It sure is – if you’re not our target customer.

Andy Atkinson has a great write-up of some of the ways Flickr is better than SmugMug. And he’s right about lots of it.

I love reviews like this. First of all, SmugMug doesn’t do any competitive research – we just don’t have time. Instead, we listen voraciously to our customers and our todo list is almost exclusively made up of things our customers want us to add, fix, or change. (Sometimes we have to read between the lines, because they don’t always know exactly how to ask for it, but we do our best). Secondly, we’re awash in positive emails and reviews all the time. They’re nice, but they can give us a false sense of security and obscure the things that we really need to work on. Andy’s review nicely shines light on some areas where we’re weak and gives us a little insight into the competitive landscape at the same time. Thanks Andy!

Andy’s review is particularly refreshing because it’s the first one I can remember, either publicly or privately, where his point of view is that Flickr has more features than we do. Given that we release new features multiple times per month, and often once per week, we frequently (daily?) hear the opposite, and it’d be easy for us to assume we had every Flickr feature our customers wanted.

I left him a comment letting him know just how valuable his write-up is to us, and how much I enjoyed reading it, but he has moderation on. So I thought I’d talk about it here, on my blog, in case he doesn’t actually allow any comments.

As I told him, we’re not trying to be Flickr. We love Flickr, often refer customers that aren’t a great fit with SmugMug, and think it’s a great site that addresses a real mass-market need for photo sharing. But that’s not what SmugMug is – we’re not a mass-market brand, we’re not for everyone, and we think we have a very narrow bead on our target. Andy sure sounds like he’s much more of a Flickr customer than a SmugMug customer, so I’m surprised he lasted this long, but he makes some great points about things we should do better, even given our different focus:

• We don’t make it as easy to get your photos AND metadata back out of SmugMug. This one hit close to home because I’m very passionate about treating your photos as if they’re yours – not ours. We try very hard not to be the photo-sharing equivalent of the roach motel, where photos check in and never check out. We make it very easy to get your photos back out of SmugMug (they are your photos, after all, so you should be able to do whatever you want with them), but we don’t make it nearly as easy to get your metadata, like keywords and captions, back out too. Andy’s right on the money here, and I need to do a better job at this. You can use the API, of course, but we should make it easier than that.
• Our Geotagging interface is falling behind. We were first (we actually had two major releases of our mapping & geotagging stuff long before Flickr), but Flickr’s doing it better. We’re aware of it, and it’s on our radar – we just have to finish our next evolution. This sort of back-and-forth leapfrogging will always happen, I’m afraid. It’s the nature of a competitive business. One company does it best for a few months, then another takes the top spot. Back and forth.
• Our statistics could be better. He’s wrong about us not having per-photo statistics (we do), but he’s right that we don’t offer searching and sorting by other criteria, like comments. Doing better, richer statistics is something we’d like to do, and it’s good to see people like Andy calling us out on it.
• Photo books (and other similar items). He mentions QOOP specifically, but the real issue is that we don’t sell photo books (or calendars, greeting cards, etc). We want to, and we’re working hard on doing it (it’s an active project in the company right now, and has been for awhile), and I wish we’d done it by now, but QOOP just isn’t the answer. Their quality level wasn’t even close to our standards, either in terms of the finished product or the shopping cart experience. This is one area where Flickr’s target customers and ours are a big deciding factor – we’d rather not offer a product for awhile than offer something that’s not high-quality. Many of our customers build their businesses on SmugMug, and if we offer an embarassing level of quality, it reflects badly on them. We take that burden very seriously.

He has plenty of other good, interesting points that we’ll have to think about, but many of them are not really SmugMug’s focus, so I can safely shelve them for a later date. All the points above, though, are solid areas we need to work on. They’re core to our business, they’d enhance our customer’s experience, and we’re clearly not executing on all of them as well or as fast as we should be.

Anyway, great review and a good illustration of the differences between our two sites. I love reading stuff like this, so be sure to let me know if you blog about anything similar. We do, of course, read all of our email every day and usually respond in minutes – so keep the feedback coming!

UPDATE 4/30/07: This post was written in November 2006, so these numbers are a little out of date. It’s now been 12 months and we’ve saved almost exactly $1M. You can see the most recent numbers, as of April 2007, in my ETech slides.

