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Summary:

Facebook’s much-anticipated announcement of its Social Inbox and acquisition of Zenbe, a mail-related startup, has directed a lot of attention to startups dedicated to reshaping the email landscape. But former Xoopit CEO Bijan Marashi warns that that goal may be too lofty for a startup.

beware_love_xoopit

Earlier this year month, Facebook acquired certain assets of Zenbe, a mail-related startup. The news came close on the heels of Facebook launching its much-anticipated Social Inbox (which, incidentally, I like a lot), and, once again, puts the focus on startups that are trying to reshape the email landscape. But if you’re looking to start an email company, Bijan Marashi, the former CEO and co-founder of email-indexing service Xoopit (along with Jonathan Katzman), says don’t do it.

20 Reasons Why Not To Do an Email Startuphttp://static.slidesharecdn.com/swf/ssplayer2.swf?doc=inboxlovebijannov2010b-101119123924-phpapp02&stripped_title=20-reasons-why-not-to-do-an-email-startup&userName=ommalik

In an email to me, Marashi wrote:

The creativity and courage needed to be a successful entrepreneur is special, but also fragile. Of all the creative venture adventures to dive into, challenging the consumer email market straight on (not communications) may be mission impossible.

This coming from a guy who raised $6.5 million in funding and sold his company to Yahoo for $20 million in 2009. Yahoo bought his company because they had pivoted into hosted search service for developers.

Last night, he spoke at the 500 Startups Inbox Love gathering in Mountain View, Calif. and shared some great insights and many reasons entrepreneurs shouldn’t start an email-focused start-up:

Despite our successful exit, we learned a brutally sober lesson — trying to fix consumer email platforms is like trying to fix the phone system — a startup simply can’t afford to do it. This lesson became even more clear to us as I spent the last year on Yahoo’s exec Product Strategy and M&A teams where I saw how the operators work and looked at many of the startup deals amongst the current class of entrepreneurs.

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  1. Just a correction: The Zenbe acquisition actually occurred this past summer, not last month.

    From the Zenbe Blog: “a few months ago, three of our engineers joined Facebook as part of a talent acquisition.” http://blog.zenbe.com/2010/11/16/congratulations-facebook/

    1. Hello Frank,

      Thanks for helping with this and I have corrected the post. Appreciate the heads up.

  2. email is not the problem. Data organization is, fix it and the email,sms, FB …. problem goes away.
    Current data organization(quantity and quality) problems remind me of the early day,before PARC, computer access problems(punch cards couldn’t solve the quantity and quality problem at that time either). Question is: If a company solves it, will Steve Jobs or SV be invited?

    1. Ronald

      Thanks for the comment. I am in agreement with you and perhaps would extend the “data organization” is a problem that is prevalent across the platforms and applications.

      I think that is why I think Social InBox from FB might actually work — it makes data organization a very simple task.

      1. “I think that is why I think Social InBox from FB might actually work ”

        Never used it. But from the outside it looks like tunnel vision to me. Think about data processing as binocular vision. Clear and focused in the overlap and a lot of data somewhat clear in the peripheral view. One can also shift focus to what doesn’t seem so important at the first glance.

  3. Matthew Bellows Friday, November 19, 2010

    The key qualifier here is “consumer” email platforms. With Google and Facebook finally iterating on broad consumer email experiences, startups in that space are on a fool’s errand. Targeted email experiences, optimized to specific high-value audiences… now that’s got some potential.

    1. Matthew

      Good points, but can you elaborate with examples? I know some enterprise mobile startups were successful — Good — but they made mail mobile in a Blackberry sort of a way and was more of an infrastructure layer offering. I would love to know more if possible.

      Thanks

  4. Ronald,

    You are right on. The author and the guy who sold company don’t have any idea what they are talking. Have been in business since jon postel wrote first rfc822 spec. Can’t tell you how true ronald’s comment are. Google entire search model falls into that category. Solved data organization and quantity – boom you got your self big company. Replicating e-mail functionality with slight improvements will not get you anywhere. It does not have to be e-mail it can any product you are trying to replace must improve both organization ( some people use the term usability but it is little more than that) and quality.

    1. Om actually knows. We just disagree sometimes in the details.

  5. Jared Goralnick Friday, November 19, 2010

    As the co-host of Inbox Love last night, and someone who both invited Bijan and discussed it extensively with him, I want to make sure the specific nature of the message isn’t missed inside the hype of the headlines: Don’t start a CONSUMER email business.

    Facebook, Yahoo, and Hotmail have all released changes to their platforms that affect the way consumers communicate, and it’d be difficult to compete for their users in their platform. Especially since there isn’t really an easy distribution method to get into their platforms or build on top of it.

    Gmail is a mixed case–they serve both consumers and businesses, and they tend to build features that are as targeted toward businesses as consumers (even if they test it on consumers first). Their recent innovations in communications like Wave, Priority Inbox, Google Voice, and the Apps Marketplace are all examples of business-y features.

