I don't know why the article list salaries, payroll and personnel costs as separate numbers like that. Payroll includes salaries, and personnel costs includes payroll.
I always ask on question to every business, and nonprofit.
How much were, are the founders of the company making per year? It's usually a lie. I've also noticed when young
entrepreneurs are given a large amount of money; they don't
quite realize that it's probally all the big money they will ever see. I know I didn't. I made a lot of money in my twenties, thinking it would always be this easy. Sometimes,
the availability of money is just because you were at the
right place at the right time; people underplay luck--especially people in their twenties, or rich kids. Rich
kids have their parents to fall back on. Poor kids will never have that safety net. I don't know
anything about this company, but their situation is not
unique--it's the norm, that's why I cringed reading the
article and looking at the pictures. I've seen it too many
times before.
It is staggering to me some of the salaries that founders give themselves. I remember reading a tip for pitchdecks/term sheets that if you put your founder salary as anything above 150k that is slightly too high for most offers.
That is insane to me. I make less than 80k a year, in D.C., with a mortgage and two kids while I build on the side. A cursory glance tells me most founders aren't under such strict cost regimes. If and when I get funding and go full time I would take the absolute minimum to keep us fed and watered (~60k). How a founder could do otherwise to me is unconscionable.
70 k/year doesn't make a difference and it's not a good thing to have founders struggling with money. If your brain is too focused on the trivialities of life you can't invest yourself 100% in the company.
Apparently it would have in this case. That would have been two months of AWS for each founder, so saying it doesn't make a difference is clearly wrong.
I didn't say pay yourself nothing - pay yourself the minimum amount you have to in order to keep your life from impeding your work. If that means you need luxuries to be comfortable, then your lunch will get eaten by someone who is more spartan.
I thought everpix was a great product and had my family using it (4 paid accounts). I'm very sorry to hear this, and I wish the whole team good fortune.
Would you mind sharing the P&L statement and/or pitch deck that the verge used in its reporting? The verge's article seems confused, and I think one of the best gifts you could make to the HN community is to teach us from this outcome with actual source documents.
When you go down the VC path, they expect hypergrowth; certain doors are opened and others are closed. Personally, next time around I minimize dependence on funding.
VC kids treat themselves like kings and never truly get to hacking. What ever happened to internal hardware? Build, setting up, and tuning servers is one of the most fun parts of running a service.
When you get millions in funding its easy to piss away on the highest tier services. When you start from the ground up, every cent is managed.
It's a lot of fun, but it's also a bit of a trap in my experience. My previous startup was all custom, my current one is all as hands off as we can be infrastructure wise.
Unless going custom allows you to do something that you couldn't otherwise do (cases which are rare, but existent), it's just optimizing margin. And you can't margin your way to success. (To failure yes, to success no.)
As noted above, their hosting was a big number, but it wasn't a dominant cost. It's like Amdahl's law of money, it doesn't matter how little you spend in one area if that area isn't dominating your costs.
And all else being equal, it's usually the wrong choice; the best way to grow the bottom line is to grow the top line. If you can spend X weeks cutting costs by Y$, or X weeks increasing revenue by Y$, grow the top line. It's fuel, it gives you options.
The thing I miss the most about doing it our selves was the raw fun of it, and how efficient it felt. But in retrospect it was a lot of time spent on things that ultimately didn't change the outcome.
Build, setting up, and tuning servers is one of the most fun parts of running a service.
As someone who has worked in this space, I can tell you that the skills simply do not exist. They don't hire for them, because they all ("all") use outsourced hosting and deployment frameworks that insulate them from these things.
It's kind of sad really. I'd love to have a big office with a dedicated center to some really awesome equipment. It's like a work of art that you crafted yourself, right up to the cable management!
