Dale Gass, President of Pantellic Software (owner of failed photo sharing site Photopoint) has certainly featured in the headlines in the last few months and just a few days ago he gave an interview to CNET. Since then Mr Gass has contacted us and to his credit volunteered to answer our questions. "As far as selling my car and mortgaging the house to let people get access to their photos goes, I think that's a bit of a naive expectation. I poured my heart, soul, and dreams into PhotoPoint for the past four years, and did everything possible to keep it alive until the bitter end"
(Questions were asked by me - Phil Askey, Answers by Dale Gass of Pantellic Software)
Q1. You obviously realize some mistakes were made at the time Photopoint 'went under', what would you have done differently if you could go back?
Certainly, hindsight is always better. Given the information we had at the time, I think we made reasonable decisions. I certainly didn't realize the number of people who kept their sole copies of their photos on PhotoPoint. Independent of Pantellic's faltering, in hindsight I think we should have educated the members much better about personal backups and such. It could have made a big difference.
But as far as the shutdown goes, if I replay things in my mind, I'm not sure how I would have handled things differently. Continuing to run up networking and lease bills that I knew would never be paid, is not something that I would do. Our local business partners were dealing with us in good faith (well, most of them), and we did the same with them, right to the end.
Members who kept proper backups of their important photos did not lose anything; and for those who didn't know to keep backups, the CD option will at least give them a way to get their photos back.
Q2. Out of the 3 million users you mentioned in the CNET article how many of them had paid subscriptions?
I don't have the number offhand, but it's a small fraction of 1%. And the majority of them paid their membership to PhotoPoint Corp USA prior to it's demise, not to Pantellic.
Q3. Many of your users are also a part of our forums community, I'm sure you've seen some of the claims that you were only looking out for yourself, how do you respond to that?
I was aware you had discussion forums, but I haven't been following this, or other forums related to PhotoPoint. I've learned that responding to (or even reading) every emotional post generally isn't useful. If people are irate about something, they typically aren't that receptive to any feedback, and any response is just fodder for more attacks.
Since you pointed out and asked about that specific note, I will respond:
As far as selling my car and mortgaging the house to let people get access to their photos goes, I think that's a bit of a naive expectation. I poured my heart, soul, and dreams into PhotoPoint for the past four years, and did everything possible to keep it alive until the bitter end, and came out with nothing (but a valuable education, and learning who my friends truly are). I'm not bitter about coming out empty handed monetarily, but I'm not going to voluntarily seek financial ruin for me and my family because of an unfortunate business failure. Don't get me wrong, I'm not being flippant about the business; I took it very seriously, and poured my all into it. But I'm not going to voluntarily let a business failure jeopardize the security of my growing family by re-mortgaging the house.
A bankruptcy is an unfortunate thing. But it is a corporate reality at times. I spent four years trying to make this thing work; there were many points in the past four years I could have made better choices, I'm sure. Maybe doing things differently it could have worked. There are certainly some choices that could have made a big difference, but those choices were generally much earlier on, not directly related to the eventual shutdown.
I guess I would ask the poster, or anyone else who shares his view, if they would sell their house or car if they made a mistake at work that cost their employer some money, or inconvenienced some of their customers. It's pretty easy to hurl stones if you're never been in this situation.
Aside from the above, there are also other unrealistic aspects to the suggestion, even if I were willing to do it; the house is already fully mortgaged, and the money from selling a car or re-mortgaging isn't going to put a dent into what would be required to bring the site back online. Bandwidth contracts at this level are minimum one year commitment, for tens of thousands a month. A system of rolling logins would take development and testing time and expense, servers, storage, networking gear, and so forth. And our big chunk of WebTV users who can't download photos, would be left out in the cold. It's just not as simple as some people think.
It's a bad situation, and if I had been a better leader, negotiator, or corporate pitchman to potential investors, it might not have ended up like this. But do I know I gave it my best effort; we accomplished a lot over the years, bringing together an amazing team of people, building a world class site, and sharing billions of photo views with people worldwide. But given the history and the current economic environment, I personally could not find a way to keep the business alive, so I shut down the business in the best way I could, making sure I protected employees and partners. And now that I realize a lot of members didn't keep copies of their photos, I've arranged a solution for that. (It would be far simpler to not do anything.)
So I'm don't feel any need to "clean up my name." I personally know I did the best I could in the circumstances, and acted with honesty and integrity. Some people will never believe that, but I've learned to not waste by breath trying to convince them. (I'm only responding here out of respect for Phil Askey, who asked these questions.) The people that matter most know the truth. It's easy to speculate and imagine the worst when you don't know the real details.
