Why I invested in Photobucket

[Like everything on this blog, these are my own words and I am by no means speaking on behalf of my employer.]

Earlier this summer, I took the plunge and made my first private tech company startup investment. It was just a couple of years ago that Sallie Mae breathed a deep sigh of relief and sent me a congratulatory note for having paid off my student loans. (In fact, I accidentally overpaid by a touch and Sallie Mae now owes me $24.87. Reversal of fortune indeed.) During the subsequent years of positive net worth, in my role at Google, I have had the pleasure of working with dozens and dozens of exceptional startups from around the world, partnering with, investing in and acquiring many of them.

However, despite many opportunities and invitations to participate, I have never put my own loot into any of these companies, until now: I am an investor in Photobucket.com.  So why did I do it? How did I make the decision? What were my criteria? How convenient that you should ask such things while I am typing this blog post.

The five reasons I invested in Photobucket, in no particular order:

1) The CEO/Co-Founder is a friend - I don't mean this in some kind of clubby, "keep it in the family" way. I mean, I know Alex and have strong respect for him. Before I was ever considering becoming involved with the company, I had a long time to get to know Alex and learn why he started the company and how he thinks about Photobucket's future. I think he is savvy and intensely ethical. The more business I have done in the Valley, the more I have realized the importance of deeply trusting one's partners, thus having this insight into Alex really makes me feel good about getting involved.

2) The Co-Founders are geeks - To the unitiated this may sound like a jab. However, in my world, it is a prime compliment. Alex and Darren are gifted technologists who have built a product that stands on its own and requires no spin or marketing. I see too much excess in this bubble that is being fashioned around mindless b-school drivel. Alex and Darren just put their heads down to code at every turn and the results speak for themselves. In this vein, at Speedera, I had the good fortune to work with two other geeky co-founders, Rich Day and Eric Swildens. It was amazing to see how this pair enabled us to outflank everyone else in our industry and I expect continued similarly great things from Alex and Darren.

3) I know the other investors - In particular, I am a huge fan of Jerry Murdock from Insight Venture Partners and appreciate his intense startup mentality as well as his impressive grasp of Internet and mobile zeitgeist. In addition, Trinity partners Tom Cole and Gus Tai are both involved with Photobucket, both guys who fought it out with us in the trenches at Speedera despite the odds being stacked against us and through a few bizzarre and surreal twists. I really appreciate the chance to invest alongside guys I value.

4) Photobucket is growing like a weed - Often when I give talks, I ask for a show of hands. "How many of you have heard of Flickr? How many have heard of Photobucket?" Sure enough, if we are in a room of folks over 25, the Flickr hands dominate. Yet, if you take a look at Google Trends and compare Photobucket and Flickr, you start to get a sense of the phenomenon. I tend not to put as much faith in some reports that Photobucket has 44% market share as Hitwise suggested and think the numer is bit less dramatic. Though, however it stacks up on a relative basis means less to me in the end. The most telling numbers are that, by last public count, Photobucket has 24 million users and is adding 80,000 a day. Wow. The company adds 7 million new images a day, has an index of 2 billion total images (not including thumbnails) and is serving up 3 billion objects a day.

5) Photobucket is wonderfully simple - People immediately understand Photobucket. The simplicity of its core application is the cornerstone of its growth and approachability. Grab a photo, click, grab the link code and go. In the same spirit in which the Google.com page has been a hallmark of a simple yet powerful user experience, Photobucket has deep capabilities but can be operated by anyone.

6) Linking is the new storage - This is a concept that is worth a post on its own. Essentially, if you ask kids today about where they store their photos, they will look at you funny. The reason? They don't store anything. It is a concept that doesn't really occur to them. Those of us who grew up with floppy disks constantly consider storage as part of our computer interaction. In the hosted present and future, content is automatically stored and this challenge falls to the background. Instead, kids think about linking. The game instead becomes discovering how they can point to their hosted content and include it on/embed it in MySpace profiles, LiveJournal blogs, and message boards around the web. Photobucket is the anchor for those links and affirms its stickiness in the process lest those links be broken.

There is a lot more I could say here, but, in the Photobucket spirit, I will let the company and its growth speak for itself. I am just happy to be involved.

Update: It has been pointed out by some wonderful readers that my list of five reasons is actually six. Well, thank you for noting this. I guess all I can say is that I strive to underpromise and overdeliver. :)

Comments

[Mike Abundo]

I know a lot of Filipinos who prefer Photobucket to Flickr. I'm a Flickr guy, but I understand why they prefer the former.

[Tom Cole]

Chris, we are honored to have you join us as an investor in Photobucket. Long live geeks!

[Ryan McDermott]

Love to meet you and pick your brain on various potential investments.

i'd even buy lunch.

Thank you.

[Steve Lerner]

Did you borrow extra from Sallie Mae, use the extra to party for 6 months post grad school, and then write off the interest payments until your annual salary made you ineligible for the writeoff?

I did!

Nice use of "flank" when referring to CDNs...

[Ashley]

Seems like legit reasons to invest in this company but in my opinon there are alot more things to look for in a start up that have better potential for profit.Good luck on your new found venture but one lesson has served me over years well and that is never get into bisuness with friends the two do not mix well.Becasue when the money goes so does the friendship and vica versa.

[Veronica]

I would like to know if photobucket, is accepting public investments, i too would like to invest in their stock

[Omar Shahine]

Looks like this was a smart investment :-).

[Dave Anderson]

Congradulations on your investment, looks like it turned out well; http://www.cnn.com/2007/TECH/biztech/05/30/myspace.photobucket.ap/index.html