Stay up to date on our entrepreneurs, events, research and more. Check out our June newsletter here.
Endeavor is pleased to make public the following transcript and video from a presentation at the 2011 Endeavor Entrepreneur Summit in San Francisco. The event, which assembled over 450 entrepreneurs and global business leaders, featured dozens of entrepreneurship-related presentations by top CEOs and industry experts.
Chairman, Pixelpipe; formerly CEO, XMarks; Venture Partner, Bridgescale Partners, and President & CEO, Xoom Corporation
James Joaquin is a seasoned entrepreneur with 20 years of experience building and growing consumer technology companies. While studying computer science at Brown University in the 80’s, James co-founded Clearview Software, a company later acquired by Apple. James co-founded When. com, an Internet calendar and events service that was acquired by America Online. After that successful acquisition, James was President and CEO of Ofoto, the leading online photo service that was acquired by Kodak in 2001. More recently James served as President and CEO of Xoom Corporation, a global money transfer service, and as Venture Partner at Bridgescale, a growth equity investment firm. Since 2008, James has served as the President and CEO of Xmarks Inc., the bookmark sync startup co-founded by Mitch Kapor in 2006 under the original name Foxmarks. In December 2010 Xmarks was acquired by LastPass. James advises a number of startups including 955 Dreams, IMVU, Nest Collective, Pixable, and Pixelpipe.
I was cofounder and CEO of an online photo service called Ofoto that was very early in taking consumer photography to the web. Many of you know Dave Geary at Endeavor and Dave worked very closely with me for many years building Ofoto and we sold that company to Kodak in 2001. I stayed on and ran it as a wholly owned subsidiary of Kodak for another three years or so. More recently, I’ve been an advisor, board member, and investor to a number of digital and social photography companies and I’ll show you a couple of those today.
On the evolution of consumer photography and building Ofoto
We’re going to be talking about photography; something that brain science has shown makes us happy as humans. The way we store happy memories is predominantly in images and I think the popularity of photography very much speaks to that. And I want to walk you through what has happened with consumer photography from its very beginnings to some of the really bleeding edge innovation that’s happening with photography on the social web.
When we think about consumer photography, we’ve gone from this notion of being able to take and capture pictures, to being able to do that digitally. Many of you remember when digital cameras were pretty rare and expensive, to mobile photography, which is you when your camera came free with your cell phone. What’s interesting is that now we’ve gone from mobile photography to social photography. I’m going to talk about what that means and dive into how that happened, so that it might help you understand how great social great phenomena happen on the web and they may inspire you in the products and services that you’re building at your company.
Let’s zoom out to the year 1900. This is roughly when consumer photography was invented. I’ve singled out the “brownie camera” – this was a product from the Eastman Kodak company that really made photography accessible to everyone. Before this, photography was a very difficult science with really arcane equipment. If you look at some of the early advertising that Kodak did for this, it’s surprisingly friendly and consumer focused – this idea that for 1 dollar you can buy the camera and they had a cute little mascot.
Now if we zoom out and think about a hundred years later and we look to the late 90s – this is when we started Ofoto. Ofoto launched in December of 1999. It was around the time Apple had shipped the first consumer digital camera, the Quick Take 100. My first digital camera, the Nikon Coolpix 950 – that was a 2 megapixel camera, it was state of the art at the time. When we launched Ofoto, we basically had a vision that digital photography was going to change the way we took pictures and it was going to create new problems. How do you share those pictures when they’re digital? How do you print them and turn them into Kodak prints? We had this crazy idea to build a service to do that. When we first marketed this service, we used the tagline “Rediscover Photography” because we found that it was a renaissance – suddenly you never ran out of film, you could take more pictures, you could manipulate them in a digital darkroom, you could share them on the internet. It really was a game changing event for consumer photography.
But there was a catch. When we were doing this in 1999, broadband was not very pervasive, most people did not have a digital camera (film cameras cost about $20 and digital cameras cost about $1,000). It was a very risky idea in terms of when we did it.
