Startup Junkies Reaction Paper #1: Earth Class Mail
An inherent fundamental risk of any startup is that when revenue is not positive, everything put into the company becomes an expense, which is no different for any other company operating in the red. A startup has to avoid spending money that it does not have until it secures adequate capital. As this episode states, nine out of every ten startups fail, and some of the biggest factors are poor product/service selection, poor market selection, and/or an inability to raise proper capital. My initial reaction to this episode is that Earth Class Mail, and their idea of the digitization of traditional mail to an electronic form, is phenomenal. It is synonymous with other forms of pervasive and ubiquitous universal communication such as cellular communication, voicemail, or email, and is a phenomenal business concept. However, the amount of risk, and how it played out in this episode, is equally phenomenal. The liquidation of assets, such as 401Ks, IRAs, and planes, in an effort to secure capital, is a huge gamble. Every other primary form of communication has gone digital other than traditional mail, which makes this a huge, unexplored market opportunity for any new startup. Taking on the United State Postal Service’s communication model and delivery method to change the way individuals receive and handle their everyday mail is both incredibly ambitious, and incredibly lucrative to a company that is successful. This service has the potential to be a success in the short run as an added-value service to the current system, or as a game changing market solution in the long run. To be able to scan, sort, and deliver mail electronically, primarily to smart phones, so that traditional mail follows individuals wherever they go, is a game-changer. The analogy that Earth Class Mail’s CEO uses to describe the addition of the company’s service to traditional mail to that of adding cellular capabilities to...
Please join StudyMode to read the full document