Consolidating Junk Mail with Updater.com’s David Greenberg
October 17, 2011
JOHN SHEGERIAN: Welcome back to Green is Good, and we’re so honored today to have from New York City with us on the line David Greenberg, the founder of updater.com. Welcome to Green is Good, David Greenberg. DAVID GREENBERG: Thank you so much. JOHN SHEGERIAN: Hey, you know, David, like every other person in this world, you have a very interesting story and journey. I’d rather you tell your story. Instead of me reading your wonderful bio, I’d rather you tell your story of how you grew up, how you got educated, and how you came to the founding of updater.com. DAVID GREENBERG: Sure. I graduated from the University of Pennsylvania and Cornell Law School, and I formally practiced corporate law in New York at Cravath, Swaine & Moore. I left my law firm job to start Updater about a year-and-a-half ago. JOHN SHEGERIAN: Gotcha. So, you were a corporate lawyer, and how many years did you practice? DAVID GREENBERG: A little over three years. JOHN SHEGERIAN: Three years. What was the epiphany? What was the moment that you said, “A) I don’t want to sit here and practice law every day the rest of my life and B) I’ve got to find a vehicle to exercise my entrepreneurial jones, so I’m going to go do something different.” Where did this converge, and how did this happen? DAVID GREENBERG: Sure. I actually did have a moment where I realized I wanted to start this business. About two years ago, I was moving, and I needed to change my address. I actually started making a list of all the places that I needed to reach out to, and I realized that directly updating all my businesses, schools, and organizations would end up taking me probably a few hours. So, I searched online for a service that might just do this for me, and I couldn’t find a trustworthy site to help me. Considering about 45 million Americans change their address each year, I found it really surprising that a great service didn’t yet exist to help people safely and efficiently change their address. I began researching this industry, and I found that virtually everything related to postal address is inefficient for both consumers and businesses. Of course, consumers currently have absolutely no control over who can access and use their postal address. Consumers passively receive paper mail from anyone who buys their address, and when they move, distributing the new address information is time consuming and inefficient. During that process, people unwittingly make their new address available to marketing firms and other unauthorized mailers. In fact, I believe that the root cause of junk mail in U.S. is the change of address process, and on the other side, businesses and organizations experience very costly database decay. I’ve spoken with some universities that only have accurate address data for less than 50% of their alumni. So, I began to realize that a good user-friendly website that gives consumers control over their own address could solve the inefficiencies that I discovered, and it would greatly benefit the environment. So, I quit my law firm job and got to work. JOHN SHEGERIAN: OK. So, before you quit, did you go on GoDaddy and buy Updater or come up with the name or the brand, or did you do it after you quit, while you were sitting in your apartment? How did that happen? Explain because we have so many entrepreneurs, not only here in the great United States, but around the world that are always thinking, “Hey, this guy is amazing. He’s a genius. How did he really do it?” So, walk us through a little bit of the process. DAVID GREENBERG: Actually, the original name of the website was Updtr.com. We kind of had a Web 2.0 version of the word because that was available on GoDaddy, so I was able to get it for about $10. Then after we raised some money, we realized that we probably should try and purchase updater.com. We weren’t able to do that until we raised some money, but initially we just had a very Web 2.0 name. JOHN SHEGERIAN: Are you the sole founder? Do you have lots of partners or a couple partners? How did that go? DAVID GREENBERG: I’m the sole founder, and I started the business myself, but I’ve had a lot of friends help me along the way. Some of my friends from Cravath have been helping me and a lot of support from a lot of people, but I suppose I’m the sole founder. JOHN SHEGERIAN: It’s like a jailbreak, though. You’ve got out of Cravath, and now your friends are watching you saying, “Take us with you.” Talk about, though, being a first-time entrepreneur. Was your mom or dad an entrepreneur or anybody in your family, or is this a first-time family event, or is there an experience in the background on being an entrepreneur in your family? DAVID GREENBERG: No, there’s really no experience in my family. This is my first time being an entrepreneur, and I’m learning a lot as I go, that’s for sure. My education was in law and mathematics, so I’m definitely learning as I go. JOHN SHEGERIAN: Got it. So, now you got the site, great