Zilker Ventures Interviews Steve Adams of MyFaxJun. 12, 2008
VP of Marketing for Protus, owner of MyFax, discusses everything from human voices to sinfully delicious truffles and everything else internet fax.
- What is your role at the company?
- How much growth are you seeing in the internet fax as a whole?
- How does internet fax work?
- Do you think that email will eventually replace fax in being the preferred method of transmitting documents, and if so, when and how do you think that transition will occur? And if not, why?
- Are internet fax transmissions secure? And what types of security measures are taken when sending and receiving internet fax transmissions? As a third part to that questions, how does this level of security compare with that of traditional fax or email transmissions?
- What's the role of Voice-over IP in the Internet faxing industry?
- What are the challenges people have with internet fax services, and what has MyFax done to address these challenges?
- We believe that internet fax services are superior to and cheaper than operating a traditional fax machine with a dedicated fax line. Can you elaborate on some of these advantages?
- Last week my account was sending me a fax, and he sent it to my phone number instead of my fax number. I answered the phone; the fax tone [was on the line]. I [hung up], and a few minutes later his fax machine [called] me back. So, I called him on his cell phone and told him what the problem was. He walked over to his fax machine and cancelled the fax. My question is: What happens in that situation if the sender is using MyFax?
- It appears that local area codes are [sometimes] available, and other times they are not. Why is that? And what do you do if [a customer] wants an area code, but it is not available on that day?
- Has the popularity of PDA's affected the internet fax industry? How has MyFax capitalized on this trend?
- FaxCompare.com tries to review every internet fax service in the industry, and we're constantly coming across new service providers. Where are they coming from? And should consumers be wary of these new entries?
- Your site touts MyFax as the fastest growing internet fax service with more than 15,000 sign-ups per month. What do you attribute this growth to?
- What is the distribution of your customer profile: individuals versus small businesses versus large businesses, etc.?
- Geographically, where is your customer base: the U.S., Canada, Europe, etc.?
- How many of your customers are signing up for their first internet fax service as opposed to moving to MyFax from another competitor?
- What do you feel has been MyFax's competitive advantage in the industry?
- What is the history of MyFax? Where did you come from? What is your corporate philosophy, etc.?
- What are MyFax's plans for the future?
- Do you have any examples of well-known customers that some of our users might recognize?
- MyFax has seemingly endless communication lines with customers. What have you learned from your customers? Has that information led to change in your system?
- What does MyFax do to ensure superior customer service? Do you offer customer service in languages other than English?
Steve Adams: Sure, Gaines. Thanks for having me say. I have the marketing group, and I guess I have two functions. One very important one is working with customers and understanding their needs, and [another is] how we can evolve the MyFax service-both its feature set and how we deliver it to meet [the customers'] needs. So one aspect is product direction, and another aspect is general marketing, helping people learn about MyFax.
GK: That's great, Steve. Why don't we dive right into our questions? [Zilker Ventures] has prepared 20 questions for you that we believe your future customers and [FaxCompare.com's] users would like to know. First question is: How much growth are you seeing in the internet fax as a whole?
SA: Good question. The internet fax industry is really taking off, both for individuals and small businesses, as well as for larger enterprises. The published numbers, and there's an analyst named Peter Davidson who follows them, would say that the overall spending on internet fax is growing about 17% per year, [which means] a good strong, growing market. Within that [overall growth], MyFax growth last year compared to the year before was over 75%. So we're having tremendous growth and success with MyFax.
GK: That's great. Can you give us a brief explanation of how internet fax works?
SA: Sure. The beauty of internet fax is its simplicity, so hopefully I can convey that. Internet faxing lets people fax without having a fax machine. We give all our MyFax customers their own fax number, and it behaves just like a regular fax number; so any faxes that are received there, we receive them. We create them into a PDF document, and we deliver them to our customers via email. Instead of getting blurry papers on your fax machine, you get a nice PDF document in your email.
And you can send faxes the same way. You simply take the document from your computer-and you don't even have to print it-you attach it to an email, send it to a fax number at MyFax.com, and we do the rest. We make the call; we deliver the fax; we send you back an email to tell you that [the fax] has been delivered. That's the core functionality. We let you send and receive faxes via email.