I want to go to my mystery box and just quickly show you what this box is. This is the launch kit that we used to send to press when we launched Ofoto. We actually made 25 of these. We picked the 25 most important journalists that we wanted to write about our new service and we sent them one of these. Inside the box was a set of instructions, a 2 megapixel digital camera, and most importantly, a floppy disk adaptor so that they could get the memory card from the camera to their computer to transfer their files. That’s how hard it was not that long ago. We’re talking less than 15 years ago. This was really bleeding edge.
So a lot happened, but it took a hundred years to go from brownie camera to digital photography and online photography. That’s almost as long as it took humans to put wheels on luggage so the rate of innovation was pretty slow. Now let’s zoom forward 10 years. Look at what happened between 2000 and 2009, 2010. We saw the advent of Flickr, Facebook, and Twitter. And these three services, kind of in that order, are really transforming how consumers are sharing and enjoying consumer photography.
I’ll zoom into Facebook for a second, because very quickly, over those 10 years, Facebook quickly became the number one photo sharing service in the world. Now Facebook didn’t start as a photo sharing service. They didn’t envision it with that narrow of a focus, but the power of the social connections that Facebook enabled just naturally had this gravitational force that pulled consumers to use the service for sharing.
Let’s look at some of the current 2011 numbers for Facebook. Over 80 billion photos – 6 billion new photos each month. That is an unbelievable tidal wave of photography that’s showing up on the service. And next up is video. Video is becoming so easy to share from mobile that in my estimates, Facebook is doing 30 million videos every month.
Twitter: smaller numbers, but interesting public sharing is happening. Twitter just announced a whole bunch of new photo initiatives so you can expect a whole bunch of photo action happening on Twitter as well.
Elements of Social Networks:
So how did this happen? How did we go from dedicated photo services like Flickr and Ofoto, all of which is getting dominated by Facebook? To understand that, I pulled a diagram from a user experience consultant and author named Gene Smith. He posted an article in 2007 called “Social Software Building Blocks” and he created this diagram [see presentation] which is kind of a user experience diagram. In the center is what is the key attribute of your web service and what are the secondary or related attributes around it?
He pulled these seven items and he based this on a 2003 article by Stewart Butterfield, who was one of the cofounders of Flickr. So you can see this story has its roots in some of the early social networking websites like Flickr. The center here is identity. Any social software is about putting a digital presence for yourself on the web and then linking your identity to other people. Around that are other attributes, like presence – are you currently on the web in real time, your relationships and connections to other people, reputation – how much authority or reputation you have, groups – grouping people into groups, conversations, and of course sharing, which is very much the cornerstone of Facebook.
What Gene Smith did is he took this diagram and color coded it for different services and I’ve made an attempt to update that. If we look at Flickr, we can see that it was very focused on photo sharing and that was at the center of that service and it took off very quickly based on that, but it didn’t have very strong functionality in a lot of those other areas.
Digg, the social news service, really took off in terms of creating conversations around shared links.
When you look at Twitter, it really brings presence, the real-time aspect of what are you sharing right now. And it also brings in reputation. How many followers you have on Twitter is a pretty interesting type of reputation for your social clout on the web.
And last, but not least, is Facebook. You can see the Facebook is very strong in almost all of these social building blocks. So it’s no surprise when you start to unpack the plumbing that Facebook has become the dominant social service on the web globally.
Looking at some of the roots of social photography, when we look at Flickr, one of the innovative things that Flickr did is it allowed its users to tag areas within a photo and point out people or things of interests. And it also allowed people to create these topics or tags and those informally became groups. Here’s a group pool that someone created many years ago called, “What’s in your bag?” And as crazy as it sounds, large numbers of people would take photos of what’s inside their briefcase or purse and they would tag the contents. We can take a look at one here. We can see that this person in her purse has tagged everything in her purse, including her watermelon deodorant.
