Cliff Shaw is a Boulder-based entrepreneur that I first met a little over a year ago when he was launching ProtectMyPhotos. Here’s my coverage of that startup in November, 2006. He and his team had a nice earlier success called Family Tree Legends, which exited a few years back. Cliff and his gang also recently launched DocSyncer which is a seamless way to synchronize documents stored on your local machine with Google Docs. DocSyncer works well and it has people talking.
I recently caught up with Cliff to ask if reports that ProtectMyPhotos was now dead and gone were true, as well as to talk a little more about DocSyncer.
Cliff, is it true that ProtectMyPhotos is dead?
ProtectMyPhotos was not to be and is ceasing operations at the end of the year. I take failure pretty well. When something isn’t working, there’s no sense in crying about it – let’s just figure out what we need to do to work towards our next success.
How did you arrive at the decision to shut down?
The decision wasn’t clear cut. Sure, we ran out of money and that helped the decision. However, considering all the hype surrounding online backup, I’m certain we could’ve gotten more. We arrived at the decision when we realized two things:
- We were bored with backup. What more can you do with a name like ProtectMyPhotos other than just that. Some people are great at running boring businesses – and we thought we could hang with this. In the end, we realized that our creativity was being crushed by an idea that put us to sleep. My business partner and I came to the realization that what fires us up to come to work everyday is the feeling that we can build really cool things that people care about. Sorry but no one is “passionate” about their backup service.
- Chasing Best Buy. Very early on, we made some connections at the company and started pursuing a multi-million dollar deal to license the service to them under a number of structures (such as bundling it with their hardware service plans). We had a number of executives in decision-making roles using and loving our service. However, after almost two years of pursuit, we didn’t lose the deal – they just couldn’t make a decision. They knew we were the best solution but we couldn’t wait around forever.
Have others made offers to acquire ProtectMyPhotos? Will you go the eBay route worst case?
We’ve gotten a few offers but I’m not sure if any of these will really come through. From the outside, with a 2 person team, we made ProtectMyPhotos look like a heavily-funded market leader. The service had the highest rated user experience (one example: CNET called us the “best photo backup ever”) that was offered in 14 languages. At the end of day, none of this really mattered because it didn’t convert to sales.
I’m not a big fan of the eBay route. Without trying to sell the company on eBay, we can’t know what we would get. However, once we start the process, we pretty much have to agree to the price, no matter how low it is. It would cost us major money and time to even close a deal – what if it was for only $50,000?
What are the big lessons you learned from protectmyphotos?
- Don’t chase a single deal, no matter how big the opportunity, if it’s going to kill most of your time. This puts way too many eggs in one basket – a classic mistake in business. Our eyes were captivated by a 7-figure deal and we got tunnel-vision. Big mistake.
- Don’t over-invest in an idea until the market proves it to you. On paper, ProtectMyPhotos looked like a slam dunk of a business. The market research said 97% of people would be distraught if they lost their photos, among plenty of other stats that looked amazing to us. In the past, I never built a company based on market research and I regret doing it this time. Saying you’re concerned about something does not mean you want to pay to do something about it. People may care – but do they care enough to part with their money?
- Don’t build anything that doesn’t have a viral component. ProtectMyPhotos had no way to promote itself to the friends and family of its members. We were a private backup service with a very limiting name, which brings me to my next point.
- Don’t pick a limiting name. Sure, Web 2.0 names can get rather ridiculous. We were trying to make a service that appealed to the masses and thought a simple, descriptive name would work best. The name was deadly effective at telling people what we do. If our business had worked out, I’d be telling people to pick really specific names. However, when it starting looking like we needed to switch plans, we were stuck with this name. Sure, we could’ve renamed the company but that’s even harder when you’re service is being tested in Best Buy stores.
- Fail quicker and spend less money doing it. We only lost $280,000. That’s a lot of money, no doubt, but we could’ve lost $2.8 million. When I look back, I think we could’ve lost even less money figuring out that ProtectMyPhotos wasn’t going to work.
- The biggest lesson we learned of all: Do what you’re passionate about. In the startup world, if you’re bored, you might as well be dead.
Great stuff. It’s clear that you’ve thought about these lessons in depth. The fail quicker mantra, while counterintuitive to many, can be so important.
Cliff, are the same people behind DocSyncer?
Yes – the two primary partners are moving to DocSyncer. Our part-time C++ developer isn’t. We’re looking for someone to fill this position now.
DocSyncer seems useful and obviously people seem to like it. The criticism I’ve seen is that there is no supporting revenue model. Can you comment on this?
We love this criticism! It keeps people from cloning us.
Our business model is far better than what people think. There are 500 million users of Microsoft Office worldwide with 100 million of these copies installed in U.S. workplaces. Every year, companies spend billions upgrading and maintaining office software, even though we all know 90% of the features are never used by most people. Microsoft brings in no less than $13 billion in cash every year from Microsoft Office. That’s a lot of money wasted on software that people aren’t even using that much.
Along comes Google Docs, which now has all of the important features found in Word, Excel, and Powerpoint. However, for someone considering Google Docs, Microsoft still has a virtual monopoly over their existing documents. It’s not easy for the everyday person to migrate their entire document library to Google Docs. Until DocSyncer, that is. By automatically uploading all of your existing documents to Google Docs, you can seamlessly migrate away from Microsoft Office. Plus, DocSyncer offers you remote access to your existing document files, mobile access through Google Docs Mobile, and automatic backup with versioning. You can even file associate all your existing documents with Google Docs using our service so when you click on a document in Windows Explorer, it will auto-launch in Google Docs in your browser. And get this: It’s even faster than loading the document in Word.
This kind of seamless experience is where our business model comes in. By removing all barriers to entry to using Google Docs, businesses will have to take a hard look at why they pay $200 for a copy of Office for workers who will most likely never use most of it. The future Enterprise version of DocSyncer will probably cost $25 per employee per year – saving the company a lot of money on Office and boosting productivity by easing document sharing and collaboration. We’ll start with small companies, since the adoption will be easier. We find that most companies are starting to trust having their information stored in the cloud. I personally believe that Google protects my information far better than a Windows computer connected to the Internet ever could. Will certain employees still want or need Office? Sure, but the majority of the market will have a hard time justifying the continual billions spent per year just for a few extra features that most don’t use.
Where does DocSyncer go from here?
We want build a complete document management, sharing, and synchronization company (and not just about Google Docs). We’re in the fund-raising process now, even though we just passed 1 million documents synced and 6,000 users (1600 more than $280,000 bought us in the last business!). Since honesty in the startup world seems like a rarity (everyone’s ego is telling them to hide their faults maybe), I’ll be very frank in saying that we’re having a fairly hard time raising money. I’ve met too many VC’s that would “need” to invest more to make the investment worth it to them. This sounds like the playbook from 1999 – we don’t need more money and wouldn’t know what to do with it. I’ve built and sold 2 successful businesses (with 7-figure exits) on less than $150,000 so I don’t really understand their logic. As for local angels, we just don’t know many of them.
Thanks Cliff. It’s amazing that you’ve passed the 1 million document mark already! Best of luck with DocSyncer, and thanks for your candor relating to ProtectMyPhotos.