[Everpix] lost the $50,000 first prize
[at TechCrunch Disrupt] to Shaker, a
bizarre kind of Second Life-meets-Facebook
social network that raised $15 million and
hasn't been heard from in a year.
A promising, arguably 'disruptive' company lost at a TechCrunch event to a startup backed by Michael Arrington? Color me shocked! Shocked, I say!
> They spent too much time on the product and not enough time on growth and distribution. The first pitch deck they put together for investors was mediocre. They began marketing too late. They failed to effectively position themselves against giants like Apple and Google, who offer fairly robust — and mostly free — Everpix alternatives.
People on HN crap all over MBAs, but these are the types of problems many of them have been trained to solve.
Does an MBA inoculate someone from making these judgment errors? If so, I personally know multiple MBA-holders who've made similar errors who should be informed that they deserve their money back or something.
It's important to be aware of the necessity to perform those business functions that coders probably would rather not bother with, but once that happens, I find that technical people tend to make much, much better judgment calls than their business school superiors.
In reality, it's rare to find people who're daring enough to apply simple rationality across most or all spectra, regardless of their background. Unfortunately, an MBA seemingly does very little to mitigate this, and it's the core problem.
Yes, people could hypothetically learn, but most don't. I don't understand why we've all fooled ourselves into believing that four years of rote memorization and arbitrary compliance will do anything. I guess it being a much more fundamental problem is scary, because as simple as it may be, it's apparently quite difficult for most people to change.
We have a big problem with our educational and hiring cultures.
> People on HN crap all over MBAs, but these are the types of problems many of them have been trained to solve.
So, didn't their investor have any MBAs? These are also the kinds of problems VC investors are supposed to advise on, to protect, you know, their investment.
I am going to tackle this, from a coders point of view, you can very quickly see if someone is any good. Or a designer, sysad, most other things.
But MBA are like economists, they all have different ideas on how to advance, and it is very hard to actually hard to test them, takes a long time to see if they were actually correct, if they fail they have a good reason, and it all sounds like something you could have worked out anyway.
Let's be clear: learning about those lessons will take maybe, at most, a month or two of reading a couple of books, reading PG's essays, and reading a few of the blogs written by great entrepreneurs and VCs. That's it. An MBA probably does teach you this - it just doesn't need to take two years and XYZ thousand dollars. There's a lot of fluff in an MBA that's just not necessary for a startup.
The fact also remains that the vast majority of people I know who got an MBA did it for the network, not for the education.
I can't help but wonder if that safety net feeling is part of what doomed Everpix. If they had believed they were incredibly lucky to land $1.8M and that they had to build the whole business with that (rather than having a belief that more funding awaited whenever they needed it), would it have forced a different set of decisions to be made that would have driven revenue and growth, and ultimately success, instead?
From the sounds of it, what doomed them was pricing too low in a way that made it impossible to create higher tiers of service, and, perhaps most importantly, using AWS for everything. AWS bills monthly, so if in fact they were running a $35k/mo bill there, a HUGE refactor was passed by. But then again, startups don't hire sysadmins anymore.
When you go down the VC path, they expect hypergrowth; certain doors are opened and others are closed. Personally, next time around I minimize dependence on funding.
"Blogger was a success and quickly gained traction. But unlike their enterprise product, Blogger had no way of making money. Pyra Labs eventually had to lay off all of their staff as the money ran out. For a year, Ev worked on Blogger by himself in order to keep the site online. After a year of struggling to keep the site afloat, Blogger eventually started to make some money. Google would eventually make Blogger it’s first acquisition."
Sad. It looks like their technology did a great job at solving a very real problem.
If any of the founders are here, can I ask a question: why did you chose to implement this as a cloud based service, when a little basic Math would suggest that it was a better match as a client-based tool with upgrades?
Take me for example. My internet is 20mb down, 1.5mb up. That's pretty good for Western countries. I currently have around 300gb of photos taken in the last 10 years. That'll take months to upload. But if you made it client based you could do conversion & classification locally. Then uploaded the best into a pinterest style gallery for your website (with social features).
