Competing against non-consumption sucks
There is a biting piece in this morning’s New York Times about the Shutterfly saga and how its IPO has not proven to be the pot of gold at the end of the rainbow that most of its founders/investors expected. It’s really too bad— after all Shutterfly is the last of the photo 1.0 sites that is still independent, and they seem to have users that like what their product (Shutterfly is after all, the most mentioned site by the photo 1.0 refugees that we’ve gotten at Tabblo).
At the end of the day, the challenge that all of these guys (Shutterfly, Ofoto, and Snapfish) faced was building and ramping big businesses on two flawed assumptions. The first was that people would print a lot more 4×6s than they actually want to print in the era of digital cameras. When combined with the fact that there was a commonditization of the silver-halide print market (taking prices from $0.50 to $0.12 in a couple of years), this was cause for just horrible economics for all three of these guys. However, alone this flawed assumption is correctable which is why you see all three vendors moving aggressively into specialty print products (books, cards, calendars) and away from the dying 4×6.
What really got these guys was the second flawed assumption which was that getting users online who want to share pictures would cut their cost of customer acquisition well below what it has needed to be, mainly because of how “viral” or at least “social” sharing pictures by this means would be. As it turns out, sharing pictures through a website is not as much of a compelling activity as say building commentable online profile pages (MySpace) or group tagging of photos (Flickr). The reason: most of what you can get from a Shutterfly/Ofoto/Snapfish experience you can get from simply attaching a bunch of pictures to an email and sending them to your friends.
In other words, Shutterfly and the gang were not competing against each other on sharing (as they were on the dwindling print market side) but against non-consumption— or more accurately, simply sending the pictures by email. And, as all of the groupware or social people will tell you, email is a powerful foe to vanquish. As the Internet’s first killer app, it’s easy, flexible, and provides natural data replication.
This is also why we at Tabblo have been super focused on the editor, the collaborative authoring experience, and the transition from bits to atoms— three things that are not easy to ape with email. Just like Flickr nailed it on the collaborative tagging and grew a huge community out of that, we’re hoping that by providing enough additional value over email for sharing photos, we can avoid the trap of competing against non-consumption.
UPDATE: If you want to see some of the other ways in which we’re hoping to compete against email, send an email with some photos to share@tabblo.com with some email addresses that you want to share the photos with in the body of the email. It’s in beta testing now— but hopefully marries some of the niceties of email with what makes Tabblo special.