name, you have a great vision here, 45 million people a year, that’s approximately what? One-sixth of our whole population almost, right? DAVID GREENBERG: Yeah. People move very frequently in this country. JOHN SHEGERIAN: Wow. Who knew? So, now you have the URL, you have at least 2.0 and you know you’re probably going to have to buy the real domain one day. How do you start thinking about raising money? Who do you go to first? Who was your first check? Talk about the startup company that merges both technology and green because you’re doing something that’s really the future. You’re merging both the online tech world, which is hotter than hot nowadays, and the green world. So, one and one should equal five here, and we believe it will, and that’s why we’re thrilled to have you today. But how did you start putting one foot in front of the other and putting it all together? DAVID GREENBERG: It was definitely a challenge. I didn’t have any experience raising money, and I just started speaking to individuals who were willing to listen, who I knew invested in Internet startups. I started getting better at pitching the idea, and eventually, after about six months of trying, I started to get a lot of traction. All of a sudden, a lot of people were interested, so I think it took me some time to really understand my own industry well, and then I could perfect the pitch. It took me a long time. I spent about a year researching the offline consumer data market and the postal system. I think once I became a true expert on the subject, then I was able to provide a compelling business plan. JOHN SHEGERIAN: Perfect. Before we go into updater.com, for our listeners out there who just joined us, we’re so excited and honored to have David Greenberg, the founder of updater.com. Please, Mike and I have our laptop and our iPad open right now. Please go to it and look at it if you’re close to one right now. It’s www.updater.com. It’s a great website. Before we go in and talk about all the great features of it, talk a little bit about the timeliness of this interview, David, the United States Postal Service. Why is it so broken? Why isn’t it able to service the great people of the United States anymore, and why does your amazing and timely website fill a huge void that the United States Postal Service just is never going to be able to do anymore? DAVID GREENBERG: Sure. I’m sure your listeners have been reading a lot about the problems that the USPS is currently facing, and I’ll briefly talk about some of the root causes and some of the solutions that we propose. As everyone knows, total mail volume is decreasing, which of course is a challenge for the postal service. But in addition, first class mail volume is declining much faster than advertising mail volume. Now advertising mail makes up a greater percentage of total mail than in the past, and the challenge for the postal service is that first class mail is much more profitable than advertising mail and the structure and size of the postal service remains in place to handle the mail volumes of the past. In addition, an increasingly high percentage of the total mail delivered is unwanted by the recipient, and I believe that this affects the integrity and the reputation of the postal service. So, the postal service has some very difficult decisions to make, and they’re actually doing a great job of addressing the problems head-on and analyzing the solutions. I’m optimistic that the postal service can reinvent itself and become a self-sustaining government entity. There’s been a lot of proposed solutions in Congress, and I’m sure your listeners have heard of some of these proposed solutions. Some involve eliminating Saturday delivery, which a lot of experts believe could save the postal service about $3 billion a year, and I also encourage the postal service to look into cutting back the delivery of standard mail, which is advertising mail, even further, perhaps only delivering standard mail or bulk advertising mail a few days a week. I think most consumers would be OK with that. Also there are a lot of current loopholes and special deals that force the postal service to charge certain customers less than the true cost of delivery. Those deals should be phased out over time. I also think the postal service should look into generating new types of revenue. For example, Congress should possibly consider allowing the postal service to sell advertising space on their vehicles and facilities, as long as those advertisements respect the postal service’s integrity. Of course, at Updater, we think a major improvement in modernization will naturally occur when consumers are put in control of their own mailing address. We hope that in the future, consumers can decide for themselves which mailings that they receive and which they don’t receive. Our site hopes to fill that void. JOHN SHEGERIAN: OK, so let’s talk about that, David. Let’s talk about updater.com. Is it for businesses, or is it just for our general consumers out there, or is it