Our guest this past week on the GeekWire Podcast was Steve Shivers, co-founder and CEO of Doxo, a Seattle startup that offers a digital file cabinet for keeping records, paying bills and interacting with utilities and other service providers. We talked about the growth of digital bill-paying and communications, but also explored the areas where paper billing is still sticking around.
How many of you still send or receive letters and bills in the mail on a regular basis? In the podcast, Shivers explains the larger trends that are leading the U.S. Postal Service to end Saturday delivery of first-class mail, and helps us get a sense for how the shift to a paperless society is surpassing and, in some cases, falling short of expectations.
If you missed the show, or just prefer text, continue reading for selected excerpts from his comments.
Todd Bishop: For people who have never heard of Doxo, what is it?
Steve Shivers: It’s a digital file cabinet, and what you do on Doxo is list any business or organization you have to regularly interact with, so banks and credit cards and utility companies, etc. The average household in America has about 25 different businesses, which is sort of depressing when you add it all up. Probably half of that is bills, but then you’ve got your bank statements or your auto insurance policies, or any other type of document that you want to organize and have to keep track of to run your life. I’ll be upfront — it’s not fun. It’s a hassle.
We started the company because I took a walk to the mailbox one day, back in about ’07, and it was full of junk mail. This is actually the main problem the Postal Service is having. It’s about 70-80 percent junk mail now. They’re one of the biggest trash-haulers in the United States because we all drop it straight in the recycle bin. It’s such a headache to log in at 25 different websites, and we haven’t really adjusted to that either, so that’s what Doxo’s about. The way we make our money is you set up your file cabinet and then businesses join. The same way I would connect with you on LinkedIn or Facebook, I can connect with a business now. So I can do it all in one place with lots of businesses in one simple inbox. There are about 40 businesses now in the Washington state area — Puget Sound Energy, Sound Community Bank, AT&T, Sprint and others, and we’re signing more up over time.
Shivers: There is probably no mainstream industry in America that is tipping over faster than postal mail. Unfortunately, it’s like one monopolistic provider of it, so it’s really concentrated. They lost $15 billion last year, and that’s almost as much as they made last year. It’s tripling year after year in their losses. The biggest problem for them is less and less mail of the first-class variety is being sent. They’re running trucks across every corner of America every day regardless of whether there’s something useful to deliver, and it’s kind of stuck in this 20-years-ago business model that doesn’t even remotely apply to modern life.
John Cook: Do you think it will be around in 5-10 years?
Shivers: There’s a huge debate on this topic. I think it is inevitable that they’re going to go from cutting Saturdays to cutting Mondays, Wednesdays, and Fridays within a year or two. And then it’s going to be two days a week, and it’s going to be like trying to find a soft landing for the American businesses and society to let go of this cash hemorrhaging organization that doesn’t fit with modern life.
I think the best thing the government could do from a policy standpoint is give everyone involved a soft landing. Plan ahead. It’d be great if they said, “In a year, we’re going to drop to three days a week,” and then people can start planning and migrating their businesses off of it. There is a huge amount of government workers who will need to find a new way to make a living.
Bishop: We’ve seen Amazon build up a local infrastructure of trucks that they use to deliver. Is there a chance that a private company like Amazon could come along and take over the USPS fleet and facilitate some kind of commercial interest?
Shivers: With delivering goods, I think so. I don’t think the Postal Service, as a standalone business, can make delivering goods work if they’re not delivering the paper. I think the paper shouldn’t be shipped anyway anymore. And frankly, the thing that’s been subsidizing it the past decade has been marketing and junk mail, which is a huge headache, and society is ready to let it go.
Shivers: Mainland America is only about 15 percent paperless, which seems really low. They [the paper bills] sit at home by our computers. Then, once or twice a month, I sit at home and log in to my bank. And I open my envelopes, and I pay them online. So what’s interesting is electronic payment is growing like a weed, but paperless adoption has been flat for the last four or five years, or growing very slowly. This is sort of a disconnect and that’s actually why we started Doxo.
Bishop: What’s it going to take to get people to switch to paperless?
Shivers: There are actually a few key reasons people don’t turn off paper mail. A lot of folks feel they need some of the stuff for record keeping. A lot of it is that folks just don’t have enough time to go log in. Instead of hopping all over a gazillion websites, we go to Facebook and create our own account and then our friends come to us. LinkedIn is similar. That’s effectively the model we’re trying to catalyze at Doxo.
Cook: Todd, how do you pay your bills?
Bishop: I actually fit very much the model that Steve’s talking about. One of the reasons we haven’t shut off the paper bills is that we feel like we miss it. For a while there, we switched the Comcast bill to paperless, and my wife kept saying, “I never see the bill.”
Bishop: Do banks actually send out electronic transfers, or are they just dropping a paper bill or paper check in the mail on my behalf?
Shivers: It depends on the bank. Each bank can be tied into different payment networks. What’s nice about the bank is you can pay anyone. So if someone comes and mows your yard, you can pay them through the bank and they’ll drop it in the mail. They also do that for lots of smaller companies.
Bishop: What would you want to happen in three years?
Shivers: What we’re trying to develop at Doxo is a way that every business, with very little effort and friction, can get on the network. Once they’re on, it makes it way easier for folks like you and I to get everything in one place, and build the entire thing around the customer instead of the business. Our vision for it, audacious as it may be, is to have enough businesses participating that there gets to be a tipping point. What we’re hoping to do is save a ton of money on the business side, keep it free on the consumer side, and catalyze this big shift.
Cook: What’s your competition like?
Shivers: It’s actually good to be in a space that has that much out-of-date infrastructure in some ways, as a startup. It means that we get to move forward from stuff they’re built on from 10 plus years ago. There’s been a huge shift in how we as regular people use the Internet. But businesses are still kind of stuck in the 1999 Internet trying to find a way to move forward.
One of the best things that we designed in Doxo is there’s zero junk mail ever. Most of our business comes off of the company side.
Bishop: What about security?
Shivers: We came out of another Seattle startup, Qpass. We were a payments company. In the payments business, you have a whole set of policies and infrastructure you’ve got to deploy to move transactions securely. We’ve effectively built that, even though we’re moving a document sometimes, or a payment. We treat it all like we’re moving money, and that makes it a much higher security bar that we can meet and helps us protect data.
Full show here:
Listen to the show above or via this MP3.
GeekWire airs on 97.3 KIRO-FM in Seattle at 7 a.m. and 9 p.m. Saturday, and 8 a.m. and 2 p.m. Sunday, except when preempted by live sports. The show runs every weekend on GeekWire.com. You can get every episode using this RSS feed, or subscribe in iTunes. Also search for the show on Stitcher.