Why does your startup exist?

One of the critical parts of succeeding as a startup is deciding who you are. I don’t mean describing what your product does. I mean answering the question, what is your mission? Why does your company exist? For us at Paperless Post, an important catalyst in clarifying our mission came in the form of building an adjacent product (paper), and then realizing we had to go back to our roots.

Most people know of Paperless Post because they’ve received one of our online invitations for a wedding, a birthday, or a holiday party. Over 20% of U.S. adults have used our products, and we have served 120M unique senders and receivers. Last year alone, our users sent over 70M online invitations.

What fewer people know is that, until last October, we also ran an in-house paper invitation business, called Paper by Paperless Post. In four years, our paper business grew to be one of the biggest custom stationery businesses in the country. Then, last spring, we decided to change our strategy, outsource Paper to a leading retailer called Paper Source, and focus on expanding our online offerings.

I want to tell our story, so that our experience can be useful to other startups finding their way.

Launching Paperless Post

We started in 2008 with a simple idea. We created a website that allowed people to create online invitations that looked like custom printed ones. They could send these to their guests’ emails and track responses. The product was based on two insights: organizing events is difficult, and people care about how they present themselves in social situations, including online.

While it sounds straightforward, the product was technically ambitious. It required a smooth, easy-to-use design tool entirely accessible in the web browser. It needed to let non-designers create invitations they were proud of. We charged a small fee from the beginning, believing that people would pay for a high quality product. Many in tech opposed our idea out of principle. The thinking at the time was that “communication was being democratized.” Twitter was exploding. The least trendy thing to do was to bring the formality of the offline world online.

But when we launched Paperless Post, in the fall of 2008, users got it right away. We found out from a news story that Secretary of State Condoleezza Rice had used our invitations for her farewell party from the White House. Not only did people understand the product, they paid to use it. It’s been growing virally ever since.

Going into paper

In 2012, we decided to allow our users to order printed versions of the invitations they had designed. It might have seemed like a weird decision, given our name, but they had really been asking for it — the request to print “some or all of my invitations” made up 60% of help queries.

Paper by Paperless Post was deployed just before Christmas of 2012, and within a year, it was making millions of dollars. Our online business continued to grow alongside it. By 2014, we were a different company in the eyes of our industry.

A push-pull opposition between paper and online

From 2015 to 2017, we seemed to be thriving, but beneath the surface, we felt spread thin. Every day, our teams — from engineers to designers — were torn between focusing on the online and paper experiences. While Paper and digital invitations looked similar — that was the point — operationally, they were very different. The more we invested in both products, the more we saw we were running two fundamentally different businesses.

Paper by Paperless Post was a physical business, enabled by technology. To offer it, our team had built a renderer to create high resolution PDF files within seconds, and calculated rush order and shipping options so that users could get their packages on time. Like many e-commerce offerings, it improved how people consumed real-world things, in this case allowing you to skip a trip to the stationery store and create a beautiful, physical object.

Our online business, on the other hand, was and is different. While it may look similar to a traditional invitation, it’s really more than that — it’s a communication and planning platform. Excelling in our online offering means creating a useful, functional, event management experience; improving how hosts create designs, collect RSVPs, and then message and coordinate with their guests.

Being overextended was costing us money; but more important was the opportunity cost. Anything we built for Paper was something we weren’t building for online, and vice versa. We were even having difficulty deciding which product to put on our homepage. We had to make a choice. And we decided that, while people loved Paper by Paperless Post, our online product was what made us us. In addition, the margins for online are about 3x better, the market is bigger, and it brings in new users virally.

Furthermore, we realized that we are not even just an invitation company: we use design and technology to help people gather more easily and confidently in real life. This is our mission. And the reason it matters is because we believe that getting together in real life is how relationships thrive. Great design and useful planning tools are far more than a 10X improvement on paper. They make life better by helping people actually get together. That’s why we founded the company.

Going back to our roots

In May 2017, we decided to end our in-house paper business. We would license our designs to a print expert and let our team focus on one, new, combined online and mobile product. Reducing the revenue from Paper in the near term meant that we had to reduce costs. And that meant laying off members of our team. The layoff was by far the most difficult part of exiting our paper business. If there is one thing I regret, it’s that we didn’t make this change earlier. Perhaps we could have avoided it.

The future of Paperless Post

To make big changes, we needed to understand why we exist, beneath the layers of features, and business models. But now that we understand this, it has enabled us to make decisions much more easily. Now that we are thinking 100% about our online opportunity, we’ve been reimagining what an invitation can be. We don’t need to use our imaginations too much because we’re building based on feedback we’ve been gathering for years. We’re confident that we haven’t served nearly all the demand that is out there.

Our new product, Flyer, is in early beta. It’s targeted at serving a market that Paperless Post hasn’t been able to capture yet: invitations for casual events. The same insights that govern our original product hold true: getting together in the real world is a logistical challenge. And people aren’t just concerned with logistics; they care about how they present themselves in social situations as well. In creating our new product, we’ve also realized something else. People’s needs vary widely from event to event. They need a product that is very flexible.

The world has changed since we launched. More than 50% of our traffic comes from mobile devices, and hosts want to reach guests not just through email, but through services like Facebook, SMS, Whatsapp, their blog, etc. To meet their needs, we are changing the format of our design tool so that it works well on a phone; it also doesn’t always have to look like paper. You can deliver wherever your guests are. In addition, we’re expanding the functionality of the event page, so that hosts in the future can use Paperless Post to do more things beyond simply collecting RSVPs — like selling tickets, splitting costs, tabulating the number of adults versus children, etc.

Progress is rarely linear. Our Paper offering didn’t last, but it helped us recognize what we really exist to do. To our team, past and present: you created a product that over a hundred million people have used for the most important moments in their lives. The future is exciting, but it’s possible only because of your contributions. Thank you.