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Everpix was great. This is how it died
- thatthatis 13y ago35k/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.
- Codhisattva 13y agoWow. 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.
- TylerE 13y agoLooks to like it died because they spent too much by being in the Bay Area. Seriously... they're spending ~$1k/employee/month for office space in a "co-working venue" in SF.
- Codhisattva 13y agoWell in defense of that - it's easy to underestimate the value of a good, creative, productive workspace.
- TylerE 13y agoAlso very easy to overestimate it, especially when you are targeting a low value niche like a consumer web subscription. See also: Their $35k/month (Over $5/paying customer!) AWS bill, when they probably could have done the non-sexy startup thing and just leased a couple of beefy VPS servers for a fraction of that.
- chiph 13y agoI'm not a SV resident, nor a startup kind of guy, but one thing I've noticed is that VC firms are hit driven. And when there are periods in time when hits are far apart, you end up with events like the Series-A crunch. I'm wondering if there could be a VC firm that would emphasize a low cost of business (for them) in return for not so many hits, but rather a series of smaller firms that just get on base. They'd build a pool of talent, and one or more of the firms might hit it big (aka got lucky), but the VC would be more about spreading their bets, and having a strong base to generate recurring income. And with a possibility of synergy between the various firms under management. So -- more dividend oriented than IPO oriented.
- darkarmani 13y ago> I'm wondering if there could be a VC firm that would emphasize a low cost of business (for them) in return for not so many hits, but rather a series of smaller firms that just get on base. They'd build a pool of talent, and one or more of the firms might hit it big (aka got lucky), but the VC would be more about spreading their bets I think the management and vetting overhead isn't worth it for them. Maybe SV is more hit driven, but I've seen non-sexy start-ups raise small rounds of funding. You don't really hear about them though.
- girvo 13y agoHere in Australia, there are lots of high-tech businesses working on unsexy problems who get funding, that no one ever hears about. The only reason I know anything about any of them is I ended up in the right place at the right time. It's a shame, but that's how it goes.
- lmm 13y agoThere are private equity funds that do this kind of thing at a slightly later stage. I think the window between a startup that burns fast enough that it needs a big exit and one that burns slowly enough to not need VC at all is pretty narrow though.
- hv23 13y agoThat sounds pretty close to the 500 Startups strategy.
- coldcode 13y agoIt's not a great product but a great idea. A great product is one people will either pay for or investors invest in with the assumption is will be more valuable in the future. There is a difference. Sometimes the people with the idea can't figure out the leap to a great product and it fails. I've been there.
- Codhisattva 13y agoFrom the investor perspective, the company is the product. Not the company's product. Everpix, from a user perspective is a great product. So says this paying customer.
- simonw 13y agoI disagree. It sounds like they had a great product, but they didn't have a good enough business.
- angersock 13y agoFrom the article: "The reaction was positive for you as a team but weak in terms of whether a $B business could be built." Wow, fuck these guys. It seems like a lot of good ideas are getting left on the cutting-room floor because people are holding out for the next giant thing. I hope the crowdfunding thing is enough to help unlock capital for things like this. (j/k crowdfunded equity is going to be a shitshow) EDIT: The folks probably blew some money they didn't need to, but the quote I brought is specifically "Yeah, so, you guys are good but we don't see this being a billion dollar business". A glorified photobucket doesn't need to be a gigantic billion-dollar business. Most startups which solve simple problems and solve them well are very useful to consumers but aren't going to be massive juggernauts; that doesn't mean that they're bad investments. Had the investor said, "Yeah, we don't see this becoming a $100M any time soon", maybe that'd make sense. But the additional order of magnitude (one billllllllllion dollars) strikes me as unreasonable. This is a great example of why everyone thinks we're in a bubble folks.
- jmduke 13y agoI agree that venture capitalists passing on great businesses because they're "lifestyle ventures" or whatever the politically correct phrasing is is an issue, but that doesn't seem to be the case here? EverPix wasn't trying to become a $B business, yeah, but they were still rapidly outspending their income streams, which is only sustainable if you're an extreme edge case (or receiving the massive, massive influx of buzz and users like, say, SnapChat.) Everpix's raw product seems to be great in the same way "free puppies for everyone" is great. Their monthly variable costs outpaced their revenues, and their market positioning left them amidst a sea of giants who offered similar services for free. I think neither venture capital nor crowdfunding should (or can) be a panacea for a bad business model.
