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Will the new Hey email service eat Gmail’s lunch?

I’m an email expert. Here’s what I think.

Every couple of years, a new-fangled email service launches and generates a lot of buzz on Twitter and in the tech press. The latest app is called Hey, made by Basecamp, which is based in Chicago, where I lived for 15 years. If you follow the email ecosystem, you might be familiar with Superhuman, another email software startup that has garnered a lot of attention over the last few years for also re-inventing the email experience.

The skinny on Hey

  • It’s a web-based email system.
  • It only works with @hey.com email addresses. The company has started onboarding companies who want to move their team’s email to Hey, but it’s not widely available yet.
  • It’s invite-only for now.
  • It costs $99/yr or more if you want a two or three-letter username @hey.com.
  • About 100,000 people have requested access, according to Jason Fried.
  • It has some neat features like blocking open-tracking pixels by default (bad for guys like me) and being able to see all of your attachments sent from everyone in one place. Its screener makes you apply a Yes/No to everyone that’s emailing you for the first time, which then determines where future emails are routed. It features an “Imbox” instead of an Inbox, and although plenty of people are annoyed by this, Jason Fried and company insist that itsnotatypo.com.

Will Hey become wildly popular, displacing Gmail as the #1 email service for entrepreneurs and startups?

I doubt it. Hey will likely succeed as a niche email tool and a moneymaker for Basecamp, Inc., but it’s unlikely to be a dominant force in the consumer or business email market.

People love to hate email, so whenever a new email app arrives onto the scene, it feels exciting. I tried Superhuman last year but quickly switched back to Gmail. I’m a special case, though, because I use Gmail in a way that nobody else in the world uses it — I use it to manage every aspect of my company. Every time a new user signs up for GMass, a notification goes into a special Label. Every time a user launches a campaign, a notification goes into a special Label. Why do I do this? So that when I’m handling a support issue for a user, I can search for any user by their email, inside my Gmail account, and immediately pull up a history of everything they’ve done. Gmail’s exceptional search capabilities make this all possible.

Additionally, once I was turned onto Gmail’s keyboard shortcuts, the productivity advantage of Superhuman disappeared.

The biggest drawback of using any email client outside of Gmail is that it will never have the vast ecosystem of third-party developers building added functionality for it. There are already hints that Hey will be a mostly closed ecosystem, given that you can neither relay email via SMTP to a hey.com address or retrieve your hey.com messages over POP or IMAP. Perhaps there will eventually be an API. Still, unless alternative solutions like Hey and Superhuman are willing to natively add demographic information to contacts, help you turn emails into to-do items, and tell you how to write a message to a particular person, they’ll never be able to compete on features. Other Gmail extensions add email tracking and auto follow-ups, both of which are useful to a sender of emails.

Since Hey is decidedly anti-spying, it would create quite the kerfuffle if it were to add pixel-based open tracking to the service as a user of Hey but then tout the blocking of said pixels on the receiving end as a feature and more-so a product mantra. Superhuman fell victim to this when a blogger “discovered” that by default it includes the tracking pixel in all sent emails, although I never understood why this was such a big deal. If I’m a user of any email client, I’d love to know when my emails are opened.

For some reason, privacy advocates get far more riled up over marketers knowing you’ve opened an email than knowing every move you make on every website, which is fairly commonplace if you’ve ever logged into a website or if you’ve ever clicked on a Facebook ad and then browsed the advertiser’s site.

Additionally, Gmail already natively includes scheduling, snoozing, and smart text suggestions, not to mention the best email search function on the planet. Given that Gmail is made by Google, and Google’s almost-trillion-dollar business is based mostly on its ability to accurately dole out search results faster than you can compose your next thought, it’s unlikely that any alternative email service will be able to provide a search function that’s better than Gmail’s native search function.

About that Screener

Hey’s primary method for sorting out email that you want from email that you don’t want is the Screener, a place where all first time emailers end up, and you, as the user, have to choose YES or NO to each sender. It’s a simple way of deciding what’s spam and what’s not.