I still have some more Web 2.0 Summit stuff to write up if I get a few minutes today, but let me talk about Amazon’s S3 for a minute. At the conference, I was chatting with Michael Arrington of TechCrunch fame (who perfectly handled a blogosphere mini-explosion last week, I thought) and we got to talking about S3. He was impressed with how we were using it, but joked that our $500K saved number sounded like “complete bullsh*t”. I laughed along with him and assured him it was true, but on the way home I got to thinking that it IS a really big number to throw out there without details.

So here are the cold hard facts:

• Our estimate, as you can see in BusinessWeek’s cover story, is that we’re saving $500K per year. We’ve been using S3 for almost 7 months so far (we launched it on or around April 14th), so for my $500K estimate to be in the right ballpark, we should be somewhere near $291K saved to date (well, we don’t grow linearly, so less than that … but let’s do easy math, shall we?).
• We had roughly 64,000,000 photos when we launched S3. We now have close to 110,000,000 photos. Yes, that’s ~72% growth in 7 months.
• To sustain our pre-S3 growth, we were buying roughly $40,000 per month in hard disks plus servers to attach them to. We’re not talking about EMC or other over-priced storage solutions. We’re talking about single processor commodity Pentium 4 servers attached to really cheap Apple Xserve RAID arrays. Not quite off-the-shelf IDE disks, but once you factor in the reliability and managability, the TCO comes out to be in a similar ballpark (We’ve done it both ways).
• If you’re doing the math at home, $40K may seem a little high until you realize how our architecture works: We use RAID-5, with hot spares, and we have two entirely separate storage clusters. That means we have to buy 1.4TB of raw disk to store an actual 500GB.
• To sustain our current, Nov 2006 growth rate, we’d need to buy more like ~$80K per month. Let’s assume over the 7 months, it ramped from $40K to $80K linearly (it was actually more of a curve, but this makes the math easier). $40K + $46K + $53K + $60K + $66K + $73K + $80K = $418K
• Our datacenter space, power and cooling costs for those arrays is ~$1.36/month for every $100 of storage. (~$544month @ $40K, ramping to ~$1088/month @ $80K). $544 + $626 + $721 + $816 + $898 + $993 + $1088 = $5,686.
• It’s cost us some manpower to move everything up to S3. So while I expect to save money on manpower in the long run, currently it’s probably break even – I don’t have to install, manage and maintain new hardware, but I’ve had to copy more than 100TB up to Amazon. (We’re not done copying old data up yet, either)
• Total amount NOT spent over the last 7 months: $423,686
• Total amount spent on S3: $84,255.25
• Total savings: $339,430.75
• That works out to $48,490 / month, which is $581,881 per year. Remember, though, our rate of growth is high, so over the remaining 5 months, the monthly savings will be even greater.
• These are real, hard numbers after using S3 for 7 months, not our projections. They closely match (but are actually slightly better) than our projections.

So there you have it.

But wait! It gets even better! Because of the stupid way the tax law operates in this country, I would actually have to pay taxes on the $423K I spent buying drives (yes, exactly like the money I spent was actually profit. Dumb.). So I’d have to pay an additional ~$135K in taxes. Technically, I’d get that back over the next 5 years, so I didn’t want to include it as “savings” but as you can imagine, the cash flow implications are huge. In a very real sense, the actual cash I conserved so far is about $474,000.

But wait! It gets even better! Amazon has been so reliable over the last 7 months (considerably more reliable than our own internal storage, which I consider to be quite reliable), that just last week we made S3 an even more fundamental part of our storage architecture. I’ll save the details for a future post, but the bottom line is that we’re actually going to start selling up to 90% of our hard drives on eBay or something. So costs I had previously assumed were sunk are actually about to be recouped. We should get many hundreds of thousands of dollars back in cash.

I expect our savings from Amazon S3 to be well over $1M in 2007, maybe as high as $2M.

Perhaps most important, though, is the difficult-to-quantify time, effort, and mental thought we’re saving. We get to spend both that money and all of our extra time and effort on providing a better customer experience and delivering better customer service. Storage was a necessary evil that’s now been nearly removed as a concern.

Want more? I have some other posts on the subject:

• Amazon S3: The Holy Grail
• Amazon + Two Guys + $0 = Next YouTube

And I’ll continue to post with more hard details, including our technical architecture and some of our code, as well. And yes, we’re starting to consume other Amazon services like EC2.

