How a Snail Mail Startup Bust Shaped One Serial BIZ Experiences Learn how an engineer learned the value before building the product.
This story appears in the July 2016 issue of BIZ Experiences. Subscribe »
Jonathan Siegel has launched 20 companies. Two led to eight-figure exits -- hooray! -- and 16 went bust. But one failure from 2005 informed a success a decade later. The flop was PostASAP, which sent letters for users who didn't want to deal with printing, envelopes and the post office. It died in a year. Today he owns Earth Class Mail, a $5 million platform that scans, shreds or processes businesses' snail mail. Here's how he got from one to the other.
Q. What was the first sign of trouble for PostASAP?
A. The week after we launched was an amazing letdown. We got some press and plenty of traffic, but nobody was signing up and staying. At the time, people weren't as comfortable invoicing or writing important documents online. And they didn't want to pay a premium for the service.
Q. Did you try to fix the problem?
A. We talked to a marketing consultant who helped us build a customer acquisition plan; generated site traffic through Google ads and got an affiliate partner, Stamps.com; and created different pricing structures.
Q. And none of that worked?
A. We made about $80 per customer, but we had to spend $480 to do it. So every customer we got cost us $400.
Q. What did all this teach you?
A. If I had turned the business upside down and started at the end -- building a landing page, buying ads, seeing how much customers were willing to pay and how much it cost to get them to that landing page -- I could have tested my business eight or nine months before I found out that the concept was no good. That's a respectable way of getting an early read on the market.