Q4. I think I can agree with you about people using photo sharing sites as the only storage for their images, however, as you well know this industry is in its infancy and many users are beginners. Don't you think a more 'softly softly' approach to those thousands of users who feel they have lost their images would have been better?
I'm not sure what you mean by "softly softly" approach. If any of my comments about people not keeping backups were seen as blaming the users, that certainly wasn't my intent. If anything, I don't blame the consumers, but I do think that vendors (especially Pantellic) could have done a better job educating the public about the importance of backing up any digital content.
And I wouldn't say the extent of members who didn't keep backups is in the "thousands," but in the "hundreds." It's easy to overestimate the problem, when people are being very vocal.
Q5. Shouldn't you have made it more clear to people that even paying a subscription was no guarantee their images were safe?
Absolutely. We did always clearly bill ourselves as a "Photo Sharing Site," not a "Photo Archival Site," and we did offer backup CD's (which sold very poorly); but we should have been more explicit about educating people as to the value of backups. One obvious factor in our neglecting to do so, is that we never planned to fail; we were naive enough to assume that we'd always be around. When we hit some rough periods, though, and when PhotoPoint Corp USA went away, it probably should have dawned upon us to educate people about backups.
Actually, when PhotoPoint Corp USA went away, the site was offline for several days during a negotiation period; this might have given some people a hint about the need to keep copies of their photos. But yes, we certainly should have educated our members more directly about backups.
Q6. Quite a while ago I made my public my personal opinion that photo finishing for digital cameras was a very difficult business to make profitable because only a small percentage of the shots taken would be printed, people want to share electronic images electronically. Do you, in hindsight agree with this?
In some ways. I think there's more of a threat from personal printing, than from selective photofinishing. That is, people are more likely to print on their own printers; that's a bigger threat than people only printing specific prints commercially. We always found print orders were a respectable size; I think that while people might print a smaller percentage of their digital photos, they take a *lot* more of them, which balances things out a bit.
While home printing doesn't yet have the print quality or longevity as commercial photofinishing, it's close enough for most consumers, and getting better every day.
I think the bigger issue is the difficulty in making money on small consumer transactions. The Wal-Mart's of the world really are far better positioned to make money on extremely cost effective photofinishing, than smaller companies. It's hard to beat the convenience and pricing of a megacorporation like that.
But again, as photo printers get better and cheaper, I think more and more of the photo finishing will be brought into people's homes.
Q7. Do you think there is a viable business model for photo sharing sites?
I think so. Up until September 11th, our daily revenue was greater than our daily expenses, which shows a lot of promise for a business model. If it weren't for some historical debt (and some related surprises) and the September revenue hit, we'd still be here. The revenues were starting to rebound in early December, but by then it was too late, we were out of money.
I suspect the Wal-Mart's of the world, who have the positioning, penetration, and marketing skill to make money on small consumer transaction, will eventually dominate this space, as they do with most consumer items. The other approach is to keep it small, only grow within your means, which is what Pantellic did in the early days, prior to VC funding. ClubPhoto was another small startup shortly after PhotoPoint, and seemed to pursue a more steady, gradual growth; they're still around and reporting profitability, which is awesome. In retrospect, I wish we had taken that approach instead of going with the larger VC funding.
Q8. What does the future hold for you? Anything you can tell us about?
As mentioned, for the past four years, I've poured myself into PhotoPoint; in that time, I think I only took about one week off. We had a new arrival, Jenna Marie, a couple of weeks ago (joining the ranks of our 18 month old son, 9 year old son, and 10 year old daughter), so I'm now taking a few months off to enjoy more time with the growing family.
As far as the next project goes, I've got a couple of pretty exciting projects in the works. They're more on the "enabling technology" side than the consumer side (but I refuse to use the buzzword B-to-B); at PhotoPoint, we had a number of significant technical and cost challenges in provisioning storage, bandwidth, and servers. Setting up and running that amount of storage is a costly and labour intensive endeavour, and we learned a lot about how to address these issues. These new products are designed to solve this type of problem, in a simple, low cost, high reliability manner. They're the type of products that PhotoPoint would have jumped at buying had they existed six months ago. Not directly related to the consumer photo space, but potentially useful to companies in this space.
Q9. What's the future for the Photopoint name?
That's undetermined at this point.
Phil: Thanks to Mr Gass for approaching me and responding so openly to my questions.
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