
Uncensored Everpix metrics, financials and slides - jot
https://github.com/everpix/Everpix-Intelligence
======
jusben1369
So one of the things that's interesting here is the Amazon component. And the
anonymity of Amazon vs a smaller provider. Let's assume for a minute the
founders actually wanted to keep it alive (I'm guessing they didn't but that's
a whole other story) You're generating revenue of say $40,000 and your Amazon
costs are $30K. If you went to a small or mid tier sized provider and said
"Good news/bad news. We're generating $40,000 a month and growing (oddly
revenue isn't which is again another story) You're costing us $30,000 a month.
If we can cap you at $20,000 a month for 12 months that frees us up $20,000
and we can keep 3 employees on in the short term and still grow the business.
We can get through the rough patch and continue to grow and in a year from now
we can adjust this upward and be worth more. If you insist on $30K, which is
your right, we shut the whole thing down because we can't keep the lights on.

Now the provider is either looking at generating $240,000 for the next 12
months _or losing everything_ from your account. He/she is probably doing the
deal with you because much of their costs are fixed. But I don't know if/how
you have that conversation with Amazon.

EDIT: Oh and fantastic that they shared.

~~~
jph
> But I don't know if/how you have that conversation with Amazon.

I do. I've had a conversation like that with Amazon. What I found is the
Amazon hosting team is excellent: they moved mountains for my account to get
us to success.

The Amazon account exec arranged immediate discounts and bridge services, even
working through the holidays, then brought in multiple engineers for phone
calls with me to teach me how to optimize our project to cost less to run.
Every one of the Amazon people who helped me was 100% on board with finding
ways to make the project successful.

That conversation is _always_ worth having with vendors in my experience. They
may be able to come up with ideas, or offer rebates, or promotions, or even
convertible note financing toward the next fundraising round.

~~~
yeldarb
Can vouch for this as well. So far Amazon customer service has been great for
us as well. We just got introduced to our account manager a couple of months
ago but she has been very helpful in getting us connected with the right
people and helping us save money on our monthly usage.

------
carsongross
What a _hugely_ useful thing for you guys to do. Thank you, truly.

The lesson I see from this: AWS hurts bad if you are using it heavily, but
salaries... salaries kill. Automate, outsource and self-build as much and as
long as you can possibly stand it, and then push on a lot longer than that.

~~~
nashequilibrium
Is the AWS cost so high because they primarily stored pics? If so what can be
done to reduce this cost in terms how to store the pics?

~~~
danielweber
I'm currently someplace where we are treating AWS as a VM provider and it's
freaking nuts how much it costs. (We might be looking at the problem wrong or
failing to appreciate the fact that we can always scale with enough money.)

~~~
sehrope
If you have a fixed workload ( _i.e. X servers always online_ ) then take a
look at reserved instances. The break even point is about 6 months for the
light instances and a bit more for the medium ones. I don't recommend the
heavy ones as the cost structure is different ( _you pay regardless of whether
tt 's on so ... if you later change your instance types you still have to pay
hourly for the full term of the reserve_).

Even better is if you can plan your infrastructure on AWS around using spot
instances. They can be _really_ cheap ( _we 're talking a 5x times cheaper
then on-demand and 3-4x than reserved_). If your instances are used in a
stateless fashion with all persistent state saved externally (DB, S3, etc)
then you can do some pretty cheap scaling with spot instances.

One setup I've played with is a core set of non-spot instances phalanxed by a
number of spot instances ( _at a couple different price points_ ) for
stateless web traffic. As long as the spot price stays below your bid you have
significantly more instances available ( _which should give your users better
response times_ ). When the spot price rises your spot instances die and
things slow down, but your app would still be alive thanks to the non spot
instances. Again it takes quite a bit more engineering to get a setup like
this but this is the kind of thing you need to do to take advantage of elastic
computing.

