[eDebate] One Solution to Tubs
Tue Jul 22 14:17:17 CDT 2008
Re: One Solution to Tubs
By Dr. Arthur Kyriazis, M.S.E. Molecular Biologist, Consultant, debate
coach/judge for more than thirty years.
Looking to go Paperless? Try a little Schumpeterian Destructive
Here's a startup by one of my Harvard schoolmates which will take all
your paper and convert it into data automatically:
Is paper piling up? Send it off to Pixily
Netflix-style start-up scans, digitizes, and, if needed, shreds your
Text size ? + By Scott Kirsner July 20, 2008
Before 1998, when Netflix Inc.
operations, the idea that your mailbox might somehow compete with the
neighborhood video store was inconceivable.
This week, a newly launched Waltham company will try to convince
consumers and small-business owners that the mailbox can render the
filing cabinet obsolete.
Like Netflix, Pixily has bright, durable envelopes. The difference is
that instead of sending DVDs, you send Pixily a stack of documents you'd
like digitized. Pixily scans the documents for you, makes the text
searchable online, and then either returns the documents to you by mail
or shreds them and recycles the paper.
A plan that allows you to send in one envelope a month (envelopes can
contain up to 50 items) costs $14.95 per month.
Will it fly? Pixily, with its sprightly name, is onto something big. Who
doesn't have a desk cluttered with papers that can't be thrown away, but
might never be glanced at again?
Shipping them off for scanning and storage eliminates the job of
figuring out where to file them, solves the problem of limited space in
a file cabinet, and yet makes them more accessible than they'd ever be
in a manila folder - just perform a Google-style search to locate that
old credit card bill you're looking for.
But to make Pixily a household word, the company's founders will need to
crack the riddle that faces every entrepreneurial venture: How do you
generate awareness and acquire customers without spending yourself into
Pixily's founders, led by its chief executive, Prasad Thammineni, have
built complex Web systems for companies like Fidelity Investments, Sun
and IBM <http://finance.boston.com/boston?Page=QUOTE&Ticker=IBM>. They
left their consulting lives behind last July to begin working on Pixily,
forgoing salaries to try to get the idea off the ground.
Big companies, Thammineni says, spend about $5 billion annually on
document storage and archiving, but there isn't a solution targeted to
small businesses, home office workers, and individuals. In February,
they started a test of the service with about 200 users.
Here's how it works. On Monday, I sent a package containing six sheets
to Pixily, using a bright green Tyvek envelope the start-up had
provided. I didn't need to add postage, and the envelope had already
been coded with my customer ID, so Pixily knew who had sent it.
On Tuesday afternoon, e-mail from the company let me know my documents
were available online. When I logged in, I saw images of the documents
I'd sent in, which included a hotel receipt, a page of typed notes, and
a printed-out PowerPoint slide. All the text had become searchable -
except for the handwritten stuff - and I could give the documents labels
(like "travel receipts") to organize and categorize them.Continued...
Page 2 of 2 --
I could choose to share one of the documents via e-mail, download it in
PDF form, or print it out again.
On Wednesday, the originals were back in my mailbox, along with a new
envelope for future use. (Users can also upload already-digitized
documents from their hard drives to Pixily for archiving.)
Thammineni says the company has lots of thoughts on what to do next.
Pixily eventually plans to offer higher-end pricing plans that encourage
users to send entire file cabinets of documents, so they can "go
paperless." They'll set up direct relationships with your bank or
wireless company, and pull e-statements automatically into your Pixily
account each month.
The two big costs of the business are postage (between $2.50 and $3.00
each time a full envelope travels to and from Pixily) and labor, since
humans must feed the documents into a scanner and then package them for
But Pixily's founders say they've built a decent profit margin into the
company's monthly fees, which range from $14.95 for one envelope and
3,000 pages of online storage to $59.95 for four envelopes a month and
12,000 pages of storage.
For now, scanning takes place at Pixily's Waltham office. But as it
grows, the company, which has six employees, may have to add scanning
centers around the country, similar to Netflix's DVD distribution depots.
Pixily has economized by building the entire website atop Amazon.com
<http://Amazon.com/>'s Web services infrastructure, which allows a
company to rent servers and storage space as needed. "That gives us the
flexibility to add more servers based on our demand, as traffic
increases, instead of paying for them at the outset," says chief
technology officer Vikram Kumar.
Though Pixily has had a few conversations with venture capitalists over
the past year, it hasn't raised any venture capital. One possible
reason: A key challenge will be finding a marketing strategy that clicks
with customers, and none of the founders have marketing backgrounds.
Rob Go, a principal at Boston-based Spark Capital, has met with the
company and tried the service. "I really liked the consumer value
proposition," Go says. But "there's an activation energy that you need,
because there are such high hurdles to trusting a company to handle your
How much is it going to cost to acquire these customers?
Netflix, for example, pays about $30 for every customer it acquires, and
that figure is down from as high as $47. An interesting experiment would
be for Pixily to distribute a first trial envelope free at Staples
<http://finance.boston.com/boston?Page=QUOTE&Ticker=SPLS> or Office
Depot <http://finance.boston.com/boston?Page=QUOTE&Ticker=ODP>, to see
if that wins loyal, long-term subscribers.
With the investors Pixily has made pitches to choosing to stay on the
sidelines, it's up to the company to figure out how to generate momentum
on its own, without a multimillion-dollar marketing budget or a
well-paid marketing exec. For now, they'll be spending frugally to pay
for ads on Google and trying to get free press coverage.
"Our plan is to show traction in the market, and understand the cost of
acquiring customers," Thammineni says. Then, they may make a second try
at raising venture capital.
No one ever said it was easy to start a revolution in the mailbox.
/Scott Kirsner can be reached at kirsner at pobox.com
<mailto:kirsner at pobox.com>./
? Copyright 2008 Globe Newspaper Company.
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