Then offer backups, custom galleries etc as professional features ($5/month for low-res jpeg backups, $20/month for 500gb RAWs). Maybe you could have found a niche with semi-pro photographers who're fed up with flickr? Or families who want to share photos with relatives without the risk of Facebook/Google using them in adverts?
We built a unique image pipeline with excellent full-res image optimizations allowing to save close to 5X in bandwidth and storage costs. Incidentally, it also makes syncing entire life photo collections much faster, that's why the average Everpix user had more than 9,000 photos.
35k/month in aws bills. 6k paying users. 10% upgrade rate.
That means their storage + servers per customer cost ~$.5/month. Storage per paying customer of about $5/month.
Ergo their $5/mo service has costs of $5/mo per paying user.
This isn't a failure to raise funds, it's a failure to achieve basic unit economics. And that's just cost of goods sold before you even think about acquiring new customers or paying staff.
Everpix team: sorry to hear that the runway ended before you could take off. It is a great idea, but with such tough competition for user acquisition (esp free competition in the B2C space), it's easy to see how customer growth couldn't deliver the returns needed for a VC-backed startup. We considered this space heavily but decided we'd be no match against the giants throwing money at this space.
At Tourbuzz, we've approached the photography market from a commercial angle. We've bootstrapped a profitable niche in professional real estate photography and are now planning our expansion into other niches. I do believe that the feature set you were formulating is one that is in consumers' interest, it's just a matter of finding a way to monetize it successfully. The photography space is still huge and growing, and there is plenty of time to build large, successful companies in the space.
We'd love to talk to you about the future if you're interested.
Their focus wasn't on the product, it was on living/working in SF. They could have saved a year's worth of AWS payments alone by trimming the fat that comes with wanting to be in a "hip" location.
I know what you mean, SF is too expensive. But it's basically impossible to relocate a team of 7 who already have various different ties to a given area.
"Everpix sponsored the DF RSS feed twice this year, which is how they first came to my attention. ... Really a shame to see them close."
There's the problem. They spent $16K on Daring Fireball sponsorship instead of doing basic research to discover where they should actually be targeting their marketing efforts.
Your best idea for acquiring more users is to sponsor one of the most expensive RSS feeds in the world? Sponsoring DF is typically what companies do when their accountant says "you need to get rid of some cash, stat."
If Everpix hadn't yet found a path to sustainability, doing something like sponsoring Daring Fireball as a tactic to acquire more users is a good indicator of some very poor business decisions.
My hunch is that Everpix's $35,000/mo AWS bill could have been significantly less if they went with their own dedicated servers.
When I ran my music start-up, really smart people would look at me funny when I'd tell them it is cheaper than AWS for us to get a couple of high-power dedicated servers with unmetered 100mbps bandwidth. We were pushing over 100tb per month and paying under $3,000/mo, including the cost for our web and db servers.
The transparency in this article is something we can learn from. It's sad to see a service like Everpix go as they were making money. But if you look at the other numbers, they just staffed up too quickly. Salaries, personnel and payrolling costs of together $3.7 million in two years is just way to much compared to the money they were making.
What I'm curious about is that the cost per user (storing photos) is what killed them, or a burn-rate simply to high for what they're doing.
But then again it's easy to look at this as an outsider and try to point out their flaws. I'm hoping to learn more about how they monitored specific business metrics to test their business model.
If they were paying $35K/mo to AWS for hosting and storage, they could have paid about that much for a year of hosting on their own machines. There's a lot we don't know about this angle, but suffice it to say they were throwing money away on infrastructure.
Dammit. That sucks. I am (well, was) a paying member of Everpix and I loved it. It was very great. It surprises me that this is how I found out about the closing. They haven't sent out the notifications to members yet, it seems.
Guess I now have to look for another similarly seamless remote backup of my photo library. Any suggestions?
I am in the same boat :( so sad. Loved the product; checked the flashbacks everyday, shared through the easy photomail feature. It was way better built out than Loom and didn't have a storage cap. But yeah, what is that worth when it's not viable? :/
I am another very, very satisfied Everpix user who is sad to see them go. They did such a perfect job of increasing visibility on old photos and I've been sharing pictures like I never did with Facebook or any other social network. Such a shame.