~~~
swisspol
At Everpix, we were already extensively using spot instances for the vast
majority of our EC2 needs (which were pretty intense considering the type of
computation and image science we were doing). That did save quite a bit of
money when we did the switch and it was easier to do than we expected, so
strongly recommended!

~~~
latch
Did you guys look at bare metal at all? (either dedicated or colocated)? Spot
gets you in the same ballpark of price on a "unit", which can be mentally
deceiving since an AWS unit is pretty weak.

In our experience with CPU or IO intensive workloads, Spots are still 2-5x
slower than what you can get at decent dedicated provider..

~~~
swisspol
No, there was no time nor did we have the in-team experience. EC2 is one
thing, which you can get down to pretty cheap if leveraging spot instances,
but most of our infrastructure costs was on storage.

------
pkrein
I did some spreadsheet-ing to look at the "profitability" of their userbase.
If the business were sustainable, then Monthly Recurring Revenue [1] would be
higher than the cost to service the customers [2]. If not, then growing the
userbase just increases total monthly losses (assuming a steady freemium
conversion rate).

In Everpix's case, it appears they were growing unsustainably.

Their data shows that all the way up until February 2013, they were spending
$3 on AWS for every $1 of MRR. That's scary, because it means that a new
customer bringing $1 MRR was actually increasing their monthly losses due to
usage costs!

Things got better though. In March and April 2013, a surge in premium users
seems to have shifted the balance in the right direction. But still, for May
2013 until the shutdown they were spending $1.20-1.40 on AWS to service every
$1 MRR.

So growth in their userbase was actually increasing their total burn rate,
which makes growth unsustainable.

You can see the spreadsheet analysis here:
[https://docs.google.com/spreadsheet/ccc?key=0Ap7fmpANG_0QdHV...](https://docs.google.com/spreadsheet/ccc?key=0Ap7fmpANG_0QdHVUbGdudnhCaFdVSlVnOEJpUXBVUVE&usp=sharing)

[1] [https://github.com/everpix/Everpix-
Intelligence/blob/master/...](https://github.com/everpix/Everpix-
Intelligence/blob/master/Internal%20Metrics/Subscriptions%20and%20Revenues%20\(Revenues%20in%20Sales%20Recognition%20Basis%20-%20Minus%20Processing%20Fees%20and%20Refunds\).csv)
[2] [https://github.com/everpix/Everpix-
Intelligence/blob/master/...](https://github.com/everpix/Everpix-
Intelligence/blob/master/Internal%20Metrics/System%20AWS%20Costs%20\(Monthly%20Spending\).csv)

~~~
swisspol
Your analysis is certainly logical, but with all due respect relies on the
faulty assumption that Everpix's infrastructure, responsible for almost all of
variable costs, was somehow "frozen".

The reason we were getting closer and closer to being positive on variable
costs (looking at revenues on a sales recognition basis, since from the sales
volume perspective, things were already positive in the last few months) is,
yes, improved monetization, but more importantly AWS optimizations. We had
squeezed a lot out of S3, then EC2 and our last step, the one we were working
on before shutting down, was RDS where there was a _ton_ of room. Looking at
our trajectory, I'm pretty confident we would have been positive even on AWS
(but unlikely much). You can even compound that with AWS discounts which
apparently even startups can get looking at other comments in this thread.

To re-iterate, you would not build a freemium business like Everpix, with
intense computing and storage requirements, at scale on AWS. Large photo
platforms have their own storage and servers. Everpix was never intended to
grow out of AWS either and you know you can cut your infrastructure costs to
at least half. That was the plan post Series A. Most CTO / CEOs of large
established photo companies I talked to said they were doing much better than
this 1/2X, so that's conservative (I've been told ranges of 3-8X in savings vs
S3 for instance).

Anyway, Everpix was bringing about $6 revenue / user / year IIRC, which is the
part that really matters considering the denominator, infrastructure costs, is
something you know you can really bring down. One relevant reference point is
500px for instance which is doing about $1 revenue / user / year [1]. I would
be surprised if they were growing "sustainably" too ;)

[1] [http://techcrunch.com/2013/08/07/500px-
scores-8-8m-series-a-...](http://techcrunch.com/2013/08/07/500px-
scores-8-8m-series-a-from-andreessen-horowitz-harrison-metal-to-build-a-photo-
marketplace-expand-consumer-reach/).

