Cryptic bitcoin company 21 Inc has launched a paid email platform that seems far removed from its initial focus on hardware.
The move is yet another in a string of pivots by the firm. Since it revealed it had raised $116m in 2015 (accrued over multiple rounds), 21 has evolved its strategy several times.
Originally founded as a bitcoin mining company, it soon appointed a new CEO – Andreessen Horowitz partner Balaji Srinivasan – and announced plans to distribute bitcoin mining chips embedded in consumer and enterprise hardware devices. The chips, attached to a Raspberry Pi and called ’21 Bitcoin Computers’, started shipping in November 2015 and quickly developers began building applications for the device.
Then, in March 2016, the company launched its first proof-of-concept for a network of devices incentivized to monitor websites with bitcoin. Several months later, it launched a software package that allowed any connected device to join the 21 network, enabling capabilities that were once only available to those with a 21 Bitcoin Computer.
The new communications platform seems to be yet another evolution for 21 Inc, though Srinivasan said the company has been working on this idea for some time, pointing to an SMS version of the current product that was published in late 2015.
Further, the CEO said, the email platform still aligns with the company’s primary goal.
He told CoinDesk:
“Allowing people to earn bitcoin by responding to emails and completing tasks achieves many of the same goals in that it may get millions of people their first exposure to digital currency.”
In the old SMS version, 21 Inc showed users how to set up a 21 Bitcoin Computer to allow them to receive paid text messages from anyone without revealing the recipient’s number. The new platform, which allows users to set their own rate, makes the service accessible for people even without the company’s hardware.
Rewarding the recipient
The new service – available via the website and a MacOS app – looks similar to LinkedIn’s InMail (which Srinivasan said is the platform’s closest competitor). And some enthusiasts, including Craig Lauer, an angel investor and mentor to TechStars and EvoNexus, have even made it public that they’d rather use 21’s platform over LinkedIn.
That’s probably because, according to Srinivasan, the recipient gets paid instead of the social network giant. On LinkedIn, payments made to send email to people outside your network are taken by LinkedIn itself, but on 21’s platform, the money goes straight to the recipient.
Most of it, anyway. When a user sends an email, 21 adds a 10% fee to transactions – for instance, sending an email to someone charging $1 means paying $1.10 total.
That small fee, though, has the potential to turn into big revenue for 21.
“InMail is nevertheless estimated to be a $300m per year business for LinkedIn, and we think that market could expand if recipient’s can get paid,” Srinivasan said.
This is especially true if well-known early adopters keep setting high prices (and people are prepared to pay for access to them).
Andreessen Horowitz’s Ben Horowitz set his account at $100 via the service. With such high values, some wonder what the benefit of using bitcoin would be since, in these cases, it might be just as easy to add debit and credit payment options.
But Srinivasan contends there are several advantages.
“It allows instant receipt of funds without linking a bank account, it works across borders and it can scale up and down to very small and large payments alike,” he said.
This appreciation is also, it seems, why people have rushed to the new service, since users can make $2 in bitcoin just by reading through how the site works and setting up an account.
This mechanism for offering monetary value for tasks is the real mission of the 21 platform, according to Srinivasan.
“The goal is to make it possible to send targeted tasks to people. In the same way that your resume qualifies you for an offline job, a verified 21 profile qualifies you for online tasks, payable in bitcoin,” he said.
The Gerson Lehrman Group, an expert network that provides independent consulting services, offers a service like this, although it is aimed at survey participants, rewarding users with virtual event credits and monetary reimbursement.
“Think of it like a hybrid of LinkedIn and Amazon Mechanical Turk,” Srinivasan said.
John Light, head of product marketing at Abra, a bitcoin-based mobile app for remittances, suggested the paid email use case is merely a way to market the tasks platform.
“The email application seems like a useful idea, especially for those getting a lot of inbound requests and they need to apply some filter to decide what’s worth responding to – especially if those people are outside your network,” Light said. “The messaging product is also useful because it’s public-facing … and acts as a marketing tool.”
Although others, like Wayne Vaughan, founder and CEO of Tierion, remain skeptical – not only of the paid inbox, but also of the tasks platform.
In today’s world, social signals such as getting introduced by a mutual friend are generally seen as more valuable than monetary compensation, Vaughan suggested.
“Putting a price on that … it’s like if I want to tell you something interesting, but you ask for $50 to do that, I want to tell you to go screw yourself,” he said.
Not to mention, high prices put some people – such as young entrepreneurs or developers and small publication journalists – at a disadvantage.
“It’s not a perfect solution,” conceded Light, “but it’s a new option for purely unsolicited messages with no pre-applied filter.”
Of course, there will always be other channels on which people can reach out, such as the public networks like Twitter On these, though, account holders aren’t guaranteed to respond, and surely, said Light, they would if someone paid them to.
As an added incentive for some, the money received from incoming emails or earned from tasks can be donated to three different “tech-savvy and bitcoin-friendly” charities, said Srinivasan.
“Because price is a signal, money could be a very interesting way to prioritize messages,” he argued. “At the same time, the recipients often don’t actually need the money, so donating it to a good cause is a creative solution.”
Yet, some like Vaughan are still doubtful.
All in all, Vaughan (and other observers) wonders if 21 isn’t trying to amass a large user base, a new asset so the company can sell.
“If you’re trying to sell your company and show fast customer acquisition this might be a way to do it,” he said.
But maybe it’s more about finding a business model that gains traction, allowing 21 to drill down on a specific use case, Light argued.
While the move isn’t necessarily a desperation play, Vaughan thinks 21’s ability to raise money could be limited since its mining equipment business hasn’t worked itself into a commercial success as of yet.
In Vaughan’s mind, this is the latest pivot that shows a company experimenting with revenue-generating business models.
“If there’s a thread of continuity, then they need to do a better job of communicating what they’re all about.”
Images via 21 Inc
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