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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 h

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?

shin_lao 13y ago
I agree with you. From what I read it seems they cared more about raising money than making money.
- sameer_sundresh 13y ago
  Our 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 ago
    Scale goes both ways. Costs can be reduced very easily these days.
  - marincounty 13y ago
    I 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.
    - AndrewKemendo 13y ago
      It is staggering to me some of the salaries that founders give themselves. I remember reading a tip for pitchdecks/term sheets that if you put your founder salary as anything above 150k that is slightly too high for most offers. That is insane to me. I make less than 80k a year, in D.C., with a mortgage and two kids while I build on the side. A cursory glance tells me most founders aren't under such strict cost regimes. If and when I get funding and go full time I would take the absolute minimum to keep us fed and watered (~60k). How a founder could do otherwise to me is unconscionable.
      - deleted 13y ago
        [deleted]
      - shin_lao 13y ago
        70 k/year doesn't make a difference and it's not a good thing to have founders struggling with money. If your brain is too focused on the trivialities of life you can't invest yourself 100% in the company.
        AndrewKemendo 13y ago
        Apparently it would have in this case. That would have been two months of AWS for each founder, so saying it doesn't make a difference is clearly wrong. I didn't say pay yourself nothing - pay yourself the minimum amount you have to in order to keep your life from impeding your work. If that means you need luxuries to be comfortable, then your lunch will get eaten by someone who is more spartan.
  - dpe82 13y ago
    Curious: how many TB where/are you storing and what was your bandwidth usage like?
  - shin_lao 13y ago
    Thanks for the answer. It sounds like your per-user profit was insufficient. Did you have intermediate milestones before reaching the "economies of scale" one?
  - yajoe 13y ago
    I thought everpix was a great product and had my family using it (4 paid accounts). I'm very sorry to hear this, and I wish the whole team good fortune. Would you mind sharing the P&L statement and/or pitch deck that the verge used in its reporting? The verge's article seems confused, and I think one of the best gifts you could make to the HN community is to teach us from this outcome with actual source documents.
sameer_sundresh 13y ago
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.
- rfnslyr 13y ago
  VC kids treat themselves like kings and never truly get to hacking. What ever happened to internal hardware? Build, setting up, and tuning servers is one of the most fun parts of running a service. When you get millions in funding its easy to piss away on the highest tier services. When you start from the ground up, every cent is managed.
  - rhizome 13y ago
    Build, setting up, and tuning servers is one of the most fun parts of running a service. As someone who has worked in this space, I can tell you that the skills simply do not exist. They don't hire for them, because they all ("all") use outsourced hosting and deployment frameworks that insulate them from these things.
    - rfnslyr 13y ago
      It's kind of sad really. I'd love to have a big office with a dedicated center to some really awesome equipment. It's like a work of art that you crafted yourself, right up to the cable management!
      - bandy 13y ago
        It's loads of fun, especially when you have dedicated chillers and sufficient power for everything. However, as you come to the realization that your C-level execs negotiated forever contracts for keeping data and servers spinning with no common outage windows, consolidation/virtualization becomes difficult and eventually the reality distortion field collapses and you're out on the streets with everyone blaming you for the failure, despite your ability to run modern services with stone knives and bearskins. Plus, you don't have that all-important "Cloud" buzzword for them to throw around!
rhizome 13y ago
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.
- thatthatis 13y ago
  I think the relevant standard should be: focus on the core of your business, outsource everything else. If you are a photo backup company, storage is (or at least should be) part of your core. It seems like they tried to take the heroku route, repackage aws services with premium software and sell it for a premium. But forgot to charge the premium end user price.
  - ghaff 13y ago
    Amazon regularly features SmugMug at their conferences and in case studies. I haven't looked at the specifics recently but they basically went all-AWS. (SmugMug is also a bit different from your typical consumer photo site but they are a photo storage and sharing company.)
    - rhizome 13y ago
      Since they are a featured customer, they may also get price breaks.
    - thatthatis 13y ago
      I don't believe smugmug is a freemium service, are they?
      - dublinben 13y ago
        Nope, their lowest tier is $5/mo. http://www.smugmug.com/features http://www.smugmug.com/features
- 13y ago

shin_lao 13y ago

I agree with you. From what I read it seems they cared more about raising money than making money.

