Aviary is Quietly Cornering a Billion-Dollar Market - Forbes
The Internet is awash in photos. Facebook users alone upload 250 million pictures every day. Add in the recent spate of photo-sharing apps like Instagram and Path, along with more established services like Flickr, Picasa and Photobucket, and the number of photos floating around the web begins to approach 200 billion. Most companies, including those mentioned above, profit by hosting and sharing images online; far fewer make money, or gain attention, by editing them.
Aviary, a New York company headed by CEO Avi Muchnick, is quietly cornering this vast under-explored market. By integrating its editing tools free of charge within 500 partner websites and apps – now including Box, MailChimp and Constant Contact – this 13-person company powers the edits of 1 million photos each day.
Launched in 2008, Aviary didn’t hit its stride until releasing a suite of mobile photo-editing tools for Android and iOS in September 2011, helping developers add Photoshop-like capabilities to their mobile apps. Aviary spent its first three years as a website for creative types, where image-editing tools accompanied products for creating and remixing music. Though growing respectably with a loyal cadre of customers and 50,000 daily edits, it took the proverbial pivot, beginning in April 2011, to set it on its current path.
“Making that transition was incredibly difficult,” says Muchnick, 32. “It’s very easy for companies that clearly aren’t working to decide to make a change. We had a really passionate fan base that was still growing.”
A self-taught web designer, Muchnick created Worth1000.com, a contest website for graphic artists, just before entering law school at Yeshiva University’s Cardozo School of Law in New York in 2002. In 2003, the site’s “Where’s Saddam” contest produced altered images of Saddam Hussein – depicted as Zsa Zsa Gabor or Billy Idol, for example – that eventually found their way to soldiers in Iraq. CNN caught wind of the satirical leaflets tacked onto the streets in Tikrit and ran a segment sourcing the posters to Muchnick’s website. The site shot to fame practically overnight.
“The Pentagon actually issued a statement distancing themselves from Worth1000,” remembers Muchnick. “I’d have to say that’s one of the highlights of my career.”
Aviary's Mobile Photo Editor
Aviary, a New York company headed by CEO Avi Muchnick, is quietly cornering this vast under-explored market. By integrating its editing tools free of charge within 500 partner websites and apps – now including Box, MailChimp and Constant Contact – this 13-person company powers the edits of 1 million photos each day.
Launched in 2008, Aviary didn’t hit its stride until releasing a suite of mobile photo-editing tools for Android and iOS in September 2011, helping developers add Photoshop-like capabilities to their mobile apps. Aviary spent its first three years as a website for creative types, where image-editing tools accompanied products for creating and remixing music. Though growing respectably with a loyal cadre of customers and 50,000 daily edits, it took the proverbial pivot, beginning in April 2011, to set it on its current path.
“Making that transition was incredibly difficult,” says Muchnick, 32. “It’s very easy for companies that clearly aren’t working to decide to make a change. We had a really passionate fan base that was still growing.”
A self-taught web designer, Muchnick created Worth1000.com, a contest website for graphic artists, just before entering law school at Yeshiva University’s Cardozo School of Law in New York in 2002. In 2003, the site’s “Where’s Saddam” contest produced altered images of Saddam Hussein – depicted as Zsa Zsa Gabor or Billy Idol, for example – that eventually found their way to soldiers in Iraq. CNN caught wind of the satirical leaflets tacked onto the streets in Tikrit and ran a segment sourcing the posters to Muchnick’s website. The site shot to fame practically overnight.
“The Pentagon actually issued a statement distancing themselves from Worth1000,” remembers Muchnick. “I’d have to say that’s one of the highlights of my career.”
The success of Worth1000 eventually brought Muchnick to the attention of Jeff Bezos, who offered to invest in his next project in 2007. Reid Hoffman and others joined that year to fund Aviary in a $4 million seed round, at that time an investment in Muchnick more than anything else. The company later raised another $7 million in 2009 from Bezos Ventures and Spark Capital. Growth, though steady, remained tepid during the company’s early years. Since July of 2011, it’s looked like this:
According to the company usage is increasing 10-15% each week, growing both as the company’s partners get bigger and as new partners adopt its tools.
Of course smoldering growth in usage is one thing; revenue is quite another. Aviary currently has several pilot programs in place where end-users pay for add-ons like stickers, filters and other tool sets. The company intends to split revenues with partners. Also in the works: licensed content like sports logos and cartoon characters.
Muchnick estimates that 10% of photos that go through Aviary’s network receive editing attention. Extrapolating that behavior to an entire web full of photos (conservatively estimated at 200 billion) means there are 20 billion photos waiting to be tweaked. A conversion rate of 2.5% translates to 500 million potential payments for add-ons – at $1.99 a piece, easily $1 billion in revenue waiting to be collected. And virtual goods, by the way, have virtually no overhead.
Aviary is the first company to approach the photo-editing market in this way and at this point, they have no direct competitors. Muchnick says, “I have no doubt that other companies will pop up as soon as they see what we’re doing.”
“For now we just need to keep innovating and staying ahead.”
According to the company usage is increasing 10-15% each week, growing both as the company’s partners get bigger and as new partners adopt its tools.
Of course smoldering growth in usage is one thing; revenue is quite another. Aviary currently has several pilot programs in place where end-users pay for add-ons like stickers, filters and other tool sets. The company intends to split revenues with partners. Also in the works: licensed content like sports logos and cartoon characters.
Muchnick estimates that 10% of photos that go through Aviary’s network receive editing attention. Extrapolating that behavior to an entire web full of photos (conservatively estimated at 200 billion) means there are 20 billion photos waiting to be tweaked. A conversion rate of 2.5% translates to 500 million potential payments for add-ons – at $1.99 a piece, easily $1 billion in revenue waiting to be collected. And virtual goods, by the way, have virtually no overhead.
Aviary is the first company to approach the photo-editing market in this way and at this point, they have no direct competitors. Muchnick says, “I have no doubt that other companies will pop up as soon as they see what we’re doing.”
“For now we just need to keep innovating and staying ahead.”
J.J. Colao’s Popular Posts
- Top 20 Franchises For The Buck 79,003 views
- Meet America's Most Promising Company: Smashburger 73,932 views
- Eight Reasons Startup Incubators Are Better Than Business School 48,084 views
- Aviary is Quietly Cornering a Billion-Dollar Market 3,578 views
- Startup Lessons from Rick Santorum 2,173 views
No comments:
Post a Comment