    If you look at the startups vying for the email landscape, they’re mostly focused on Gmail, and not only because it’s trendy among geeks. It has business users and has a distribution method (Apps Marketplace) that the other providers don’t offer, not to mention that its “Apps for Your Domain” is the only business domain hosting that’s taken off of the consumer-y email providers.

    Look more closely and you’ll see WHERE people are competing with email apps–Rapportive, Gist, eTacts, Xobni are primarily about business contact information or CRM. And of course the companies in the security space, email marketing space, and developer space (like SendGrid) are all business use-cases. There are tons of enterprise communication tools, too. I believe my application–www.awayfind.com–is addressing a business need–email urgency and interruptions within the inbox–too.

    There are not very many Xoopits alive today. Threadsy, Inbox2, 0Boxer, and the like do have their work cut out for them. The first to have to get the eyeballs, the latter has to find a way to make money off an arguably niche consumer feature.

    It’s perhaps a bad time to start a consumer oriented email startup, not just any email startup. And, when Xoopit was sold to Yahoo several years ago, there weren’t the integration paths with Gmail, or even to some extent Yahoo and Hotmail, that there are today. Back then the name of the game was marketing. Today the game is distribution, and there are both platforms and app stores that make the landscape very different.

    I haven’t even mentioned the elephant in the room, which is Exchange. They’ve been iterating as quickly as the consumer providers have, now offering better extensibility and language support for developers than ever before. Sure, Outlook is a beast, but its customers are the ones most affected by many of the challenges the startups above are addressing. And people or businesses willing to pay for one software application are more likely to pay for another.

    So, email startups are not dead. Startups that try to win over people with little money on a platform that doesn’t give them attention or distribution are dead. In email or anywhere.

    So, go ahead and change email. I’ll be happy to pay for it.

    1. Jared

      …..And, when Xoopit was sold to Yahoo several years ago, there weren’t the integration paths with Gmail, or even to some extent Yahoo and Hotmail…

      Xoopit was sold last year and their product was initially developed for Gmail and it was later adapted to Yahoo mail. So they were doing whatever the GMail-based companies like Rapportive are doing long before everyone else.

      Just an FYI

      1. I think we’re in agreement here, Om : ). The challenges that Xoopit faced with integrating with Gmail–lack of both distribution platform and API (not to mention oAuth!)–are why Bijan’s recommending NOT to build on top of email.

        I’m well aware of those challenges firsthand, but today the landscape is different in terms of technology and distribution–it’s easier to do both.

        Rapportive is a perfect example of a company that has the advantages that Xoopit didn’t have and also is going after a very different market–CRM.

  6. Patrick Peterson Saturday, November 20, 2010

    I agree completely: “trying to fix consumer email platforms is like trying to fix the phone system”. But a lot of people who have been working in email for the last decade understand this well.

    Email is a very big ecosystem and there are many outstanding business opportunities that don’t involve fixing consumer email. A better title would be, “20 Reasons Not to Start a *Consumer* Email Startup”

  7. One thing I haven’t seen mention of is trying to scale an email service.

    FACT: people HAVE an email address and are NOT willing to trade in the address they – and everybody else they know – uses and ‘loves’.

    When we started building our web version of inbox2.com we found it extremely painful to scale and provide a good experience in terms of speed and responsiveness (think gmail). You need a lot of infrastructure and capital to pull this off.

    Most of the services that exist today – including ours – are pull based aggregators in contrast to the source email systems such as gmail, hotmail, exchange etc, which are inherently push based. This puts a humongous burden on the infrastructure you need to serve only a few customers. Sure there are tricks to improve this but they either work for just ‘some’ providers or get blocked quite quickly etc.

    It can be done and we did it but we have decided that (bummer) it’s not the right business model to pursue. You can not monetize it effectively unless you reach massive scale. To reach massive scale you need adoption and traction, to reach sticky traction you need maturity, to reach maturity you need capital, to get capital you need funding, to get funding you need traction, to get traction you need …. and the circle goes round again :-)

    What we are doing instead now is focusing on parts of the bigger problems around the Inbox, and solving those. We any startup should do from the start anyway (yeah we all learn).

    The second thing I am missing from the above discussion is the social inbox. I actually believe Facebook is in the perfect spot to solve this, think about the problem of spam. It can be solved once you can positively and uniquely identify the sender. Facebook could pull this off.

  8. Om, what do you think of Threadsy? I have been using their service since I saw them launch in 2009 at TC50.
    The service has become pretty robust since then and solves many of my data organization issues. They have more work to do of course (and a few bugs to fix, Rob/Scott if you’re reading this…), but I think that they are doing a good job of solving the inbox problem.
    I’d be interested to know your thoughts on their approach to solving this.
    Cheers.

    Mike

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