Success startup iStockPhoto. How to earn $ 50 million carried away by photography
IStockphoto startup success story
iStockphoto is both an online community for photographers and a source of high-quality, affordable photos.
As of October 2006, the iStockphoto photo library contained ~ 1.1 million images provided by more than 23,000+ photographers.
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In 2006, iStockphoto expects to sell from 10 to 12 million photo licenses from this library, at prices ranging from $ 1 to $ 40 per image.
IStockphoto’s success in opening a new market segment in the photo services market.
The segment consists of consumers avoiding expensive photographs from libraries like Getty Images and Corbis. The success of the company attracted the attention of Getty Images, which absorbed iStockphoto for $ 50 mln. in cash in February 2006.
All information is obtained from sources within the company and is representative.
Key success factors
Offer a free alternative to expensive services.
iStockphoto has organized a market for selling high-quality images at extremely low prices. The company's innovation in offering the entire database of photos as royalty - free available for download over the Internet. (By paying once - you are entitled to use the photo at your own discretion - excluding direct resale rights and copyright).
Free licensing of high-quality photos - changed the rules of the game in the photo market in 2000 (the price for a photo will appear later).
For the first time, iStockphoto installed a distribution of photos from amateur and low-professional photographers to the general public.
IStockphoto also dramatically reduced the cost of photos for the mass of customers (designers, small business, social organizations ... etc), which traditional photo suppliers did not do.
With the growing popularity of iStockphoto, in proportion began to increase the cost of hosting and communication channels for the site.
Solving the question of how to pay bills of $ 10,000 per month, the founder of Bruce opened the discussion on the iStockphoto community site, offering to solve this issue to the community itself. In February 2002, the community decided to set the cost of $ 0.25 per photo to cover the main costs of the site, with a compensation of 20% to the photographer.
The iStockphoto startup moved through several iterations of adjusting its own business model, but continued to offer photos at relatively low prices. The first iteration happened in 2004, when iStockphoto officially became a commercial structure. At that time, iStockphoto installed a 1.2 or 3 "credit" ($ 0.50 for a loan) for a photo of various sizes, offering the author of the photo a 20% commission.
Now, iStockphoto offers photos at a variety of prices, as well as various author commissions.
For example: photos are offered for 1,2,3,5,10,20 or 40 credits ($ 1 for 1 credit).
Commissions range from 20% to 40%, the exact amount depends on some factors, for example, depending on the provision or not of exclusive rights to a photo for iStockphoto.
The growth of loyalty and activity of the community.
iStockphoto started as an amateur site of its founder Bruce Livingstone, and this has remained for several years. The fact that iStockphoto was not created as a business - an enterprise from the very beginning is a huge factor in its success. In launching, iStockphoto has a lot in common with the launch of another popular online community (at one time) - CraigList.
Like Craig Newmark's, who influenced CraigList, and Bruce, who influenced the iStockphoto community, have always been the main users of their sites and cared about their members.
iStockphoto deliberately worked with the community day after day, through forums, e-mail, and face to face at meetings. iStockphoto had many online forums where users could ask questions and get support from experienced users.
Secondly, iStockphoto had the ability to provide quick answers by e-mail to user questions. Even the CEO - Bruce usually spent time sending e-mails to users in order to assist in their question.
Third, iStockphoto supported a series of photos called iStockalypses, where users could take photos of interesting places and share information about photos.
The site had many opportunities to educate its users.
Different statistics were shown, and there was transparency as to how many participants were on the site, how many photos were uploaded and the number of paid downloads.
This provided new users with the opportunity to learn success from experienced authors. Only photographs that pass the quality test were taken, which created a positive sense of involvement among the users, and this process, indirectly affecting the improvement of photographic skills, created a feeling for users that they “deserve, earn” their local community.
The emergence of low-cost digital camera SLR
In the winter of 2003, the Cannon Digital 6.3 megapixel camera became available at prices up to $ 1,000. Bruce and Patrick (co-founders) saw this as a turning point for iStockphoto, as the camera could produce high-quality images. iStockphoto was in an excellent position to capitalize on efforts through the infrastructure they were working on as far back as in previous years.
