Fastmails future in the light of recent developments

**JeffK** · 16 Jun 2004, 08:33 AM

This is cross posting but I think it's important enough to have a thread of its own. This is IMHO Jeremy's most comprehensive, albeit general statement, about Fastmail's reaction to recent developments. It's been pulled out of a thread which was primarily about Yahoo's new offering and I thought it ought to be posted here again for comment by members focussing on Fastmail's future, not just in relation to Yahoo.

Quote by Jeremy from

http://www.emaildiscussions.com/...threadid=22510

"Hi gang!

Hey I'm really appreciating all the honest feedback you're giving us in this thread. I assure you that we are listening!

Now the bad news is that any changes we make won't be for a little while. You see, we rely on people upgrading to keep us financially afloat. When we change the features of our service levels, we change the incentives people have to upgrade. If we make a mistake here, we can potentially destroy the whole business by making it unprofitable. It's very hard to 'undo' any changes, because doing so can upset a lot of people. So, we're putting in the time now to make sure we get this right, and make changes which ensure the future of FastMail.FM.

What I can tell you right now is that we won't be relying entirely on larger storage space as the key factor to get people to choose FastMail.FM. Our target market has always been those people for whom email is important enough to pay for - these are people who use email a lot, and care about synchronization with their email client (i.e. IMAP), good spam protection, effective filters (e.g. subdomain addressing, rules, and Sieve), backups/restores, etc. We want to make sure that we provide the best service for these people - and if it turns out we need to provide more space in order to do so, then we'll do that.

We have been adding the basic/advanced screens because there are plenty of people who need some of the features I listed above, but who aren't interested in learning a complex interface. I know many people (mainly 'road-warrior' business people) who really like IMAP and the filtering, but want the web interface to be easy to understand."

Jeff

**ReuvenNY** · 16 Jun 2004, 09:54 AM

The email world is different today from what it was a couple of years ago. In addition to many Member accounts or better, I recommended to a lot of people the free account, stating that it offers 5 times more than Hotmail and more than double of what Yahoo offers. Those people, who didn’t understand too much about email were impressed. Those days are over. In my view there is going to be a very significant drop in new signups for the free accounts. Further more, many will abandon those accounts in favor of much bigger Yahoo and Gmail.

The Member accounts (new ones) are also obsolete. Who would pay today ANYTHING for a 16 Mb account? Certainly not power users. Neither will average Joe.

That leaves Full and Enhanced. There is a lot of room to play with those two type of accounts. They should be redesigned to reflect the new reality, along with special features to attract power users. Some of the artificial, non justified restrictions (like 10 virtual addresses for you own domain etc.) have to be lifted.

The general public is not going to shell out money for smaller accounts than the free being offered. Only the more sophisticated users, looking for features that the BIG free do not offer, will. And frankly, Fastmail doesn’t have the resources to compete with the BIG services. It must refocus it’s effort to those that are likely to appreciate and use it.

Being cautious is prudent, but coming with too little too late is dangerous.

As long as we are quoting previously posted threads, here is what I suggested to the Fastmail team a month ago (with some minor modifications):

1. Find a way to elegantly cancel the Guest account program (offer special conversion discount to Full and Enhanced accounts)

2. Stop offering NEW Member accounts. (Too expensive for what they offer, not potent enough
to compete with the BIG free or for power users)

3. Offer an improved Full account along the lines of today’s Enhanced.

4. Offer an Enhanced account with similar features of the new Yahoo paying accounts (virtually unlimited)

5. Develop features and nuances that are unique - that no one else offers.

6. Stop being the “jack of all trades” in the email world. Find a niche, or a specific target market. Leave the BIG organizations fight for the average Joe.

7. Stick to the “guiding light” - it’s not the size, it’s the profitability that counts...

follower · 16 Jun 2004, 12:09 PM

Quote:

Originally posted by ReuvenNY

The Member accounts (new ones) are also obsolete. Who would pay ANYTHING for a 16 Mb account? Certainly not power users. Neither will average Joe.

The two things that attracted me to the account are:

* One off payment

* IMAP

I first signed up a couple of years ago & recently added more storage space (again a one off payment). FastMail remains the only net-only service (well, other than a domain) I've actually felt justifies spending money on.

sparx · 16 Jun 2004, 02:00 PM

As a Member account holder I'd like to add that the ability to access FM's SMTP server to send emails was an extremely important factor in my scrimping and saving ( and more importantly finding and convincing someone to use their credit card on my behalf to pay for the upgrade! )

The additional 6 MB of mailbox space and guaranteed no-ads web interface didn't hurt either....

