Ron Wiener’s Earth Class Mail is changing the way we get mail. And in the process, he is making a positive impact on the environment. On the flip side if you are an entrepreneur or a millionaire in training this is THE most informative interview I have written about.
In 2004 Ron Wiener started Earth Class Mail. It is a global digital post office, delivering postal mail to customers around the world via the internet.
What I love about Ron is that he doesn’t blink an eye when he says he’s out to build the next FedEx or Google. This may sound like hype but Ron bares his soul in this Weekend Entrepreneur interview. From the inside scoop on investors to the challenges he has had to overcome, the low down on the entrepreneur’s mindset, how he feels about having a day job as compared to a business and so much more.
Vocation?
RON: CEO of rapid-growth companies.
Recent breakthrough?
Ron: We figured out how to scale our automation, so that a national post office can offer the Earth Class Mail service to all the citizens of their country.
Role model?
RON: Benjamin Franklin
Career mantra?
RON: Make sure your activities each and every day contribute in a meaningful way to shareholder value. If you can steadily improve upon what you are able to contribute you will be justly rewarded, and your own wealth creation will take care of itself.
What inspired you to start this business?
RON: What inspired me to start Earth Class Mail was the classic “necessity being the mother of invention� story. I was tired of spending an hour of every day driving to collect mail from various offices and PO Boxes for all the different ventures I’m involved with, and wanted a way to retrieve my mail, shred and recycle the junk, deposit checks, etc., from anywhere, anytime, just like I handle my voicemails and emails. This is the sixth business I have founded, being a battle-hardened serial entrepreneur.
What is unique or special about your service that gives it an edge over your competitors?
RON: No other players have the automation, security and confidentiality assurance systems we’ve developed at Earth Class Mail. We’ve pulled together a seasoned team and deep-pocketed venture capital backers, as well as strategic partners. We’re out to build the next FedEx or Google – and have attracted the talent and resources to make it happen. During the past few years we’ve developed a formidable quantity of proprietary technologies around scalability, such that our system can eventually become a platform for the digital transformation of national post offices. We recently initiated a strategic partnership with Microsoft to scale our systems to support millions of simultaneous users.
What if any personal challenges inspired you to launch your business?
RON: I launched Earth Class Mail because of its potential to massively impact the economy – and the environment. When you think about it, more than 90% of the mail we receive is recycled or shredded. People want the information on the paper, not the paper itself. They want the cash deposit, not the paper check itself. When you think of the ramifications of this, that if everyone had the option of receiving their postal mail electronically, then only a tiny percentage of the mail we expend so much fuel and resources to deliver today would actually have to be physically delivered.
There are few things I’ve encountered in the for-profit world that can have such a massive impact on the environment today, right now. There are two parts to sustainability. Creating new alternative energy sources is crucial, but that’s only one part. Reducing our energy consumption and pollution is the other part.
According to the US Government, the post office is the third largest consumer of energy after the DOE and DOD. In the United States, paper companies are the third largest manufacturing polluters. What drives me more than any economic goal is having a meaningful effect on what kind of planet we leave behind for our children.
Were there any challenges that you experienced along the way that you had to overcome?
RON: The first challenge was that of convincing investors that a) the world needed this service, b) we had the technology to make it scale cost-effectively, and c) we had the right management team to pull this off.
Once we demonstrated real customer demand from more than 100 countries, and recruited an amazing team including the guy who managed 800,000 operations employees as the Assistant Postmaster General of Logistics for USPS, we started to see serious engagement with top-tier venture capital funds who like “swing-for-the-fences deals.� It may surprise a lot of people that most venture capitalists don’t see realizable billion-dollar business plans every day. In fact, with all the me-too business models out there, it has become a rarity. The flip side of that is that it makes it harder for investors to believe in a billion-dollar business plan until they see plenty of proof. The challenge was surviving the lean years to get to the point where they could call enough paying customers to hear the proof with their own ears.
Did you need to have a certain mindset to achieve success?
RON: Of course you need to be incredibly persistent to overcome the challenges of getting a new business off the ground. 80% of entrepreneurs either do not have the intestinal fortitude to survive the first year or two, or just didn’t bake their ideas enough before launch. The other 20% have the ability to tough it out until they figure out their formula for success.
Have you noticed certain advantages to being an entrepreneur versus a day job?
RON: In a startup, there is a much tighter connection between your everyday decisions and shareholder value. In every “real� job I’ve held in even modestly large companies there was a disturbing disconnect between what I observed other executives doing and what truly drives shareholder value at the end of the day. People get caught up in bonus-driving goals that are linked to irrelevant metrics. In a startup, you will know your metrics for staying alive and getting to the next plateau – whether it is turning cash positive or hitting key milestones for investors. In a startup, the entire management team tends to be much more in tune with what truly matters.
Has it been difficult to get financing for your company?
RON: At first, yes. We made the mistake of imagining that venture funds would be eager to throw lots of capital in early to capture such a huge market opportunity. However, they wanted to see traction before writing big checks, so we had to go back to traditional angel financing to get the business to a stage where we could show VCs lots of paying customers and verifiable interest from large enterprise customers.