~~~
pkrein
Oh, yes you're absolutely right. Growth didn't have to _remain_
unsustainable... reducing costs on AWS seems like the right idea (and kudos
for huge efforts there with spot instances, etc!)

My attempted point was just that during the lifetime of the company, growing
the userbase was increasing burn rather than decreasing it. That's a normal
VC-funded approach to things, and occasionally works dramatic wonders like
Facebook. But in the case of Everpix, the negative operating margin helps
explain why an exponentially growing, paying(!) userbase can still fall apart
without additional funding.

Btw, I really appreciate you guys being willing to share all these numbers.
Very brave, and extremely fascinating. Best of luck in your next endeavors!

------
mbesto
Amazing. This one piece is simply eye opening -

[https://github.com/everpix/Everpix-
Intelligence/blob/master/...](https://github.com/everpix/Everpix-
Intelligence/blob/master/Financials.md)

And here it is - the side effects of the talent war in full effect:

HR - $1,374,695.06 - or 52% of total costs

And the real winners of the whole thing (the pick axe industry):

AWS - $394,588.35 - or 14% of total costs

~~~
crystaln
> HR - $1,374,695.06 - or 52% of total costs

Why would it be unusual for the majority of costs to be salaries for a company
that sells services and develops products? This has nothing to do with the
"talent war." That's just the way things work. What else would they be
spending money on?

> AWS - $394,588.35 - or 14% of total costs

How much higher would that number have been had Everpix built out their own
infrastructure?

~~~
mbesto
My points weren't criticisms, they were merely highlighting the sentiment that
comes from outside "the bubble" that is SV. It is _unusual_ to people outside
SV* to see such a high number (the % was just an additional data point that
signals to non-tech people how much salaries constitutes tech startups). This
has _everything_ to do with the talent war - the market dictates that an
engineer's salary must be $foo because Facebook/Google/etc are willing to
compensate that much. People are generally curious _why_ that "that's just the
way things work" who aren't familiar with it.

> _company that sells services and develops products_

Here is my criticism now - not all products and services are equal, yet the
costs to develop them (in SV) are. FB/Google/etc.'s high revenues dictate that
their products and services constitute a developer that costs $foo - they set
the market rates. Talented developers are fungible, but their salaries are not
- thus the disconnect.

> _How much higher would that number have been had Everpix built out their own
> infrastructure?_

I don't have the answer to that question, and probably very few people do.
There are two points to be addressed there - (1) could they save money by
building their own? mature companies deal with that question all of the time
(2) this is a real life indication of how much a software services money can
make on one client by "selling pick axes in a gold rush" \- thereby singalling
a reinforcement to that sentiment.

*(note - I'm in SV)

~~~
patio11
I am intimately familiar with high-level metrics at software businesses in
many locales other than Silicon Valley, and direct cost of employees is the
largest expense at all of them. (Not true generally, since marketing budgets
get arbitrarily high at some firms, but true of all dozen or so that I have
direct experience with.) It can easily range to 80%+.

Also, the imputed salaries being paid here are very much not Google/Facebook
numbers. The payroll for a team of five Goolgers is plus or minus $100k a
month, almost double what it was for Everpix. Everybody was likely taking far
below-market salaries.

~~~
patio11
I did a bit of Excel modeling of this, based on Everpix's hiring timeline and
published numbers. My count is that they had 157 employee-months prior to
shutdown at a fully-loaded cost of approximately $9,200 per employee-month. An
employee-month is one month worked by a founder or employee, but not a
consultant. Fully-loaded costs includes recruiting, healthcare, salary, and
taxes, but (for the purpose of this calculation) does not include pro-rated
costs for rent, hardware, software licenses, or what have you. Those are all
numbers I'd be careful to bake into my planning as a founder but which I don't
need to reverse the math here to salary packages.

I would _ballpark_ the average package at Everpix as what Americans would
understand as "$90k plus healthcare plus equity." This is _not_ straight-line
comparable to "$90k plus healthcare" at other US-based software firms, even
those with baseline perks packages for working professionals rather than those
competing in the Valley perks arms-race with Google and Facebook. For example,
if one were to take "$90k plus healthcare" at an insurance company doing Java
EE XL mappings every day, it is virtually beyond question that there'd be
401Ks with employer matching and whatnot in the picture as well.