Then, there are some extras. You can do [everything] from the website. Even if you can't get to your email address, you can use our website. The website also stores all the faxes you've sent and received. If you've lost something, misplaced a page, whatever, you've still got an archive there, and that archive [is available] for a year with no extra charges. And finally, you can integrate directly into applications like Microsoft Office. If you're working in Word, and that's where your form is that you want to fax, you can simply go to File: Send Fax, and you can choose MyFax and go from there. We've really made it easy to send and receive faxes without having a fax machine, and that's how Internet faxing works.
GK: The steam engine was replaced by the internal combustion engine. The typewriter was replaced by the Word Processor. The fact that the internet fax service exists suggests that there has been a movement to transition from fax to email transmission of documents. Do you think email will eventually replace fax in being the preferred method of transmitting documents, and if so, when and how do you think that transition will occur? And if not, why?
SA: That's a good question. [Those] are good examples. Other examples would be the drive towards the paperless office, which-as I sit here, surrounded by heaps of paper-hasn't happened, and the cell phone. [But] I just get more phone calls; I don't reduce my phone [usage]. Will documents all, in the end, be emails? They could very well be. Certainly, email becomes more and more ubiquitous. The real question is when that's going to occur. Faxes are ubiquitous. I was in a tire shop this morning. Faxes are a core part of their business. I don't even think they have an email address. And so, the ubiquitous nature of the fax machine makes it very easy to communicate with it.
I think what we're seeing is MyFax working as bridge between the old faxing world and the newer email world. It lets people who have moved to email continue to communicate with the fax world, which is still very large, but without having a fax machine. We expect that to continue certainly over a period of many years.
GK: Are internet fax transmissions secure? And what types of security measures are taken when sending and receiving internet fax transmissions? As a third part to that question, how does this level of security compare with that of traditional fax or email transmissions?
SA: Let me start with the third part of your question. When you think about a regular fax, [the transmissions] actually have lots of security issues. [For example] your doctor faxes you lab results, or your real estate broker faxes you information about the house you're purchasing. And typically that fax is sitting on a shared fax machine out by a secretary's office where everybody can walk by and see what it is. It's difficult to protect confidential information in that kind of environment.
There was a bank, actually, about a year ago that was sending all sorts of confidential information to a junk yard in Pennsylvania, simply because [the bank employees] had programmed their fax machine incorrectly, and it just kept sending [the faxes] all out. Traditional faxes aren't all that secure, and we see a lot of customers [who are] often in a medical space or financial space, where protection of privacy really matters. Those customers are [using]
internet fax for their security.
One big part of that security is simply that faxes go directly to the person who receives them. Rather than having a whole company share fax machine, each individual user has their own fax number, and their documents are delivered directly to their email. And that means that you don't have the risk of other people seeing the document.
On top of that, there's electronic security-and this goes with the earlier parts of your question-electronic security measure that protect that fax while it's in transmission. These are things like HTDPS, which is the same security you use for online banking, etc., and layers of encryption on top of that, TLS or PTP encryption. Depending on how concerned the user is about security, there are various levels of options they can use.
But Internet faxing is very secure, and many industries that are concerned about that security and protection of private information are among the leaders in moving toward internet fax.
GK: What's the role of Voice-over IP in the Internet faxing industry?
SA: It's an interesting question because you would think that [VoIP and internet fax] are tightly linked, but
internet fax services don't require Voice-over IP. It's really hidden away from the user's perspective. All our customers require is a fax number. We give them a fax number, or they can port their fax number to us. And then it all works.
We do have lots of customers that have signed up for a VoIP service, like Skype or Vonage, and they have difficulty faxing. They expect that because they can make a voice phone call, they can also use those services for faxing. And they have lots of difficulties making that work. Particularly they'll get pages cut off or transmissions that fail, and so, they then move to internet fax service. And we have a far higher level of quality and deliverability. Internet fax is a very good complement to Voice-over IP, but customers don't require VoIP. All they require is email-based access to the Internet, which virtually everybody has.
GK: What are the challenges people have with internet fax services, and what has MyFax done to address these challenges?
SA: I think the biggest challenge people have is simply the lack of familiarity with the notion [of internet fax]. Most people, when they think of a fax, think of a physical piece of paper and the machine that spits it out, and clearly we're doing it differently. There's a general reluctance or concern about whether the service actually works and how easy it is, and that's a concern right up until people use the service. So our biggest challenge is familiarity.