I'm Currently looking at loom.com as a replacement, though they don't have the same cool Flashback feature that I loved.
>> They haven't sent out the notifications to members yet, it seems.
I just had an email pop into my inbox. Sad, indeed; I really enjoyed using it and paid money to help ensure they stuck around. I guess not enough folk felt the way I did. :-(
Wow. What an interesting example of what's wrong with the venture capital model. A great product dies because the founders "spent too much time on the product".
I hope a 9th inning miracle saves the day. If not, thanks for the great product.
Here's my perspective as an avid, sometimes published photographer...I never used Everpix but my perception is that it solved a very real problem but unfortunately, it is a problem that most people don't realize they have.
For starters, most people already use something like Facebook, in which they've selected the best or most interesting of their photos to share to the adoration of their social network. When these users wonder if they've done enough with their photo collection, they just have to look through FB and remember that yes, they did put up a few photos and people liked and commented them, end of further discussion.
Of course, these users may have thousands of other photos that they just never got to...but that might not matter for most people...they've already gotten some satisfaction from sharing.
Of course there are shutterbugs who do feel a yearning to go through their photos and see them all again...but are there enough to support a paid service? Hard to say, especially with the many other photo services out there.
From my perspective, I have a pro Flickr account where I have nearly 10,000 photos...which represents less than 5 percent of the photos I've taken in the last few years. However, a service like Everpix is not appealing enough to me...because the barrier to me is not that I can't easily access old photos, but that I've realized that editing and sorting photos is the long part of the work...and unless Everpix mitigates that part better than Lightroom and a bunch of external HDs, I don't think id be compelled to try it out.
And so for now, Flickr is good enough...I mostly use Flickr because it's an easy way for people to find me. I imagine 500px likewise finds its success less as a storage service and more of a place to shareable nod be seen. A lot of the testimonials I've seen of Everpix was its value to people and their own photos...which, while is a very valuable thing to serve, it is ultimately the sharing of these photos that makes people want to join a service in the first place
I wish the author had dug into the budget more. Yes you need to grow your company.. but $1.2M in salaries? Half a million in "consulting fees"? To develop an early stage product?
This seems like a missed opportunity to explore startup finances. Not just growth strategy. I personally would love to know more.
Can somebody explain the difference between salary, payroll, and personnel? As far as I can tell, this money goes to employees. However, with a sum of roughly $3.8M, this seems a bit high for 6 employees over 2 years ($270k+/employee/yr), so that can't be right..
> They hoped that at the very least, they would be able to refund their customers' money and allow them to download their data.
I wish more web services gave the option of hooking into my own personal AWS S3 buckets or DropBox account (with append-only permissions). This would totally eliminate any concerns over data retention and possession. Double-bonus points for open formats. I want to (unambiguously) control the underlying data!
I don't know if EverPix had this option or not... it's just a frustration for me that keeps me from using (most) web applications.
It's somehow ironic that a service provider whose name contains 'ever' and promised to store your photos for ever has to shutdown after only two years. As a user, I tend more and more to go with well established providers to avoid such situations. 40 days isn't much to migrate away from a service either. On the other hand, users have probably to be glad that the service wasn't shut down with immediate effect.
The thing is, more established companies aren't a guarantee either. I tend to hit the back button as soon as I see an internet company promise to do anything "forever."
Wow, I just signed up for Everpix two weeks ago. According to this article, they had already written the message announcing their end when they took my money.
[+] [-] aaronbrethorst|12 years ago|reply
[+] [-] martingordon|12 years ago|reply
People on HN crap all over MBAs, but these are the types of problems many of them have been trained to solve.
[+] [-] cookiecaper|12 years ago|reply
It's important to be aware of the necessity to perform those business functions that coders probably would rather not bother with, but once that happens, I find that technical people tend to make much, much better judgment calls than their business school superiors.
In reality, it's rare to find people who're daring enough to apply simple rationality across most or all spectra, regardless of their background. Unfortunately, an MBA seemingly does very little to mitigate this, and it's the core problem.
Yes, people could hypothetically learn, but most don't. I don't understand why we've all fooled ourselves into believing that four years of rote memorization and arbitrary compliance will do anything. I guess it being a much more fundamental problem is scary, because as simple as it may be, it's apparently quite difficult for most people to change.