If you were to do a straight-line comparison with e.g. Google or Facebook,
this is substantially below their pure-cash offers for _fresh graduates with
no professional experience_ , and both would add both substantial cash bonuses
and incentives plus equity grants plus perks with non-trivial cash value. The
compensation packages employees capable of solo-shipping e.g. iOS applications
or non-trivial image recognition software would be offered are _substantially_
north of that. $140k cash-on-the-barrel plus industry standard perks isn't
even an eyeraising number for _intermediate_ engineers with no skill more
specialized than shipping working software.

I'm mostly doing this math to say that "Lavish expenditures on employees were
not a contributing factor here. They paid substantially below-market wages for
employees doing similar jobs locally." I know that this might cause people who
are not located in the Valley to feel a bit of heartburn given the absolute
numbers, but that's another discussion entirely. (It should be noted that I
live in an area where $90k cash packages would be unusual for engineers with
20+ years of professional experience.)

~~~
mr_luc
I think this is probably the definitive comment for the 'cost of talent'
portion of the discussion. I just wish it weren't buried so far down.

------
wwayneee
Everpix designer/cofounder here.

This is pretty dense stuff. We're working on putting together a more extensive
and user-friendly site to make sense of this heap of data. Stay tuned. :-)

~~~
rgovind
Wayne, Thanks a ton for sharing these documents. If you could also tell us
which sources you used for market research, that would be great!

------
minimaxir
Per [1], the average cost of each user the month before closure was $0.56, and
the average cost of each user with accessible photos was $0.75.

Just one of the many important costs of a freemium business model.

[1] [https://github.com/everpix/Everpix-
Intelligence/blob/master/...](https://github.com/everpix/Everpix-
Intelligence/blob/master/Internal%20Metrics/System%20AWS%20Costs%20\(Average%20Cost%20Per%20User\).csv)

------
pistle
So helpful. Thanks for all this.

6800 subscribers. 2,665,192.34 in expenses. 50000 users.

$395 per subscriber per year. $35/mo.

Convert 10% more of users.... 5000 and it's still $20/mo.

Was this really $5/mo or $40/yr?

There had to be a story about HR plateauing and subscribers increasing an
order of magnitude in 12 mo. - and it's still under water for another 2 years.

Who saw the writing on the wall and when did they start raising the warning
flags? What happened from then on? What warning signs (talent leaving,
investors glaring) showed up? When? How did they take form?

------
lancewiggs
Fantastic.

I went through an exercise to recast the numbers as a bootstrapped company
here in New Zealand. we don't, for example, have any healthcare costs, and
items like legal fees, rent and salaries (including taxes) are substantially
lower.

I have 3 Questions for the founders, if possible:

How much did you play with pricing to try to drive revenue per customer up?
e.g. Did you consider/test no free customers, higher pricing and gold tiers?

The consultants cost of $272k seems very high - what sort of consultants was
this spent on?

If you did it again as a bootstrap (i.e. founders are in control), what are
the to 3 things that you would you do differently that would impact on costs
and revenue?

------
jmathai
Amazing. Kudos for all the transparency around your shutdown. I'm still
reading through all of this.

I'm founder @ Trovebox and recently posted this which anyone doing a
subscription consumer photo service should read.

"Hello 2014, Goodbye Consumer Photo Service" \-
[https://medium.com/p/b1234eaf75b](https://medium.com/p/b1234eaf75b)

------
dchuk
The trend towards startup transparency is pretty damn awesome as a startup
founder myself. Even with startups that have nothing to do with photo sharing,
being able to see the guts of a (failed) startup is extremely insightful.

------
wheaties
Thank you for this. Reading the VC letters was just so amazingly refreshing I
can't begin to tell you. I love how they said "no" in almost all the same
ways.

