Sunday, November 4, 2012

Alexa Hirschfeld, CEO of Paperless Post

Welcome Alexa Hirschfeld, CEO of Paperless Post back to Harvard! Alexa graduated from Harvard College in 2006 and has since co-founded the leading online stationary company.

Starting Out
  • When you're starting out, it's hard to tell what you should be spending your time. Example: large internal debate on whether or not to spend development time on envelope liners. Initial thought was: that's the last thing we should be spending our time on. But people cared about whether their magenta liner would match their periwinkle card. People cared. So what started as a seemingly silly internal debate really changed the direction, because the introduction of liners created explosive growth in revenue. From there, we understand that people are willing to pay for customization.
  • Was told by a prominent business person that "people won't pay for pretty .jpegs". He was wrong: people will pay. (And, they were .pngs!)
  • People were really negative about wanting to go B2C instead of B2B. We raised our initial round thinking we were going to be more B2B and reach organizations who were planning events. We thought we would be an Eventbrite model where 501(c)3's would use our product for fundraising and we would take a cut of purchase. But then we saw explosive growth on the consumer side, and the consumer side ended up requiring more scalable. But then the question is how to get consumers to pay? The answer was charging people based on customization, and creating a freemium model if people don't want to pay.
Huge Network Effects
  • It's about the guests, stupid. Only 30% of people RSVP, but 60% of people see the Guest List. 
  • Upon receiving the 3rd card, a 225% increase in registration. After the first card, they say, "this is neat." After the second card, they say "this is just like someone else's card." After the third card, they say, "I guess this is what we're doing now.
  • We did a test on social functionality. If you login, you can see the guest list. Registration numbers went through the roof because people wanted to register to see the guest list. Doubled receiver conversion rate in a couple of weeks. Social features for receivers. Private messaging for hosts and guests. Next up: guests can have conversations with each other. Social features created a hockey stick effect in weekly user growth.
New Products
  • It's hard to tell what users want. When you survey people, users want everything: wine tags, gift tags, menus, tote bags, etc.
  • New product: Paper by Paperless Post. Hard for something named "paperless" to actually be selling a hard paper product.
Additional Thoughts:
  • You have more than 1 customer: senders and receivers. Senders are a tiny sliver of the total population of people who interact with Paperless Post. We didn't think about this initially, but then we realized that receivers are as important and are also our user. Also, it's a free user acquisition channel.
  • Nielsen's Participation Inequality: "90% of people are lurkers. 90% of postings are from 1% of users, a big participation inequality curve. As a founder, you don't change the fact that there is an inequality curve. But you change the shape of the curve."
  • Vanity is what drivers PaperlessPost, at least for senders. 
Thanks Alexa - we loved the keynote!

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