for both? DAVID GREENBERG: It’s for both. For individuals, they can come on our site and really control the privacy and communications settings for their postal address. What that means is they can choose themselves who can access and use their postal address. For businesses, on the other side, they will be able to receive a near real time feed of user-authorized address updates to keep their databases more accurate. JOHN SHEGERIAN: That is great. Wait a second. Let’s talk about some compelling facts. Before we did this interview, we got some great information from you on Updater and also some compelling statistics out there. Talk about how much we pay as a country and as citizens of this country to dispose of junk mail. Who’s listening to this show that doesn’t have a junk mail problem? Basically, updater.com has created a spam button for all the junk mail that we all get. DAVID GREENBERG: Yeah, that’s exactly right. We believe we have created a spam filter for paper mail. The environmental hazards are really serious with respect to junk mail, and the statistics, as you’re indicating, are pretty shocking. About 100 billion pieces of junk mail are delivered each year, and that’s actually about 800 pieces per household. Between 5-6 million tons of catalogs and other direct mail advertisements end up in U.S. landfills. Only 22% of junk mail is recycled, and about half is never opened. As far as the costs, which you mentioned, in addition to the hundreds of millions Americans spend annually to dispose of junk mail that does not get recycled, the manufacturer of that junk mail releases more greenhouse gases than 9.3 million passenger cars, so it’s a very substantial problem. Of course, we believe that if consumers have control over who can access and use their address, these numbers could be dramatically improved because a lot of this paper mail is unwanted by the recipient. JOHN SHEGERIAN: OK. So, now it’s environmentally bad junk mail. Obviously, it’s a nuisance. It’s really not helping further the country in any way, shape, or form because, like you said, half of it goes unopened. So, how do we actually use your website? Walk us through. Walk our listeners through the experience. Also, is there a cost that’s involved? DAVID GREENBERG: Sure. On the change of address side, there’s really two primary features that we offer. One is to change your address, and the other one is to control the privacy settings for your address, which means that you’d get to decide which mail you receive, which mail you don’t receive. The address privacy service costs $5 per year, and the address change service is free. I’ll explain a little bit about both those services. The address change service – When you move, in addition to filing your postal change of address form on your behalf, we enable our users to create an update list. They simply select all their mailers and affiliations that they want to share their new address with, and then we update all their records for them. This will save our users tons of time, and we do all that for free. So, rather than having to raise out to each individual business or organization, we’ll just do it for you. On the address privacy side, we will remove the name, address, and personal information of our users from marketing and profiling lists. Those lists are bought and sold behind your back for the purpose of advertising through the mail system. In addition, as you indicated, we have what we call a spam filter for paper mail. Our users can block any mailer that they choose, mailers being catalogs, coupons, charities. If you get mailers that you don’t want, you can just log onto your Updater account with Facebook or Google and add that mailing to your Do Not Mail list, and then we will contact that mailer as your authorized agent on your behalf, and instruct them to remove your information from their mailing list. JOHN SHEGERIAN: Wow. That is awesome. OK, so that’s for personal use. Talk about businesses, though. It’s compelling for people to do it. The moving service itself just sounds amazing because I know what a pain in the butt it is to change all your addresses when you’re moving and things of that such. Talk a little bit about businesses. How would businesses get involved? Why do they get involved? DAVID GREENBERG: Sure. We have a network of thousands of businesses that accept updates from Updater. They accept both Do Not Mail requests from Updater and also change of address notifications from Updater. On the change of address side, it’s really valuable for businesses, schools, and organizations to keep an accurate database. Currently, most businesses suffer from really bad data decay, which means they have a hard time keeping up with where all their alumni or customers are moving to. We make it really simple for their customers or alumni, etc. to distribute their new address to their database because the consumer can simultaneously update all their affiliations instantaneously and simultaneously on our site. The recipients of that