There’s one major problem with this approach. It requires a LOT of manual work. In the beginning, as @hey.com addresses are new, users won’t mind this. In fact, on Twitter, new Hey users delight at getting new email just like they did when email first became commonplace in the late 90s with AOL Mail. Over time though, as you use your new @hey.com address more and more, working your way through the Screener will become as tiresome as trying to achieve Inbox Zero with a “regular” email platform.

Here is where Gmail is far superior. Most people have never heard of TensorFlow, an open source machine learning AI platform developed by Google that Gmail is now using to block spam. Can Hey match this? Possibly, but as smart as Basecamp’s engineers are, the kind of computer science expertise required to build AI-based systems goes far beyond being able to create beautiful UIs for project management systems and email platforms.

How about Hey vs. G Suite and Docs, Sheets, Calendar, YouTube, and more?

If you host your company’s email on G Suite, then you’re probably also using Google’s Calendar, Google Docs, and a bunch of other Google services like YouTube and Meet are likely tied to your G Suite account address. Fortunately for these users, it is possible to switch to Hey for email, but keep the rest of your G Suite services. This is due to the nature of how email works, and the magical DNS MX record that controls it all. If my domain, mywidgets.com, wants to use Hey for email but keep my G Suite services alive, all I have to do is change the MX record for mywidgets.com to point to Hey, and now I can host all of my @mywidgets.com email accounts at Hey but still log into all of my  G Suite services using the same @mywidgets.com accounts created on G Suite. The only difference is that email messages sent to @mywidgets.com will no longer appear in Gmail.

The drawback of this hybrid approach is that you’ll be forced to pay the monthly fee for G Suite and for Hey, and that “double” cost is unlikely to be palatable to most businesses. The only sustainable solution to this would be if Google uncoupled the Gmail service from the rest of the G Suite services, and that’s just not going to happen.

The key difference between Hey and Superhuman

Hey is both an email client, via its web-based app, and an email hosting service. As a user of hey, you have an @hey.com email address which you then manage through the Hey website or app.

Superhuman is only an email client. It works on top of other services like Gmail. With Superhuman, you keep your @gmail.com or G Suite account, and you use Superhuman to send and receive emails from those same addresses. With Superhuman, you can also use the Gmail app or web-based client to send/receive. With Hey, you are locked into the Hey website or app to manage your @hey.com address.

The advantage of Hey’s approach is they can offer users a new beginning, with a new email address, for people that are sick of the volume of email they receive at their current address. Of course, you can also solve that problem by creating a new @gmail.com address — but you’re not likely to get tom@gmail.com, whereas you probably can get tom@hey.com for a price.

The disadvantage of Hey’s approach is that new beginnings are not easy. Because you can’t just slip Hey’s email client over your existing email client, it’s not nearly as easy to switch to it. Establishing a new email address that will become your primary email address is hard. You have to inform everyone you’re in touch with that you have a new email address, hope they update their contacts, and further hope they never reply to an old thread with your old email address. You could forward your old email address to your new @hey.com address, but that’s clunky and can break threads.

How desirable is having a hey.com email address?

For me, the litmus test of an awesome email address is whether I can utter my email address to a customer service rep over the phone without any ambiguity as to its spelling.

Let’s say I had the account me@hey.com (I don’t), and I say over the phone, “My email is me at hey dot com.” That’s still ambiguous. Is it “hey” dot com, or is it “hay” dot com?

“Sorry, was that ‘hey’ or ‘hi’?” I foresee someone asking.

The only way for this issue to become moot would be if the Hey email service became as ubiquitous as Gmail or Yahoo Mail, and even if that happens, it will take time.

Hey’s battle with Apple

Hey is currently in a fight with Apple because Apple is refusing to publish the latest version of the Hey app unless they include in-app purchase functionality in the app (see update below). As a subscription service, Hey charges a minimum of $99/yr, and Apple is arguing that the app must offer in-app purchases to be compliant with App store policies, and so that Apple can take its 30% cut.

