Well that sucks, what else you got?

Posted October 16, 2012

The Conversation

It was getting towards the end of the breakfast hour on the second day of Business of Software, and people started getting up to refill their coffee before the first session, leaving only Jason Cohen and me to chat while we finished our meal.

"So what do you do?" he asked me. I explained that I used to work for Fog Creek, but now I was off on my own, trying to start a company that provides photo backup for serious photographers. He asked the questions I've come to expect from people in the tech industry. "How is it different than Dropbox/BackBlaze? Where are you storing the files?" And so on.

Then he asked the key question. "How's it going so far?"

"Well, to be honest, very slowly." I proceeded to describe how we'd gotten a strong showing of interest by being featured on betali.st, only to have to drastically restructure pricing in a way that significantly cut our margins. Then, how, even with the new pricing, conversion rates were dismally low. I explained who our competition was and how we were having trouble explaining to our users why we were better. I repeated an observation that a former coworker had made, that the photography market is inverted, amateurs have plenty of money but don't care (that much) if they lose their photos, while professionals, whose businesses could be devastated be losing a single shot, don't have a lot of extra money to spend. Lastly, I pointed out that an effective marketing campaign would almost necessarily rely on convincing people that something bad (i.e. losing all of their photos) will likely happen to them sometime in the future, a particularly unappealing proposition to me.

Jason listened patiently while I explained all of this, and then summed it all up.

"Well that sucks, what else you got?"

The Realization

It had slowly been occurring to me over the past week. Snaposit was probably done. My co-founder, Jeff and I had already put it on the back burner to focus on Jeff's photo deblurring software, Blurity. Further development was becoming harder to justify.

Over the course of Business of Software, I became more open about talking with people about the problems we were running into. The hope was that the more experienced entrepreneurs I was talking to would be able to provide some reassurance. But reassurance was not forthcoming. If anything, I was hearing more reasons why it would be a tough sell.

My talk with Jason gelled it all together in that single phrase. "Well that sucks, what else you got?"

I realized it at the time, but it took me another few days before I could admit it. Keeping Snaposit going just didn't make any sense. Sure, it wasn't hemorrhaging cash, but it did have a slow leak. More importantly, it was still demanding enough attention to be detracting from other projects. To keep it running in the hopes that it might miraculously take off at some point in the future was unrealistic. It was time to shut it down.

The Causes

Poor Conversion Rates

While we were thrilled with the response from betali.st, the subsequent conversions were abysmally low. With those numbers, we would have to find traffic sources ten times larger than betali.st, every week for two years before we would even reach the level of "lifestyle business". Of course, we could hope to improve the conversion rate or the incoming traffic, but the numbers were still pretty poor. More realistically, it would take us much longer to hit the sort of revenue levels we were looking for.

Misunderstanding Our Market

In hind sight, there was a disconnect between what people said they thought was a good idea and what they would actually pay for. Almost everyone we talked to said something similar: "That's a really good idea." We heard it enough times that we really thought we were onto something. But there were two problems with this feedback: First, we were talking to more software developers, friends, and family than actual photographers. Second, we were just getting feedback on the idea itself, not on whether people would pay for it or not. Of course people think an automatic backup service is a good idea. It's like flossing, one of those things that everyone knows they should do, but the majority of people still neglect actually doing.

We also didn't fully understand what photographers wanted and needed. One of Snaposit's big features was that it backed up your entire library faster than a general backup service. It did this by compressing the photos to full resolution, high quality JPEGs, which saved anywhere from 50%-90% of the size. The downside of this, of course, is that photographers who shoot in RAW would only have a JPEG copy backed up. We figured this was a reasonable compromise. In a catastrophic event, wouldn't a photographer rather have a JPEG copy than nothing at all? It turns out the answer was no. But we didn't ask that question, because we thought the answer was so obvious.

Lastly, we wrote the first version of the Snaposit desktop application for Windows. We figured, "We're photographers who use Windows, we'll be able to find beta testers for this version and we'll get to the Mac version once all the bugs are ironed out." Nope. We couldn't find a single beta tester who used Windows.

The Loss of a Founder

For various reasons, the amount of personal runway Jeff and I had differed greatly. At a point, it became very clear that Snaposit would not be pulling in revenue before we reached the end of Jeff's runway. He decided that, in order to remain financially secure, he would shift his focus to Blurity, which was much closer to having a reliable revenue stream. I fully supported his decision, but it meant that the majority of the Snaposit work fell to me after that point. While this seemed feasible at the time, in retrospect, it did cut the chances of Snaposit's success. Unfortunately, there wasn't really any other way around it, it was just the reality of the situation. To this day, I still fully support Jeff's decision.

The Lessons

Of course, the experience was not a total loss, by any means. We learned a lot from failing. Below is a quick list of what we learned about:

  • How to apply for Y Combinator and Tech Stars.
  • How to integrate Stripe's subscription plans.
  • Python on the desktop with WxPython.
  • Mac development and deployment.
  • How to organize and form an LLC.
  • A better look at the backup industry.
  • That Jeff and I work well together.
  • How to run an effective 99designs competition.
  • Twitter's Bootstrap framework.
  • Desktop deployment and installers.
  • How to ask better questions about our market.

All told, we actually did quite well. For this experience, we spent less than $1,000. Compared to an entrepreneurship class at any college, that's quite cheap!

The Next Step

Jeff is continuing to work on Blurity. The recent press he's gotten has kicked Blurity into overdrive and he's continuing to knock it out of the park.

As for me, there are a few small side projects that could use some attention. I'm also getting back into writing. A few larger ideas are percolating, but nothing's quite finished brewing yet.

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