- angersock 13y agoRight, I agree that it looks like their business model was flawed. That said, that should've been the rejection status code instead of the billion-dollar opportunity remark.
- schenecstasy 13y ago
- chaz 13y ago"... and not enough time on growth and distribution." Look at the numbers posted, and even if they cut back heavily on their expenses, the subscription revenue was not where it needed to be.
- Artemis2 13y agoI'm not surprised, AWS is expensive as hell.
- eterm 13y agoWhile the article concentrated on the incomnig AWS cost, if you look at the infographic the expense of AWS is tiny compared to their overall expenses.
- ismail 13y ago500k for consulting???????
- sameer_sundresh 13y agoEssentially part-time specialist employees. Hiring them full-time would have cost a lot more.
- middus 13y agoLet me break this down a bit: USD 500k at USD 2k/man day = 250 man days A US man year has ~235 man days, so that's just roughly 1 external FTE for a year. Not so much, actually.
- jrochkind1 13y agoWhat kind of FTE makes $2000 a day, what?
- twic 13y agoConsultants. Not freelancers, consultants. They have to charge that much so people know they're consultants rather than freelancers!
- middus 13y agoTop of my head: Patrick, Thomas and probably a lot of other HN regulars. Looking besonders technology: lawyers, marketing and branding consultants, and, last but not least, management consultants. $2000 is not outrageous.
- johnrob 13y agoThat would be a very high fill rate (5 days a week) for such high prices.
- runako 13y agoI don't think the math implies that it's a single person 5 days a week for a year, in a staff augmentation fashion. It could be e.g. 2 people for a month, then nobody, then 3 people, all at different rates. Why would you do this? Examples: * a team to write the Android port(s) * a Web design team * QA * HR * Legal ($$$$$) * etc. All of these will be at different rates. You might outsource parts of the technology to hit your other growth goals.
- ismail 13y ago500k for consulting???????
- 3JPLW 13y agoDammit. 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?
- sameer_sundresh 13y agoWe're sending out emails in batches. We will also be in touch about refunds and downloads.
- 3JPLW 13y agoJust got it. Thanks for your part in creating a product I loved. Best luck in your future endeavors.
- adrinavarro 13y agoToday is a very sad day :(
- 3JPLW 13y agoFYI - I just got the subscription cancellation notice. It says "Your Everpix subscription has been canceled. You can continue using your account until [my renewal date, well beyond December]." You may want to change that to reduce confusion.
- derstang 13y agoI'm using loom (loom.com) and its nice--very similar I think. hope it doesn't go the same way. Yes I am paying :)
- ScotterC 13y agoI've been enjoying PictureLife. Allows you to use your own S3 bucket too
- mikestew 13y ago>> 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. :-(
- danso 13y agoHere'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
- SoftwareMaven 13y agoI 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?
- shin_lao 13y agoI agree with you. From what I read it seems they cared more about raising money than making money.
- sameer_sundresh 13y agoOur per-user income was above our per-user costs. But we hadn't yet reached the economies of scale where fixed costs were covered.
- radley 13y agoScale goes both ways. Costs can be reduced very easily these days.
- marincounty 13y agoI always ask on question to every business, and nonprofit. How much were, are the founders of the company making per year? It's usually a lie. I've also noticed when young entrepreneurs are given a large amount of money; they don't quite realize that it's probally all the big money they will ever see. I know I didn't. I made a lot of money in my twenties, thinking it would always be this easy. Sometimes, the availability of money is just because you were at the right place at the right time; people underplay luck--especially people in their twenties, or rich kids. Rich kids have their parents to fall back on. Poor kids will never have that safety net. I don't know anything about this company, but their situation is not unique--it's the norm, that's why I cringed reading the article and looking at the pictures. I've seen it too many times before.
- radley 13y agoPerspective: "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/ http://culttt.com/2013/09/11/founders-work-review/
- homersapien 13y agoTheir 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.
- sameer_sundresh 13y agoI 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.
- bjansn 13y agoFor product development, remote working is one solution. I work remote with my team all the time. Sometimes you need to see each other face to face, then meet up somewhere where it's affordable. Could make for a good team field trip even!
- Guillaume86 13y agoMy feeling too, when you have an internet business, why would you waste so much money in the location...
- physicsyogi 13y agoTrue. But, it seems many VCs won't consider you if you're not in the valley.
