"One of the most common words we heard [during] our first two years in business was 'no'," says Andrew Laffoon. He and his partner, Aryk Grosz, had started Mixbook, a website that enables users to create custom photo books, cards, and calendars, and they were desperate for funding. "We probably talked to 50 different venture capitalists," he says.

Mixbook, which has sold more than 10 million products since it was founded in 2007, grew out of its founders' frustrations with the traditional online photo book experience. Design templates were too limiting and there was no social element to creating an online book.

The two University of California-Berkeley engineers envisioned a site where multiple users could work on the same project and then either share it online or purchase it as a high-quality book. It was this social, collaborative nature of the experience that separated them from the pack. Rejected by VCs, they did manage to persuade the co-founders of Art.com, Joshua Chodniewicz and Michael Marston, to invest. That investment, combined with a small round from friends and family, paid for the original site development.

Their first success was a Facebook app called Photobooks that went viral and attracted more than 2 million users; the company grew 16-fold and became profitable. While that app no longer exists, its popularity landed them a $1 million series A round of funding in 2008 from Labrador Ventures and Band of Angels. The company won't disclose revenues, but the founders say that Mixbook has increased revenue by 250% every year since 2009; in 2011, growth spiked 324% over 2010.

The company differentiates itself with its design flexibility, and by allowing users to collaborate on projects and to pull pictures from their own accounts on other sites, such as Facebook, Flickr, Pinterest, and Wordpress. As for the customer base: Think brides, soccer moms, family reunion organizers, or school groups. Hence the company's decision to invest in daytime television ads--a move that has been very effective, says Laffoon.

Every participant in a Mixbook project can upload photos to the site and then design a book that is uniquely hers. The book is then stored in the cloud and sent to one of seven printers that Mixbook partners with. "What's tricky with our operation is to keep our vendors tightly integrated with our back-end [operations]," says Grosz. "We're very much 'just in time.'"

He says that Mixbook has extremely high standards for its printers--"almost to the point where they have to buy new equipment to work with us. That's what happens with you have a company started by two industrial engineers."

Last August, Mixbook landed a $10 million Series B round of capital, led by Level Equity. Since then, the founders have hired the former chief marketing officer for Dunkin Donuts and the former CFO of ThinkGeek.com.

They've also made two acquisitions, including Yobongo, a mobile apps company which will help Mixbook create its own mobile app. "We're entertaining a lot of ideas to monetize," says Grosz.