Why greeting cards aren't dead

When guests visited the Hirschfeld family's Manhattan home in the early nineties, Alexa Hirschfeld played gallery owner.

The towheaded elementary schooler would run upstairs to her younger brother James's closet, then return with handfuls of his artwork. She'd dazzle guests with his latest paintings and sketches, pointing out aspects of each work she knew each visitor would find most compelling. Hirschfeld took care to remember who liked which piece best, and which styles of her brother's art earned the most attention.

“I never knew what my role in art was,” she reflects. “Because I was such a deep appreciator, and such passionate appreciator. But every time I would try to sit down and be an illustrator or painter, it was just not my best use.”

Nearly two decades later, she is still helping others appreciate art, albeit in a much different medium. We're sitting at a conference table at her and James's online card company, Paperless Post, in the Chelsea neighborhood of Manhattan. Hirschfeld looks more than a little tired, slumped into a bright red chair in the otherwise white room. I've pulled her away from talks with her Web developer team over a new iPad app.

“Busy day?” I ask. “Every day is busy,” she sighs. It's less a complaint than an acknowledgment of reality -- she's the 28-year-old cofounder of a startup that's gained 2 million users over its three years of existence.

The Hirschfeld siblings launched Paperless Post in 2009 based on the idea that people actually want visually pleasing online content. James, then a college senior, felt the Internet lacked artful options for invitations and greeting cards. So he posed the concept of creating a digital card company to Alexa.

“The first thing I said was that people would use it, and I don't know if they'd pay for it,” she remembers telling her brother. So the siblings researched the approaches of likely competitors, services such as Evite and Facebook Events.

“We looked so closely at all of them. And instead of being disturbed by what we saw, it really helped us narrow our entry point to the market,” Alexa tells me. She speaks slowly and deliberately, looking off at the side wall as she formulates her response. “We basically positioned ourselves as something super narrow and super new -- a more design-focused company, which was seeking to bring the best of the old tradition to the new medium, and updating it to make it better where possible.”

The Hirschfelds took care to study what users wanted from online greetings and invitations. People seemed to view the current offerings as wanting in terms of style.

“I thought it was interesting that none of the competitors online really cared about the invitation itself, they all cared about the Web presence. It was like an afterthought. Whereas all the users in the real world really cared about the invitation itself. That was probably the most surprising thing, it was the most heartening thing too. What the consumer wants is, surprise surprise," she smiles, "pretty things, easy things, responsive things.”

So, Alexa and her brother created a business plan that might seem archaically sensible in the current tech age. “We basically built a pricing model that surgically identified what people wanted to pay us for and what they didn't want to pay us for,” she explains. “One of the things we figured out early on was that we could create value for people by creating a product that allowed them to design something that they couldn't design without us.”

Paperless Post began as a fully premium service, with a set price for every card. But the Hirschfelds soon learned that users preferred to pay per card feature. The site now operates on a coin system, with each coin costing about 20 cents. Those coins buy customizable features for your card, such as envelope liners, stamps, additional notes, and different colored backgrounds. Paperless Post cards feature in-house illustrations, as well as graphics made through partnerships with designers like Kate Spade. Sending multiple cards multiplies the number of coins that a particular greeting costs. Some simple, non-customized cards can be sent for free, and new users begin with 25 coins in their digital purse.

Those small coin payments have added up for the startup. It reached a positive cash flow by its second year of business. Paperless Post also has managed to penetrate a market that has evaded its less design-conscious competitors -- digital wedding invitations.

Hirschfeld credits the startup's success to a practical harnessing of aesthetics. “I believe in form,” she tells me, looking off at the wall again, “and the manner of what you say being as important as the content of what you say. And what this company lets people do is in line with that. ”

As a classics major at Harvard University, Alexa wrote her thesis about the poet Constantine Cavafy, which provides some insight into her philosophy about design. “His entire poetics was about the importance of style. A lot of time the style is the substance.” And with Paperless Post, she says, appearance really is the product.

While the company originally found success offering the digital version of something physical, it recently began offering paper versions of its digital cards.

“So many people were asking for it,” Hirschfeld says of the printed product line, “it would have been a risk not to build it and try it.”

So Paperless Post launched its Paper line in October 2012, at a price point five to 10 times higher than its digital cards. Within five weeks of launch, the founders witnessed a day when Paper's revenue outstripped that of the digital cards.

I ask Hirschfeld whether the success of paper cards spells failure for digital greetings. “No,” she answers with certainty. “It's that,” she pauses, “basically print is more of a statement now. People still want to make those statements.” She says there are uniquely physical ways in which one uses paper greetings, such as the holiday cards you find displayed on the mantle or the name cards at a wedding reception table. “The physical world is not going away,” she adds, “just items take on different meaning. Paper takes on this archival, very important meaning now that it's not the only way to communicate something.”

Hirschfeld sees this dual online-offline access as key to a modern content company's success. She points to Netflix and Amazon (with its Kindle) as companies that have made a flexible medium the product itself -- we pay them for the way they allow us to easily access content.

“Seamlessness makes a lot of sense for us,” she explains. “Because even hard paper invitations are a digital product. The physical item itself is not always the most important part, it's the visual information and the actual data that's important. A design is an intellectual product."

Two decades after her years as a child curator, Hirschfeld has found her role in the creative world-- connecting people with aesthetics for which they're happy to pay.

Photo: Elisabeth Bernstein

This post was originally published on Smartplanet.com