Jeff Bezos just gave a great presentation and had an interesting chat with Tim O’Reilly here at the Web 2.0 Summit. I’ve written about Amazon’s web services a few times, including the BusinessWeek cover story this week.

In case you don’t want to read the long-winded version, here’s a summary of what I think is really going on here:

• Amazon Web Services isn’t some strange deviation from Amazon’s core business. Instead, it’s an evolution of their business that makes a lot of sense. They’ve learned to scale datacenters well, and companies like ours don’t want to have to learn those same lessons, so we can build on Amazon. Amazon makes money, we save time (which is money) and get to focus on our application, and everyone wins.
• Google gets a lot of press for building a “WebOS” as they release web-based replacements for desktop applications. But they’re really focused on client-side desktop replacements, whereas Amazon is really focusing on backend, server-side recplacements. It’s less glamorous to the average consumer, but far more glamorous to anyone who needs those services to build their company.

I’m not sure everyone grasps how truly huge this is. I suppose that’s good, since we do and it gives us an edge.

Some notes from the Eric Schmidt piece:

• Google Video was doing well, YouTube was doing better. Something fundamentally changed last year where video became a prominent web format, so buying YouTube locked up that growth.
• Has a pretty good idea on how to monetize “other kinds of traffic” (other than text ads). He’s referring here to copyrighted data in particular.
• Worries about competition, particularly being a big target. Feels the best way to defend against this is to make it user-friendly and user-centric, as opposed to the typical large corporation defense of keeping everything proprietary.
• As long as people feel like they can easily switch from Google, that keeps Google honest and keeps them focused on their customer. Does that sound like anyone else we know?
• Stood up to the government request for index data for those very reasons. What user would want their data in the hands of someone else?
• Is happy to stand up for what they feel is right, but as soon as a federal judge rules that they have to do something, they will. They realized they’re beholden to US law.
• “It’s a mistake to bet against the Internet. Don’t bet against the Internet.”
• “Fundamentally better to keep your money in a bank than in your pocket.” … compares that to software belonging in a datacenter.
• Google’s not trying to position their stuff, like Writely, Calendar, GMail as an Office Suite. Instead, their focus is to enable casual sharing and casual communication.
• “You could pay people to use their product.” (in answer to a comment that free is pretty compelling)
• The engineer wins if there’s a difference between a sales guy and an engineer.
• All of the really good stuff comes out of the 10% of time employees spend on things other than their core projects (70%) and adjacent projects (30%)
• Google may appear chaotic, but it’s very strategic. Chaos is part of the creative process.
• “People don’t work for money. They work for impact.”
• Everything at Google is group-driven, no single decision makers. Been difficult dealing with partners because of this, but worked really well internally. Best decisions come from groups.
• “They always win.” (referring to Larry & Sergey and disagreements)
• “I’m the one with the experience who’s late. They’re the ones with the inexperience who’s early. That’s what makes it work so well.” They end up in the middle.

To be honest, I was surprised by how intelligent he came off (sorry Eric!). I’ve never met or interacted with him, but the blogosphere tends to poo-poo his impact on the company as just being a babysitter for Larry and Sergey. He knew what LAMP was (inluding the various meanings of the “P”), and made plenty of other comments that suggested he’s not just a figurehead at Google but is really involved with the vision and strategy. Refreshing and good to hear.

I’m at the Web 2.0 Summit and watching the Launch Pad demos where new startups get a chance to show off their hot new stuff. Most of last year’s launch pad don’t seem to have changed the world (yet?). Be interesting to see what this year’s crop is up to:

First up, In The Chair is some hot music education software. It lets you put yourself into the rest of an orchestra, see the other instruments playing, and hear how you mesh up. Seems like a great way to practice your music.

Next, Instructables has a new offering for collaboration. People can share their projects, how they built them, and how you can do the same with everyone else on the web. Seems great for hobbyists and hackers alike.

Klostu (“close to”) is doing something neat with message boards. They’re trying to build a super-social network. They’re hoping to connect all of the message boards together into one big network. Very interesting proposition – I’m often tempted to post on boards I lurk on, but the signup process is so laborious, I usually don’t. Searching, keeping track of conversations, etc across multiple boards. Works with Flickr, YouTube, del.icio.us, etc. (I assume SmugMug, but if not, someone should email them. ) They claim their reach is 300M people. Could be pretty huge.