By the time we raised our first significant funding round, the management team had worked more than two years without salaries. We were headquartered in Portland, Oregon – a place long-known for its great quality of life, but also for its inhospitable climate for rapid-growth startups, and especially for risk capital formation. We moved corporate headquarters to Seattle, where investors are much more accustomed to swing-for-the-fences business plans. Once we were able to get in front of the right investors and recruit new senior executives known in their own community, funding became dramatically easier, almost instantaneous. In the Keiretsu Angel Forum alone we broke new records for participation and amounts raised, and we eventually attracted the largest and most respected venture fund in the Pacific Northwest, Ignition Partners, to lead our Series A fundraising round. My only regret was that we didn’t move north sooner.
Has the media picked up on your story? If so what have you done to attract the media?
RON: We have received coverage in online blogs and news sites such as TechCrunch, as well as local press including television news stories in the Pacific Northwest. Mail industry publications were quick to cover our disruptive technology, and we are being invited to speak at major industry conferences from Washington, D.C. to London and Berlin. We published a white paper that got picked up around the world by the postal industry, post office CEOs, regulators, academics and technology vendors. The paper describes the recipe for a national post to transform itself to the Internet age by employing our platform. It was so well received we changed the name of the company from Document Command to Earth Class Mail a week after its publication.
Perhaps the most exciting media exposure opportunity is a new cable TV series called “Startup Junkies� set to air in January 2008 on the MOJO Network in high-definition. Earth Class Mail was selected from a wide range of startups as the sole focus of the first season of this breakthrough documentary series. They are currently filming eight half-hour episodes exclusively about our company and what it’s like to work inside a startup. The network was looking for a company that did something that would be universally understood (everyone gets mail, at home and at work), and that had a reasonable shot of becoming “the next Google or FedEx�.
Did you have mentors to help you get started?
RON: I’ve been very fortunate to have several excellent mentors throughout my career. I dropped out of Carnegie Mellon University after one year, chasing the shiny object that was calling to me from Silicon Valley. The personal computer industry was booming. From ages 19 to 24, I only held jobs in which I reported to the CEOs of rapidly growing technology companies – all of whom were fantastic mentors to me. By age 25, I had raised my first venture capital round for my first startup but did not yet know how to build a good board of directors, so my VCs were my only formal mentors. By that time I had already met plenty of senior CEOs in the business community who I sought counsel from when I had tough decisions to make. Perhaps that is why I often advise young CEOs on their business challenges. Sometimes I invest in these companies, but usually the best thing I can do for them is pass along the mentoring that has been given to me over the years. Capital is far less important than making the right decisions in how to deploy it. I will always be grateful to my first two bosses, in particular, who put me in roles that were akin to “assistant to the president,� where I was able to participate in many of the day-to-day meetings and decisions that went on in the executive suite. The head start this gave me in business was immeasurable.
Approximately how much money did you invest before your business became profitable?
RON: Let’s put it this way. The first thing I did was to sell our beloved B36TC Beechcraft Bonanza airplane and re-finance both a first and second mortgage for the seed capital we needed. Plus, our entire management team went without salary for more than two years. In hindsight, I can look back and say we “skipped an A round� by living off of small convertible debt investments and refraining from drawing salaries until much later. But at the time, none of us believed we’d go more than six months without salaries. Investors wanted to see a lot more proof of traction than our early team members needed to see before taking the leap of faith - and that, quite frankly, is what is often required to get a bold new business idea to a fundable stage – real skin in the game.
How long did it take before your business became profitable?
RON: We’ll be expending tens of millions of dollars of investment before any expectation of profitability. This is a global operation much like a FedEx or UPS, requiring physical plant investments as well as a substantial amount of software and IT investment before we expect to generate a profit. Because our customers either sign-up for pre-paid subscriptions or license our platform as a software-as-a-service, our cash flows are extremely strong.
Are you still working at your full-time job, and approximately how many hours per week do you currently spend on your business?
RON: I worked other projects for the first six months of the business, mostly to feed its cash flow. For the last three years I’ve been involved full-time with Earth Class Mail. That means 6am to 11pm on weekdays and 8-10 hours on weekend days. Vacations are rare and usually interrupted with phone calls, emails and writing projects. Not everyone is physically or psychologically able to endure such a commitment of personal capital but I knew going into this venture that it would be a 24×7 global business with tremendous demands on my time. I’m also fortunate to have an exceedingly supportive wife who has had to tolerate my being gone the majority of the time.
We now work even harder because our own momentum keeps us charged up and jumping out of bed each morning eager to conquer the next challenge. The taste of success stirs up even greater passion in the team.
What resources were most helpful to you when you were starting your business?
RON: Most cities have non-profit entrepreneurial support groups, such as the Oregon Enterprise Network in Portland. These are so helpful that I tried to join their boards whenever I could, as it only increased my exposure to mentors as well as passionate entrepreneurs. I held the president post of the Oregon Young Entrepreneurs Association from 1991 to 1994, devoting insane amounts of volunteer time, but creating relationships which have lasted for many years and that I still leverage today, both in business and personal friendships.
