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Everpix was great. This is how it died

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Re: Everpix was great. This is how it died

#61

Post by rhizome »

SoftwareMaven wrote: post #16

I can't help but wonder if that safety net feeling is part of what doomed Everpix. If they had believed they were incredibly lucky to land $1.8M and that they had to build the whole business with that (rather than having a belief that more funding awaited whenever they needed it), would it have forced a different set of decisions to be made that would have driven revenue and growth, and ultimately success, instead?

From the sounds of it, what doomed them was pricing too low in a way that made it impossible to create higher tiers of service, and, perhaps most importantly, using AWS for everything. AWS bills monthly, so if in fact they were running a $35k/mo bill there, a HUGE refactor was passed by. But then again, startups don't hire sysadmins anymore.

Re: Everpix was great. This is how it died

#62

Post by rhizome »

martingordon wrote: post #28

> They spent too much time on the product and not enough time on growth and distribution. The first pitch deck they put together for investors was mediocre. They began marketing too late. They failed to effectively position themselves against giants like Apple and Google, who offer fairly robust — and mostly free — Everpix alternatives. People on HN crap all over MBAs, but these are the types of problems many of them…

To be fair, the slogan their late-term marketing consultant came up with was pretty lame.

Re: Everpix was great. This is how it died

#63

Post by qq66 »

guynamedloren wrote: post #51

Can somebody explain the difference between salary, payroll, and personnel? As far as I can tell, this money goes to employees. However, with a sum of roughly $3.8M, this seems a bit high for 6 employees over 2 years ($270k+/employee/yr), so that can't be right..

Payroll = salary + benefits

Personnel costs = full-time employees + contractors (iOS development shops, etc.)

Re: Everpix was great. This is how it died

#65

Post by darkarmani »

chiph wrote: post #15
Codhisattva wrote: post #2

Wow. What an interesting example of what's wrong with the venture capital model. A great product dies because the founders "spent too much time on the product". I hope a 9th inning miracle saves the day. If not, thanks for the great product.

I'm not a SV resident, nor a startup kind of guy, but one thing I've noticed is that VC firms are hit driven. And when there are periods in time when hits are far apart, you end up with events like the Series-A crunch. I'm wondering if there could be a VC firm that would emphasize a low cost of business (for them) in return for not so many hits, but rather a series of smaller firms that just get on base. They'd build…

> I'm wondering if there could be a VC firm that would emphasize a low cost of business (for them) in return for not so many hits, but rather a series of smaller firms that just get on base. They'd build a pool of talent, and one or more of the firms might hit it big (aka got lucky), but the VC would be more about spreading their bets

I think the management and vetting overhead isn't worth it for them. Maybe SV is more hit driven, but I've seen non-sexy start-ups raise small rounds of funding. You don't really hear about them though.

Re: Everpix was great. This is how it died

#66

Post by rhizome »

bjansn wrote: post #43

The transparency in this article is something we can learn from. It's sad to see a service like Everpix go as they were making money. But if you look at the other numbers, they just staffed up too quickly. Salaries, personnel and payrolling costs of together $3.7 million in two years is just way to much compared to the money they were making. What I'm curious about is that the cost per user (storing photos) is what k…

If they were paying $35K/mo to AWS for hosting and storage, they could have paid about that much for a year of hosting on their own machines. There's a lot we don't know about this angle, but suffice it to say they were throwing money away on infrastructure.

Re: Everpix was great. This is how it died

#67

Post by guynamedloren »

qq66 wrote: post #63
guynamedloren wrote: post #51

Can somebody explain the difference between salary, payroll, and personnel? As far as I can tell, this money goes to employees. However, with a sum of roughly $3.8M, this seems a bit high for 6 employees over 2 years ($270k+/employee/yr), so that can't be right..

Payroll = salary + benefits Personnel costs = full-time employees + contractors (iOS development shops, etc.)

Wait, so are these 3 costs not summed? I didn't do all the math from funding to net income, so I might have missed something.

Re: Everpix was great. This is how it died

#68

Post by radley »

sameer_sundresh wrote: post #41
shin_lao wrote: post #20

Earlier quoted context omitted.

I agree with you. From what I read it seems they cared more about raising money than making money.

Our per-user income was above our per-user costs. But we hadn't yet reached the economies of scale where fixed costs were covered.

Scale goes both ways. Costs can be reduced very easily these days.

Re: Everpix was great. This is how it died

#69

Post by aespinoza »

rhizome wrote: post #61
SoftwareMaven wrote: post #16

I can't help but wonder if that safety net feeling is part of what doomed Everpix. If they had believed they were incredibly lucky to land $1.8M and that they had to build the whole business with that (rather than having a belief that more funding awaited whenever they needed it), would it have forced a different set of decisions to be made that would have driven revenue and growth, and ultimately success, instead?

From the sounds of it, what doomed them was pricing too low in a way that made it impossible to create higher tiers of service, and, perhaps most importantly, using AWS for everything. AWS bills monthly, so if in fact they were running a $35k/mo bill there, a HUGE refactor was passed by. But then again, startups don't hire sysadmins anymore.

Do you think they were better off by having their own servers ? (Honest question we use AWS and Rackspace, and we feel the pain of Monthly bills as well).

Re: Everpix was great. This is how it died

#70

Post by jrochkind1 »

middus wrote: post #11
ismail wrote: post #4

500k for consulting???????

Let me break this down a bit: USD 500k at USD 2k/man day = 250 man days A US man year has ~235 man days, so that's just roughly 1 external FTE for a year. Not so much, actually.

What kind of FTE makes $2000 a day, what?
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