There has been a lot of talk of inserting text banner ads to support the free accounts. Has this been done so far ?

FMRocks · 16 Jun 2004, 03:25 PM

Quote:

Originally posted by ReuvenNY
In my view there is going to be a very significant drop in new signups for the free accounts. Further more, many will abandon those accounts in favor of much bigger Yahoo and Gmail.

Both of which are mostly encouraging developments since that would decrease the resource pull by the free accounts, and would thus free up resources to be offered to paying users. As for the loss of potential payers (one day), that can be compensated by a good limited-time trial.

**gdg** · 16 Jun 2004, 03:33 PM

What I'm wondering is...if all these other guys are making business decisions left and right, what would be taking FM so long? I'm not saying it is a bad thing to take your time making a decision necessarily. It could be good ... or bad.

elvey · 16 Jun 2004, 05:08 PM

I think J&R have done a good job defining the different levels. They work well even with the changes the other players have made. They are ALL still good value, IMO. I still recommend FM over the others. I certainly DON'T want to see prices go lower- I'd like to have FM be able to throw more resources at issues, not be spread thinner!

ezequielv · 16 Jun 2004, 06:59 PM

I just wanted to say that I opened a guest Fastmail account a couple of years ago. I lived in Argentina at the time, and the cost of paying for the account was not as low as it seems for a US/european citizen. So "free" e-mail was the realistic way to go.

Still, I am a power user. I've had accounts in almost every e-mail provider I heard of. I never paid a dime for these services. Not until I found Fastmail. When I moved to the UK, and started earning more money, I upgraded at once. I am a member now, and I'm considering upgrading in the near future, plus I'm planning to give my wife and sister gift certificates for them to upgrade as well. They both love it.

You see, sometimes some people need different "times". I was always turned off by 30-day trials myself. I felt that I could not give my address to anybody just in case the provider was not good in the end, and because of that, no serious testing could be done until you pass your new address to almost everybody you communicate with. It's a chicken-and-egg problem.

But when I heard about Fastmail, it was its IMAP support, its superb web interface, its speed, and the great reviews that made me decide to try it more seriously. Even then, I was not sure about paying (not just because of the poor conversion between the local currency and USD).

I think Fastmail is the best e-mail provider I know of. I really love it. But I don't think Fastmail bosses should jump into an aggressive commercial attitude that may jeopardize new users "flow".

Keep up the good work!

Ezequiel

oysterquartz · 16 Jun 2004, 08:47 PM

Sorry to be a pessimist, but testimonials from a few satisfied power users (myself included) are not relevant to this discussion.

Realistically, if FM keeps the levels as they are (or only slightly modifies them) they will find it increasingly difficult to attract much commercial or media attention. Nobody is going to "recommend" the Member or Guest accounts vs. Yahoo or Gmail's free accounts.

FM had a difficult enough time getting any decent press coverage (especially US or EU) when they offered 2-5 times of the storage of Yahoo or Hotmail. How are they possibly going to compete at 1/10th of Yahoo free (or less than 1/5th for member), not to mention 1/100th of Gmail.

Add in the availability of POP3/SMTP for non-USA Yahoo free accounts with 100MB, along with the $19.99/2GB Yahoo offering, and you have big problems ahead.

That, and FM's increasingly complicated non-user friendly GUI. Great for power users, but simply too much work for the average consumer. What incentive will a long standing Yahoo user now have to switch? FM Full vs. Yahoo Mail Plus. None IMO. IMAP (for most people) is a non-starter, and Yahoo has plenty of real world features which are very well integrated with Yahoo Mail Plus.

Personally, I think that most paid services will have a very difficult time competing unless they addresses small niches. For FM this could be ultra power users for an improved Full and Enhanced account.

Otherwise, it will be (no matter what they cheerleaders say) bad news are renewal time added to the increased difficulty of enticing anyone from the enhanced free services.

**Sherry** · 17 Jun 2004, 03:03 AM

Quote:

Originally posted by oysterquartz
Sorry to be a pessimist, but testimonials from a few satisfied power users (myself included) are not relevant to this discussion.

Are you saying only those wanting to see FM "increase" their service should post to this thread? According to the title of the thread (Fastmails future in the light of recent developments), I think, the satisfied power users should post to this thread. I'm another one that says FM shouldn't jump in and offer Guest/Member accounts more without thinking over the consequences for the future. If it's to good, they won't upgrade and FM is, after all, a paid service...

