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By   /   Friday, March 6th, 2009  /   Comments Off on You

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The digital revolution rid daily life of most of its paper documents, but the wood-based stuff persists in one arena: mail. Westlake Village’s Zumbox wants to change that and save time, money and trees.

Zumbox has created a digital mailbox for every street address in the country. It’s hoping billers, government, newspapers and – most crucially – advertisers will sign on.

In 15 or 20 years, no one will be using physical mail, argues Glen Ward, the company’s president. “What we’re trying to do is facilitate a transition – to help people switch to paperless,” Ward told the Business Times. “We call it ‘environmental 2.0.’ It’s pro-business, pro-customer and pro-environment.”

Zumbox has about 22 people at its Westlake Village headquarters and another team of 10 in Buenos Aires. Founded in 2007, the company has run on about $4 million in seed money and plans to seek a venture capital round of about $6 million this spring, Ward said. Ward couldn’t disclose the exact number of users Zumbox has racked up since its launch in February, but called it “many thousands.”

The first question Ward usually gets: How is Zumbox different from the “digital mailbox” – that is, e-mail – that millions already use?

First, Zumbox mailboxes are attached to physical addresses, and the firm sends a PIN number to the address to confirm the user lives there. The user plugs the PIN into Zumbox’s Web site and is set to use a digital mailbox.
That process, along with a host of security certifications, lets Zumbox send and receive sensitive messages – such as bank statements, government communications and medical records – that need more protection than public e-mail systems offer.

Zumbox – which is also an application platform, in true Web 2.0 fashion – can offer more inbuilt services than e-mail, Ward said. “We have a ‘pay now’ option” for billers, Ward said. “Whatever the preferred method of payment is, we can facilitate that.”

The system is also completely digital and doesn’t require senders to change much in how they mail. Digital files that would normally go to a printer instead go to Zumbox, which delivers them.

Zumbox sells eyeballs. Users don’t pay for their box, and the company lets billers, governments and nonprofits send mail for free. But advertisers pay 5 cents per digital “letter.”

Advertisers can target potential customers based on location, sending out, say, a coupon to every address within a two-mile radius of a deli. “We still feel that the advantage we have [over e-mail marketing] is geo-targeting – it’s very specific,” Ward said.

So Zumbox has spam. But Ward is hoping it’s more useful than the spam in e-mail inboxes. Users can turn off mail from any sender, and it’s a closed system, so Zumbox controls what messages get in. “People are paying to send the mail, so we have a quality filter there,” Ward said. “Equally, as a recipient, you know who’s sending to you. We are the gatekeepers for what comes in and what goes out.”

Zumbox is also stepping into the newspaper world. The New Lenox Patriot, a suburban Chicago newspaper, is being delivered digitally to subscribers.

The move comes as newspapers search for a way to make digital content pay and prominent papers such as the Rocky Mountain News in Denver have folded. Ward comes from the music industry, which he said makes him “well aware of the impact of technology on traditional businesses,” he said.

“The timing with the newspaper publications business is very interesting,” Ward said, noting one of the people involved with the Patriot is also an investor. “[The publisher] wanted to get ahead of the curve. He wanted to make sure his customers had a choice between the paper version and the digital version.”

Ward knows it’s a tough market these days for selling eyeballs – advertising budgets have shrunk. But he’s banking that 5 cents a letter will save marketers so much over physical postage that they’ll make the switch.

“Timing is all. Very much at the top of the agenda for all businesses is the cost savings that we present,” he said. “Also rising up the agenda is concern about the environment. We’re providing, we think, a solution [for both].”

And that’s the trick, Ward said. Zumbox wants to convince advertisers that they can go green and save green at the same time.

“For me, it’s always been about [environmental] solutions that will appeal to a mass market – that is, businesses,” Ward said. “All of us want to do the right thing, but it has to be made easy. You have to get the CFOs to sign off on environmental change.”

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