We try to take some of the risk away from our customers. We let them cancel any time. If you cancel in the first month, we don't charge you. We really make it a risk-free trial for people to experiment with MyFax and to see what happens and to see for themselves how well it works.
In terms of exposure to different features, we've also created a whole series of quick, two-minute videos that let people see how easy it is to send and receive a fax through email, how to use the website, how to fax from Microsoft Office-a bunch of really focused tools that help people understand the service. But it is very easy. I think people are surprised how easy the service is [to use] once they get going.
GK: We believe that internet fax services are superior to and cheaper than operating a traditional fax machine with a dedicated fax line. Can you elaborate on some of these advantages?
SA: Sure. Certainly MyFax is cheaper than a dedicated fax line. A ballpark number would say that just for the fax line itself a typical charge runs about $40 per month. MyFax runs about $10 a month. That's a significant savings right there. And [$40/month] doesn't even count in the cost of a fax machine, the paper, the toner, long distance charges. All of those [expenses] are added on top of [$40]. Just take the simplest comparison--$40 to $10-and it's a whole lot cheaper to use MyFax.
And lots of people start looking at internet fax because of those savings and because they want to get rid of that fax line. That's a great starter. What most people get is a whole lot more functionality for [a lower] price. What kind of functionality? Well, obviously, you can send a fax without being near a fax machine. A traditional fax machine is physical and in one place. [With internet fax] I can access my fax machine wherever I can access the Internet. Real estate agents love that. They don't have to go back to the office to send a fax or receive a fax. It's great for people, who work in a home office, either on the weekends or permanently, because you don't have to go to that shared fax machine to get things. You have mobility.
There are the archiving features, that all of the faxes you send and receive are stored online. They're safe and secure from you losing them, so you can always go back and look at those records of what happened. [internet fax provides] the mobility, the privacy, the convenience. And particularly for people who have fax machines in their home, it's silent.
Now you can receive a fax in the middle of the night and there's none of the bells or whistling sounds as faxes are being delivered. Price and cost savings are a big driver. But equally, there are all sorts of features and benefits people receive from moving to an internet fax service.
GK: Last week my accountant was sending me a fax, and he sent it to my phone number instead of my fax number. I answered the phone; the fax tone [was on the line]. I [hung up], and a few minutes later his fax machine [called] me back. So, I called him on his cell phone and told him what the problem was. He walked over to his fax machine and cancelled the fax. My question is: What happens in that situation if the sender is using MyFax?
SA: Good question, and that's a very irritating scenario when a fax machine keeps calling, which typically happens to me at home in the middle of the night. MyFax has an intelligent technology. When the call is answered, we'll detect if it's a voice. And if it's a voice, we'll never retry the number. We will send an email back to the originator of the fax, saying that we couldn't send the fax because we reached a voice line, and the originator of the fax can then easily re-edit the fax number and resend the fax.
A slightly different scenario is when we reach a fax number that's busy. And in that case, MyFax will automatically retry until the fax is delivered, up to three different tries. And that means that the originator of the fax doesn't have to monitor if the fax went through, like you have to do with some fax machines. We take care of that, and again, send back the delivery [email] to make sure that the customer knows [the fax] has been delivered.
GK: Great. As the publisher of FaxCompare.com, we regularly check MyFax's website to make sure that our information is current. It appears that local area codes are [sometimes] available, and other times they are not. Why is that? And what do you do if [a customer] wants an area code, but it is not available on that day?
SA: OK, so why do the area codes change? Well, two things happen. One thing is that we'll continue to expand our coverage. I think we cover, in terms of population, 80% to 90% of the U.S. population [which is] already covered by our local area codes. But we do continue to add to that coverage.
There are times, and you've probably seen some of these, where we do run out of inventory in a particular area, and when that happens, we simply remove it from the website. We do offer, at no extra charge, toll free numbers. If the geographic number that you want is not available, we can always give you a toll free number, and we can do that permanently or make it temporary. You can sign up for a toll free number, and once we have a local number we can switch you over to that number free of charge. If you don't see number or area code that you want, feel free to pick up the phone and call our sales team, and they'll be able to tell you when more numbers will be available.