I'd really like to know the two that were so standup, that they wouldn't fund
a competitor or someone who could, eventually, be a competitor. In all
honesty, those are the types of funds you want backing you. They've bought
your vision and they're not going to do anything to undercut you.

~~~
MediaSquirrel
Are you kidding? The "we can't fund a competitor" VCs are just saying "no"
like everyone else. There's nothing particularly noble (or ignoble) about it.

~~~
jchonphoenix
In the particular case of Everpix, I'm relatively certain I can guess who
these VC funds are and who that competitor is. Given this information, it's
not just some empty excuse for a VC to bow out.

------
adventured
Could Everpix have been run by a very small team at the end, rather than shut
down? It looks like it was near adding a net 1,000 subscribers per month.

Also, wouldn't it have been possible - with the understood pain points - to
substantially reduce costs by moving off of AWS? Trading the ease of AWS for
the critical cash for operations.

~~~
loceng
This could have been beginning of a hockey stick growth too. You'd think this
is where a VC would be willing to accept some risk.

~~~
jmathai
If you read through the VC correspondence the hang up was that the space
simply isn't big enough (>$100M). According to the VCs the hockey stick would
have hit a ceiling too low for them to invest.

------
rokhayakebe
You know at some point we are going to have to sit back and ask "Where the
F&*^K" does this $100M or $1B business number comes from.

The minute I get the opportunity to put my money my mouth is, I will invest
solely in lifestyle businesses: one to two guys/gals wanting to build a
profitable business with a yearly dividend, one where if the team makes
$500,000/year we are all extremely happy.

~~~
username223
This is what separates you from the real movers and shakers: they just want to
get in, get theirs, and get out, and they believe they're sufficiently smarter
than the rubes to do it.

------
EricMayo
$30K/month and ~100 servers seems like a huge waste. I'm in the business of
managing similar services. I handle, not photos, but video streams. My work is
for one of the largest companies in the world (Fortune-5) and I deal with
things like superbowl traffic spikes, etc... Everything is handled in house
but for spiky loads, we look to things like Akami.

I realize managing at Fortune-5 is different than 100% oursourcing but the
cost constraints, I have to imagine, are very similar. For example, I have to
imagine Amazon gets similar price breaks from Cisco as my company - I know
Amazon has custom built servers and all so there may be some advantages but at
$30K/month, I think any hosting company would happily take 1/2 or 1/4 of that.

I'd be curious to know what kind of bandwidth loads you were pushing through
AWS and how much of the AWS cloud can be made redundant per client.

~~~
JoachimSchipper
Note that they were apparently doing very fancy image processing, not just
pushing bytes; that does make things more difficult/expensive.

~~~
EricMayo
Yes, I took that into account in mulling things over. We do very similar stuff
with video streams (post processing) before pushing to Akami. We also use SAN
backed storage and Cisco CSM load balancers. All of our equipment is in the US
and we use VMWare for everything. I know little about AWS and their
virtualization technology but where I work, it would appear we pay a little
bit more of a premium for VPS nodes if I assume Amazon rolls their own - the
$30K just seems outrageous in this regard. And to top things off, we don't
host just one web site; we have a myraid of applications spanning our data
centers to deal with all sorts of stuff (many product lines each with their
own web site with streaming, flash, user accounts, etc...)

------
bidev
Hey Guys, Thanks for posting this.

Could anyone please clarify for me following things? I have just started to
learn about startup capital. 1\. Since company is now closed down what happens
to Investor's money ? Do they just loose all or do owners have to return it ?
( sorry if this seems pretty noob but I would like to know it ) 2\. What does
1 year maturity mean in convertible notes ? 3\. Shouldn't the Net Operating
Income be negative ? Since they had income of $280696 and Expense were
$2,665,192.34 ? Did they count investor's money as income ? or how did they
arrive at $2,384,224.67 ? Thank you for the reply.

~~~
karangoeluw
I can answer the first one

> 1\. Since company is now closed down what happens to Investor's money ? Do
> they just loose all or do owners have to return it ?