Sherry

hadaso · 17 Jun 2004, 07:53 AM

Quote:

Originally posted by ReuvenNY
... In my view there is going to be a very significant drop in new signups for the free accounts. Further more, many will abandon those accounts in favor of much bigger Yahoo and Gmail.

The Member accounts (new ones) are also obsolete. Who would pay today ANYTHING for a 16 Mb account? Certainly not power users. Neither will average Joe.

...

1. Find a way to elegantly cancel the Guest account program (offer special conversion discount to Full and Enhanced accounts)

2. Stop offering NEW Member accounts. (Too expensive for what they offer, not potent enough to compete with the BIG free or for power users)

...

If there will not be many signups for free/member level accounts, then they won't be much burden. Then there's no reason to cancel those levels. The costs of maintaining those levels would go down. Those who have them will either keep them or they will expire. Anyone new who will decide to use them and then abandon them will not be using significant resources, and might be a future upgrader. The only reason to abandon these levels is if J&R see that they are unprofitable in the longrun, i.e., will not produce enough subscribers in the future to cover the present costs. I think that there might be a great market for fastmail in the "third world": businesses that right now can hardly afford a member's account, but in the future would be able to afford full/enhanced for each employee. There's no way to get these with a 30 days trial.

Jeremy Howard · 17 Jun 2004, 08:08 AM

Quote:

Originally posted by gdgrph
What I'm wondering is...if all these other guys are making business decisions left and right, what would be taking FM so long? I'm not saying it is a bad thing to take your time making a decision necessarily. It could be good ... or bad.

The reason is that we haven't yet seen any impact at all on free or paid signups. As soon as we see the first sign of this, we'll be ready to spring into action!

However, if we pre-empt things by assuming how customers will respond, we could cause major financial damage to FastMail.FM (e.g. by making ourselves unprofitable, removing incentives to upgrade, etc). So we're making sure we're prepared, but we're also making sure we respond to real results, rather than guesses.

FMRocks · 17 Jun 2004, 09:57 AM

What I find fascinating is how we, power users, feel perfectly comfortable testifying for the "average user." What is that anyway? Average user? Typical user? Who is one and who is not?

Jeremy,

I understand your desire to respond to real market forces only, but I also think FM has a responsibility not to leave at least the Full and Enhanced users feeling like they are no longer getting such a good deal or as good a value.

**ReuvenNY** · 17 Jun 2004, 11:28 AM

Quote:

Originally posted by Jeremy Howard
The reason is that we haven't yet seen any impact at all on free or paid signups. As soon as we see the first sign of this, we'll be ready to spring into action! However, if we pre-empt things by assuming how customers will respond, we could cause major financial damage to FastMail.FM (e.g. by making ourselves unprofitable, removing incentives to upgrade, etc). So we're making sure we're prepared, but we're also making sure we respond to real results, rather than guesses.

While it is a prudent defensive measure to wait and see, it also has it’s drawbacks. A company doing nothing in the current environment may be perceived as indecisive, passive, laggard and in general non responsive to the current affairs of the industry.

But that’s not the worst: the most damaging part would be the perception, that the company is trying to get away with as little as possible. It leaves the impression that what you are saying is this: if we do not see any impact on sales, we will not improve what we offer, but if we start losing money, hell, we will come up with some great package.
Now one thing is sure: this is not a good public relations attitude. Particularly in comparison to Hans Lysglimt’s inspiring statement earlier today, announcing 1000Gb storage Runbox will be offering. http://www.emaildiscussions.com/...threadid=22653

bitequator · 17 Jun 2004, 11:35 AM

^ Good points, OTOH I do also see the point about not rushing to make decisions that would be hard to change again in the future. For example MailSnare increased Enhanced to 100MB right away. If this upgrade is not sufficient in light of the latest developments, they may find it somewhat difficult to change again. If they increase the storage quota right away a second time, it might be seen as too much of a defensive, me-too, desperate move? And customers may perceive the management as too pliable?

Wait, I just found Gankaku's post:
http://www.emaildiscussions.com/...454#post210454

It's just a hard road to tread I guess. Must strike the right balance in boldness and timing. And FM being a dedicated email service provider, can't afford to make too brash trial-and-errors that may irretrievably ruin the business...