GK: Has the popularity of PDA's affected the internet fax industry? How has MyFax capitalized on this trend?
SA: Certainly, the mobility aspect matters. Many of the people who were early users of MyFax were mobile professionals, whether they were in real estate, insurance, or people on the road who wanted to send and receive faxes. And Blackberries and Trios have been great for that because both can view PDFs and other documents right there on the device. Recently we've seen iPhone as being a growing trend, but obviously not as established as the other two. So [PDA's] are important for us.
One great application [of internet fax] is using it as a quick, portable printer. [For example] I've got a PowerPoint document that I've received on my Blackberry. If I'm in [a place] where I don't have access to a printer, I can just fax [the document] to [any] fax machine and get a quick printout. So there's sort of a "print anywhere" functionality built into MyFax.
GK: Interesting. FaxCompare.com tries to review every internet fax service in the industry, and we're constantly coming across new service providers. Where are they coming from? And should consumers be wary of these new entries?
SA: Excellent question. Consumers should certainly be wary. And I think it's a good service that the folks at FaxCompare [provide], to weed out the weak from the chaff. It's relatively easy for people to pop up a website, hook up a fax machine, and pretend to be an internet fax service.
What's really hard is to deliver a consistently high level of performance for customers, by which I mean that there shouldn't be a delay when you send a fax, and there should be a delay when you receive a fax. You should always be able to send and receive faxes, and you should be able to get help when you need it. And those are things that are very difficult for two guys in their basement to do.
One thing [MyFax] really prides itself on is its quality levels. In practice, there are a handful of large, legitimate providers, and it's a very competitive marketplace. I would really encourage consumers to focus on the top tier of providers. And don't take the risk of going to two guys in a basement.
GK: That's good advice. Your site touts MyFax as the fastest growing internet fax service with more than 15,000 sign-ups per month. What do you attribute this growth to?
SA: Well, a lot of that growth is really attributed to our customers liking the service and telling their friends about it. Half of our business comes from that word of mouth method, and we work a great deal on that, focusing on the customer experience.
There are three things I would highlight. One thing is that we have a very feature-rich product. There are features you can't really get with other competitors that you can get with MyFax, but we price [the service] significantly cheaper. Efax is $16 or $17 a month, [compared to MyFax's] $10 a month. We really like value pricing. Our strategy has been to shove as many features and free pages into the package as we can and make it a nice, simple purchasing experience versus competitors that keep pushing their price up and charging more for incremental features. And importantly, we focus on customer experience-making sure that each and every customer is successful with the service, that we have 24-hour, live, English-speaking help desk, and tools that help people.
The value, the feature set, and the customer experience are the things that stand out for our customers.
GK: What is the distribution of your customer profile: individuals versus small businesses versus large businesses, etc.?
SA: Good question. It's a mix. And I think the internet fax service really started with individuals, and in the last couple of years, we've seen a significant pick-up from larger businesses. In terms of numbers, we're probably weighted toward individual sign-ups. Typically, they're from small businesses or a person like a sales rep or lawyer working for a larger organization, but purchasing on [the organization's] behalf. The last couple of years, we've seen and had some great success with larger organizations, some of which are purchasing up to 10,000 fax numbers at a time. We have that range, and we have a service that really suits those segments.
GK: The next question is sort of a follow up question. Geographically, where is your customer base: the U.S., Canada, Europe, etc.?
SA: Most of are customers are in the U.S.-I'd say about 80% of our customers are in the U.S., 20% in the rest of the world. Canada and the U.K. are probably the biggest non-U.S. marketplaces, and we've seen a lot of growth in areas like France, Germany, Italy and Spain as well, as we've launched [there] over the last six months.
GK: How many of your customers are signing up for their first internet fax service as opposed to moving to MyFax from another competitor?
SA: The internet fax service industry is still very much in a growth mode; so most of our customers are moving from traditional fax to internet fax service. We do have a good flow of customers on a continuing basis from our competitors, who are frustrated with [competitors'] service levels and constantly increasing prices. [These customers] find MyFax, with its good value pricing and good customer experience, a happier place to be.
GK: What do you feel has been MyFax's competitive advantage in the industry?
