There are few better examples of bureaucratic resistance to innovation than the demise of a company that promised to fix U.S. mail. As InsideSources explains (h/t Andy Quinn), Outbox arranged for its customers’ mail to be rerouted, digitized, and sent to their smartphones or email addresses. Users could then choose which pieces of mail they wanted physically delivered. Two former Hill staffers founded the company after seeing for themselves the waste and inefficiencies of the U.S. Postal Service. They believed the service could help save money for the perpetually broke USPS while sparing people the hassle of throwing out daily piles of unwanted mail.Customers loved the service when it was tested in smaller markets, but for the company to grow, the USPS had to allow its users to sign forwarding contracts for Outbox. As the founders garnered more media attention and popularity, the Postmaster General called them into a meeting in Washington, DC to quash their service:
When Evan and Will got called in to meet with the Postmaster General they were joined by the USPS’s General Counsel and Chief of Digital Strategy. But instead, Evan recounts that US Postmaster General Patrick Donahoe “looked at us” and said “we have a misunderstanding. ‘You disrupt my service and we will never work with you.’” Further, “‘You mentioned making the service better for our customers; but the American citizens aren’t our customers—about 400 junk mailers are our customers. Your service hurts our ability to serve those customers” […]Outbox was a disruptive innovation. Outbox offered utility for many consumers and offered new technology that the Post Office should have been offering for years. In a well-functioning market, we would expect a company like Outbox to disrupt the dominance of the incumbent and force them to either innovate or die. But of course, USPS is not a normal company; rather, it is an entity of the US government, and the market forces that lead to innovation and growth in the free market are completely missing in DC bureaucracy.
The postal system stopped cooperating with Outbox, and the company eventually died. This story is a sad chapter in the ongoing refusal to streamline and modernize the outdated USPS. What makes it especially notable is that in recent years the USPS leadership has welcomed changes, while Congress has resisted them. Here, it seems, Congress didn’t even need to step in, and the USPS killed the “disruption” all on its own—even though consumers are less and less willing to use the existing service. The information revolution has the potential to make government more efficient. But stakeholders in the current system will try to stop, slow down, or co-opt that process, as Outbox’s untimely death shows.