Posted in: Uncategorized

Where Are the Big Consumer-Facing Email Startups?

Email is one of those things that everyone complains about and wishes worked better. Some people want to kill email, some people want to make it work better, and others want to automate away the drudgery of managing email. In spite of all of the complaining about email and all of the entrepreneurial energy spent around making email work better for end users, it has been really hard to build venture scale business in and around consumer-facing email services. Yahoo recently acquired Xobni, which had made some good products in the space and had been at it for several years. There are tons of new companies including Contactually, Sanebox, Boomerang (Baydin) and others who are still in their early days but making good traction. I hope one of the current crop of players can grow into a really big company some day (disclosure – I use lots of those products but am not an investor in any of them).

To be clear, there are some places where you can make money in email. The anti-spam companies in the 2000s made good money selling anti-spam services to consumers and businesses. There are lots of good businesses that exist in B2B and B2C marketing (ExactTarget, ConstantContact, MailChimp) and email infrastructure (Sendgrid, Amazon, etc.). I’m talking specifically, though, around products and services targeted at email end users, mostly consumers or business people who use email on a regular basis. I think of them in two broad categories:

Email clients – I have used (and will continue to use) email clients that make managing and dealing with email much easier. The latest incarnation of successful email clients includes Sparrow (acquired by Google), Mailbox (acquired by Dropbox), and Mailplane, and Boxer. Prior to that, we had lots of other ones including Oddpost (acquired by Yahoo) and many other 3rd party alternatives still exist.

Email services and extensions – The other big bucket of services includes a set of services that make working with and managing email easier. That’s everything from Xobni (acquired by Yahoo), Rapportive (acquired by LinkedIn), Sanebox, Unsubscribe (now part of TrustedID), Outbox and many many others that do everything from triaging your mail to keeping spam out of your inbox.

Despite all of the frustrations around email, it has been pretty hard to build big, venture scale businesses in and around email. I’ve been scratching my head as to why this is the case and there are a few hypotheses I have around why this is the case:

Email is not one market because everyone uses email differently – Even though everyone complains about email, everyone seems to use it differently. As such, it’s hard to build tools and technology that address a large enough chunk of the audience to allow companies to achieve scale. There isn’t one market for email technology – it’s a market of mini-markets based on how people use and manage their relationship with email.

Many consumers are unwilling to spend real money on a service (email) that they get for free – One other hypothesis is that because most people get their email for free, they think of email as free. As such, they are unwilling to spend much money to make that experience better. Rather than spending money to make email work better for them, they would rather just suffer with the status quo. This makes it hard for some services to remain independent.

The large email providers (Yahoo, Microsoft, Google, AOL) have big balance sheets and will quickly gobble up teams whose interfaces or services are getting traction. Given the size of their respective audiences, it’s hard for the larger companies to tinker with core email without risking alienating their audiences. So they allow smaller companies to experiment with new services and UI paradigms and quickly snatch them up when they start to get traction.

If you’ve been involved with building a consumer-facing email product or service and have something to contribute, I’d love to hear your perspective. Feel free to leave a comment below or send me a note @chudson as I’m looking to learn more.

Back to Top