Sharpcast isn’t technically a new launch, since they launched at the D Conference in May, but they’re interesting. They make it super-simple to synchonize your photos (and other data) between your PCs, your online experience, and your mobile devices. The interface is clean, fast, and efficient. They claim that it’s taken them years to write the technology, but I seem to recall some applications built on SmugMug’s API that do similar things, so I may be missing something.

Their big announcement here at Web 2.0 is codenamed “Project Hummingbird” which basically does the same thing for non-photo data, like documents. When you edit a document on one of your PCs and save it, it gets auto-sychronized with the web version and other clients you’d like to sync. I’m not totally clear on how this is different from FolderShare, which I use and love, but I’m sure they’ll explain it at some point. Or maybe not – their pitch is over.

Stikkit is web-based note taking. I’m dying for for a good service like this – but alas, I’ve tried dozens of apps and web services that have all let me down. Hopefully this one won’t. It’s web-based, so you can collaborate easily with the people in your life. It’s available anywhere you are, like reminders on your mobile device, access on your laptop, etc. Their organization mechanism makes sense, and works well with “messy data”. It doesn’t try to do AI or anything to get in your way, which is nice. Post-Its are messy and dumb and work fine. This is trying to do the web-version: just getting things done.

Turn is trying to apply “search-like” technology to online advertising. They maintain there’s no manual targetting or keywords at all – it’s fully automatic. You go to Turn and set your goals, say $10 per signup. You then upload your ads. Turn analyzes the ads, your website, and everything else they can using online sources. When ad requests come in from destination sites, they analyze the request and see if it matches your ads, company, product, or brand. If they determine that there’s a good probability of a match, they compare bid price to the probability to decide whether to serve the ad. Sounds incredibly interesting.

Sphere, which I believe I heard about a year ago, is YABSE (Yet Another Blog Search Engine). Their twist is that they now are working with mainstream media to integrate blogs with traditional articles. When you’re reading a MarketWatch article, for example, there’s now a link to read related blog entries. It analyzes the article you’re reading, searches their blog index, and provides results. It also shows related articles throughout the rest of MarketWatch, too. It’s sorta like a localized immediate version of TechMeme or TailRank, and I’ve been wondering when the big newspapers, magazines, and media websites would do something like this. Sphere says it’s one line of JavaScript to drop onto your pages. You can customize the look & feel to make it match your look & feel, too. Very cool – I’m a huge fan of TailRank and TechMeme and would love to have the blog content brought one step closer, right into my favorite articles.

OmniDrive is an online storage aggregator. This is something that’s been on my mind a lot since S3 launched, since I’d love to have most of my storage “in the cloud” where I can get to it from anywhere. A buddy of mine wrote Jungle Disk, which is very cool, using S3. I wouldn’t be surprised if OmniDrive is also using S3, but they haven’t said. The big idea is that your stuff, whether it’s your documents, photos, videos, music, whatever is normally “stuck” on your PC where you can’t get at it if you’re somewhere else. It’s also prone to loss, since your PC could crash or get infected with a virus or something. Using OmniDrive, you can get that data from anywhere. OmniDrive seems like most of the other online storage providers that have been around for awhile, and plenty more are cropping up now. I’m not sure what’s unique about their offering – their pitch sounded very similar to existing services. Nonetheless, it’s something that everyone wants, whether they realize it or not. Personally, I’m afraid things like Time Machine in Leopard are going to obsolete stuff like this, if Apple (and Microsoft) start linking to things like dot Mac, LiveDrive, or S3 for storage.

ADiFY enables small, focus groups to create their own ad networks online. You can build your own newtork, invite and recruit publishers, and sell ads on your new network. The big play here is that you can build networks which are highly specific for a given target demographic, and thus the ads that are run there will be more lucrative because they’re so targeted. Their target networks are passionate enthusiast communities, something we know a lot about here at SmugMug. Sounds powerful.