We have a big problem with our educational and hiring cultures.
[+] [-] enjo|12 years ago|reply
[+] [-] weixiyen|12 years ago|reply
[+] [-] lazyjones|12 years ago|reply
So, didn't their investor have any MBAs? These are also the kinds of problems VC investors are supposed to advise on, to protect, you know, their investment.
[+] [-] megablast|12 years ago|reply
But MBA are like economists, they all have different ideas on how to advance, and it is very hard to actually hard to test them, takes a long time to see if they were actually correct, if they fail they have a good reason, and it all sounds like something you could have worked out anyway.
[+] [-] rhizome|12 years ago|reply
[+] [-] argonaut|12 years ago|reply
The fact also remains that the vast majority of people I know who got an MBA did it for the network, not for the education.
[+] [-] mathattack|12 years ago|reply
[+] [-] unknown|12 years ago|reply
[deleted]
[+] [-] SoftwareMaven|12 years ago|reply
[+] [-] rhizome|12 years ago|reply
[+] [-] sameer_sundresh|12 years ago|reply
[+] [-] shin_lao|12 years ago|reply
[+] [-] radley|12 years ago|reply
"Blogger was a success and quickly gained traction. But unlike their enterprise product, Blogger had no way of making money. Pyra Labs eventually had to lay off all of their staff as the money ran out. For a year, Ev worked on Blogger by himself in order to keep the site online. After a year of struggling to keep the site afloat, Blogger eventually started to make some money. Google would eventually make Blogger it’s first acquisition."
http://culttt.com/2013/09/11/founders-work-review/
[+] [-] radicalbyte|12 years ago|reply
If any of the founders are here, can I ask a question: why did you chose to implement this as a cloud based service, when a little basic Math would suggest that it was a better match as a client-based tool with upgrades?
Take me for example. My internet is 20mb down, 1.5mb up. That's pretty good for Western countries. I currently have around 300gb of photos taken in the last 10 years. That'll take months to upload. But if you made it client based you could do conversion & classification locally. Then uploaded the best into a pinterest style gallery for your website (with social features).
Then offer backups, custom galleries etc as professional features ($5/month for low-res jpeg backups, $20/month for 500gb RAWs). Maybe you could have found a niche with semi-pro photographers who're fed up with flickr? Or families who want to share photos with relatives without the risk of Facebook/Google using them in adverts?
[+] [-] swisspol|12 years ago|reply
[+] [-] thatthatis|12 years ago|reply
That means their storage + servers per customer cost ~$.5/month. Storage per paying customer of about $5/month.
Ergo their $5/mo service has costs of $5/mo per paying user.
This isn't a failure to raise funds, it's a failure to achieve basic unit economics. And that's just cost of goods sold before you even think about acquiring new customers or paying staff.
[+] [-] apinstein|12 years ago|reply
At Tourbuzz, we've approached the photography market from a commercial angle. We've bootstrapped a profitable niche in professional real estate photography and are now planning our expansion into other niches. I do believe that the feature set you were formulating is one that is in consumers' interest, it's just a matter of finding a way to monetize it successfully. The photography space is still huge and growing, and there is plenty of time to build large, successful companies in the space.
We'd love to talk to you about the future if you're interested.
[+] [-] homersapien|12 years ago|reply
[+] [-] sameer_sundresh|12 years ago|reply
[+] [-] Guillaume86|12 years ago|reply
[+] [-] 650REDHAIR|12 years ago|reply
Of course there are cons to living in SF, but if you're going for a series A after landing an initial investment it makes sense to base out of SF.
[+] [-] physicsyogi|12 years ago|reply
[+] [-] mvkel|12 years ago|reply
"Everpix sponsored the DF RSS feed twice this year, which is how they first came to my attention. ... Really a shame to see them close."
There's the problem. They spent $16K on Daring Fireball sponsorship instead of doing basic research to discover where they should actually be targeting their marketing efforts.
Your best idea for acquiring more users is to sponsor one of the most expensive RSS feeds in the world? Sponsoring DF is typically what companies do when their accountant says "you need to get rid of some cash, stat."