They lose it.
[http://en.wikipedia.org/wiki/Venture_capital](http://en.wikipedia.org/wiki/Venture_capital)

~~~
bidev
Thank you both.

------
inkaudio
The elephant in the room that nobody is talking about here is they gave away
too much. They could have adjusted their freemium model. Why not contact
people using a lot of resources ? Let them know the best way to keep the
services up at the current clip is for them to start paying.

~~~
MasterScrat
That's my feeling t0o. I had been using it for a few months before it shut
down and was amazed at the amount I could host for free. I recommended the
service to a number of people and would have been willing to pay for it if I
needed to.

Also I don't get why it disappeared from one day to the next... Couldn't they
massively restrict free usage? Or have some form of donation/fund raising à la
Reddit Gold? people were attached to the product and it was disappointing to
see it just go away /rant

------
stevenwei
These are very interesting numbers. Obviously the financials are not well
suited to the VC-backed startup model, but I wonder if Everpix could have been
successful as a small business run by a small handful of people.

------
rl12345
In the "About Everpix" part, the text make it seem like the app was doing ok
and the reason they had to shut it down was because investors didn't want to
invest in it anymore for whatever reason.

Well, the lack of investors was surely a big symptom of their failure but the
cause it was not.

When you burn > $2 million in funding ($200k alone in PR and "Promotional
Expenses" as their spreadsheet shows) and still can't get through the timid
mark of 50 thousand users, then maybe there is something very wrong with your
business model that you should think about.

I'm confident that's something that crossed all the investors minds during the
series A conversations. They didn't mention that fact directly because it
could sound too harsh or rude and they wanted to keep the relationship in good
spirits, obviously.

The startup game is tuff, no doubt about it. I hope the Everpix guys learn
their lesson and to better next time, they look like cool and competent
people.

------
hv23
Awesome, thanks for sharing.

The PR expenses (109,552.34) seem pretty high and I wonder what that line item
entails. Did you guys use a PR firm or run any expensive marketing campaigns?

~~~
swisspol
No marketing campaigns (we spent maybe ~10K on online ads mostly for testing).
We did use a national PR firm though for several months and PR contractor for
a couple months as well before that.

~~~
siverson
My message to all startups out there: despite Valley folklore, it is ok to
have a marketing budget and spend money to advertise to users - especially
initially. Not every successful company or service grows "organically".

------
FollowSteph3
Why is the main focus on Aws costs when in comparison the HR costs are
multiple of the Aws costs? Is it because were too technically minded here? Is
it cause the charts in the article only showed the Aws costs whereas including
the HR costs would have changed that perception. I don't know but i just keep
seeing people focus on the Aws cost which was not the real problem in
comparison.

It makes me think of bad pre-optimizations ;)

~~~
pistle
Note my other comment. It hints at this. You make the point clearer.

The technical costs are not damning. Where is the concern about the other
costs, which aren't being picked apart? If AWS was 0, it's still unsustainable
growth until someone (swisspol?) dispels our concern there.

Another big void is who was pulling the plug and how/what are the founders and
direct employees feeling? I'd like to know if there were ship-abandoners, etc.

What is the turning point and what were they decision makers watching that
caused the shift?

This doesn't look like a technical learning here. This looks like a business
learning. So, while they're being transparent and it's still fresh :) share.

We can A/B test buttons. How do you A/B test business decisions?

It looks like a bunch of people can armchair this thing, technically, to the
point where it makes me wonder if someone could NOT take on nearly the funding
and make the $100M company on this idea with just some bootstrapping.

Also... how was there not a pricing model that scaled with use?

------
hectoroftroy
What was the roughly $300,000 in consulting fees for? How do the typically
help startups? And did you find them yourselves or were they recommended by
the VCs? Is it business/process consulting? Do you feel not having a non-
programming founder was beneficial or a hindrance? This is awesome that you
guys did this btw. Really eye opening. Thanks.

------
pkincaidsmith
Everpix team, thanks for being generous. These metrics and insights are a gift
to the startup community. Thanks also for choosing SendGrid to deliver your
transactional and marketing email. Judging by the different categories of
email you sent, you put a lot of thought into your email program. Question:
How essential was reliable email delivery to your business expansion? What
lessons did you learn about using email effectively?

(BTW, would you consider publishing more of your email metrics on GitHub? For
example, SendGrid reports the type of email clients that read the mail you
sent (e.g. desktop, mobile, webmail), and the mailbox providers that you sent
the most mail to (e.g. Gmail, Yahoo, Hotmail, etc.) Here's where to find and
download those reports:
[http://www.screencast.com/t/5mW9bm4Ueq](http://www.screencast.com/t/5mW9bm4Ueq))

Best wishes for your next gig!

------
phreeza
with all the lamenting about how hard running a consumer photo service is, I
wonder how imgur does it. their traffic must be insane, and they have no
subscribers, so how come they can do it and these relatively upmarket services
can't?

