Every day, people take an estimated 2.7 billion digital photos. The vast majority will forever remain digital (or deleted.)
And as our conversation -- and the results -- show, his hunch turned out to be correct.
At least to me, "physical" photography seem to be a dead -- or at least dying -- industry. What did you see that I didn't?
I'm a 30-year veteran of entrepreneurship, and it seems like every seven years or so I find an idea that seems obvious to me, but no one else is looking at. I've done that in several industries: The paper business, snack food... huge industries where everyone was following the status quo and there was no real innovation. Yet these were still really big industries.
But basically the epiphany for entering the photo business came from my acquisition about nine years ago of a company called Successories. Its foundational business model was inspirational photography for walls and desks. I'm a rah-rah kind of guy, I like to think I motivate and inspire other people, and I always loved what Successories stood for.
But they had stubbed their toe when they were trying to reinvent themselves and take a primarily catalog-driven business into the digital age. We transformed that business and made it an innovative, profitable company that sells to everyone from Fortune 500s to non-profits to universities.
So the photography side of that business...?
Knowing that photography was huge, that everyone is a photographer, that everyone is taking amazing pictures -- including kids and my 70-something mom -- I had a hunch that everyone has a lot of photos they don't care a lot about, but everyone also has a few pictures they love and would love to make into something physical, either for themselves or as a gift.
But I also had a hunch the thought of doing that scared them. The thought was daunting, archaic... just something they don't want to deal with. No one wants to sit around on a Saturday afternoon and figure out how to create a photo book.
So I went on a quest to see if my thesis was true -- and found that most people, especially in the older demographic, would love to take a certain image and do something special with it so it doesn't disappear into the digital quicksand.
I get that. But I also get that the only way it works is that it's incredibly easy to for the user.
The problem was definitely the complexity. The hassle quotient would definitely be the limiting factor. We needed to make it crazy easy and crazy fast.
So we started in malls, but the retail apocalypse was occurring at the same time... so we had some successful stores but the wind was against us as traffic started to decline precipitously in some locations.
But still: I knew we had solved a problem for the people who came in and touched and felt a product and did something awesome with their photos.
I can tell where this is going.
About two years years ago I decided to take that experience, to continue to keep one retail location so we could continue to talk to our customers... but develop an online process that was totally simple for anyone to use -- even, literally, 90 year-olds.
What we landed on was a simple technique to get pictures from the customer to us. We use a tool everyone has and is familiar with: Email. People understand email. It's familiar to them.
So while it took two years to pull together, as well as acquiring the intellectual property, we launched MyPhoto last September, primarily through television advertising but also to some degree through digital.
Why TV advertising? That would seem counterintuitive for a digital-based product.
We focused heavily on television advertising because it's emotional, it's very visual... in a two-minute commercial we could really explain the process.
We know people are watching TV with their phones nearby; they can easily find a picture to test our service while they are watching. And they had no risk; our system provides a way for people to see what their photo would look like on a desk, on a wall, on a product... and in real time.
That does two main things: It lets people see what they will get, and it also makes them feel confident that they won't be able to mess it up. They know it's not hard, and they know they're doing it right.
We want people to see exactly what they will get, and to feel confident that what they see is exactly what they will get.
That's a key point. My folks would probably never order certain things online, partly because they can't see and feel the end product, but also because they would be afraid they would do something wrong that affected the result.
That's why TV advertising is so effective. It appeals to our initial target demographic audience. We asked them to simply send an email and we'll do all the work in seconds, we'll send them back an email showing them the result... and from within that email they can make a purchase within seconds. The whole process takes less than a minute.
(Jeff: I was curious to see how it works. Saturday I was at the Richmond NASCAR race and someone took a photo of me with driver Ross Chastain on the starting grid. I emailed that photo to email@example.com and in about a minute got back an email with a number of examples of products. While I won't be ordering any -- mainly because I'm in the photo and I have a face made for radio -- it's a really slick service.)
To the user it's really simple technology -- but it was a difficult to create system and infrastructure that cost us two years and several million dollars to build and test and prove out.
And the experience has proved out the initial thesis: We've had an incredible six months and are in the midst of scaling up our business in a very large way.
Since you ultimately sell physical products, success is great but also requires major investments in capacity.
Currently we're in a position to do many thousands of orders a day. We've geared up and invested heavily in people, equipment, training, technology, etc... but you're right. We did hit a nerve, and so for us it's good news that we had to temporarily shut down our factory so we could improve our workflow.
But the truly complicated aspect of the business was making the consumer experience simple. You would think simple to use for the consumer means less work on the tech build side, but the opposite is true. Eliminating a lot of the steps for the customer makes it more, not less complicated from the developer side.
You backed away from large stores in malls. Do you plan to address the fact that some people still want to touch a product before they buy?
We plan to launch retail displays inside of heavily trafficked locations, like malls, hotels, or creating stores within stores...
The new model we'll be testing is a cashless showroom where people can touch and feel the product. You're right: Some people still want to. And millions will never see our TV or digital ads. So we'll make it possible fro them to touch and feel the product and complete a transaction directly from their phones.
We'll pop up our first showroom soon, and based on that we will decide where else to put physical footprints that complement what we're doing with TV and digital.
In that way, the retail apocalypse is actually good timing for us. Forward-thinking retailers know they have to use retail space efficiently. Mall owners and other landlords are becoming increasingly flexible and creative in light of so many national closures. They want to find tenants that are doing neat stuff.
You've scaled up dramatically. What are the challenges to future growth?
Our infrastructure is built and scalable. So the primary challenge, as it is in most businesses, is finding the best way to spend your next marketing dollar.
We just hired our first data scientist to work with some of our other folks so we can understand every channel we use. That's especially important for TV, since it's harder to evaluate results than it is, say, with Facebook advertising where the customer just clicks a button. We especially have to understand TV and what is working and what is not.
We're also spending heavily on customer service. We say orders will be in your hands in five days with free shipping, but we shoot for four. We touch customer with personal letters, thanking them for their business. We hand-write letters and postcards.
We believe easy, crazy fast will win... but we also want to hug our customers: From our packaging, to the messages inside, to the handwritten handwritten notes and postcards...
You got into this business on a hunch. Data-driven entrepreneurs would say gut feel is a crazy reason to start a business.
Every one of my businesses were based on hunches. And I'm batting over .500, so those hunches have been pretty good.... but it all starts with talking to a lot of people when you have a hunch. Listen closely not only to those who agree with you but also to the skeptics.
It's okay to once in a while have a lot of people think you're crazy, because that could mean you're on to something even bigger than you think.
But for us, this started with a hunch that there was a bigger market than other people thought. And our research showed -- and shows -- that our customers were not and are not buying these products from other people.
We're stealing market share. We're trying to grow the market from $5 billion to $50 billion, or whatever it turns out to be... because I think the sky is the limit in terms of opportunity.
That's the kind of hunch that is definitely worth following.