It’s hard to feel bad for Hey, though, because although I believe them when they say this isn’t a PR stunt, the amount of publicity this battle is generating is insane. Every tech site you can think of is covering the story from TechCrunch to The Verge to protocol. Furthermore, Superhuman had the same issue, did comply with Apple’s requirements, and is happy with the results.

I, too, have struggled with similar issues with both the Chrome extension store and the Gmail Add-on Marketplace, the two app marketplaces relevant to my business. I’ve argued that my app should be allowed to do X and look like Y, only to be told No, even when other apps did the same thing. I’ve managed to prevail over Google by using sound logic and persistence. At least with Hey’s fight against Apple over the App Store policies, there’s a point of contact and guaranteed communication with the app review team. That’s far more than a Chrome extension developer gets. Finding out why your extension has suddenly been delisted is like wandering around a pitch dark room with no walls.

I predict that Hey’s place in the App Store will eventually be settled one way or another, even if they succumb to the Apple tax, but I doubt the way they’re flaming Apple all over social media is helping their cause. Apple is too big to be swayed by a few haters, and even though there might be 5,000 haters siding with Hey, that won’t be enough.

UPDATE: Apparently, over the weekend, Apple did capitulate and approved the version of the app with the bug fixes, and the fight has now struck a more conciliatory tone. The folks at Basecamp are surely rejoicing, not only because their app is approved, but because they’ve just earned another round of major press coverage from every. publication. on. Earth.

Revenue Predictions for Hey

According to Jason Fried, about 100,000 people have requested invites, and supposedly after this week, all 100,000 people will have had the opportunity to sign up. I’m going to assume that 75% of the people that get an invitation code will use it and sign up. That’s pretty high, but given the high engagement of users on Twitter and the massive press coverage, it’s reasonable. Every new user also gets a few invites to hand out, so let’s say at the end of this week, a total of 80,000 people have signed up for the free trial.

For free trial SaaS products that don’t collect a credit card upfront, a 10% conversion from free to paid is typical. Hey is going to do a lot better than that, given the excitement around its launch. Let’s double that to 20%. So at the end of  the 14 days following the end of this week, I predict that 20% of 80,000 users will have signed up for the basic $99/yr service, which amounts to 16,000 paying users at about $100/yr, which equals $1.6M in Annual Recurring Revenue (ARR). Not bad.

Do I want Hey to succeed?

Somewhat. I’m a bootstrapped entrepreneur, and so are Jason Fried and David Heinemeier Hansson, the two faces of Hey, so I feel a kinship with them. I admittedly also feel threatened every time a Gmail alternative is launched because my whole career is based on people using Gmail. Whenever an alternative surfaces, my target market shrinks ever so slightly. So take this analysis with a grain of salt since I’m naturally biased against Gmail alternatives like Superhuman and Hey.

Invite-only? You’ve already lost me.

I loathe invite-only systems, but for some reason, every shiny new email product starts as invite-only. Gmail started as invite-only in 2004. Superhuman is still invite-only. And now Hey is invite-only until July. I’m immediately turned off by invite-only systems, but I recognize that I’m a rare soul. Why does invite-only bother me so much?

  • I see it as a self-indulgent attempt to drum up buzz when the actual product is not in limited supply
  • I feel like an ass explaining that I have access to something that you don’t
  • It’s usually a sign that a product hasn’t been tested enough to be released to the masses

Now some products are truly in limited supply, and so limiting access based on supply is key to survival. Like diamonds. Just kidding.

This kind of product launch reminds me too much of other life experiences where the product uses the customer to market themselves rather than the product. It’s like a bouncer forcing a line to form outside a popular nightclub when there’s actually plenty of room inside.