SA: I think our competitive advantage really has to do with the points I've highlighted. We focus tremendously the customer experience, simple pricing, no hidden fees, helping customers get success with the product. We also have been great at continuing to improve our service levels, which means eliminating delays. All of the faxes we receive are delivered in less than a minute. All the faxes that are sent are typically held here for a minute as we process them before we start to call. We have service levels that are 99.9% availability or more. Those are great numbers, and customers can rely on MyFax. That's our competitive advantage.
GK: What is the history of MyFax? Where did you come from? What is your corporate philosophy, etc.?
SA: The company has always been a faxing company. It started in the early days of the Internet with an international fax service that really made it easy to avoid expense of international long distance rates. From that big, distributed model, which had equipment everywhere, it moved to a centralized service and was one of the very early internet fax services. It has always had that focus of combing faxing and the Internet and [eventually] hit upon the formula that is MyFax today. Our focus is delivering service to a large number of customers and really keeping a focus on individual customer experience.
GK: Thank you, Steve. What are MyFax's plans for the future?
SA: We really try to collect information from our customers about what they like, what they don't like and where they want us to work. And that really helps us hone, improve, and perfect MyFax. We've got a continuing series of releases, which are no extra charge to our customers, where we introduce more features, more services, and more extensions.
Recently, for example, we introduced the free archiving service that lets you keep your faxes online. We expanded so that it's easier to share a fax number. Up to five email addresses can send and receive on that one fax number. Things like that. We're committed to driving that product evolution from the customer's perspective.
Operationally, we continue to improve service levels. We invest in more data centers, bigger and faster hardware, and all of that pays off in terms of reliability and performance for our customers. Over the long term, we're introducing complementary features to MyFax. I hope we have an opportunity to talk about those in the future, but we see opportunities for faxing with voice communications and other services that really help the core MyFax customer base.
GK: The next question relates to your existing customers. Do you have any examples of well-known customers that some of our users might recognize?
SA: Sure. We have over 200,000 customers, a wide range, some of which choose to remain confidential. But some that we've been working with quite publicly more recently are in the real estate space. Some brands that people might know include Century 21, Keller Williams, Coldwell Banker, large distributed organizations, lots of users. And they range down to Sinfully Delicious Truffles [chuckles], one of our favorite customers, which is a person who makes truffles in her kitchen.
GK: MyFax has seemingly endless communication lines with customers. What have you learned from your customers? Has that information led to change in your system?
SA: We listen to our customers in many different ways. One way is by answering the phone and listening to what our customers have to say. We also reach out proactively. We send out annual surveys to our entire customer base, and we do smaller surveys when we have particular questions we're trying to answer. We then read the results and listen and act on them.
The last release was a great example. The entire release was specific requirements given to us by our customers. We took those, went back out to the people who suggested them, and let them know that we built [into our system] what they asked for. And we got a great reaction from our customers. A) They were actually surprised that we read what they wrote, and B) [They were] startled that we'd actually done something about it. We were really pleased with that, and we think it's a great way to build the future direction of our product.
GK: Customer service is one of the most important aspects of operating an internet based service business. What does MyFax do to ensure superior customer service? Do you offer customer service in languages other than English?
SA: We think about customer service as not just people who are there when you need to call, although that's an important part of [customer service]. But really [we try] to make sure that there's a variety of tools that people can use, whichever way they want. Some people, and I'm one of them, prefer to work from the knowledge base, rather than phoning in to somebody. MyFax has an extensive knowledge base that answers most questions that people have.
And there are online video tools, as I mentioned earlier, that show you on screen how it works. There are tools like the knowledge base, the customer videos, user guides, and things like that. But when you do run into problems or you want to speak to somebody, we answer the phone. We have 24-hr support, seven days a week. It's American-based, and we think we have good, friendly, qualified people on the phone. They're typically able to answer you on the first call. Obviously, some calls get escalated, but we focus on trying to answer your question on the first call.
In terms of languages, formally we really only offer languages in English or French, but we've hired people from a variety of different backgrounds; so you can typically get help in many other languages.
GK: Well, Steve, that concludes our interview. I appreciate your time, and we at Fax Compare would like to thank you for taking the time to meet with us today. I can certainly attest that our users have enjoyed their MyFax plans, and we hope to continue that relationship in the future.
SA: Excellent. Well, I've very much enjoyed speaking with you today.
For additional information regarding online fax services, visit FaxCompare.com
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