data can receive, as I said before, near real time feed of address updates. We find that most businesses do want to respect consumer choice with respect to mailing. So, businesses, when they receive a do not mail notification, we’re seeing almost 100% adoption that they do take your name and address off their mailing list. So, we make it really efficient for you to communicate with those mailers and let them know that you don’t want their mailings, or let them know that you do want their mailings. JOHN SHEGERIAN: Got it. This is both for people, general consumers, and for businesses. You said when people are moving, there’s no cost associated. So, any of our listeners out there can pass along your great website, www.updater.com, to their friends, families, co-workers, and for moving services it’s for free. DAVID GREENBERG: Right. JOHN SHEGERIAN: Now talk about how much does it cost to help maintain my home mailing lists, and then also my business mailing lists? What are the charges that are involved there? When you’re talking to folks, when you’re doing a discussion on this issue, what is the ROI? Besides having time savings, peace of mind savings, and just the general good feeling that we’re helping the environment, which is so important unto itself, talk about some of the other stuff that comes with it too. DAVID GREENBERG: Sure. The cost, I think I mentioned, for address privacy is $5 per year for the consumer. For businesses, schools, and organizations to receive our updates, we actually are not charging at this time. There’s no reason they wouldn’t want to receive those free updates. I think why it’s important to give control over postal addresses back to consumers, we think that by giving consumers control over who can access and use their address, we can streamline the change of address process, save consumers time, stop unwanted paper mail, reduce identify theft, and help the environment, all through one website. We believe unless consumers take control over their postal address, mailers will increasingly use it as a channel to send thousands of unsolicited paper advertisements. So, the time has come for consumers to take control over their address. JOHN SHEGERIAN: So, businesses and schools right now, there’s no charge. For the general listener out there that wants to use this to continue to adjust their mailing list at their house and hit the spam filter and get rid of the junk mail that’s come into all of our homes across this land, it’s $5 a year. That’s incredible. David, that’s incredible. I promise you, after this show, I will be signing up for your service, and I’ll be sharing it also with my colleagues, friends, and family. Let’s now talk about the business itself. You’ve raised the money. You open an office in New York City. How many employees do you have going? What’s the flow look like? What’s the adoption look like of your business model in terms of people responding to it? What’s the response been like? DAVID GREENBERG: Sure. We do have an office in New York City. We’re located in the West Village, and we have about 10 employees. We’re really excited about the adoption. It’s been a lot of work, but we’ve seen great success so far. It’s only been about seven weeks since we launched, but we’ve seen our user base rapidly expanding since we launched. Already thousands of businesses, schools, and organizations are accepting updates from us, so we think the future is bright for Updater, and we think it’s a good service. We’re excited about it. JOHN SHEGERIAN: It’s more than bright. It’s really bright, and it’s also green, by the way. So, you have 10 employees now. You’re starting to see adoption. Have you had any discussions with large organizations, such as even the United States Postal Service, and offered to take over their moving function, instead of everyone having to go fill out those cards that half the time never work? Have you had any of those discussions yourself with them? DAVID GREENBERG: We have, actually, gotten a lot of calls from some bigger organizations, asking to partner with us. I suspect I’m probably not supposed to be disclosing that. Some of that is confidential, but we have actually gotten a lot of calls from bigger organizations asking to partner with us. Right now we’re not affiliated with the postal service in any way. We work with the postal service, but we’re not affiliated with them. JOHN SHEGERIAN: Got it. So, what does the horizon look for? What do you see the future of the United States Postal Service with regards to your services and junk mail over the next five years? I mean, when you vision out your vision, and you have to articulate it both to your investors and to other people, what does it look like to you? How do you articulate that the best? DAVID GREENBERG: Sure. In the future, we think that the entire postal system will be reinvented, over the next 10 years or so. The first step is giving consumers control. We hope in the future consumers will decide themselves which mailings they receive and which