Jump ahead to Facebook. Facebook took that tagging metaphor and it applied it to the people in your social graph. So here’s a photo from a friend’s birthday party. It’s a group shot with all the attendees of the party and you can see from the blue text below that a high percentage of the people that were there are also on Facebook and they’re all tagged in that photo. That caused an exponential virality because whenever someone’s tagged, they get notified on their newsfeed that they’re in that photo. That really helped spread the adoption of photosharing on Facebook. Once those people are all tagged, they can start posting comments, they can start the discussion about what made that event so great. That’s the power of social photography, bringing those together. It really ties into all those building blocks.
Mark Zuckerberg and his entrepreneurs were not the only ones to figure that out. There is a huge explosion of social software on the web. Many different sites tailor to many different things. That creates huge choice for the consumers. When we think about where tomorrow’s consumer going to share on the web, it’s not just going to be on Facebook. Unfortunately, there is no one perfect service that does everything. Consumers are faced with a huge number of choices.
Based on that, I want to talk about some of the innovation that has occurred in this category of social photography. I’ve picked three startups to share with you. One is a startup called Pixelpipe. Pixelpipe was born by some ex-Ofoto folks to solve this problem of, how do I take a photo or video from my mobile device and share it across the social web. I don’t want to upload it 17 times, but I might want to upload it to 17 different places – my blog, YouTube, Flickr, Facebook, etc. So Pixelpipe created a cloud service where you can upload once and then send that media to lots of different places, which they call pipes. They made it available on pretty much every smartphone out there. They built mobile clients on most of the predominant smartphones.
Here’s a screenshot from the Pixelpipe Android app and you can see once you’ve set up some pipes you can simply check them on or off. Every time you take a photo or a series a photo, you’re prompted to specify — is this a work photo that should go to my blog and Twitter or is it a personal photo for my Facebook? Pixelpipe also made sure you can do that in any language and has been very focused on making it a global service.
The next category of innovation that I want to talk about is discovery. Discovery is this idea of how you find great photos that you want to enjoy. They might be photos of your friends and family that you care about. You’ve all experienced this on Facebook where your newsfeed is like a conveyer belt — there is so much stuff happening, it’s flying past you. You probably only see 7% of what’s being shared with you. Similarly, you might want to discover great photos about a certain topic. If you’re obsessed with kite surfing you might want to find pictures of kite surfing. How do you find those? How do you discover great photography?
Pixable is a New York based startup that is focused on solving that problem. It’s actually a very global startup. The two founders are both from MIT. One founder from Caracas, Venezuela the other is from a small town in northern Spain. Pixable really built their products on top of the Facebook social graph. They actually used the Facebook platform and the Facebook APIs to create a series of products. You can use it as a Facebook app. You can use it on your iPad or on your iPhone. What Pixable does in a nutshell is it scans all of your connections on Facebook and all of the photos shared with you and it automatically ranks them. It finds the most important ones, the ones with the most likes, the most comments. It groups them into different categories: best of the week, best of the month, best of the year and it gives you a wonderful interface to browse through those.
Pixable shared with the world some interesting insights. One of the things they found was that people were changing their profile three times more frequently now than they were in 2006. The interesting trend they were able to pull out was that people using Pixable had an average of 26 profile photos.
The third startup I want to talk about is Instagram. You may have already heard of this product. It’s grown very rapidly as an iPhone application. Keep in mind this is a startup that only has an iPhone app. They barely have a website, they don’t support any other mobile platform, yet they have experienced exponential growth. Instagram is innovating how we capture photographs using these mobile and social devices. I’ll walk you quickly through the user experience. When you run the Instagram application it takes control of the camera on your iPhone.
Here’s a picture I took of the Transamerica building. I can then from the little filters on the bottom choose a special effect filter so I can make my photo look more creative. Instagram helps turn ordinary people into creative photographers. That’s part of the emotional benefit of the product. Once I’ve done that I can give it a title, “Good Morning San Francisco.” I share this photo. Once I’ve shared that, in addition to putting that on Twitter and Facebook, I’m now in the Instagram feed. This feed is just a continuous stream of pictures of all the different people that I follow.