- Encosia 13y agoTypically, no VC will consider funding a business which has gone bankrupt and shut down...
- 650REDHAIR 13y agoAnd shoot yourself in the foot when it comes to future funding, potential hires, and acquisition talks. 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.
- dm8 13y agoThat was fascinating read. Kudos to the team for opening up their finances and talking about them openly. It brought some scary memories when I was in a similar situation a while ago and had trouble paying AWS bills even though they were much smaller than what you guys have to pay. Startups are indeed hard. One thing that I've learnt is that market size matters the most in venture backed startups. And if your addressable market is not large enough then product or team are irrelevant. Regardless, good luck to the team. I'm sure things will work out eventually for everyone.
- martingordon 13y ago> 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.
- deleted 13y ago[deleted]
- brandnewlow 13y agoEither way, they need to hire an annoying "business guy" to worry about money 24/7 at some stage during the 18 months.
- kohanz 13y agoI do not hold an MBA, but have a few friends that do and this seems like an inaccurate generalization. My understanding is that MBA's can have varied focus areas, with a varying curriculum. For example, MBA's can be focused on: Finance, Marketing, Management, etc, and yes, Entrepreneurship.
- dm8 13y agoHow can you have formal education in Entrepreneurship? It's pretty much on job type of learning. Not trying to be snarky but I'm genuinely curious.
- msutherl 13y agoFor my part, I didn't use Everpix because I actually want to edit my photos and just save the best ones. I keep less than 5% of the photos I take. Everpix tried to do the editing for me, but software will never win that game.
- msutherl 13y agoI should say though, it was a beautiful product and did its job extremely well.
- ebarock 13y agoYou don't need just a great idea, you need to set a finance strategy that can follow this idea. A VC or others investors, does not mean that you will survive. Keep an eye open and do a balance forecast. It seems basic, but it is always forgotten.
- schenecstasy 13y agoAt least they didn't call themselves Foreverpix.
- bjansn 13y agoThe 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.
- rhizome 13y agoIf 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.
- bjansn 13y agoYes. We moved back to our own infrastructure as well. But AWS has a broad range of services. I can imagine storing photos on S3 makes sense for a startup like Everpix. Because, you don't need to worry scaling on storage level. Sometimes it makes sense to pay a premium, but it should really be tied to your growth metrics. If you see a month to month growth to which you can't keep up with updating and migrating your own infrastructure, then make the move to AWS or another big cloud vendor.
- kansface 13y agoThat 35K wasn't the breaking point (nor close to it).
- Touche 13y agoIf you're a user who signed up because of the new tagline: > Your photo mess, solved. I'd be pissed right now. Not solved, the company's out of business. This is why I won't sign up for another web service that isn't open source again. I'll gladly pay for hosting, but core technology must be libre.
- atourgates 13y agoAs a user, I get pissed off with acquihires, or pivots. Those can feel like a breech of trust. This is different. It's pretty clear that the Everpix team worked hard to deliver the service they were selling, and in the end, failed. I love(d) Everpix. It really did solve my photo mess, and their daily "flashbacks" were a welcome dose of nostalgia, delivered to my inbox every morning. There are other photo services that do similar things to Everpix, but none that can match their unique combination of pricing, ease of use and the brilliant flashbacks. I'm sad that I lost a service I really really liked, but far from pissed off, at least at the company itself. They created an awesome service, and hopefully one that will soon be copied by a more financially stable successor.
- Touche 13y agoBut your photos are much more important than the life span of one company. So if you're truly trying to solve photos, it has to be as an open source project.
- TheTechBox 13y ago> This is why I won't sign up for another web service that isn't open source again. There are really two sides to this coin. This kind of model works well for Wordpress with hosted and self hosted/open source(?) though.
- jmathai 13y agoThat's the goal behind Trovebox (formerly OpenPhoto). But we've since moved away from the consumer space and into the business/organization space. Nonetheless, we're open source, hosted and a bunch of other things to try and make this problem suck a little less. Here's the original Kickstarter from 2 years ago, http://www.kickstarter.com/projects/jmathai/openphoto-a-photo-service-for-your-s3-or-dropbox-a http://www.kickstarter.com/projects/jmathai/openphoto-a-phot... Github repositories at https://github.com/photo https://github.com/photo Hosted service now geared towards organizations at https://trovebox.com https://trovebox.com
- keithwarren 13y agoI cannot help but wonder if this is why my startup Pivotal (http://pivotal.ws http://pivotal.ws) got a rejection letter from YC last night.
