Entrepreneur Jon Oringer spent $800 buying a digital camera so he could take pictures and create his own stock-photography website.
That website, Shutterstock, is now one of the largest photo marketplaces in the world, and this year Oringer became the first billionaire to emerge from New York's Silicon Alley.
So how did the photo enthusiast turn several hundred dollars into an IPO and himself into a billionaire?
Shutterstock was born in 2003 out of a recurring frustration Oringer had with finding quality images at a reasonable price. When sourcing images for marketing literature or websites the serial entrepreneur either had to fork out for expensive photos from companies like Getty Images or opt for cheaper lower quality images. There was nothing in between.
“I had a few different software companies and built different things I thought people wanted to buy. I made one of the first pop-up blockers that came on to the market. That did well until Internet Explorer built a pop-up blocker into their software.
“I constantly needed imagery for my companies but found it very expensive and time consuming getting images.”
So armed with a new digital camera, which cost him $800, he decided to take some of his own. Over the course of a year he took thousands of generic photographs, before uploading them to a website he had created.
“I had always been interested in photography so I went out and took 30,000 images for my first site. It took around a year to take them.”
Shutterstock gained popularity quickly, becoming a hub for people looking to make extra money by selling photos, joined with businesses looking for high-quality images at affordable prices.
“I wasn’t able to keep up with demand for stock images on my own so I opened the site up for other people to contribute. They could upload their own images and when they were downloaded we paid them.”
While other photo companies concentrated on images, Oringer put his focus into building a standout technology platform.
“While some traditional players in the photo business are media companies, we are a tech company. Our whole system is data-driven. We sell three images per second. Every time an image is downloaded, the contributor knows what was searched for. They can tell what people are looking for and what’s popular.”
He bootstrapped the company for several years, believing it best not to take a round of funding unless it is really necessary.
“I didn’t take funding until 2007 when we took on our first investor. I was lucky as the site was profitable from the beginning.”
The company took the public plunge in October last year raising $76.5 million in an initial public offering. Oringer, who owns about 55 per cent of the company and did not sell any of his shares in the offering, emerged as a hectomillionaire worth some $315 million. Shutterstock shares have since risen by more than 230 per cent, giving Oringer a net worth of more than $1 billion.
Out of hiding
"We went public to strengthen our balance sheet and get more exposure. We needed to come out of hiding and wanted more flexible financing options for the future. I don't take too much notice of the billionaire status."
The company has gone through many changes to become one of the volume leaders in the stock photography space. “We continue to innovate. We started building other marketplaces such as Offset, our high-end image marketplace. It usually costs thousands of dollars for images like those. We charge $500 for them. They can be used in a two-page spread in advertising.”
While many tech companies and Silicon Valley darlings struggle to generate profit, Twitter being a case in point, Shutterstock has done so from the beginning. The company ended 2012 with gross profit of $105 million, a 40 per cent profit jump over 2011.
So what are the secrets to his company’s success? Entrepreneurial staff is one. When hiring he tries to identify people who are disruptive, asking them questions such as: If you were going to start a business right now to make $1 on the Web, what would you do?
“We look to hire entrepreneurs. We want people who can think in creative ways. We hire them so we can stay ahead of the competition.”
The company also holds hackathons several times a year, where they set aside time for staff to work on projects related to the business or ones they're personally passionate about. "Every year we have one large hackathon and lots of smaller ones. Employees get 24 hours to create something that will help the business. We encourage employees to collaborate across all departments. The spectrum search tool we have came out of a hackathon. That allows users to search images via colour."
Oringer's entrepreneurial streak began in high school, where he used to teach guitar and fix computers by the hour.
“I learned to play guitar just to teach it. I wasn’t that great at it but the people I was teaching didn’t know better. I also fixed people’s computers. Those two businesses were cool for high school but not scalable. I only had so many hours in the day.”
So what’s the company’s future strategy? “We are in 150 countries but very few we are localised in. We want to have more local content.”
As for downtime, Oringer likes to take to the skies.
“I have my own helicopter which I bought around three years ago.”