Guy Kawasaki’s “Art of the Start� is a must-read that I’ll sometimes give a new entrepreneur as a gift, among Guy’s other good books. I like reading autobiographies and biographies of great leaders and entrepreneurs.
Some of the best lessons, frankly, can be gleaned from analyst reports written about contemporary companies each and every day. Few entrepreneurs do enough real-time weekly research on their own industry, and even companies in other industries from which parallels may be drawn. I make it a priority to study the vast amounts of free information available through the Internet. Since most entrepreneurs come out of engineering or sales, few have been steeped in financial analysis or market research to know how to do this well, or even to understand why it’s important to understand the macro-economics of your large competitors, the industry as a whole, and the global market.
I have had the good fortune of senior Wall Street financial executives and analysts join our board, like our current chair, Chris Kwak, who has drilled into my consciousness the importance of understanding the Darwinian capital markets. What you may think is extremely important today may have no bearing in the big picture, in what will eventually have the most impact on investor ROI and the exit path for the company. They don’t teach enough of this in business school.
What ways have you found to be most effective in marketing your product or service to get sales?
RON: Internet marketing is such a godsend when I compare to what we used to have to do “in the old days� before Google advertising to get a startup off the ground. These days it is incredibly simple to find customers around the globe while spending very little money. The problem is that search engine marketing doesn’t scale, so eventually you need to bring in direct mail and other traditional advertising methods, and a sales force to keep the company growing rapidly. Even when you have a million-dollar-a-month marketing budget, you still want to test new products and new marketing concepts online before you invest in other media. The ability to get a quick reaction to your messaging or offer is amazingly useful no matter what marketing channel you end up concentrating dollars in, whether television ads, radio or billboards.
What tips can you give others who want to embrace their dream but, don’t have the confidence or feel they don’t have what it takes to succeed?
RON: If they don’t feel it in their bones they probably should pack up and go home – they simply won’t have the resolve to survive the inevitable rejections and disappointments that kill most start-ups. That said, if their concept is good but they lack the experience to pull it off themselves, they should build a good board of directors and leverage that board to help recruit the right executive management team. The best way to avoid getting ousted out from your own company is to let someone else more experienced take the CEO position. That way, when the CEO needs to be replaced, they can still stay in the company and continue to contribute and share more of the reward in the end.
What would you tell someone who wants to be an entrepreneur but doesn’t know where to begin to get their idea up and making money?
RON: Build a “sniff test� council of the ten smartest business people you know. Sit down with them one at a time to go through your different ideas and see what kind of reactions you get. For the cost of lunch, this kind of early feedback is invaluable in preventing wasted cycles later. When ALL ten people say they think you’re onto something with one of your ideas, then put that idea “in the running.� Keep working the list of ideas until the strongest one bubbles to the top and then move on it.
Last but not least, describe your business including monthly costs?
RON: Earth Class Mail delivers postal mail via the Internet. Customers see their postal mail online and choose which items to open and scan to a PDF. They can also shred, recycle, archive or forward the mail piece. Our customers span 120 countries, and include traveling business people to Fortune 500 companies and government agencies. The service starts at $12.95/month. For more information, visit www.earthclassmail.com.
What’s next for Ron Wiener?
RON: Homes and buildings designed to accommodate personal robots that unobtrusively perform the menial tasks of our lives.
If you have questions, comments or a great story to tell— let us know. Many of our best ideas come from readers like you!
Keep smiling,
Michelle Anton & Michelle Price
This entry was posted on Thursday, October 4th, 2007 at 10:42 pm and is filed under Online Business, Work, Starting a Business, Inventor. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.5 Responses to “Earth Class Mail Reinvents How Mail Is Delivered”
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October 8th, 2007 at 9:49 am
[…] Earth Class Mail Reinvents How Mail Is DeliveredEntrepreneur - 9 minutesIt is a global digital post office, delivering postal mail to customers around the world via the internet. What I love about Ron is that he doesn?t blink an … […]
October 8th, 2007 at 9:50 am
[…] Earth Class Mail Reinvents How Mail Is DeliveredEntrepreneur - 10 minutesWhat ways have you found to be most effective in marketing your product or service to get sales? RON: Internet marketing is such a godsend when I compare to … […]
January 23rd, 2008 at 10:23 pm
[…] October I interviewed Ron Wiener, CEO of Earth Class Mail and I have no doubt that he is on his way to stardom. This start-up has […]
June 22nd, 2008 at 4:11 am
Hey, I have been using Earth class for some time. I know their services arent the best for everyone but i do feel that what they provide is worth its weight in gold!
When abroad i use a similar service, www.privatebox.co.nz and they do a superb job too.
July 10th, 2008 at 12:59 pm
Weak article. How does Earth Mail save the environment? The mail still gets sent, it just goes the “last mile” via the internet. It might be a decent service (although do any of you use it? Are any of you dissatisfied with the way your postal mail box works today?) but I doubt this guy’s 6th bite at the apple will go any better than his previous 5.