Startup strategy and marketing
iStockphoto was originally an amateur site created in May 2000 by Bruce Livingstone. Bruce created a website to publish his own portfolio.
Initially, the site contained 1,600 photos created by Bruce, available for free download. This site attracted the attention of other photographers who also want to share their own collections.
This transformation took 6 months from launch, created a community of photographers sharing photos.
Bruce initially promoted his website by verbally advertising, telling his friends by e-mail. One of Bruce's friends, web designer, guru Jeffrey Zeldman helped promote the site by mentioning it on his blog and using photos from sites in magazines like Macworld. The influence of Mr. Zeldman in the community of designers and photographers, greatly contributed to the promotion of the site as stock-free photo exchanges.
With the evolution of the community, the base of photographers has become the main engine of marketing. By advertising their own photographs on the site, photographers created publicity and provided viral marketing for the service.
The site offered them some interesting marketing tools - such as free, customizable business cards, to assist in their own promotion of their photo collections. Today, the site has a base of 23,000+ photographers who form the cornerstone of marketing promotion efforts.
At its later life cycle, the site began to advertise on the Internet, in print, and at trade shows.
Output analytics
iStockphoto could continue its operations in the future, at the expense of money received from the sale of photographs. However, at the end of 2005, the company decided to raise about $ 10 million to ensure subsequent growth, including $ 3 million for hardware development.
The management team for the first time decided to attract venture financing. After receiving the list of conditions from VC, the management doubted that losing control over the product was the best choice for the company. Therefore, Bruce decided to find other options, such as contact with Jonathan Klein, CEO of Getty Images.
After a positive evaluation of the company's strategy and culture, it was sold to Getty Images in February 2006 for $ 50 million in cash. This grade was higher than the grade suggested by the VC.
PS: By the way, both Patrick and Bruce are fans of Guy Kawasaki. Since 2003, he has been a personal tutor of the iStockphoto management team. The presence of large figures in mentors is crucial for the success of the company, but only partially for a start-up.
iStockphoto is both an online community for photographers and a source of high-quality, affordable photos.
As of October 2006, the iStockphoto photo library contained ~ 1.1 million images provided by more than 23,000+ photographers.
')
In 2006, iStockphoto expects to sell from 10 to 12 million photo licenses from this library, at prices ranging from $ 1 to $ 40 per image.
IStockphoto’s success in opening a new market segment in the photo services market.
The segment consists of consumers avoiding expensive photographs from libraries like Getty Images and Corbis. The success of the company attracted the attention of Getty Images, which absorbed iStockphoto for $ 50 mln. in cash in February 2006.
All information is obtained from sources within the company and is representative.
Key success factors
Offer a free alternative to expensive services.
iStockphoto has organized a market for selling high-quality images at extremely low prices. The company's innovation in offering the entire database of photos as royalty - free available for download over the Internet. (By paying once - you are entitled to use the photo at your own discretion - excluding direct resale rights and copyright).
Free licensing of high-quality photos - changed the rules of the game in the photo market in 2000 (the price for a photo will appear later).
For the first time, iStockphoto installed a distribution of photos from amateur and low-professional photographers to the general public.
IStockphoto also dramatically reduced the cost of photos for the mass of customers (designers, small business, social organizations ... etc), which traditional photo suppliers did not do.
With the growing popularity of iStockphoto, in proportion began to increase the cost of hosting and communication channels for the site.
Solving the question of how to pay bills of $ 10,000 per month, the founder of Bruce opened the discussion on the iStockphoto community site, offering to solve this issue to the community itself. In February 2002, the community decided to set the cost of $ 0.25 per photo to cover the main costs of the site, with a compensation of 20% to the photographer.
The iStockphoto startup moved through several iterations of adjusting its own business model, but continued to offer photos at relatively low prices. The first iteration happened in 2004, when iStockphoto officially became a commercial structure. At that time, iStockphoto installed a 1.2 or 3 "credit" ($ 0.50 for a loan) for a photo of various sizes, offering the author of the photo a 20% commission.
