Everpix and Its Last Photo

Everpix was known as one of the best solutions for managing large libraries of photos. You know, where our pictures go after we take them and then never look at them again. No, not a photobook. Think about it, we take thousands of photos each year to remember various occasions, but when was the last time you went back to the beginning of a journey just to reminiscence or find those images. It’s a very common problem and we always wait until we need a photo for a reunion or event when we realize the true hassle of finding it. Well, Everpix was one of those solutions and a very good one at that. So why do they only have one photo left now.

Everpix would allow users to store an infinite amount of photos and organize them for you for just $4.99/mo or $49/yr. If you didn’t want to pay for Everpix’s services, you could just receive an email daily with photos from the same day in prior years, which is still pretty cool. Users thought so too as Everpix quickly gained over 55,000 users and over 400,000 million photos. Sounds like a strong start, but did I mention that only 19,000 of those users were paid subscriptions. Let’s look at the numbers.

The Snapshot

Everpix had raised $2.3 million from investors and had revenue from paid subscribers of $250,000. They had total expenses of $4.9 million, in which salaries, payroll, and personnel costs equated to $3.6 million of it. That easily leaves you with a big red negative net income of  -$2.3 million and just as many questions of how did it get this bad and where did the money go.

The Photo Finish

Everpix spent far too much time on perfecting the user experience and design/layout of the site, which cost them close to $2 million alone. They also neglected some of their major competition in Apple and Google, which offer services similar to theirs for free. Everpix may have had a better product and service, but without spending the necessary time selling and advertising the service to acquire new users, especially paying users, they were losing out on necessary revenue to keep doors open. With any business or startup, if you can’t keep a steady income, grow, and expand, investors will not continue to fund you nor will you be able to keep your own doors open. A great product doesn’t solve anything if you don’t market it.

Everpix had a very intelligent and focused team, which is why the product and service was designed well, receiving a 4.5 out of 5 average rating on the iOS app. However, it should be questioned why $3.6 million was spent alone on salaries, payroll, and personnel costs. When most people think of startups, they think about a small group of individuals squeezed into one room and all receiving a small compensation package and pouring all money back into the business with hopes that they will make it one day and then never have to worry about money again. When looking at Everpix’s $1.1 million for salaries, $1.2 million for payroll, and $1.4 million in personnel costs, where exactly was the money going? Better yet, why wasn’t more put back into the startup?

Everpix did attempt to correct early mistakes like the lack of advertising and the budget expenses. They hired a marketing specialist who helped better position Everpix in the marketplace and helped create a better pitch deck to help raise money. Everpix’s staff also took major pay cuts all the way down to San Francisco’s minimum wage of $10.55/hr. Unfortunately, all these moves were far too late, Everpix was losing more money than they were generating from paying users. With no investors willing to hand over millions to Everpix to continue business, it was time for one last photo. This all goes to say that a business that doesn't generate a consistent revenue stream can very well be seen as just a hobby.

References:
http://www.theverge.com/2013/11/5/5039216/everpix-life-and-death-inside-the-worlds-best-photo-startup