sameer_sundresh 13y ago
Our 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 ago
  Scale goes both ways. Costs can be reduced very easily these days.
- marincounty 13y ago
  I 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.
  - AndrewKemendo 13y ago
    It is staggering to me some of the salaries that founders give themselves. I remember reading a tip for pitchdecks/term sheets that if you put your founder salary as anything above 150k that is slightly too high for most offers. That is insane to me. I make less than 80k a year, in D.C., with a mortgage and two kids while I build on the side. A cursory glance tells me most founders aren't under such strict cost regimes. If and when I get funding and go full time I would take the absolute minimum to keep us fed and watered (~60k). How a founder could do otherwise to me is unconscionable.
    - deleted 13y ago
      [deleted]
    - shin_lao 13y ago
      70 k/year doesn't make a difference and it's not a good thing to have founders struggling with money. If your brain is too focused on the trivialities of life you can't invest yourself 100% in the company.
      - AndrewKemendo 13y ago
        Apparently it would have in this case. That would have been two months of AWS for each founder, so saying it doesn't make a difference is clearly wrong. I didn't say pay yourself nothing - pay yourself the minimum amount you have to in order to keep your life from impeding your work. If that means you need luxuries to be comfortable, then your lunch will get eaten by someone who is more spartan.
- dpe82 13y ago
  Curious: how many TB where/are you storing and what was your bandwidth usage like?
- shin_lao 13y ago
  Thanks for the answer. It sounds like your per-user profit was insufficient. Did you have intermediate milestones before reaching the "economies of scale" one?
- yajoe 13y ago
  I thought everpix was a great product and had my family using it (4 paid accounts). I'm very sorry to hear this, and I wish the whole team good fortune. Would you mind sharing the P&L statement and/or pitch deck that the verge used in its reporting? The verge's article seems confused, and I think one of the best gifts you could make to the HN community is to teach us from this outcome with actual source documents.

sameer_sundresh 13y ago

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.

rfnslyr 13y ago
VC kids treat themselves like kings and never truly get to hacking. What ever happened to internal hardware? Build, setting up, and tuning servers is one of the most fun parts of running a service. When you get millions in funding its easy to piss away on the highest tier services. When you start from the ground up, every cent is managed.
- rhizome 13y ago
  Build, setting up, and tuning servers is one of the most fun parts of running a service. As someone who has worked in this space, I can tell you that the skills simply do not exist. They don't hire for them, because they all ("all") use outsourced hosting and deployment frameworks that insulate them from these things.
  - rfnslyr 13y ago
    It's kind of sad really. I'd love to have a big office with a dedicated center to some really awesome equipment. It's like a work of art that you crafted yourself, right up to the cable management!
    - bandy 13y ago
      It's loads of fun, especially when you have dedicated chillers and sufficient power for everything. However, as you come to the realization that your C-level execs negotiated forever contracts for keeping data and servers spinning with no common outage windows, consolidation/virtualization becomes difficult and eventually the reality distortion field collapses and you're out on the streets with everyone blaming you for the failure, despite your ability to run modern services with stone knives and bearskins. Plus, you don't have that all-important "Cloud" buzzword for them to throw around!

rhizome 13y ago

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.

thatthatis 13y ago
I think the relevant standard should be: focus on the core of your business, outsource everything else. If you are a photo backup company, storage is (or at least should be) part of your core. It seems like they tried to take the heroku route, repackage aws services with premium software and sell it for a premium. But forgot to charge the premium end user price.
- ghaff 13y ago
  Amazon regularly features SmugMug at their conferences and in case studies. I haven't looked at the specifics recently but they basically went all-AWS. (SmugMug is also a bit different from your typical consumer photo site but they are a photo storage and sharing company.)
  - rhizome 13y ago
    Since they are a featured customer, they may also get price breaks.
  - thatthatis 13y ago
    I don't believe smugmug is a freemium service, are they?
    - dublinben 13y ago
      Nope, their lowest tier is $5/mo. http://www.smugmug.com/features http://www.smugmug.com/features
13y ago