While I’m on my soapbox, this also annoys me. A veiled attempt at being transparent with an interesting story of how they acquired the hey.com domain name without revealing the one thing that actually matters — the price. So they had some back and forth with the seller over a period of time, and another buyer entered the picture? That’s the story of EVERY SINGLE high-value domain purchase.

What do I want to happen?

I hope that when alternative email apps like Superhuman and Hey come to market, it forces everyone else in the email ecosystem, including Gmail, to up their game. Gmail has struggled recently as an innovator. Since it implemented strict new security protocols, put in place for its third-party developers, it has essentially squashed innovation from third parties by making it cost prohibitive. What makes Gmail remarkable, and what makes it unlikely that Superhuman or Hey will ever be able to catch up, is its vast library of extensions and add-ons. Gmail itself, as evidenced by its blog, rarely adds new native features.

The future of Hey

It’s likely that Hey will eventually offer an API, just like Basecamp does, and who knows — maybe afterwards, a certain someone will write a Chrome extension for Hey to make it possible to send email campaigns through Hey. Whoa! Actually, that’s unlikely. Hey’s native feature-set seems to be fairly anti-email-marketing, and while I haven’t seen any documentation as to how many emails a single @hey.com account can send in a 24-hour period, I’m almost positive they will limit the service so that it can’t be used to send even low-volume campaigns, like Gmail and Outlook currently can.

Disclaimer: I haven’t tried Hey. It’s invite-only, and I don’t have an invite.

13 Comments
  1. Great analysis and explanation. I’m evaluating Hey but doubt I’ll ever switch from Gmail, which I’ve been using since I got an early invite in 2004.

    While I understand Hey’s (and others’) frustrations with Apple, the App Store *is* their marketplace. If you want to play there, you have to follow their rules (and I’m sure Hey knew what they were prior to building). I don’t like that there are 800 pound (more like 8 ton) gorillas that obliterate smaller (and possibly better) players, but that seems to be the tech environment we’re in.

    And I’ll throw in my two cents about GMass as well. Only been using it for a few weeks (on recommendation of Bryan Harris from Growth University). It has been extremely helpful to be able to send bulk emails directly from Gmail and not have to use an ESP. The auto-followup feature is very cool, and I’ve gotten many responses from that because people ignored or didn’t see the original email.

    1. Glad to hear it! Obviously I have no plans of switching away from Gmail either.

      Awesome that you’re liking GMass so far!

  2. Great blog.
    I found it after signing up, to find out how much this will cost. I’m grateful for this walkthrough.

    So, if you want, let me know, and I’ll send you my code. It has another use !

  3. Keep kicking (gm)ass!

    Companies who try to impede digital marketers from being able to use response data to continually improve relationships with their customers simply don’t understand commercial email and should stay in their lane.

  4. “There’s one major problem with this approach. It requires a LOT of manual work.”

    “Over time though, as you use your new @hey.com address more and more, working your way through the Screener will become as tiresome as trying to achieve Inbox Zero with a “regular” email platform.”

    So mis-guided. It is the opposite. Use the Screener for *maybe* a week and you might have to screen a couple a couple of emails every day or so.

    I do realize that your business is at stake but please be accurate. The net is that it takes very little effort and one achieves Inbox Zero, as you say, and it remains that way far better than any other email service. It’s actually brilliant. Choose what you want to receive, never again see what you don’t.

    Btw, I am a gmail user and have been since beta, 2004.

  5. Hey Ajay, love this take on hey.com. A super thoughtful analysis! You should add to the discussion on souffle.club. Some prominent VC’s and founders in there, and a great way to get some visibility for your argument 🙂

  6. Great article on the pros and cons of Hey. I strongly agree with the vast ecosystem of third party developers building added functionality makes Gmail a very strong email service.

    I do however like the Hey’s screener functionality, and one click filtering (Gmails filter is super powerful but also cumbersome). I had some free time and decided to add these these as a browser extension: zenmailhq.com 🙂

    So now you can screen and have one click filters directly on Gmail!

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