00:07 Jon Oringer: I knew that that delicate balance, if it was not created right, would destroy the business.
In 2003, Jon Oringer founded Shutterstock, a stock photography company.
At first, he shot all the images himself.
00:22 Oringer: I shot about 100,000 photos on my own and it didn't take that long, it took about six months. I just went out and shot everything I could find. I had looked online, learned what a stock photo was and what was happening was companies of all sizes started to come in, they were buying my content in a lot quicker of a pace than I thought was actually going to happen. So, I kept going out and shooting more and more and more and trying to find people that I can buy theses photos from but I couldn't keep up the demand. And, so I realized something needed to change. I opened up Shutterstock to the whole world. I created a contributor community that anyone could give stock photography a shot.
Shutterstock began accepting submissions from all photographers who wanted to contribute in 2004.
Jon says the company's "marketplace" model, connecting crowds of photographers with people looking to buy images, was new to the industry.
01:13 Oringer: So, I knew I needed to take kind of a leap and I knew that this leap could either put me out of business or create like the perfect marketplace model. It was scary and it was scary because no one had sort of created a stock photo model that was based on this very delicate balance of being able to give a subscription buyer exactly what they needed and also pay photographers exactly what they needed to be... So, that they can continue to upload at the rate that my buyers wanted to download at. So, I settled on a 25 a day subscription at the time which actually, if you did the math back then at the rate I was paying out and the rate I was bring in, if people downloaded all 25 images a day, I wasn't going be able to make money, I was actually going to lose on that subscription. I sort of had to have faith in the fact that buyers are professionals, buyers are businesses, and they weren't going to download all 25 images every single day.
Jon was right--most buyers did not download the maximum number of daily images.
02:20 Oringer: I needed to make the buyer happy, I needed to provide a price point and sort of a model that was attractive to them. But I also needed to make the contributor happy. They were shooting and they needed to... They need to get paid each time one of their photos was downloaded. If... Photographers didn't have a way to monetize their hobby before. Right? And if they were going to be photographers in this marketplace, they needed to be able buy new lenses, buy new cameras. They needed to be able to sort of make the amount of money depending on how much they put into it. Right? They can put a lot of work into this and it could become their career or they could put a little bit of work into it and could become... It could just be a continuation of their hobby. It's important ultimately that you understand your customer. In our case we had two customers, and I had to sort of put myself in the shoes of both sides to understand exactly how the marketplace would work.
To date, more than 35,000 photographers have contributed more than 19 million images to Shutterstock.
Shutterstock went public on October 11, 2012.
Shares rose 27% on the first day of trading, giving the company a market cap of more than $700 million.