Instagram also has a part of their UI that they call Popular. This is where you can see pictures from people you don’t know. So this is a little Twitter-like, where the photo sharing is happening publically. I picked one in particular to show you. Here is a popular photo posted from Instagram account called “photooftheday.” Now this account has nothing to do with the company that created Instagram. It’s just some clever entrepreneurs that decided that they were going to do a daily photo contest. When I click on their account, I can see they’ve been doing it for 137 days, they’ve posted a photo each day, they have over 10,000 followers, and they’re using Twitter and Facebook as a way to get people to enter their contest. So they’re leveraging existing social graphs like Twitter and Facebook, but they’re creating this new shadow graph of people following them on Instagram. So we’re in this new weird time with new social networks on top of the Facebook platform. That product single handedly turns your iPhone into this connected digital camera. It’s a really powerful experience. You can see from their user growth how popular it’s been. It’s very quickly grown to over 5 million registered users in about 18 months or less.
Moore’s Law and social photography
The pieces of the puzzle for this thing that I’m calling social photography can be distilled down to these four areas: Capture, Share, Discover, and Discuss. We saw how capturing photos is made more exciting and more creative with a service like Instagram. Sharing photos is made effortless with a service like Pixelpipe. A service like Pixable is really helping you discover new photos and new people and new photographers. Across all of these services, using Facebook and Twitter, people are actually getting into a conversation around the pictures.
Those numbers that we’ve looked at for Instagrams is a good example of something you’ve probably heard of called Moore’s Law. Moore’s Law started with semiconductors and the number of transistors growing exponentially, but it’s really been applied to a number of other areas of innovation. There’s a whole new university called Singularity University that teaches the application of this to new scientific areas.
For photography, I want to play on those words and claim that in the case of consumer photography there is something called the “Moore Captures Law.” What’s happening is that all of these innovations are allowing us to take more pictures more easily. This effortless capture from all of these new connected devices and they allow take and share these pictures. That is going to continue to lead to exponential growth in this category around photo sharing, photo discovery, photo capture. The three services I showed you today I believe are just the tip of the iceberg in terms of new innovation happening in this area.
On monetizing social photography
What is the business model for this new category of social photography? I’ll start with Flickr. Flickr is an interesting case study because it was acquired by Yahoo! very early in its existence. It lived on for many years as a service at Yahoo!, but there have been press reports that Yahoo! was never able to make it profitable. They were never able to find a way to monetize it. When we look at Instagram, it’s unclear how that service will ever make money. It’s a free app for your phone, but the same question was asked about Facebook in its early days and I think the venture capital community believes that when services get to extreme scale, when you have tens of millions of people engaged with your product then you’ll probably find a way to monetize that product.
One direction may be to incorporate advertising, which is always challenging with photography, especially if it’s pictures of your friends and family – do you really want a Netflix ad appearing above that? Maybe if the service is compelling enough, you do. Another angle that social services are taking is to build a freemium service. A certain part of the service is free and then they try to compel you to upgrade to pay money to get some more premium services. It’s a little too early to tell with the Pixables and Instagrams which of those directions they’ll head in, but I think they’re both first focused on getting to scale.
On photo print-on-demand businesses
When we built Ofoto, online sharing was a way for your family members that live in a different city to see the pictures, but then to also make prints and put them in an album. Now we are so connected all the time with our digital connections on our phone, on our laptop, on our digital picture frame in the kitchen, that consumers are printing less. I think printing is still important, for archiving, but more of the consumption is happening digitally. Take it from a guy that grew a very big printing business.
There is a startup based in New York City called 20x 200 that takes emerging artists and allows you to buy a collectible print for only 20 dollars. But they are using Facebook and Twitter to get excitement and promote those images, but really the ultimate experience is to purchase that print and to have it and to know that it’s a limited edition print that you’re one of only 200 people that have that image. So some other things are happening where the social web is driving printing and it really varies by category.
© 2016 Endeavor Global, Inc.
All Rights Reserved
Endeavor Global, Inc.
900 Broadway, Suite 301
New York, NY 10003
1 (212) 352-3200
Site by #BRITEWEB