Now, iStockphoto offers photos at a variety of prices, as well as various author commissions.
For example: photos are offered for 1,2,3,5,10,20 or 40 credits ($ 1 for 1 credit).
Commissions range from 20% to 40%, the exact amount depends on some factors, for example, depending on the provision or not of exclusive rights to a photo for iStockphoto.
The growth of loyalty and activity of the community.
iStockphoto started as an amateur site of its founder Bruce Livingstone, and this has remained for several years. The fact that iStockphoto was not created as a business - an enterprise from the very beginning is a huge factor in its success. In launching, iStockphoto has a lot in common with the launch of another popular online community (at one time) - CraigList.
Like Craig Newmark's, who influenced CraigList, and Bruce, who influenced the iStockphoto community, have always been the main users of their sites and cared about their members.
iStockphoto deliberately worked with the community day after day, through forums, e-mail, and face to face at meetings. iStockphoto had many online forums where users could ask questions and get support from experienced users.
Secondly, iStockphoto had the ability to provide quick answers by e-mail to user questions. Even the CEO - Bruce usually spent time sending e-mails to users in order to assist in their question.
Third, iStockphoto supported a series of photos called iStockalypses, where users could take photos of interesting places and share information about photos.
The site had many opportunities to educate its users.
Different statistics were shown, and there was transparency as to how many participants were on the site, how many photos were uploaded and the number of paid downloads.
This provided new users with the opportunity to learn success from experienced authors. Only photographs that pass the quality test were taken, which created a positive sense of involvement among the users, and this process, indirectly affecting the improvement of photographic skills, created a feeling for users that they “deserve, earn” their local community.
The emergence of low-cost digital camera SLR
In the winter of 2003, the Cannon Digital 6.3 megapixel camera became available at prices up to $ 1,000. Bruce and Patrick (co-founders) saw this as a turning point for iStockphoto, as the camera could produce high-quality images. iStockphoto was in an excellent position to capitalize on efforts through the infrastructure they were working on as far back as in previous years.
Startup strategy and marketing
iStockphoto was originally an amateur site created in May 2000 by Bruce Livingstone. Bruce created a website to publish his own portfolio.
Initially, the site contained 1,600 photos created by Bruce, available for free download. This site attracted the attention of other photographers who also want to share their own collections.
This transformation took 6 months from launch, created a community of photographers sharing photos.
Bruce initially promoted his website by verbally advertising, telling his friends by e-mail. One of Bruce's friends, web designer, guru Jeffrey Zeldman helped promote the site by mentioning it on his blog and using photos from sites in magazines like Macworld. The influence of Mr. Zeldman in the community of designers and photographers, greatly contributed to the promotion of the site as stock-free photo exchanges.
With the evolution of the community, the base of photographers has become the main engine of marketing. By advertising their own photographs on the site, photographers created publicity and provided viral marketing for the service.
The site offered them some interesting marketing tools - such as free, customizable business cards, to assist in their own promotion of their photo collections. Today, the site has a base of 23,000+ photographers who form the cornerstone of marketing promotion efforts.
At its later life cycle, the site began to advertise on the Internet, in print, and at trade shows.
Output analytics
iStockphoto could continue its operations in the future, at the expense of money received from the sale of photographs. However, at the end of 2005, the company decided to raise about $ 10 million to ensure subsequent growth, including $ 3 million for hardware development.
The management team for the first time decided to attract venture financing. After receiving the list of conditions from VC, the management doubted that losing control over the product was the best choice for the company. Therefore, Bruce decided to find other options, such as contact with Jonathan Klein, CEO of Getty Images.
After a positive evaluation of the company's strategy and culture, it was sold to Getty Images in February 2006 for $ 50 million in cash. This grade was higher than the grade suggested by the VC.
PS: By the way, both Patrick and Bruce are fans of Guy Kawasaki. Since 2003, he has been a personal tutor of the iStockphoto management team. The presence of large figures in mentors is crucial for the success of the company, but only partially for a start-up.
Source: https://habr.com/ru/post/30913/
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