3B is attempting to build a 3D interface to web browsing. This is something of a pet passion of mine, having spent a few years in the video game industry. Unfortunately, their interface isn’t pretty and seems quite slow. Clicking is so efficient, it’s tough to match with an avatar that “walks” through a 3D world made up of your web pages. Maybe if the renderer was a little heavier duty, with nice art and modern shaders, it’d help – but I doubt it. The UI being fast and seamless is so crucial. 3B is the latest in a long line of companies that have tried to do things like this, and I’m afraid they’ll join the junk heap soon enough. Too bad – I’d love to see a serious, good attempt at using 3D graphics to create a richer interface, rather than a lesser one.

oDesk lets you quickly find and hire talented developers (something that’s difficult and of personal interest to us). It’s a global model, so you can hire people from all over the world. All the programmers are tested and screened, and you can see what their test scores are. Posting jobs, interviewing applicants, etc all seems fast and seamless. Maybe I’ll give it a whirl for our open developer position.

Venyo is a univeral reputation tool for bloggers to use. Turns out that people don’t really trust blogs as a realiable source of information. So Venyo is basically doing the eBay seller / buying ratings for bloggers. You can establish a Venyo reputation and other users can verify that you’re a reputable blogger. If Venyo, or something like it, can establish a toehold and a brand, it could easily become a big factor in blog search engines. I’m not clear, though, on exactly how this establishes that your information is good, rather than your information is popular. It’s pretty obvious that the two are often at odds. I suppose we’ll all have to play with it to find out.

I was hoping TimeBridge was going to finally solve the Outlook problem. (As in “I hate Outlook and Exchange Server, but it’s really the only good group meeting organizer. Where are the open-source and/or web-accessible alternatives already?!”). Unfortunately, it’s not. What it is, though, is a method to have TimeBridge handle all of the back-and-forth communication for scheduling meetings using Outlook. Instead of lots of back-and-forth over times, locations, etc, it collects everyones available options and semi-automatically sets up the best possible fit. Sounds great, if you use Outlook, but we don’t. Dang.

These were 5 minute pitches, so who knows how good or fully fleshed they are. But, still, let’s make some bets, shall we? Big potential: Klostu, Stikkit, Sphere, and Turn.

UPDATE: Richard McManus has a brief rundown of his impressions, and we clearly got different impressions of 3B. Might wanna check it out.

Michael Arrington also has his thoughts up at TechCrunch. He seems to lean more in my direction with 3B, so maybe it’s a taste preference thing. *shrug*

The next YouTube will be built on Amazon’s Web Services by two guys in a dorm for roughly $0.

BusinessWeek has an article up about Amazon’s push into web services. GigaOM’s got a little coverage, and I see it spreading a bit over on TechMeme and TailRank.

We’re in the article, since we’re a big believer in this “new” vision of Amazon’s. Amazon calls the stuff they’re exposing the “muck” of doing business online, and I think it’s a perfect term. Some people see this as some radical departure from Amazon’s core business, but I don’t at all. Just like much of Amazon’s business, it’s an evolution. They began as a bookstore online (no-one remembers this, but they weren’t the first. BookStacks was relatively huge when Amazon launched), and eventually evolved by adding more and more products. They sell nearly everything, including groceries, now.

Why? Because once they had some of the infrastructure built to sell books, it made sense to add DVDs and CDs. And then once that was built, it made sense to add electronics and video games and gardening supplies and everything else under the sun. Why? Because they had even more infrastructure built. The average person doesn’t appreciate just how difficult the fulfillment piece of Amazon is, from warehousing, inventory control, packing, and shipping, but those who do boggle both at how difficult it is and at how well they do it. May as well leverage that expertise across other product lines where it makes sense, right?

Along the way, they also happened to get extremely good at systems. My father co-founded and successfully ran a direct competitor to Amazon, fatbrain.com, so we got a good, close look at just how good they were. While eBay was having massive outages, Amazon continued to purr along, scaling well and fast. When Toys R Us had a disastrous holiday season one year because they couldn’t scale their systems, who did they call? That’s right, Amazon.

I don’t have any direct knowledge of the chain of events, but I’ll bet it was something like that which caused the initial light bulb to start glowing. Dimly, at first, but glowing none-the-less. The thought process probably went something like this: “Hmm, you know, this letting other businesses like Target, Borders, and Toys R Us build their businesses on ours is turning out to be a good deal. It leverages our existing infrastructure and knowledge to grow our sales. I wonder how we can let other businesses build and grow on ours?”

