Is paper piling up? Send it off to Pixily
Netflix-style start-up scans, digitizes, and, if needed, shreds your files
Before 1998, when Netflix Inc. began operations, the idea that your mailbox might somehow compete with the neighborhood video store was inconceivable.
This week, a newly launched Waltham company will try to convince consumers and small-business owners that the mailbox can render the filing cabinet obsolete.
Like Netflix, Pixily has bright, durable envelopes. The difference is that instead of sending DVDs, you send Pixily a stack of documents you'd like digitized. Pixily scans the documents for you, makes the text searchable online, and then either returns the documents to you by mail or shreds them and recycles the paper.
A plan that allows you to send in one envelope a month (envelopes can contain up to 50 items) costs $14.95 per month.
Will it fly? Pixily, with its sprightly name, is onto something big. Who doesn't have a desk cluttered with papers that can't be thrown away, but might never be glanced at again?
Shipping them off for scanning and storage eliminates the job of figuring out where to file them, solves the problem of limited space in a file cabinet, and yet makes them more accessible than they'd ever be in a manila folder - just perform a Google-style search to locate that old credit card bill you're looking for.
But to make Pixily a household word, the company's founders will need to crack the riddle that faces every entrepreneurial venture: How do you generate awareness and acquire customers without spending yourself into oblivion?
Pixily's founders, led by its chief executive, Prasad Thammineni, have built complex Web systems for companies like Fidelity Investments, Sun Microsystems, and IBM. They left their consulting lives behind last July to begin working on Pixily, forgoing salaries to try to get the idea off the ground.
Big companies, Thammineni says, spend about $5 billion annually on document storage and archiving, but there isn't a solution targeted to small businesses, home office workers, and individuals. In February, they started a test of the service with about 200 users.
Here's how it works. On Monday, I sent a package containing six sheets to Pixily, using a bright green Tyvek envelope the start-up had provided. I didn't need to add postage, and the envelope had already been coded with my customer ID, so Pixily knew who had sent it.
On Tuesday afternoon, e-mail from the company let me know my documents were available online. When I logged in, I saw images of the documents I'd sent in, which included a hotel receipt, a page of typed notes, and a printed-out PowerPoint slide. All the text had become searchable - except for the handwritten stuff - and I could give the documents labels (like "travel receipts") to organize and categorize them.
I could choose to share one of the documents via e-mail, download it in PDF form, or print it out again.
On Wednesday, the originals were back in my mailbox, along with a new envelope for future use. (Users can also upload already-digitized documents from their hard drives to Pixily for archiving.)
Thammineni says the company has lots of thoughts on what to do next. Pixily eventually plans to offer higher-end pricing plans that encourage users to send entire file cabinets of documents, so they can "go paperless." They'll set up direct relationships with your bank or wireless company, and pull e-statements automatically into your Pixily account each month.
The two big costs of the business are postage (between $2.50 and $3.00 each time a full envelope travels to and from Pixily) and labor, since humans must feed the documents into a scanner and then package them for return.
But Pixily's founders say they've built a decent profit margin into the company's monthly fees, which range from $14.95 for one envelope and 3,000 pages of online storage to $59.95 for four envelopes a month and 12,000 pages of storage.
For now, scanning takes place at Pixily's Waltham office. But as it grows, the company, which has six employees, may have to add scanning centers around the country, similar to Netflix's DVD distribution depots.
Pixily has economized by building the entire website atop Amazon.com's Web services infrastructure, which allows a company to rent servers and storage space as needed. "That gives us the flexibility to add more servers based on our demand, as traffic increases, instead of paying for them at the outset," says chief technology officer Vikram Kumar.
Though Pixily has had a few conversations with venture capitalists over the past year, it hasn't raised any venture capital. One possible reason: A key challenge will be finding a marketing strategy that clicks with customers, and none of the founders have marketing backgrounds.
Rob Go, a principal at Boston-based Spark Capital, has met with the company and tried the service. "I really liked the consumer value proposition," Go says. But "there's an activation energy that you need, because there are such high hurdles to trusting a company to handle your documents."
How much is it going to cost to acquire these customers?
Netflix, for example, pays about $30 for every customer it acquires, and that figure is down from as high as $47. An interesting experiment would be for Pixily to distribute a first trial envelope free at Staples or Office Depot, to see if that wins loyal, long-term subscribers.
With the investors Pixily has made pitches to choosing to stay on the sidelines, it's up to the company to figure out how to generate momentum on its own, without a multimillion-dollar marketing budget or a well-paid marketing exec. For now, they'll be spending frugally to pay for ads on Google and trying to get free press coverage.
"Our plan is to show traction in the market, and understand the cost of acquiring customers," Thammineni says. Then, they may make a second try at raising venture capital.
No one ever said it was easy to start a revolution in the mailbox.
Scott Kirsner can be reached at kirsner@pobox.com.
