Stamps.com 2004 Annual Report Download - page 11

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receptive to future fee structures and special promotions that we may implement. Even though we have established a
sizeable base of users, we still may not generate sufficient gross margins to remain profitable. In addition, our ability
to generate revenues or sustain profitability could be adversely affected by the special promotions or additional
changes to our pricing plans.
Personnel changes may interfere with our operations.
On January 31, 2005, Craig Ogg, our VP of R&D, resigned from the Company in order to pursue other
endeavors. Immediately following that event, JP Leon, our VP of Advanced Technology, assumed the leadership
role for the R&D team. Changes in the direction of, or delays in, our software development could harm our business,
financial condition and results of operations.
If we do not successfully attract and retain skilled personnel for permanent management and other key
personnel positions, we may not be able to effectively implement our business plan.
Our success depends largely on the skills, experience and performance of the members of our senior
management and other key personnel. Any of the individuals can terminate his or her employment with us at any
time. If we lose key employees and are unable to replace them with qualified individuals, our business and operating
results could be seriously harmed. In addition, our future success will depend largely on our ability to continue
attracting and retaining highly skilled personnel. As a result, we may be unable to successfully attract, assimilate or
retain qualified personnel. Further, we may be unable to retain the employees we currently employ or attract
additional qualified personnel to replace those key employees that may depart. The failure to attract and retain the
necessary personnel could seriously harm our business, financial condition and results of operations.
The success of our business will depend upon the continued acceptance by customers of our services.
We must minimize the rate of loss of existing customers while adding new customers. Customers cancel
their subscription to our service for many reasons, including a perception that they do not use the service
sufficiently, the costs for service are too high or other issues are not satisfactorily resolved. We must continually add
new customers both to replace customers who cancel and to continue to grow our business beyond our current
customer base. If too many of our customers cancel our service, or if we are unable to attract new customers in
numbers sufficient to grow our business, our operating results will be adversely affected. Further, if excessive
numbers of customers cancel our service, we may be required to incur significantly higher marketing expenditures
than we currently anticipate to replace these customers with new customers.
If we fail to effectively market and sell our service, our business will be substantially harmed and could fail.
In order to acquire customers and achieve widespread distribution and use of our services, we must develop
and execute cost-effective marketing campaigns and sales programs. We currently rely on a combination of
marketing techniques to attract new customers including direct mail, online marketing and business partnerships.
We may be unable to continue marketing our services in a cost-effective manner. If we fail to acquire customers, in
a cost-effective manner, our results of operations will be adversely affected.
If we fail to meet the demands of our customers, our business will be substantially harmed and could fail.
Our services must meet the commercial demands of our customers, which include home businesses, small
businesses, corporations and individuals. We cannot be sure that our services will appeal to or be adopted by an
ever-growing range of customers. Moreover, our ability to obtain and retain customers depends, in part, on our
customer service capabilities. If we are unable at any time to address customer service issues adequately or to
provide a satisfactory customer experience for current or potential customers, our business and reputation may be
harmed. If we fail to meet the demands of our customers our results of operations will be adversely affected.
A failure to further develop and upgrade our services could adversely affect our business.
Any delays or failures in developing our services, including upgrades of current services, may have a
harmful impact on our results of operations. The need to extend our core technologies into new features and services
and to anticipate or respond to technological changes could affect our ability to develop these services and features.