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.

  • Here’s one thing I’d like: A web email service that I can use with any mobile client. On the web, it enables me to install filters and controls such as the number of characters in any message, automatically filtering out messages I never interact with (a learning Sanebox), gives me stats ongoing about how I use email and how often I act on it, etc. Ultimately, these would just be simple ad-ons to Gmail but they have no incentive to do it.

  • If someone built that client, I’d use it. But I don’t know who would have the incentive to build it.

  • Right. It would take someone special who felt deeply about it.

  • niyogi

    @chudson:disqus i’m working on a project called @Suggest that enhances email from a composition standpoint. and it’s a gmail addon like rapportive. can get you an early glimpse if you sign up at http://www.atsuggest.com.

    i think build full-blown email clients is difficult and people need their email client to “just work”. way too much cost/risk associated with switchover from both a provider and user perspective.

  • Done – just signed up!

  • Adam MacBeth

    Mostly #2 and a bit of #3, though it’s probably just as likely that the large cos just build these in-house since most of the startups are incremental features at best. Gmail is doing a good job of adding incremental features, and while you can quibble with their implementation it’s not clear that anyone else can do better – and certainly not for free.

    Sure, people complain about email, but it’s not clear what problems need to be solved. I’ve never heard a clear articulation of what’s wrong with email. Xobni in particular didn’t solve any real problem, so while some small number of people geeked out at the data they provided, no one else cared.

    I’d wager there will never be another big email startup, just like there will never be another big web browser startup. These happened once in the past (Hotmail, Netscape), and now that there are established, high-quality free offerings from the bigcos, there just isn’t anything there. I think there’s plenty of room for innovation in communications, but looking specifically for innovation in email is rearguard thinking.

  • Really smart feedback – thanks for the comment. I suspect you’re right on email today being like the browser.

  • Rishit @ CloudMagic

    @chudson:disqus I’m co-founder at CloudMagic. We enable instant search through your entire mailbox, on any device. Search on email is critical, especially when mobile, but it’s so broken. Do give it a spin if you get a chance.

  • Maneesh

    shouldn’t Sanebox just do this?

  • For users, the use of services rather chaotic. They can not find your way, make mistakes, because it is not clear how to proceed to their done

  • Even better, Baydin should merge with Sanebox to create their own brand new email protocol with their offerings baked in. Baybox.

  • philjeudy

    Nothing can replace email, but there are opportunities to level up the experience of email in a collaborative way. Charles, CCGenie is a French startup working on email, check this out http://www.ccgenie.com/

  • http://www.sailthru.com are doing some pretty cool stuff. Using segment data & open rates and a lot of secret sauce, they’re increasing delivery rates. I haven’t used the service myself.

    post-spam email company that people can love?

  • JDG

    We’re doing some interesting stuff (and have plans for a lot more 😉 in the email client space over at Evomail (http://evomail.io)!

    Lots of room for innovation — email isn’t necessarily broken, it just hasn’t kept up with the pace of change on the internet. It’s 2013, not 1985 after all. 🙂

  • Nick Mehta

    This is definitely a question that’s puzzled me for a long time. Having worked in the back-end (security, compliance, etc.) part of email, I always hoped the front-end would create new companies as well. But my conclusion so far is maybe email is too much like a public good / utility – where it’s difficult for any non-monopolist to make money from it. In a way, email clients are a lot like browsers.

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    yes the perfact way for good communication to others peoples

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  • Eddie Wharton

    Rapportive and Yesware are both fantastic email apps. Yesware is made for salespeople, but anyone who relies on networking can benefit to a degree