they don’t. Then, the postal service can make the appropriate structural changes necessary to serve the mail volumes of the future. Ultimately, the postal service will need to adapt to modern usage, and that will happen probably in the next five or ten years. We think that the postal service will change its size and structure, and consumers will exercise a different level of control over the mailings that they receive. JOHN SHEGERIAN: When you take the $5 from us, that’s all online over PayPal or some other type of payment system? DAVID GREENBERG: Exactly. We do use PayPal. JOHN SHEGERIAN: How fast? Because I’m signing up for this later today. How fast does it actually work, and how fast does your service really take effect and I can see a difference in my mailbox every day? DAVID GREENBERG: It’s pretty quick. For the marketing list opt-out, those do take a little bit of time because we need to send to each marketing firm, and we contact all the major marketing firms. We notify them that they should no longer be buying and selling your address information behind your back, and your information is removed from their lists. That takes effect within a month or two. But the Do Not Mail notifications that you can send to any mailer that currently has your address, those notifications go out in real time, so as soon as you add a mailer to your Do Not Mail list, we’ll instantly send them a notification requesting that they remove your address. So, you should not be getting any more mail from them in the future. I think you’ll notice an impact within a month or two. JOHN SHEGERIAN: Got it. I assume, then, one of your goals is to have Americans not filling up the landfills anymore with all this unnecessary junk mail, as people start adopting and using updater.com. DAVID GREENBERG: Right. We think it’s best for the direct marketing industry, best for the postal system, and it’s best for consumers to only be delivering paper mail that is wanted. That’s really our goal. We don’t want to turn off paper mail. We don’t want to negatively impact the direct marketing industry. We just want consumers to be in control of which mail they do get. The number that I mentioned earlier about how much paper mail ends up in landfills that’s unwanted could be dramatically decreased. JOHN SHEGERIAN: David, I’m online all the time, as are most people nowadays. Without giving out any names or anything, because I don’t want to help any of the competition, do you have any direct competition? Because if you do, I’ve never heard of it or seen it. Do you have any other online competition that you’re up against? DAVID GREENBERG: There are a few websites that offer some features that are similar to some of our features, but we’re really carving out a completely unique service that gives consumers unprecedented levels of control over their postal address. I believe our site is far more comprehensive than other sites that help consumers with issues related to their postal address. So, I don’t believe there are any direct competitors, no. JOHN SHEGERIAN: Got it. Hey, you know, David, we’re down to the last minute-and-a-half or two minutes here, and before we sign off and say goodbye, we’re going to have you back on again in the next six months and talk about how successful your venture is because there’s no way that you don’t become the Groupon or the LinkedIn of your space. This is a tremendous opportunity for America to get rid of their junk mail once and for all. What pearls of wisdom do you have for our budding entrepreneurs, or let me just say, eco-preneurs out there that want to be the next David Greenberg, that want to come up with the next great concept and business model like updater.com? What have you learned along the journey that you can now share backwards with our listening audience? DAVID GREENBERG: That’s a good question. Thanks. I would say that, along the way, there are a lot of moments that are really challenging. You’re going to come across a lot of people that will tell you that it’s probably unlikely that your site will get any traction, or that your idea is not a great idea. You kind of have to push through that. I think that’s what most entrepreneurs that finally get their site up say, and it’s true. You really have to just keep pushing through and stay very dedicated because it’s easy along the way to quit because there’s a lot of time where you want to quit. I would just recommend staying with it. Stick with it. JOHN SHEGERIAN: Perfect. David, like I said, Mike and I are going to be so excited to have you back on to give us an update on updater.com. For all our listeners out there, please go to David’s great website, www.updater.com. Share it with your friends, families, your colleagues, and business. Everyone should be using this. David Greenberg, we’re so lucky that you’re no longer a lawyer, that you’re actually working to save our landfills and leave a better legacy behind us. You are a visionary and a sustainability leader, and truly living proof that green is good.