~~~
dreamdu5t
because imgur was focused on making a product people valued from day one while
Everpix was focused on VCs, offices, hiring, blog writing, etc.

~~~
simonw
Everpix's product was loved by their users. They absolutely built "something
people want". Unfortunately the promise they made their users was very
expensive to deliver.

------
rl12345
I just read all their pitch decks and they never mentioned exactly _how_
Everpix was - or could be - better than Dropbox, which IMO would be the first
obvious competitor.

The overall problem they were attacking is real, so maybe if they were more
focused and had distilled better their solution, with a smaller and lest costy
team, they could have made it.

Just my opinion from a totally outsider perspective. Take it for what it's
worth. I want to congratulate the team for trying and wish better luck next
time.

------
jot
Do startups at a similar stage usually measure things as diligently as Everpix
seem to have done?

If they kept an eye on of all this on a monthly or weekly basis while they
were still running would they have been doing too much or too little?

I've worked with some organisations that are reluctant to invest in this level
of analysis. Some of them might even now say "It didn't help Everpix to spend
time on that stuff."

~~~
patio11
Commenting because you asked me to on Twitter:

 _Do startups at a similar stage usually measure things as diligently as
Everpix seem to have done?_

Frequently, no. There exist companies with revenue in the $X0 million range
who have less numbers floating around the company. You'd be surprised.

 _If they kept an eye on of all this on a monthly or weekly basis while they
were still running would they have been doing too much or too little?_

I'm going to respectfully decline to answer counterfactuals about someone
else's business. In general, software businesses have two tasks: Make
software. Sell software. Analytics is a very useful thing to have if it lets
you accomplish one of those two tasks. There are many software businesses at
which it does. There are some at which it does not.

------
grahamburger
So is there another service that does what everpix did? I had it in the back
of my mind to jump in because it's a service I've really wanted, but didn't
get to it before the great shutdown. I've looked at Loom and I use Trovebox,
but neither seem to support videos very well, Loom is iOS only, and Trovebox
is moving to a different business model.

~~~
joshstrange
After Everpix shutdown I looked around and found both Loom and Trovebox but I
also found PictureLife. I tried both Loom and Picture life for a little over a
month and settled on PictureLife. Check it out, I am very happy with it.

------
neil_s
This is very interesting, thanks for taking the time to compile it all.

What I'm wondering now is whether you plan on open-sourcing the technology
built so people can potentially plug it into their own storage providers and
take up the cost of storage, or adapt the photo analysis tech. You've built a
wonderful base here, will it be put to some use?

------
bayesianhorse
To me it looked like Everpix expected the kind of growth usually seen with
free services from a paid-subscription model.

On the one hand, paid subscriptions "make more sense economically", on the
other hand, as long as we are talking about high risk capital anyway, a free
service model might have made more sense "financially".

------
jkw
This is a huge help the community, thank you! The completeness of this data is
a testament to the team's diligence and in-depth understanding of startup
metrics. Regardless of the outcome of Everpix, this analysis shows that the
team has developed some good processes and best practices for their future
ventures.

------
username223
Interesting to see Bertrand Serlet (EDIT: shit, I confused my ex-Apple
Frenchmen. Jean-Louis Gassé was BeOS), the guy behind BeOS, among the early
investors. He seems to have an affinity for good products that just don't
quite make it.

~~~
kenferry
You're thinking of Jean-Louis Gassée.