If Everpix hadn't yet found a path to sustainability, doing something like sponsoring Daring Fireball as a tactic to acquire more users is a good indicator of some very poor business decisions.
[+] [-] zaidf|12 years ago|reply
When I ran my music start-up, really smart people would look at me funny when I'd tell them it is cheaper than AWS for us to get a couple of high-power dedicated servers with unmetered 100mbps bandwidth. We were pushing over 100tb per month and paying under $3,000/mo, including the cost for our web and db servers.
[+] [-] paromi|12 years ago|reply
[+] [-] ilolu|12 years ago|reply
[+] [-] bjansn|12 years ago|reply
What I'm curious about is that the cost per user (storing photos) is what killed them, or a burn-rate simply to high for what they're doing.
But then again it's easy to look at this as an outsider and try to point out their flaws. I'm hoping to learn more about how they monitored specific business metrics to test their business model.
[+] [-] rhizome|12 years ago|reply
[+] [-] 3JPLW|12 years ago|reply
Guess I now have to look for another similarly seamless remote backup of my photo library. Any suggestions?
[+] [-] sameer_sundresh|12 years ago|reply
[+] [-] jrnkntl|12 years ago|reply
[+] [-] derstang|12 years ago|reply
[+] [-] zzzmarcus|12 years ago|reply
I'm Currently looking at loom.com as a replacement, though they don't have the same cool Flashback feature that I loved.
[+] [-] mikestew|12 years ago|reply
I just had an email pop into my inbox. Sad, indeed; I really enjoyed using it and paid money to help ensure they stuck around. I guess not enough folk felt the way I did. :-(
[+] [-] joeshaw|12 years ago|reply
We're moving more into the realm of calling ourselves a backup service than the aggregator/viewer service we are mainly today.
[+] [-] ScotterC|12 years ago|reply
[+] [-] sashaeslami|12 years ago|reply
[+] [-] Codhisattva|12 years ago|reply
I hope a 9th inning miracle saves the day. If not, thanks for the great product.
[+] [-] danso|12 years ago|reply
For starters, most people already use something like Facebook, in which they've selected the best or most interesting of their photos to share to the adoration of their social network. When these users wonder if they've done enough with their photo collection, they just have to look through FB and remember that yes, they did put up a few photos and people liked and commented them, end of further discussion.
Of course, these users may have thousands of other photos that they just never got to...but that might not matter for most people...they've already gotten some satisfaction from sharing.
Of course there are shutterbugs who do feel a yearning to go through their photos and see them all again...but are there enough to support a paid service? Hard to say, especially with the many other photo services out there.
From my perspective, I have a pro Flickr account where I have nearly 10,000 photos...which represents less than 5 percent of the photos I've taken in the last few years. However, a service like Everpix is not appealing enough to me...because the barrier to me is not that I can't easily access old photos, but that I've realized that editing and sorting photos is the long part of the work...and unless Everpix mitigates that part better than Lightroom and a bunch of external HDs, I don't think id be compelled to try it out.
And so for now, Flickr is good enough...I mostly use Flickr because it's an easy way for people to find me. I imagine 500px likewise finds its success less as a storage service and more of a place to shareable nod be seen. A lot of the testimonials I've seen of Everpix was its value to people and their own photos...which, while is a very valuable thing to serve, it is ultimately the sharing of these photos that makes people want to join a service in the first place
[+] [-] abalone|12 years ago|reply
This seems like a missed opportunity to explore startup finances. Not just growth strategy. I personally would love to know more.
[+] [-] guynamedloren|12 years ago|reply
[+] [-] beambot|12 years ago|reply
I wish more web services gave the option of hooking into my own personal AWS S3 buckets or DropBox account (with append-only permissions). This would totally eliminate any concerns over data retention and possession. Double-bonus points for open formats. I want to (unambiguously) control the underlying data!
I don't know if EverPix had this option or not... it's just a frustration for me that keeps me from using (most) web applications.
[+] [-] elag|12 years ago|reply
[+] [-] chmars|12 years ago|reply
[+] [-] lh7777|12 years ago|reply
[+] [-] robterrell|12 years ago|reply
[+] [-] girvo|12 years ago|reply