16 Jun 2004, 08:33 AM	#1
JeffK Moderator Join Date: Feb 2002 Location: Kingaroy, AU Posts: 3,179	Fastmails future in the light of recent developments This is cross posting but I think it's important enough to have a thread of its own. This is IMHO Jeremy's most comprehensive, albeit general statement, about Fastmail's reaction to recent developments. It's been pulled out of a thread which was primarily about Yahoo's new offering and I thought it ought to be posted here again for comment by members focussing on Fastmail's future, not just in relation to Yahoo. Quote by Jeremy from http://www.emaildiscussions.com/...threadid=22510 "Hi gang! Hey I'm really appreciating all the honest feedback you're giving us in this thread. I assure you that we are listening! Now the bad news is that any changes we make won't be for a little while. You see, we rely on people upgrading to keep us financially afloat. When we change the features of our service levels, we change the incentives people have to upgrade. If we make a mistake here, we can potentially destroy the whole business by making it unprofitable. It's very hard to 'undo' any changes, because doing so can upset a lot of people. So, we're putting in the time now to make sure we get this right, and make changes which ensure the future of FastMail.FM. What I can tell you right now is that we won't be relying entirely on larger storage space as the key factor to get people to choose FastMail.FM. Our target market has always been those people for whom email is important enough to pay for - these are people who use email a lot, and care about synchronization with their email client (i.e. IMAP), good spam protection, effective filters (e.g. subdomain addressing, rules, and Sieve), backups/restores, etc. We want to make sure that we provide the best service for these people - and if it turns out we need to provide more space in order to do so, then we'll do that. We have been adding the basic/advanced screens because there are plenty of people who need some of the features I listed above, but who aren't interested in learning a complex interface. I know many people (mainly 'road-warrior' business people) who really like IMAP and the filtering, but want the web interface to be easy to understand." Jeff

16 Jun 2004, 09:54 AM	#2
ReuvenNY Moderator Join Date: Mar 2002 Location: New York Posts: 4,259	The email world is different today from what it was a couple of years ago. In addition to many Member accounts or better, I recommended to a lot of people the free account, stating that it offers 5 times more than Hotmail and more than double of what Yahoo offers. Those people, who didn’t understand too much about email were impressed. Those days are over. In my view there is going to be a very significant drop in new signups for the free accounts. Further more, many will abandon those accounts in favor of much bigger Yahoo and Gmail. The Member accounts (new ones) are also obsolete. Who would pay today ANYTHING for a 16 Mb account? Certainly not power users. Neither will average Joe. That leaves Full and Enhanced. There is a lot of room to play with those two type of accounts. They should be redesigned to reflect the new reality, along with special features to attract power users. Some of the artificial, non justified restrictions (like 10 virtual addresses for you own domain etc.) have to be lifted. The general public is not going to shell out money for smaller accounts than the free being offered. Only the more sophisticated users, looking for features that the BIG free do not offer, will. And frankly, Fastmail doesn’t have the resources to compete with the BIG services. It must refocus it’s effort to those that are likely to appreciate and use it. Being cautious is prudent, but coming with too little too late is dangerous. As long as we are quoting previously posted threads, here is what I suggested to the Fastmail team a month ago (with some minor modifications): 1. Find a way to elegantly cancel the Guest account program (offer special conversion discount to Full and Enhanced accounts) 2. Stop offering NEW Member accounts. (Too expensive for what they offer, not potent enough to compete with the BIG free or for power users) 3. Offer an improved Full account along the lines of today’s Enhanced. 4. Offer an Enhanced account with similar features of the new Yahoo paying accounts (virtually unlimited) 5. Develop features and nuances that are unique - that no one else offers. 6. Stop being the “jack of all trades” in the email world. Find a niche, or a specific target market. Leave the BIG organizations fight for the average Joe. 7. Stick to the “guiding light” - it’s not the size, it’s the profitability that counts... Last edited by ReuvenNY : 16 Jun 2004 at 12:22 PM.

16 Jun 2004, 06:59 PM	#8
ezequielv Senior Member Join Date: Dec 2002 Location: Berkshire, UK Posts: 143	Think about other economies... I just wanted to say that I opened a guest Fastmail account a couple of years ago. I lived in Argentina at the time, and the cost of paying for the account was not as low as it seems for a US/european citizen. So "free" e-mail was the realistic way to go. Still, I am a power user. I've had accounts in almost every e-mail provider I heard of. I never paid a dime for these services. Not until I found Fastmail. When I moved to the UK, and started earning more money, I upgraded at once. I am a member now, and I'm considering upgrading in the near future, plus I'm planning to give my wife and sister gift certificates for them to upgrade as well. They both love it. You see, sometimes some people need different "times". I was always turned off by 30-day trials myself. I felt that I could not give my address to anybody just in case the provider was not good in the end, and because of that, no serious testing could be done until you pass your new address to almost everybody you communicate with. It's a chicken-and-egg problem. But when I heard about Fastmail, it was its IMAP support, its superb web interface, its speed, and the great reviews that made me decide to try it more seriously. Even then, I was not sure about paying (not just because of the poor conversion between the local currency and USD). I think Fastmail is the best e-mail provider I know of. I really love it. But I don't think Fastmail bosses should jump into an aggressive commercial attitude that may jeopardize new users "flow". Keep up the good work! Ezequiel