It's loads of fun, especially when you have dedicated chillers and sufficient power for everything. However, as you come to the realization that your C-level execs negotiated forever contracts for keeping data and servers spinning with no common outage windows, consolidation/virtualization becomes difficult and eventually the reality distortion field collapses and you're out on the streets with everyone blaming you for the failure, despite your ability to run modern services with stone knives and bearskins.
Plus, you don't have that all-important "Cloud" buzzword for them to throw around!
Yes, VC kids. Let's be honest. Kid creates a decent website/service in a few days/weeks -> VC funding -> ludicrous spending on top tier development environments, offices, staff, and services -> "oh fuck".
I'm 20 myself, and while I'm not the hottest shit around, I have been working at a bank for the past two years. I've been exposed to some really smart people with extremely challenging problems, way more so than creating a pretty service in a few weeks and getting crazy amounts of funding for a business that's most likely going to fail because we're just that, kids.
Before coming into my role, I truly did think I was the best because I was able to create pretty websites with whatever is the latest JS library everyone is fawning over. That illusion was destroyed immediately when you start designing and working on infrastructures that have to handle millions of payments a minute, working with multiple vendors, business units, testing units, and various other departments you need to familiarize yourself with.
I would urge you to consider whether you have an accurate picture of the world. It would be a staggering claim, to me, that even most of the people who get VC money could be characterized as "kids". Getting VC money is a lot of networking, calling, follow-ups, and frank discussion of terms. I don't think that selects well for "kids".
I know what you mean, SF is too expensive. But it's basically impossible to relocate a team of 7 who already have various different ties to a given area.
For product development, remote working is one solution. I work remote with my team all the time. Sometimes you need to see each other face to face, then meet up somewhere where it's affordable. Could make for a good team field trip even!
That's right. AWS infrastructures costs were already being covered by subscription income. We also had prototypes ready to flesh out to reduce per-user costs as we scale up, but were not at that point yet.
If the only problem was scale... how is it even possible that a VC didn't invest? You had a proven product, fanatically loyal customers (including myself), and unbelievable growth potential. Everpix is a textbook case for venture capital.
Even more amazing to me is why someone like Apple didn't purchase Everpix. They're in desperate need of competent web services, and god knows they have the cash. Of all possible futures for Everpix, I could never have seen outright shuttering as a possibility.
There's two levels to the scale problem: (a) sufficient scale for a successful small business, and (b) sufficient scale to repay a whole VC fund, with interest. VCs agreed that (a) was achievable, but they really need (b) and didn't see that with us.
Tools for private photo collections are important, but don't have the same sort of explosive viral growth curve of, say, a public social network. Even private social networks have a more difficult time scaling up quickly compared to the more open but less privacy-respecting alternatives.
Even so, Everpix is a tool that literally everyone needs -- organization, deduplication, backup, and daily refreshers of all your photos. I was contemplating buying a subscription for my elderly mother, since she has no idea where her pictures are or how to access them. To say nothing of the rest of my social network.
Maybe I'm still in mourning, but if I ran a VC fund, Everpix seems like a sure investment. You certainly had much more potential for growth -- and steady revenue -- than another Instagram clone or internet radio service. And once your growth eclipsed your fixed costs (which could have been reduced further by running your own servers when you reached an appropriate size), you'd be consistently profitable. And since Everpix provided such a valuable service, your customers would advertise on your behalf.
However, even I discovered Everpix only a few weeks ago, just before The Verge published a write-up about cloud photo backups -- and crowned Everpix the winner. You were just reaching a critical mass of followers... I can't help but think Everpix would have been a wild success if it stuck around for just another year.
I've stored a lot of images on Everpix that I actually may not have on other physical media here anymore. Can you confirm that you're going to allow exporting of data? Otherwise I'd set out now and write an export-script that downloads all my data, I'd rather not invest that time though.
FYI - I just got the subscription cancellation notice. It says "Your Everpix subscription has been canceled. You can continue using your account until [my renewal date, well beyond December]." You may want to change that to reduce confusion.
