Inc has a article entitled Why ‘Be Passionate’ is Awful Advice where they baldly state that companies built on passion are fairy tales.
SmugMug is living proof. Here’s what it was like when we started, in response to their list of questions:
Is your idea really a business or just a hobby from which you’d enjoy creating a business?
SmugMug was an accident. The real business was a social network around video games. We started SmugMug as a side project (aka hobby) since we couldn’t find a good place to host our own personal photos online.
Can you actually realize your vision with your available time, capital, and resources?
We honestly had no idea, but it didn’t seem likely. The video game thing seemed like the real money maker, but it was going to take a lot more effort.
Is there a real, palpable, and evident demand for your offering among consumers? How big is the market?
No way. Every other photo sharing site was free. The bubble had burst and the Internet was a wasteland (this was 2002). The idea of charging for every single account seemed ludicrous to everyone but the two of us.
Does it have a real business model that will allow you to generate income immediately or a “maybe” model that might take years to (maybe) make a dime?
Real model? Sure, we were going to ask people to get their credit cards out and pay us real money. Was it going to actually generate income? We had no idea – asking people to get their credit cards out for a tiny, unknown, premium-only place to store your priceless memories wasn’t exactly a recipe that had investors foaming at the mouth.
Can you fully defend to your harshest critic the reasons why your business is capable of generating a dollar? How about $1,000? $100,000? More?
Nope. Our closest friends, include VC on Sand Hill Road and successful Internet entrepreneurs, all told us we were insane and we’d never make money. After we got a single signup our first week, and only 5 the entire first month, we started to believe them.
Approximately how long do you believe it will it to generate income? Can you survive that long? How about two or three times longer than what you anticipate (which is more realistic, if not generous)?
We hoped we’d generate income immediately. We did – about $30. We bought more ramen and corn flakes. We had no idea when meaningful income would arrive – ‘never’ seemed the most likely timeline.
Why have other similar businesses failed and how is your iteration of an idea different?
We had no idea. We didn’t bother to do any competitive research deeper than “Is there a good place online to host my photos? No? Guess we’ll build one.”
Is your idea a money pit or a cash cow? Will it need constant reinvestment or can you scale organically?
Neither? We didn’t have any money (our idea was so crazy that no-one would invest in us), so we knew it couldn’t be a money pit. But cash cow seemed unlikely, too.
Can you survive a total failure or are you “all-in” if you want to get started?
We could survive a total failure for no reason other than we didn’t put anything into the business other than blood, sweat, and tears. Zero dollars of investment, either by the founders or outsiders, meant we could easily walk away. Painful, but possible. (We bummed free rack space from a friend, used three ancient free servers from a failed dot com, and threw some code on it)
Today, we’re profitable, growing fast, and work with the greatest people on earth. We host billions of photos and videos, we have millions of passionate paying customers. Our offices are possibly the most fun in Silicon Valley, complete with gourmet food, giant gigapixel prints, dogs, go karts, dueling quadricopters, more 30″ displays than you’ve ever seen, and more:
Best of all? We work on the things we love because we own our own destiny. No outside investors meant we got to keep being passionate, day in and day out.
My advice to entrepreneurs? I’m absolutely positive that if you take your favorite hobby, mix in the Internet and a ton of hard work, you can build a great business. Whether you will or not is entirely up to you.
SmugMug is always hiring. Come do what you love, every day.
SmugMug wins Best Design at The Crunchies 2007 by Luca Filigheddu Photography
It looks like we’re probably eligible for a number of categories, but even if you don’t think we’re worthy, please go nominate your favorite startups. It really means a lot to the teams that work on these companies. Nothing like a little validation for all of our hard work… 🙂
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.
photo by: Local Sports Online
My poor little sister just got totally destroyed by awful Delta employees. She was trying to fly cross-country for the first time with her 4 month old baby. Disaster ensued, and Delta totally blew the customer service. Money quote?
“I asked [the supervisor] if she cared that I had been treated poorly by Delta employees, and she said if I wanted someone to care, I should write to “corporate” and they were required by law to respond to me in 30 days or less.”
My sister doesn’t fly as often as I do, clearly, or she would have known how terrible flying has gotten these days. She would have done online check-in, and would have arrived earlier. She made some mistakes, and seemed willing to accept the consequences. But that’s no excuse for downright rude customer service. Would an “I’m sorry” or a smile have been so hard? Shame on Delta.