Bertrand is the former SVP of software at Apple, where the founder of Everpix
worked.

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EGreg
This is a REALLY useful treasure trove, thanks for posting

Looks like the largest expenses were payroll and hosting. I wonder if tbis is
the reason they shut down even as the number of subscriptions was rising.

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akbar501
This is absolutely amazing information. Thank you so much for sharing.

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leoplct
Now do you still believe in "learning by failure"?

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bobjordan
Great material for a business school case.

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avitalp
Thank you for taking the time to organise and post this, very interesting and
educational.

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pixi02139
Was your competition a big part in this demise? Pixable does similar things
for free....

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boggzPit
Thanks pretty interesting insights for other startups!

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badclient
Would love a breakdown of the AWS cost.

~~~
minimaxir
From [1], the vast majority of the AWS cost was Storage ($9k in Oct 13), a
large ECC instance from Feb-March 13 ($7k per month), and backups ($5k in Sept
13)

[1] [https://github.com/everpix/Everpix-
Intelligence/blob/master/...](https://github.com/everpix/Everpix-
Intelligence/blob/master/External%20Metrics/AWS%20Billing%20from%202012-10.csv)

------
spullara
Absolutely incredible transparency.

------
joelthelion
What a waste...

------
PaulHoule
sugoi!

------
notastartup
I wonder why they didn't simply downsize on the hosting. I mean if that's a
huge part of the operating cost, so much you need to shut down the entire
operation, doesn't it make sense to go with a different host? even resorting
to a dedicated box or choosing a different cloud provider?

It's really hard to believe because I bet the end user didn't really give a
damn about whether it was hosted on amazon or elsewhere. It's also hard to
believe why not just outsource the generic stuff. I really don't see anything
unique about everpix that a North American can only do and not some guy across
the ocean. Was it absolutely necessary to have in-house talent for everything
when it was a threat to the continued operation of the company?

I wonder if they were simply bootstrapped and grew as a small business
focusing on net profit, would they have made a better decision.

~~~
swisspol
I keep reading comments from this angle, so I'll throw in my 2 cents as an
Everpix founder :)

I can _assure_ you that without the facilities of AWS, which saved us a ton of
time and development overhead early on, there would have been no Everpix.
Period. Actually, the very first Everpix was on Google App Engine, but that's
a different story.

As an early stage startup, whose core business is not building infrastructure,
do you really want to be in the business of managing for instance your own S3
type storage with the same performance and reliability at 200+ TB scale? We
never lost a single user photo or account. Never lost a database server
either. When your users trust you with their life photo collection, that does
matter.

Then of course, if your company starts gaining traction, your bills increase
so things change. As a matter of fact, post Series-A, our plan was to switch
out of AWS, concurrently to our infrastructure's redesign to go from managing
100s of million of photos to billions.

Doing the switch earlier would have been premature IMO: there was no one the
team with such experience, even less bandwidth. The opportunity cost would
have been significant on all the other aspect of the company. Let's not forget
the required upfront capital which takes some time to recoup so savings would
not kick in from day 1. Finally there's also the fact our infrastructure was
still rapidly evolving (type of EC2 machines used, database architecture,
etc...), so even buying reserved instances was very difficult as there was a
good chance of buying machines we would not need anymore 6 months down the
road ultimately wasting money (it did happen).

So what we did instead what focusing on driving continuously driving down AWS
costs through various optimizations - if you were to look at our dashboard
graphs, you would notice AWS costs were growing slower than users / photos,
which reflected that work.

Long story short, the infrastructure was paying for itself through
subscription revenues. The real "killer" was payroll. I use quotes because in
this type of business, it's expected to have payroll your largest expense -
there was no surprise. BTW note that the team was already 1 person = 1 entire
product component like iOS or infrastructure so quite lean and highly
productive. For a VC backed consumer business, you pretty much need the VC
money to cover these fixed costs until you reach profitability.

~~~
siverson
> it's expected to have payroll your largest expense - there was no surprise

Only when you are small haven't marketed the service and your subscriber
numbers are still small. You could probably support 10x the subscribers with
only 2x (or less) of an increase in staff.

