The hot new mail app Mailbox has been down for about 4 hours and counting now. This is unfortunately hot on the heels of their much acclaimed launch and much discussion around their controversial queue system that is slowly letting users trickle in over time, as opposed to all at once. The idea was that by making the app free, and then slowly rolling it out to users via a reservation system, they would be able to handle scaling issues on their own schedule. I’m sure that they’ve been exuberant to let more and more people in, but clearly it’s caused issues today.
I fully understand and recognize why the queue system was necessary in that it helped them scale their back-end more gradually rather than need to be ready for full-scale the moment it launched. However, the reservation system has also been a major problem in the App Store where excited users aren’t able to use the app immediately after download. They seem to be exacting their revenge by posting bad reviews on the app – currently over 1/3 of their ratings are 1 star.
Despite Mailbox being absolutely incredible product, and something that I’ve had the pleasure of using and testing since it started in beta a few months back, the fact that it’s down right now is really unfortunate. Email is an absolutely critical portion of my workflow, and I’ve completely fallen in love with the way Mailbox helps me trudge through it all. So unfortunately this is absolutely not like social services going down – I’ve now lost a critical part of my workflow. I’m a big fan, and will see this through, but I’m not sure that some of their newer, more skeptical users will be so forgiving.
Free = more users, but at what cost?
Disclaimer: I fully recognize that my company, Circa currently provides our app for free. I view this as a very different situation: mail and software services, beyond subscription or paid downloads don’t have a direct path towards monetization. News and social services have many more proven options available and we’ll absolutely be implementing some of them this year.
It’s my belief that Mailbox could have been far more successful in both the short-term and long-term by simply charging for the product. Yes, it would have reduced demand for the product almost without question. However, if the demand is artificially inflated by its queue system, and the subsequent users that come to the app as a result aren’t quality users, then what value does the hype or sheer download count provide?
The reservation system was necessary because as a free product, they would need to control scale – especially for such a critical service as email. However, what if they would have simply charged $0.99 for it to begin with? If we were to assume that they’ve now reached 1 million downloads, then I’d bet that maybe half or less would have paid to download it. Sure that’s 500,000 less potential users, but it’s also $500,000 more in the bank. The lower demand would have also meant more people could use the product in a timely manner.
Aside from the initial demand, I’m truly at a loss for how they’ll make money on the product going forward. Granted, it’s their business and I’m sure they have some ideas, but let’s look at the facts:
- The product is currently free, without any restrictions on usage or number of accounts that are supported
- Ads run against email has been done before, like in Gmail or Yahoo, but with mobile we’re talking about much less screen real-estate and likely no room for ads
- It’s much easier to charge up front, and lower the cost over time, than to start as free and charge for something later. This I know from experience because we tried to do this exactly at my previous company SimpleGeo, when we realized that our product was just too cheap.
Charging for their product wouldn’t have solved their current scaling issues, but it would have at least controlled demand better.
Just charge me, dammit
As I’ve said before, Mailbox has already been a dramatic improvement to my email workflow and it’s something that I would pay for, no question. One argument could be that if they charged, then they’d start out with far less users and I’d say that’s likely true. But that’s ok because the subsequent customers they’d have (instead of users) would be paying them and subsidizing their burden on the company instead of being freeloaders. I’d also argue that the nature of their product lends itself well to people with a high volume of email, or who might be more task-oriented, and would likely be of less value to people whose email is less crucial to their livelihood. These customers are already used to paying for software, subscriptions, etc. to make their work lives much better. There’s no question in my mind that if Mailbox provided value to them, they’d pay.
Because Mailbox is indefinitely free, how will they make money and sustain themselves as a business long-term? Without a subscription charge, or advertisements as an opportunity I see their monetization potentials as being extremely limited. I care about this as a user because I love the product and want it to stick around. But how do they do that without any money coming through the door?
The other possibility is that they raise money and hope for an acquisition, but we’ve already seen how that went with another mail app.
What should it have cost?
Initially, I think they could have charged $9.99 for the app though $0.99 is probably more reasonable. This is still $8.00 less than what Sparrow charged and subsequently got hundreds of thousands of downloads with. This would at least have created an initial user barrier that would have been more manageable than their reservation system, and probably less of a detriment to their app ratings. This $0.99 would include access to one email address – think of this as the “trial.” If people thought that the app was great at that point, they might be keen to pay more for additional accounts which brings me to my next point:
Charge an additional $0.99 for each subsequent email address added, and likely as a subscription. Because Mailbox provides me long term, lasting value, I’m much more likely to be happy with a subscription than a standard mail app. They could have also gone further and simply required a subscription regardless of the number of addresses the user had, but that’s trickier.
Alternatively they could have charged based purely on volume. Such as the first 1,000 emails that someone receives, but each additional amount of email is more. This would have been far tricker, and one that I haven’t thought through as much, but it’s an option.
The catch here is, even if they charged for it initially, if adoption wasn’t what they wanted, then they could have gone free just like they started out (and implemented whatever alternative plans they had to make money). Because they didn’t start out this way, they can’t go back without having a riot on their hands.
Startups: start charging for the value you provide
I don’t want Mailbox to go to the way of another product I loved, Unsubscribe.com. They started out with a basic service, and charged for more usage. Essentially it made it dead simple to unsubscribe from a ton of mailing lists and dramatically clean up my inbox – and it worked really, really well. I would have paid them $10-20/mo EASILY, and I was a paying customer already. But then they went free claiming that they’d figured out some way to stay free. Then they died and with it a core part of my email sanity.
If your product provides an invaluable service for users, why the hell is it free? Because it makes you feel good? Feeling good doesn’t pay the bills, unfortunately. Charging for a service means that you’re far more likely to create a sustainable business from it. That’s why I really respect my former co-founder at SimpleGeo, Joe Stump. He’s been working on Sprint.ly and has charged from day one – even during his beta! And guess what? It’s working well for him and he doesn’t have freeloaders using his product. If someone’s not willing to pay, they go elsewhere.
I do love Mailbox, and they’ll get past these scaling issues, I’m sure. But I’m less bullish on their their true long-term potential. They had an absolutely incredible launch, but at what cost?
In general, I hope that startups and companies are more comfortable with charging for the value their services provide their users going forward. Otherwise I’m going to begin having a real distrust in these services that I rely on daily.