Anne, for the record, flying with Virgin America has been an absolute dream, particularly when paired with Clear. (Want a free month with Clear? Use code SCA04501). I wish both were everywhere – maybe someday. In the meantime, avoid Delta like the plague.
UPDATE: I should have known Consumerist would have lots of stories like this. Enjoy!
One great thing about Web2Open is that it’s free – anyone can attend!
See ya there!
First: Very cool.
Next: I think it’s interesting that Google has basically taken a sniper scope out and aimed it at a specific cloud computing target. App Engine is only for web applications. No batch computing, no cron jobs, no CPU/disk/network access, etc.
I think this is very smart of Google. Rather than attacking Amazon head-on, Google has realized there’s a huge playing field for cloud computing, and are attempting to dominate another portion of it, one where they have a lot of expertise. Very good business move, imho.
Will we use it? I wouldn’t be surprised. I’ve long thought that we’ll continue to mix in web services from a variety of providers, and it looks like App Engine can solve a slice of our datacenter need that other providers don’t yet provide.
I’m more than a little concerned, though, by how much vendor lock-in there is with App Engine. At first glance, it doesn’t look like the apps will be portable at all. If I want to switch providers, or add in other providers so I’m not relying solely on Google, I’m outta luck.
I’m hopeful other languages get supported, too. I think Python is great – don’t get me wrong – but we have a lot more experience with other languages, so there’ll be a learning curve.
Finally, I’m dying to find out what pricing for an application of our scale will look like. I can see some immediate, obvious things I’d like to try to do on App Engine, but the beta limits aren’t gonna cut it for us. 😦
Will it replace Amazon? It sure doesn’t look like it from where I sit. In fact, I don’t see this as much of a competitor to Amazon Web Services. There’s some overlap in some small area (hosted web apps on EC2), but I doubt that’s the bulk of Amazon’s business. As I said, we’ll likely end up using both (and other providers as they come along, too).
My favorite bit? In theory, Google has solved the data scaling problem. I don’t mean raw binary (blob) storage, which S3, SmugFS, MogileFS, and plenty of other things have solved, but the “database” scaling problem. Every popular web app runs into this problem, and it’s typically solved with a combination of memcached, federation, and replication. But it’s messy. In theory, Google has automated that piece for us. I can’t wait to play with it and see if that’s true.
I also can’t wait to see who else is going to wade into this fray. Sun? Microsoft? Yahoo? IBM?
Bring it on!
photo by: Kirk Tanner
Hank Williams over at Silicon Alley Insider has a guest post up about how VCs are ruining the online tech economy by fueling free services, wrecking it for small and/or premium services. Matthew Ingram has a response out that resonates much more closely with how I feel.
First of all, SmugMug is living proof that you can make it as a premium service. Second, I think you’d be hard pressed to name a market where there isn’t stratification. Cars, airlines, music players, shoes – you name it, there are premium brands and there are commodity brands. On the web, commodity = free. That’s just how the game is played.
There are a lot of reasons why it makes sense for us not to be free, but perhaps my favorite is: We’re forced to hone our business. If we do don’t do it right, we don’t eat. Doing it right becomes priority #1 rather than growth.
There are quite a few reasons I love that there are *lots* of free sites with deep pockets in our space, too:
- Free training. Lots of our customers go chew up customer service dollars somewhere else first, learning the basics of how to upload, share, etc, before coming to us. By the time they get to us, they know the ropes and getting up to speed is easy.
- They’ve seen how bad it is elsewhere. By comparison, our product looks amazing. The ‘Wow factor’ is huge.
- Coattails marketing. We don’t have to spend a lot of money raising awareness of the photo sharing concept – other, bigger companies are doing it for us.
- Keeps us on our toes. As if our customers weren’t enough to keep us nimble, big deep-pocketed competitors surround us on all sides. Try slowing down and we die.
There is one big nasty downside, though, that really gets me. Every time a free site dies (and they’re dropping like flies), some of those burned customers get gunshy. Sure, we pick up lots of refugees, but there are some people who just get turned off by all photo sharing sites. They lost their priceless photos, afterall. That sucks. 😦
With the market downturn, that last point really scares me. If we really do have another bubble burst in the web space (and I predict we will), free photo sharing sites are going to be devastated.
I just hope they don’t burn an entire generation.
UPDATE: I found our problem! We don’t have a FreeTardis! I’m gonna get one.