November 15, 2011 / 7:27 PM / 6 years ago

Updater.com hopes for fast growth in "snail mail"

Entrepreneur David Greenberg started Updater.com, a new service to control the flow of bills, magazines and unwanted mail to people's homes. Photo credit:Handout/Brett Deutsch

CHICAGO (Reuters) - One entrepreneur's shrinking, outdated market is another entrepreneur's goldmine.

Traditional mail may be on the wane, but that hasn't stopped entrepreneur David Greenberg from pushing ahead with a new service to control the flow of bills, magazines and unwanted mail to people's homes.

"It's almost like having a spam button for paper mail," said Greenberg, the founder of Updater.com, which launched in July and has $800,000 in angel funding. "We think the postal system is largely abused by third class and bulk mailing. It's unnecessary."

"Snail mail" has declined by 43 billion pieces in the past five years, according to a September report from the U.S. Postal Service, with first-class pieces down 25 percent. The organization also said it was considering closing 250 processing facilities and cutting 35,000 jobs.

Greenberg, 31, contends the system is going through a transformation, as the Post Office encourages bulk mailers to boost business to help make up for the first-class shortfall.

"Looking at it as a shrinking market is a mistake," he said. "Bulk mail is a growing market or a stable market, which means the market for people wishing to turn off unwanted paper mail is growing."

To build a following, Updater is going after the more than 40 to 45 million Americans who move each year, allowing them to alert utilities, banks and others of their change of address with one fell swoop, for free.

Greenberg hopes to capture 1 million of those movers in the first year, or more than 2 percent of the market. He's betting some will see the benefit of paying $14.99 for a three-year membership that lets them build "do" and "don't mail" lists, using a single service to inform catalog companies and others of their preferences.

For a bigger portion of revenue, he will rely on outside deals, both with advertisers from home improvement retailers interested in the moving set, as well as corporate marketers willing to pay a premium to keep their address lists up to date.

Greenberg acknowledged there are already a variety of alternatives available to consumers. The Post Office, for one, offers a free change-of-address service. But it relies on call forwarding, and using its 12-month option puts customers on the National Change of Address list, or NCOA, which he said contributes to more junk.

"It will immediately make your new address available to a lot of mailers that you don't want to have your new address," he said.

ATTORNEY TURNED ENTREPRENEUR

The idea for Updater came in 2009 when Greenberg himself was moving from one Manhattan neighborhood to another, and became frustrated by the amount of paperwork. He eventually left a high-paying job as a corporate attorney to develop the site, relying on one full-time engineer and a small team of outside contractors.

"I've been teaching myself as I go," said Greenberg, who draws on his legal expertise to draft third-party agreements and leans on some of the angel investors for operational guidance.

He joked that long hours in a law firm paled by comparison to the challenges of running a startup, which have included redesign of an early prototype that overwhelmed consumers with too many features.

Updater has already struck a chord with movers, he said. He won't provide specifics, but noted several thousand have already signed up for the basic offering, coming to the site without a prompt from marketing or social media.

Abigail Jones, a 30-year-old web editor at the online news site The Daily, is one. She used the service a month ago to help with her fourth move in three years, and said she planned to upgrade to the subscription.

"It could not have been easier," said Jones, adding: "I get a lot of junk mail and I don't like it."

Josh Baer, managing director of the Capital Factory, an Austin-based accelerator that reviews dozens of startups each year, said he expected the technology required to build Updater was not terribly sophisticated, making its speed to market critical to its success.

"Can you market it, can you get the word out?" he said, adding there is promise for a service "that gives consumers more control over what they receive and the ability to stop, in particular, postal mail, which is bad for the environment and costs lots of money."

Greenberg wants to accelerate the pace of development by securing $5 million to $10 million in venture funding that will allow Updater to staff up. Within six months, he plans to begin posting ads on the site, having secured commitments from at least four national retailers.

Meantime, colleges and universities, which rely heavily on print solicitations to alumni for fund-raising, have expressed interest in using the back-end service to keep track of their constituents, he said. The interest from schools was prompted, in part, by an endorsement from CASE, the Council for the Advancement and Support of Education, a membership organization for schools the focuses on development.

Longer term, Greenberg has plans to roll out additional services, like allowing customers to switch to paperless billing. For now, he's convinced that offering them the ability to control the deluge of paper coming through their mailbox is enough. "We think we're in the right place at the right time," he said.

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