- baddox 13y agoAre you aware of Pivotal Labs and Pivotal Tracker? http://pivotallabs.com/ http://pivotallabs.com/
- keithwarren 13y agoI am, we know long term we will have to change the name and already have something lined up but we figured it best right now to keep the current name. Make a bunch of mistakes and then rebrand.
- qq66 13y agoPublicly admitting a plan to "make a bunch of mistakes" under another giant company's trademarked brand may not be wise.
- 650REDHAIR 13y agoHey Keith, Hope this isn't too harsh, but that landing page needs work. Is there anyway you could turn what's in that video into a compelling landing page? I'm not sure where you're at with testing or usability, but I can't imagine that landing page generating many signups.
- keithwarren 13y agoThat is what 20 minutes on Instapage gets you. Long term this is not our branding (Pivotal is already taken) and we did not want to invest much time in the public site before we are ready to start marketing the system. That site was put up so there was at least some place people can go when put our name on an accelerator application or tell someone we meet what we are working on. We putting about $500 dollars into AdWords just to see what CAC looked like and the sign up conversion rate was around 2%, certainly meager when we are talking about just asking for a name and email but alas, it served its purpose.
- guynamedloren 13y agoCan 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..
- wehadfun 13y agoI didn't understand there cost at all
- qq66 13y agoPayroll = salary + benefits Personnel costs = full-time employees + contractors (iOS development shops, etc.)
- guynamedloren 13y agoWait, so are these 3 costs not summed? I didn't do all the math from funding to net income, so I might have missed something.
- gph 13y agoThat infographic is very confusing and misleading. They lined the numbers up as if they should equal out to the net income at the bottom. They don't. The 2.3 million funding doesn't count towards net income. I'm guessing that number is the subscription revenue - expenses, which it says in the footnote that not all expenses are shown. What everyone else said about Salary/Payroll/Personnel is correct, so I have no idea why it listed all three on the infographic. I'm guessing the author of the article took those numbers from their financial report and didn't have the financial sense to understand what he was doing so he just threw them together in a way that made sense to him, but doesn't actually make sense in reality.
- smackfu 13y agoIt probably made more sense on the P&L statement until it was dumbed down.
- 13y ago
- wehadfun 13y agoI find it hard to believe that no one wanted to buy this service. $35K per month in revenue.
- robterrell 13y agoWell, I think the article said it was $35k per month in AWS costs alone. If they had 6800 paying customers at the cheapest rate ($50 per year) they were making $333,200 per year -- $27,767 per month. My #1 priority would have been getting the storage costs to be break-even, with plan to get well under in a year. I have to assume they tried and discovered they couldn't get their numbers low enough.
- swisspol 13y agoFWIW we designed Everpix's infrastructure and our unique image pipeline so it would break even and it did: revenue from subscriptions (around $40K / month) did cover both free and paid accounts (around $30K / month).
- johnrob 13y agobut everyone here is hung up on the concern over being able to build a >$100M revenue subscription business in photos in this age of free photo tools Dropbox is a billion dollar company doing exactly that. I'm willing to bet that photos/videos are what exceed quotas and create paid accounts.
- chmars 13y agoIt'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.
- lh7777 13y agoThe 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."
- veritas20 13y agosadly, this is my first time hearing of this service...
- apinstein 13y agoEverpix 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.
- robterrell 13y agoWow, 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.
- girvo 13y agoOn the upside, they've said they'll give it back.
- elag 13y agoOther People's Money. There's a reason they're all smiling in the final photo.
- infinitone 13y agoFrankly, thats what struck me the most- them smiling as if nothing happened.
- VladRussian2 13y ago>them smiling as if nothing happened that is the beauty of enterpreneurship here. You can try until you succeed, and a failure is just a step on the ladder to success. Burning through 4M is not even a noise in the humming of the money making Valley machine.
- sameer_sundresh 13y agoPoor choice of photo, perhaps. This wasn't a posed photo originally intended for the article. We were just smiling to look good for the camera.
- weavie 13y agoI remember when my business went bust, the amount of stress I went through in those final weeks was so intense that the sense of relief I felt when it was finally over meant I was smiling during the post announcement beers. And that was my own money as well. Trying to avert bankruptcy is a horrendous experience..
- aaronbrethorst 13y ago[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!