Enter Amazon Web Services, zShops, Marketplace, and the other programs to let people sell things on Amazon without actually being a part of Amazon. The first Web Service, E-Commerce Services (ECS), allowed anyone to build their own shop online, using their own URL and look-and-feel to sell, say, TVs. But Amazon would handle all the nasty bits of the process, like actually acquiring and shipping the TVs. To use their terminology again, the “muck” of running an online retailer was taken out of the equation – the online TV shop could focus on customer acquisition rather than fulfillment headaches.

From there, it’s really a fairly small step, rather than a giant leap, for Amazon to say “Hey, we really like people building their businesses on ours. What else do we have hiding around here that would help businesses out?” And it turns out the answer revolves around their other core knowledge and infrastructure investment: datacenters, storage, and servers. Just like physical fulfillment, Amazon is one of the few truly experienced web-scale companies in the world. And just like physical fulfillment, the more volume you do, the more efficient you can get and the more you can lower costs. (Assuming you’re talented, that is, which is a large assumption).

As Amazon ships more items, they get better shipping rates. As they buy more bandwidth, they get better bandwidth rates. And that doesn’t even take into account the knowledge, software, and other intangibles that continue to get more precise as they scale, both in their warehouses and their datacenters.

It’s sorta silly that some of this stuff hasn’t become a commodity already. I think if you took a close look at how SmugMug has built and scaled, say, storage and how Flickr or YouTube or any other recent startup has, you’d see we’ve all done it in remarkably similar fashions. We’re all re-inventing and re-building the same wheel, over and over again. And it’s expensive, time consuming, and not core to our value proposition – except that without it, we can’t build our business. In other words, it’s “muck.”

At SmugMug, we want to focus on the customer experience, from user interface to customer service, and not have to worry about storage. For us, it’s a necessary evil that detracts from our ability to deliver better features faster. We’re actively investigating plenty of other web services at Amazon, both announced and otherwise, and are extremely excited about how much more time we’ll be able to spend with our customers instead of our datacenters.

Finally, I think it’s worth mentioning that we love web services of all shapes and sizes. We publish our own API, we consume web services from Google and Yahoo already, and we plan to add more to the mix. But while everyone else’s web services allow us to add whizzy features, like Google Maps, or Yahoo’s Geocoder, Amazon’s solve real hard problems down deep where no-one will notice them. The “muck.”

They’re really building the very foundation of future web applications.

Are you Master of Java? Lord of ActiveX? King of all plug-ins? God of all OSes?

Does owning a piece of a fun, growing, profitable Silicon Valley company sound like a dream come true?

Do you like being part of a small team where you own your own projects and have a dramatic impact on the company’s product and direction?

Is photography a passion? How about touching millions of lives a day by helping them stay in touch with those they love?

If so, we’ve got an opening in the family just for you. We’re looking for a world-class client-side coder who can work miracles with browsers, OSes, and other 3rd party applications using our API.

Living in, or relocating to, the Silicon Valley is a big bonus, but if you’re a seasoned telecommuter with fantastic communication skills, we’d love to talk. 6 talented Smugmuggers work completely remote, some on completely different continents, so we can make it happen. You’d better be good, though.

Send a resume, examples of prior work (embedded browser objects, plug-ins, standalone apps), and something personal about yourself to help -at- smugmug -dot- com.

Ben ran a superb contest to update our outdated SmugMug gear (t-shirts, sweatshirts, etc) – and the winners have been announced! Our customers came up with some great stuff and won some great prizes (a Canon 30D w/kit lens, a fully-loaded iMac, a copy of Photoshop CS2, etc).

Apologies in advance to our friends at Flickr (and the talented people at PBase, whom I’ve never met but assume are nice people) for Digital Grin’s resident cartoonist, fotodojo, and his parody homage to Bill Watterson’s Calvin and Hobbes, which turned out to be quite popular. I had no idea Smuggy had a mean streak – I’ll have a talk with him.

We’ll get all but the PacMan & Flickr/PBase ones up on stuff at our Cafepress store as soon as we’ve tweaked them so you can flaunt your stuff. (I’m not a lawyer, but I don’t think we can sell that stuff. The cartoonist probably can under free speech parody, but I really don’t know).

Be sure to check out all the other winners!