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Now is the time to build

October 30, 2008
Big Cats

Big Cats by micalngelo

“Every startup CEO is at least thinking about the need to cut back right now” – Michael Arrington

“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.” – Warren Buffet

I’ll give you one guess as to which man I’m listening to. So no, not every startup CEO is cutting back. Apple spent their time innovating during the last downturn and look where it got them. I’m thrilled to have just passed out big, healthy profit-sharing bonuses to all of our employees this week for the 5th consecutive year. We think and hope they’ll be even bigger next year.

SmugMug was founded in the middle of the last “nuclear winter” in Silicon Valley. Everyone told us we were crazy, and we knew there was no chance at raising venture capital at a decent valuation, even with our impressive backgrounds. So we did what any good entrepreneur would do: We did it anyway, with both eyes firmly on our business model.

So if you’re running a startup, or thinking of creating one, take heart – downturns are a fabulous time to build and grow businesses. Focus on your revenues and your margins, not your growth rate or # of unique visitors. Find some stable income streams and a customer need. Listen to your customers and give them what they want – and what they’re willing to pay for. And take care of your employees – they’re your most valuable asset.

SmugMug is still hiring Sorcerers, Heroes, and all manner of other mythical beings capable of impossible feats. We filled our last position (quickly, I might add) with a *great* hire (and I’m still sorting through the avalanche of resumes we got to see if we can add a few more), but the job door is never closed at SmugMug for true superstars. Our philosophy is to not let anyone amazing get away, even if we don’t technically have an open position for you.

So if you can make magic and want to work for a company that takes crazy-good care of its employees, let us know.

  1. October 30, 2008 at 9:52 pm

    I couldn’t agree more about now is the time to build. We build in the downturns to take us higher in the upswings. I noticed you went to PDC last week. You should come check out Dreamforce with salesforce.com. I’ve never been more inspired!

  2. October 31, 2008 at 4:00 am


    you nailed it right there.


  3. October 31, 2008 at 9:40 am

    Great advice Don. I’ve been continually impressed at how (well) you run SmugMug. More web startups need to learn that having a valid business model and taking care of your employees is more important than rocketing up the unique visitors count in the hope that they get snatched up by Google or the like. Last year I lamented your limited video support and promised to subscribe as soon as you upgraded beyond MPEG-1, I’m proud to say that I’ve been a paying customer for going on 6 months now.

    Kudos and keep up the innovation!

  4. October 31, 2008 at 12:38 pm

    I love this post and the picture that goes with it. Go SmugMug!

  5. October 31, 2008 at 12:43 pm

    Don – I’m a huge Warren Buffett fan and was recently in the Bay Area to speak at a Web 3.0 (who cares about arbitrary numerical designations?) Conference. I noticed a lot of fear in the eyes of fellow entrepreneurs afraid of venture capital drying up, which convinced me to move back to the Bay Area and start something. I don’t know exactly what that something is just yet but I’m of the belief that you don’t have to have solved all the problems to jump into an opportunistic situation. You just have to believe in yourself to figure it all out. With or without venture capital, this is a good time. When I get out there – could I look you up?

  6. October 31, 2008 at 1:23 pm

    yep, couldn’t agree more.

  7. October 31, 2008 at 7:40 pm

    I agree baring any total economic collapse which could occur before Bush leaves office.


    Around January we’re going to expanding aggressively.

    It’s a good time to be a startup….

  8. November 9, 2008 at 4:43 am

    I admire you, Don.

  9. Harold
    November 9, 2008 at 6:53 am

    I hate to be obnoxious (especially since I’m not a photo/video taking type, although I’m trying to get my brother who’s the former to start using you), but I wonder how your business is going to fare in the developing situation of severe per month broadband traffic caps, especially considering the well known psychological/behavioral effects these have.

    First, a brief overview from memory (go to dslreports.com for the details):

    Comcast has the most generous at 250GB/month … but a “death penalty” (loss of service for a year) if you go over for two months (and they don’t have to be consecutive as I remember, after one warning that’s it).

    Time Warner and now AT&T are doing single city trials, so their sizes might be adjusted, but for now TW is 5GB to 40GB/month depending on tier, AT&T 20-80GB for their 4 tiers of normal DSL (150GB if you are in the highest FTTN U-verse tier (ignoring the new even higher tier they’re coming out with) … and most of their customers can’t get U-verse and many not even the higher DSL ones). After you hit those, you pay $1/GB.

    I think other cable companies are working on this, don’t remember about Qwest, and Verizon is the only big name that’s still saying no caps.

    (Why are they doing this and with such small limits in the developing era of HD video, instead of throttling users during peak periods, where their capex is what really costs them? Third party video from e.g. Netflix competes with their double or triple play offerings that include Cable TV MK II.)

    Anyway, I can’t see how this won’t have an effect on your business, although I can see how you can make some strong arguments that your service could help by limiting the traffic that e.g. all the members of a family will need to continue what they’re currently doing.

    And you might tailor it for people like my mother, who’s on the lowest AT&T DSL tier that may get capped at 20GB/month. E.g. help her manage her limit so that she can download pictures and video of the grandchilds without going over (as a member of the Silent Generation who grew up during the Great Depression her reaction to paying as much as one unexpected dollar would be … figuratively violent). (Me, I’ll just say “stop emailing me photos, I’ll see my nephew and niece when they next visit. 🙂

    I hope you find the above useful.

  10. December 7, 2008 at 6:00 am

    "the job door is never closed at SmugMug for true superstars. Our philosophy is to not let anyone amazing get away, even if we don’t technically have an open position for you."

    I love this attitude, direct opposite of Google's!

  11. December 8, 2008 at 10:55 am

    If its your vision, your money and your commitment anytime is right to build a company. I liken it to Poker, all my chips are in, there is no cutting bait and running.

    "Passion only gets you so far, inspiration takes you the rest of the way."- Kelly Slater

  12. November 14, 2009 at 3:36 pm

    Canon FTL. I'll never buy another one of their camera's. This seals it. Peace.

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