If, in a previous article, we talked about the end of a brilliant startup due to a lack of passion, this time we shift the focus to a case that is diametrically opposed. The example of Everpix, in fact, is full of passion.
This startup, founded in San Francisco in 2011, will definitively disappear from the web on December 15th, 2013. And this is all despite the enormous efforts made by Pierre -Oliver Latour, its creator, to keep it alive. Yes, because once the abundant initial sum of nearly $2 million paid by the investors (including Index Ventures and 500 Startups) was gone, to avoid collapse Latour tried the only two solutions that were possible: find other financing or sell. And he tried. And tried again. And tried again and again. But his efforts, unfortunately, did not bear fruit, so… bye-bye Everpix!
But let’s start from the beginning. Everpix, one of the best apps in the world for photo management, was created by Latour, a French 34 -year-old who had sold his first company to Apple in 2003. That company was Pixel Shox Studio, a motion-graphics software later renamed Quartz Composer which became an essential part of the OS X system.
Once at Apple, Latour met Kevin Quennesson (at Apple he was project leader of the team for Quartz Composer), another Frenchman with a strong background in physics and mathematics, and well known for patents in the field of image processors and graphical user interface systems.
Together, Latour and Quennesson created the company.
The goal of Everpix? To become the perfect tool for managing your own photos in the easiest and most optimal way possible. A real problem for most users who today, thanks to digital cameras, smartphones and tablets , are able to take more pictures but, in fact, are increasingly “disconnected” and distant from them.
Take a picture today , take one tomorrow, sooner or later all of these photos will need to be put in order, sorted into folders, saved by date, time… in short, a mess… especially if you don’t keep up with it constantly! On the internet there are currently many services that allow you to upload your own photos free, a kind of online storage in which you can save and review them at any time thanks to an internet connection.
Even Everpix did this but, in addition, it created order so the users didn’t have to. It was enough to download this wonderful program and forget about the problem.
Set it and forget it.
And that’s not all. The software was fast, with a clean interface and high usability. It allowed users to upload images from different devices, such as smartphones, digital cameras, tablets, but also from Facebook and Instagram. For reviewing them at a later time they were conveniently archived according to different tags. This is the key word that was missing from other apps like this: organization.
Everpix took all the photos that it was decided to load and sorted them by date, creating order among hundreds and hundreds of shots and thus saving you a lot of time. Not only that, some special customizable categories were created as well, such as “Highlights”. All free of charge, with a possible paid service ($ 4.99 per month or 49 per year) for those who wanted to make sure they could store an infinite number of photos.
Therefor the product was good, very good, and starting investments were abundant. In fact, in addition to the $ 1.8 million in 2011, Index Ventures invested another $500,000 in the project the following year. But in spite of this, the team Everpix has failed in recent months to get a Round A funding of $ 5 million, even though there are several bargaining tables on this issue.
So good initial funding, great idea, and a team that, on paper, had the right experience to handle the business and an excellent know-how in the field (the two founders Latour and Kevin Quennesson).
What results did they achieve? A little less than 19 thousand users!
How is this possible? What were the mistakes that led to the closure of the service?
In a nutshell: the founders invested too much time (and money) on the product and too little on distribution and business development. Specifically:
1) Obsession with perfection. The funding of $ 1.8 million was used almost exclusively for the development of the platform and the service, regardless of a fundamental aspect of every investor: growth! Instead of going out and pushing the existing service, there was too much focus on creating the “perfect” product and zero investment in marketing and business development
2) The turnover achieved with subscriptions was only $254 thousand
3) The investment wasn’t used to grow (similar to point 1), but to “get rich .” Look at how initial capital was burned:
- $566 thousand in legal fees and consulting
- $129 thousand in office expenses
- $360 thousand in operating expenses
- $1,411,000 in personnel costs! 7 employees, an average of 200k each. Absurd!
4) Mediocre pitch for investors. In a hyper-competitive market like the U.S, you pay for your mistakes!
5) Everpix failed to position itself as a viable alternative to the services offered by Apple and Google (which offer less evolved services, but for free)
6) The developers failed (and perhaps didn’t even try) to make it easier and more intuitive to use the software
Those who used the system sincerely loved it. In the iTunes Store the app has a 4.5 star rating with over a thousand reviews, but only 12.4 % of the free users became paying ones (compared with 6% for Evernote) .
Everpix created a truly great app, but unfortunately it was not enough to keep the service alive. Congratulations to the Everpix team for the honesty with which they handled the closing and for addressing most of the difficulties in its final days.
Now what remains is a black and white snapshot of a company defeated by market forces. A valuable photograph to study again and again, to learn, from each other’s mistakes, yet another valuable lesson.