The Entrepreneur Interview Series #11: Michael McCarthy, Inkit

When you think of hot software startups, it’s probably technologies like artificial intelligence, blockchain, and virtual reality that come to mind. You probably don’t think about…direct mail. But one Minneapolis entrepreneur did, and he’s building a rapidly growing business with his vision.

Though direct mail has been around since the days of the Sears catalog and the Pony Express, it remains a popular and profitable marketing channel for many types of businesses. It’s flexible, allows precise targeting, and is one of the least costly marketing tactics other than email.

But while direct mail is effective, it’s often not efficient. In many organizations, the process of managing creative design, mailing lists, production, and logistics still involves a series of costly, error-prone manual processes.

Michael McCarthy wondered why direct mail couldn’t be produced with the efficiency of email marketing automation tools. So he did something about it. Here’s his story.

The Product

Inkit is an online automated direct mail software platform that enables enterprises to connect with their customers offline in a highly automated yet humanized, one-to-one fashion.

Even in many large companies today, direct mail processes are predominantly manual: there are teams and teams of people who manage the pieces of mail that go out, whether for operational purposes like billing and compliance, or marketing use cases such as an offer on a new credit card.

So the current way of doing direct mail is often cumbersome and involved; working with an agency or print broker, a lot of back and forth, no software, no automation…just humans doing the work.

“We solve for that whole manual process through our platform as well as a direct mail API for integrations where mail can be seamlessly integrated into a company’s existing systems,” says Michael McCarthy, founder and CEO at Inkit.

“Broadly speaking, any customer can benefit from it, though so far we’ve found greater success successes with B2C marketers because the pain of inefficiency increases with the volume of mail sent. A consumer brand may have teams of people working just on direct mail currently.

“We’re able to reduce the labor required; accelerate processes through integration; and most importantly, deliver mailing pieces that are truly personalized, on a one to one level, meaning that you can actually talk to your customer on a humanized level instead of just a canned offer or message.”

In brief, Inkit is a SaaS solution that enables companies to efficiently and intelligently communicate with their customers using printed, personalized mail.

While any company that does a significant volume of postal mail could benefit, Inkit has found its best success in midsized (e.g., BiteSquad, Bird Scooters) and large (Procter & Gamble) consumer brand businesses.

The Company

Year founded: 2017

Funding rounds: Primarily friends-and-family funded to date; currently pursuing a pre-seed funding round.

Current size: 10+ employees

InkIt is featured in:

The Inspiration

Webbiquity: What inspired you to work on a solution to this particular problem?

Michael McCarthy: Our co-founder, Abram Isola, was working at Drip (now owned by Leadpages), a company that does email marketing. And I was doing a lot of work with Facebook ads.

I saw that Facebook ads were really stagnating. This is happening all over right now, where digital just isn’t performing as well. And my curiosity was super piqued by direct mail because, like so many small business owners, I kept receiving mail pieces from Google—sometimes twice per month—offering ad credits of $50, $100 or whatever.

I thought, oh my gosh, Amazon, one of the largest companies on the Internet, is sending out postal mail to lure new customers.

And I started to wonder how many other companies are doing this as well. So I began exploring, talking to companies like SoFi, Casper, really hot startups, and saw that they were doing direct mail at scales that were pretty mind-blowing.

For instance, a company like Lending Club sends out about a quarter of a billion—250 million—pieces of mail every year. That’s just for marketing, not even operations.

This seemed like sort of a really well kept secret. Then when I started talking to people who were doing high-volume mail. Many said it was extremely cumbersome and didn’t integrate with their digital tools or CRM. It was all manual and they wanted to streamline how their mail was actually sent out, to make the whole process more efficient.

We help customers with anything that’s a postcard or inside of a letter. So, not just in marketing, but also just back of the house use cases: notification, customer notifications, invoices, compliance notices.

What’s cool about that is all that can be triggered out of their systems now; if x happens, then send y to the customer. It’s all logic based. It’s direct mail automation, coupled with data and analytics, on demand.

The Launch

Webbiquity: What were the most effective channels or methods for you to get the word out to prospective customers when you first launched your product?

Michael McCarthy: Very early on, our biggest channel was word of mouth. It still is. Our blog and content marketing is number two.

And at number three, we’ve developed relationships with very strategic channel partners who sell Inkit on our behalf. It’s channel partners like like HubSpot, where we’re integrated with their app ecosystem. We’re also part of the Braze app ecosystem, meaning that if somebody goes to Braze and they’re looking for direct mail, we usually get that referral.

The Lessons

Webbiquity: Finish this sentence: “Knowing what I know now, if I were starting over today, what I would do differently is…”

Michael McCarthy: You really put me on the spot here.

What I would do differently is we would have started selling to the enterprise right from the beginning. We wouldn’t have spent the first six months trying to sell to small business owners and marketers, who are wonderful people but just don’t do the volume of mailing needed to justify our platform. That was a waste of time, the first three to six months, but we really didn’t know any better.

Getting our target right was just trial and error more than anything.

The Takeaways

Webbiquity: What’s the most important advice you could offer to an entrepreneur starting out today?

Michael McCarthy: It sounds super cliché, but I’d say the whole concept of “grit” is very important because an entrepreneur needs to be very gritty, and able to weather lots of setbacks and storms, because there are going to be a lot of ups and downs. So it’s really just survival, it’s a lot of just persevering. just making sure after you get knocked down you get right back up on your feet.

Big, big fan of grit. That would be my biggest advice.

Really what it comes down to is the people who build the product. So in addition to having grit, you need to pick the best team. Optimize for team first, because ultimately teams win. You can have an idea that other people might think is stupid, but when you have the best team in the world, you will win at anything.

So I’m big fan of optimizing for teams, for people. That would be my advice; have grit and optimize for teams.

You can connect with Michael McCarthy on Twitter and LinkedIn.