- triplesec 13y agoI remember those final pitches. It was bizarre that Shaker, some Habbo Hotel-like facebook soc media skin would beat this functional idea, or beat a very good but boring B2B accounting thing which looked like a great idea. Of course the shaker guys also had a totally freaktastic presentation _style_.
- devindotcom 13y agoYeah, I was doing photos at that one. I nearly lost my shit when I heard it won. Mike said there were 'very good reasons' but I never found out what they were.
- batemanesque 13y ago"backed by Michael Arrington" - what more reason could you want?
- batemanesque 13y agoit's a real shame Disrupt carries any weight. the awful hype is one thing, but the fact that it screws over genuinely promising companies due to its grotesquely corrupt nature is a real problem
- imsofuture 13y agoIt's a shame that TC carries any weight. Let's stop beating around that bush...
- pavs 13y ago
- innonate 13y agoI just posted some more detailed thoughts here: http://innonate.tumblr.com/post/66113756052/everpix-blog-we-gave-it-our-all http://innonate.tumblr.com/post/66113756052/everpix-blog-we-... In some way we felt like classmates with Everpix. We started in the same half of the same year. Most every thing they wrote about we believed in too. We didn't know the team, but from afar they seemed like stellar people with their hearts in the right place -- right where our hearts were too. Awesome job team Everpix. Thanks for the inspiration and sharing the journey with us! Nate CEO - Picturelife https://picturelife.com/ https://picturelife.com/
- zaidf 13y agoMy 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 $3,000/mo, including the cost for our web and db servers.
- paromi 13y agoi was pushing 100 T / month with one server 1Gbit unmetered at 250$ / mo , also music site.
- zaidf 13y agoWhat backbones? We had an option to get much cheaper pricing on Cogent. We decided to pay a bit extra for premium. Also, most of our cost was for the hardware(not the bandwidth). We went with top-notch storage with RAID and a bunch of ram. In hindsight, we should have bought the hardware for one-time fee but didn't for cash flow reasons.
- samcrawford 13y agoWise move! FWIW, 100TB (approx 300Mbps continuous) costs us approximately $450/mo with a good quality host (Quadranet) with a good blend of upstreams. A cheaper host (Ubiquity) charge us about half of that. It's worth paying the extra for sure.
- ilolu 13y agoWhere did you buy your dedicated servers ?
- zaidf 13y agoInitially Softlayer. When that became too expensive, we negotiated a deal with an excellent provider called Choopa.com.
- gte910h 13y agoPart of this is a lesson on using AWS early then looking for cheaper stuff later if your income doesn't rise above your AWS costs. There are considerably cheaper options for many of the categories it serves that would have drastically cut down their bills.
- radicalbyte 13y agoSad. 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?
- swisspol 13y agoWe 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.
- hvidgaard 13y agoI know I'm probably in the minority, but if I was to pay anyone to store and manage my photos, I'd expect to be able to save the RAW files along. For all I care you can use high quality jpeg for daily use, but the raw needs to be accounted for as well, and storing them separately is tedious work.
- mvkel 13y agoI think Gruber (ironically) said it best: "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.
- bluishgreen 13y agoEverpix photos are private by default, it is waay more difficult to build private by default companies in general.
- j_s 13y agoI was a potential customer that decided against Everpix. 1. I couldn't install their desktop app without 'Run as Admin' (which is understandable but not documented as part of the process). When I did a minimal effort at reporting this (responding to my signup email), the email bounced. 2. I asked for slideshow support and basically got a 'we don't do that here'
- batemanesque 13y agosad to hear this, great product. in a perverse way it was also nice to see an article & responses from the team that dodged the usual Valley bullshit.
- abalone 13y agoI 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.
- jervisfm 13y agoSo I am wondering: as a startup founder / cofounder are you obligated to return investors' money/funds if it comes to the point that you have to shutdown your startup? Or was the raising of the money done with the understanding that investors may never get it back ? Obviously, the answer here depends on the exact agreement(s) between the investor(s) and the founders but I am curious about the typical case. If indeed, as I suspect, you are not "in-debt" by the amount of money that you had raised, this makes the shut down a bit less painful and also gives you room to try and do another startup in the future (due to not been burdened with paying back huge sums of borrowed money).
