Paperless Post was started in 2009, born from a desire of James Hirschfeld, co-founder and Harvard undergrad at the time, to send out a birthday party invite that accurately reflected the enthusiasm, thought and care that had gone into planning his themed birthday party.
At its core today, Paperless Post exists to combine the modern convenience of online with the personal touch and beauty of a traditional stationery. Said another way, Paperless Post sits at the intersection of “really great design” and “extremely easy-to-use functionality” and makes it “easy to communicate expressively on any occasion—from everyday correspondence to milestone life events.” The company has raised $47M to date, sent 100M cards and has 115 employees.
Paperless Post creates value by providing users with a convenient, and often cheaper, alternative to traditional stationery and by organizing and streamlining all the processes associated with hosting an event. This includes keeping track of invitees, responses and event details. However, the majority of the value it provides lies in the breadth of card designs, which is its primary differentiator versus competitors including Evite and Eventbrite.
To capture value from customers, Paperless Post uses a “freemium model,” offering its core product for free and selling premium offerings to a smaller fraction of its customers. In order to use Paperless Post, free or not, users must register, allowing the company to collect valuable data and learn about customer preferences. Then, the user can choose from over 800 free card designs created by in-house designers. To continue as a free user, one updates card’s text, enters recipients’ names and emails manually or via an excel file upload, fills out relevant event details including location, and then hits send – all for free. Recipients receive a personalized message in their email, with an envelope that they can “open” by clicking to reveal the message or event invitation.
To continue as a premium user, one can choose from thousands of more intricate or designer cards (including Kate Spade and Oscar de la Renta) or add premium features to an existing free design, such as an envelope or envelope liner. Any premium feature or premium card costs coins – a basic free design plus an envelope and liner costs 2 coins per recipient and coins can be purchased for as much as $0.30 to as little as $0.06, depending on quantity purchased. Even these premium offerings are significantly cheaper than traditional physical invitations and approximately 25% of all users are converted to paying users.
Recently, Paperless Post introduced PAPER, which allowed users to design cards online and order printed cards. This new segment was designed in response to 60% of users requesting print version of their cards and in recognition of the fact that people are living in a hybrid world, spending time both online and offline. These print cards are offered for a range of prices which are competitive with existing print stationery.
To support this business model and to attract users, Paperless Post’s operating model is focused on offering a premium experience. The company’s employees are primarily comprised of designers and engineers, who are “focused on creating and improving on the ideal version of our platform, product, content, and partnerships for our users.” Specifically, designers create new card designs frequently to engage customers, while engineers focus on integrating with technologies such as gmail, calendar applications and Doodle for convenience as well as improving overall user experience on the website and iOS. The office culture also promotes this innovative environment by offering subsidized courses and conferences in the hopes that exposure to others in the industry or to new learnings will spark employees to design creative new ways to delight consumers. Another aspect of the operating model is the lack of advertising revenue and lack of sale of customer data to 3rd parties. This aligns well with the business model’s focus on providing an aesthetically pleasing and convenient communication experience for users – according to Hirschfeld, “an ad interposes itself in what should be a purely interpersonal communication.” While this operating model does not maximize revenue, it does enhance the customer promise. Additionally, when Paperless Post entered the print card market, they chose to leverage their existing engineers and designers to maintain consistency while partnering with a printing company located close to a major airport, to offer quick shipping to customers and reduce internal costs. Finally, in order to focus on what they do best, designing, producing and distributing personalized stationery, Paperless Post chose to partner with Carpathia, an Infrastructure-as-a-Service company that provides a high degree of responsiveness and flexibility across Paperless Post’s data infrastructure. Working with Carpathia allows Paperless Post to seamlessly deal with an uptick in traffic around the holidays and will allow it to scale up over the coming years, without having to pay for unused infrastructure today.
In summary, I believe that Paperless Post’s business and operating models are aligned to provide customers with an elevated and convenient communication mechanism.