The USPS recently announced that mail volume was down 3 percent in the first fiscal quarter of ’08. This is great news for us.

First, let’s look at the details. This was a decline of 1.7 billion pieces for the quarter, largely attributable to declines in mortgage and financial services mailings.

Now, why do we think this is such a good thing? The answer is that the pressures of decline opens more room for competition and new ideas.

It’s common wisdom that you want to be in a growth market because growth exposes opportunity. The unlikely corollary is that being in a contracting market opens up just as many opportunities, as long as the market is large enough to support the decline. Print and mail are gigantic markets which can easily absorb decades of continued contraction (as they will have to).

But this is good for these industries. Competition in the print world has focused increasingly on price rather than innovation. Contraction makes that strategy dangerous and generally leads to a dramatic contraction in the total number of firms.

Given that, firms are forced to look for new ways to compete. Faced with change or extinction, many firms will stumble towards the later. But enough will attempt innovation to break down institutional barriers. The net result is a more uncertain and fluid market for all players.

And this is just what we’re positioned to take advantage of. Postful is built on a new model for print and mail focused on integration with digital tools and information. This is perhaps the most important growth area within this overall declining market.

All of this puts us in a great position to take advantage of the dynamics of change and build out a strong position to expand from here. It should be interesting to see how the rest of the market responds.