- gojomo 13y agoMost often professional tech startup investments are either (a) purchases of stock in a company; or (b) a 'convertible' loan to the company (that's expected to turn into shares when a full stock-sale round happens). In both cases, the money enters the company's accounts, not the founders' accounts, and is used over time for business purposes. If the company fails there's little or no money left to pay anyone back. In an orderly liquidation, there might be a little left over, or picked up from an asset/tech fire-sale. Those amounts go first to pay back creditors, first among them anyone owed salaries, as much as possible. If any is left over, it's split proportionately among shareholders, usually first to 'preferred' shareholders (professional investors). But by this point the liquidated value is likely to be nothing, or pennies on the dollar. Professional diversified investors understand this: sometimes the shares go to zero, and sometimes debts are uncollectable. It's not common for the founders to offer personal guarantees of repayment. (In other kinds of going-concern small-business financing, like bank loans or equipment financing, where the founders/officers have the means, they may offer such guarantees to lenders... but not in highly risky tech startups.) Now, there's a fair chance that the founders themselves depleted savings or ran up personal debts to feed the company – investing/loaning their own funds, working for little or no salary in the expectation of gains later. So it's often still a draining financial hit... but the professional investors aren't expecting a formal debt repayment. Instead, if the investors think the failure came after a good honest try, and was a learning experience for founders who will succeed at other times and opportunities, they'll favorably consider investing in a future venture, or help place the team elsewhere. So it's never a total loss: everyone learns things to do, things to avoid, and how/when to work together.
- NirDremer 13y agoCall me optimist but I have a hunch that the level of engagement around the shutdown will attract investors to try and save the company.
- GuerraEarth 13y agoEverpix. They just needed someone on the team who was passionate about marketing. Whose gifts ran in that direction. I bet what they do next will be even better/hotter.
- robryan 13y agoI am confused about the $500k loan, surely this would need to be repaid before they can look at customer refunds?
- CoachRufus87 13y agoI was wondering the same thing.
- Geee 13y agoCouldn't they have shut down just the 'freemium' part of the service and keep going? Then figure out growth later on.
- beambot 13y ago> 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.
- pkmehta 13y agoThis article is well-written and The Verge's production quality is tremendous. Can we get more like this? On Everpix - pretty shocked at the candor/level of disclosure in this article including from the founders and Index Ventures. VCs tend to keep mum about their misses so a bit refreshing to see.
- girvo 13y agoFor the past year and a bit, The Verge have been lightly dipping their toes into startup journalism. See Alexis Ohanian's "Small Empires" on there for an example. I personally hope they give it a bigger shot, as it fits their cross-section of tech and culture that they're aiming for, and I've loved the writers since some of them were back on Engadget!
- PanMan 13y agoThis is one of the first public numbers I have come across on salaries in SF startups: $ 1,168,710. This is for a team of (in the end) 7 people, in about 2 years (started with 3 people). Let's say an average of 5 people. That comes down to $ 117K/person/year. Is that average, or above or below? I know some startups in Europe, and in Europe half of that would be common.
- b0z0 13y agoIt's incredible to me that an amazing service like this, solving real problems would fail while stupid (let's be honest and call them what they really are) social media startups are prospering all over the place. It's quite sad.
- afterburner 13y agoNever heard of them before today, and I'd been looking for a good picture storage solution in the last year. Maybe that's part of the problem.
- yashg 13y agoI have a photo watermark product and I see photo backup as a natural progression of our product line up. Stories like these are a wake up call. Few things that I would take away are - - They were charging too low IMO. The free tier gave away too much for free. If your product is of value then charge for it. People will pay. It does not matter that Apple and Google are giving it away for free. - They should have spent at least some part of the millions they raised on acquiring users. - It seems they blew almost all money on salaries and consulting. Even if the AWS bill was $35K a month, the money they had raised was enough to last them for two years and they also had paying customers. At the end of the day it looks like a classic case of concentrating entirely on product and neglecting the revenue and user growth. You can afford to ignore revenue if you have the growth rate of Instagram or Twitter. But if you have neither revenue nor growth then it's difficult to keep going on VC money.
- NKCSS 13y agoThis really saddens me. I hadn't heard of the service yet, but it looks and sounds awesome... it's a shame they couldn't make it work :(
- ronjac 13y agoandrewchen wrote a blogpost about this http://andrewchen.co/2013/11/05/when-a-great-product-hits-the-funding-crunch/ http://andrewchen.co/2013/11/05/when-a-great-product-hits-th...