16 Jun 2004, 02:00 PM	#4
sparx Member Join Date: Jun 2002 Location: Bombay, INDIA Posts: 58	As a Member account holder I'd like to add that the ability to access FM's SMTP server to send emails was an extremely important factor in my scrimping and saving ( and more importantly finding and convincing someone to use their credit card on my behalf to pay for the upgrade! ) The additional 6 MB of mailbox space and guaranteed no-ads web interface didn't hurt either.... There has been a lot of talk of inserting text banner ads to support the free accounts. Has this been done so far ?

16 Jun 2004, 03:33 PM	#6
gdg Moderator Join Date: Feb 2004 Posts: 2,308	What I'm wondering is...if all these other guys are making business decisions left and right, what would be taking FM so long? I'm not saying it is a bad thing to take your time making a decision necessarily. It could be good ... or bad.

16 Jun 2004, 05:08 PM	#7
elvey The "e" in e-mail Join Date: Jan 2002 Location: San Francisco Posts: 2,458	I think J&R have done a good job defining the different levels. They work well even with the changes the other players have made. They are ALL still good value, IMO. I still recommend FM over the others. I certainly DON'T want to see prices go lower- I'd like to have FM be able to throw more resources at issues, not be spread thinner!

16 Jun 2004, 08:47 PM	#9
oysterquartz The "e" in e-mail Join Date: Feb 2002 Location: Athens Posts: 2,402	Sorry to be a pessimist, but testimonials from a few satisfied power users (myself included) are not relevant to this discussion. Realistically, if FM keeps the levels as they are (or only slightly modifies them) they will find it increasingly difficult to attract much commercial or media attention. Nobody is going to "recommend" the Member or Guest accounts vs. Yahoo or Gmail's free accounts. FM had a difficult enough time getting any decent press coverage (especially US or EU) when they offered 2-5 times of the storage of Yahoo or Hotmail. How are they possibly going to compete at 1/10th of Yahoo free (or less than 1/5th for member), not to mention 1/100th of Gmail. Add in the availability of POP3/SMTP for non-USA Yahoo free accounts with 100MB, along with the $19.99/2GB Yahoo offering, and you have big problems ahead. That, and FM's increasingly complicated non-user friendly GUI. Great for power users, but simply too much work for the average consumer. What incentive will a long standing Yahoo user now have to switch? FM Full vs. Yahoo Mail Plus. None IMO. IMAP (for most people) is a non-starter, and Yahoo has plenty of real world features which are very well integrated with Yahoo Mail Plus. Personally, I think that most paid services will have a very difficult time competing unless they addresses small niches. For FM this could be ultra power users for an improved Full and Enhanced account. Otherwise, it will be (no matter what they cheerleaders say) bad news are renewal time added to the increased difficulty of enticing anyone from the enhanced free services.

17 Jun 2004, 09:57 AM	#13
FMRocks The "e" in e-mail Join Date: Sep 2002 Location: FM does NOT refer to Fastmail (anymore). Posts: 4,034	What I find fascinating is how we, power users, feel perfectly comfortable testifying for the "average user." What is that anyway? Average user? Typical user? Who is one and who is not? Jeremy, I understand your desire to respond to real market forces only, but I also think FM has a responsibility not to leave at least the Full and Enhanced users feeling like they are no longer getting such a good deal or as good a value.

17 Jun 2004, 11:35 AM	#15
bitequator The "e" in e-mail Join Date: Apr 2003 Location: USA Posts: 2,978	^ Good points, OTOH I do also see the point about not rushing to make decisions that would be hard to change again in the future. For example MailSnare increased Enhanced to 100MB right away. If this upgrade is not sufficient in light of the latest developments, they may find it somewhat difficult to change again. If they increase the storage quota right away a second time, it might be seen as too much of a defensive, me-too, desperate move? And customers may perceive the management as too pliable? Wait, I just found Gankaku's post: http://www.emaildiscussions.com/...454#post210454 It's just a hard road to tread I guess. Must strike the right balance in boldness and timing. And FM being a dedicated email service provider, can't afford to make too brash trial-and-errors that may irretrievably ruin the business...