in the long term.

  • Andrew

    ECM’s price hikes are out of this world. There is a new company out there I recently came across at http://www.travelingmailbox.com – Based on their testimonials, it is obvious they put the customer first.

  • Sri

    I have signed up with their service three months ago and been extremely happy. Very fast response. I was able to talk to the customer support on multiple times within few mins. They go extra mile to help. I prefer to pay more for the solution to keep them providing same service. Between 3 of my small businesses and my family of 3 people mails, we are saving over $200 when compared to Regus Virtual Mailbox Service.