Chairman’s message – June 14, 2011
Dear WrapMail shareholder,
It is pretty exciting in our world these days and some of this excitement comes from:
- We recently went public (in our 6th year in business)
- We are seeing tremendous growth of signups after we became free about 6 months ago
- We have and continue to put in place upgrades to both the hardware and software platform to increase performance and functionality.
- We are looking for more programmers (on Monster.com) to speed up the delivery of new features focusing on ease of use and dynamic content (without revealing too much :- ))
- We are talking to some very interesting companies about our services from several angles
- We are working on raising capital to tackle added expenses such as development and marketing
- We have hired a few different IR firms to help us market the company and create more awareness over the next 12-24 months.
- We are getting 10-20 new clients every day, still offering all new clients one free custom wrap
- We have just fired up Re/Max in Cayman Island on the Enterprise version, the most successful Re/Max agency in the world (so hopefully it spreads).
Since we decided to make WrapMail free from Q4 last year we have had nothing but positive experiences and where it took us about 5 years to get the first 1,000 corporate accounts it took us about 8 weeks to get the next 1,000 after we became free!
Now, everyone is asking how we make money and the short answer is; we don’t (yet).
Here’s my thinking:
Look at Linked-In, Skype and Twitter for example (all free services) and see what “Market Cap” they demand, it is huge considering none of these companies made much money last time I checked. Actually Linked-In was at the time of the IPO priced at about 1,000 times earnings, Twitter turned down a few billion dollars with little to no revenue and Skype (losing $7M in 2010) was just sold for 8 billion dollars to Microsoft.
Where’s the value? THE AUDIENCE!
So, what do we do? We give away our solution to grow the audience and then look at revenue opportunities when the volume hits certain milestones over the next 1-2 years (hopefully).
Hypothetical: Let’s say WrapMail gets to 250,000 users in the next 1-2 years. That would represent 2.5 million emails sent through us every day (the average user sends about 10 external emails per day). That is equal to the circulation of the largest newspaper in the US; USA Today. I bet a lot of companies would like to advertise to that receiving audience. I further believe we would be able to generate about 5 cents per email sent in 3rd party ad revenue or license fee so now it is fairly easy to calculate potential revenues:
100,000 users: $50,000 daily revenue – $15,000,000 annual revenue
200,000 users: $100,000 daily revenue – $30,000,000 annual revenue
400,000 users: $200,000 daily revenue – $60,000,000 annual revenue
500,000 users: $250,000 daily revenue – $75,000,000 annual revenue
The higher the percentage that opt for 3rd party advertising as opposed to paying a license fee to stay ad free the higher the revenue to WrapMail.
The above is not guaranteed to happen by any means but in my mind it is very feasible if we do things right.
We are looking at models where we let the email senders share in the ad revenue to further grow the volume and revenue.
WrapMail solutions and who can use it:
Business – any business in any location with a website and employees that send emails can use wrapmail. Most businesses do not have a store so their website is their only store where they feature products and services. Take a real estate agent for example, the only place you can view all the properties in one location is on their website – with wrapmail they can show the properties with every email sent and have these images link back to the website that contains more information about that specific MLS listing. Just to give an idea of what kind of clients we get on a daily basis here’s a list of some of the clients that signed up in the past few days:
