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DYMO Endicia Chief Technology Officer Harry Whitehouse at the DYMO Endicia offices in Palo Alto, Calif. on Friday, February 1, 2013. (LiPo Ching/Staff)

If anybody should be worried about the precarious position of the U.S. Postal Service, you'd figure Harry Whitehouse would be the guy.

His entire business and the livelihood of the 168 workers who toil away at its world headquarters on a quiet Palo Alto street depend on the mail service. You know, the one that once prided itself on being undeterred by the elements, but which now is raising postal rates, contemplating ending Saturday mail delivery and losing many billions of dollars a year.

But Whitehouse, who favors flip flops, aloha shirts and Dr. Brown's Soda, isn't the sort to worry.

"There is a bright future for the postal service," Whitehouse says. "I'm less worried than I've ever been."

No, he's not a nut. He's an expert. Whitehouse and his co-founder Amine Khechfe are pioneers in the field of selling postage on the Internet. Now Endicia, their Silicon Valley company that you've never heard of, sells $1.6 billion in postage a year to companies and e-commerce sellers shipping packages by mail. The post office gets the money from the postage sold and Endicia sells supplies and software services that integrate online retailers' customer order systems and tracking systems with Endicia's postage software. That means that when an order comes in, the retailer can almost instantly print out one label with the customer's address, the proper postage, bar codes for tracking and then wait for the daily postal pickup.


And packages, Whitehouse points out, might be the postal service's savior. Shipping is a growing business for the post office (up 14 percent over the last two years), which is competing with delivery services like UPS and FedEx. It's the drop in letter mail (down 37 percent since 2006) and growing pension requirements that are killing the post office.

"Our niche is the growing part," Khechfe says. "This is the part that the postal service wants to put fuel on."

Whitehouse and Khechfe have been studying the postal service since the early 1980s, when the USPS hired what was then their consulting firm to analyze the energy use at the Carmel post office. They spent a lot of time with regional administrators who handled leases, maintenance and other issues for thousands of post offices.

"We noticed everything these facility people were doing was manual," says Whitehouse, a mechanical engineer by training. Which led to a lot of "what ifs" and "why don't theys" and an evolving business plan for Whitehouse and Khechfe.


Today Endicia (known as DYMO Endicia since Newell Rubbermaid bought it in 2007) works deep in the plumbing of the economy. It is among a long list of valley enterprises that are overshadowed by big household names like Apple (AAPL), Google (GOOG), Facebook, Twitter -- the companies that are in consumers' faces every day. Instead, these valley plumbers offer arcane sounding services that they trumpet with an alphabet soup of CRM, HRIS, SCMS and SaaS.

But in fact, Endicia is hiding in plain sight. Keep an eye on the packages that arrive at your house in the coming weeks. That item you bought on eBay (EBAY) or through Amazon? Those running shoes you bought online? That exotic coffee coming by mail? Chances are something in your mailbox will come with a postage label from Endicia.

It turns out the company sells 65 percent of all online postage. About 350 million packages move through the U.S. mail with Endicia-generated postage affixed to them. Given Endicia's share of the shipping market, you can understand why Whitehouse looks at the postal service problems differently from the rest of us. Rather than worry about the USPS dragging his business down, he sees the potential for his business to raise the postal service up. He is, after all, a major retailer for postage sales.

"It's an honor to do that," Whitehouse says. "We're working as an arm of the U.S. Postal Service, which is the biggest delivery network in the world, by far. When I see a U.S. postal truck, my little mind goes, 'God, I'm kind of working for that group.' "

But of course, it's the shippers who are Endicia's real customers. They pay for Endicia's services, which allow them to integrate the company's postal software with their customer ordering and tracking systems -- the behind-the-scenes underpinning of modern commerce.

Gillian Robinson is co-founder of ZombieRunner in Palo Alto, an athletic gear shop with an e-commerce business that ships 40 or 50 packages a day. She says the store's move nearly two years ago to Endicia has cut down the time it takes to ship a package and reduced errors from cutting and pasting customer information from order forms to shipping forms.

"Now we have the order displayed on the screen. Hit a button, the package is weighed automatically, all the postage is calculated and the label spits out, and we have the U.S. mail pick up all our packages," she says. "It's very seamless."

And for Endicia and the other plumbers in Silicon Valley, that's exactly the way it's supposed to be.
