We recently ran into Los Angeles-based FlipClips (www.flipclips.com), a firm which has a fascinating product which takes video clips and turns them into professionally printed "flip books." The firm's service -- which has been available since 2005 -- is unlike any other service we're aware of, and can be used for holiday cards, gifts, and promotional giveaways. We spoke with Bernard Chen, one of the founders of FlipClips, about the company's services and business. Ben Kuo conducted the interview.
Tell us a bit about your product?
Bernard Chen: Flipclips was founded in early 2004. We had this idea that there were all these digital cameras, and anyone could take a digital video, but there was nothing you could do with it. I like to point out that this was before YouTube -- and we thought it would be great to turn those videos into flip books. There were three of us that founded the company. We spent the first year writing code to take a video, and turn it into a printable format, we researched different print technology, and binding. It took us a year to print our first flip book on demand. Our first sale was in late 2005. We turned on our system, a week later we had an order for a single flip book, and we were able to create it economically. The quality of the print job todya is higher than it was then, but what it is is a perfect bound flipbook, about the size of a business card, 2 1/2 x 3 inches. It's optimized for 15 seconds of video, and shows video at a rate of 5 frames a second. Five frames a second is good for the low end, any less is choppy, and you can always make it more. We mostly target the mom, pet and sunset market -- such as women with pets, people on vacation, anyone with a digital camera and a quick shot of something. We just finished with Christmas, and we had videos where parents would have their kids dress up in holiday attire, holding up a sign wishing them a happy New Years, and send out 30 books as a holiday greeting card. They're fun to see.
What's your background, and how'd you decide to start the company?
Bernard Chen: Three of us started the company. I'm the bizdev and product mangement side. I worked for a bunch of different startups, and product management wasn't hard for me, though marketing was new. One of the other founders, Sairam Suresh, was an engineer, and he did the website coding. And the third was a graphic designer, who was with us for a year but left because it got too expensive for her starting it up and she had a family. Sairam is basically CTO, and architects what we need, and outsources coding, and writes all the code to tie it all together. I manage the graphic designers, and act as creative director. We usually have a one or two designers on staff and also outsource a lot of that. We use them for our graphic designs for our book covers, and advertising materials, so we have them in-house full time. We also have one production employee who makes books.
Your product is great--why aren't others like Snapfish, etc. doing this?
Bernard Chen: That's a really good question. We've actually talked to big players about partnerships and acquisitions. One decision we made early on was if we wanted to host video. The answer for us was no -- you can't make money doing that. It's pretty expensive to host video, especially if you have a hit. The bandwidth costs are huge. Big companies like Snapfish are making the decision that they don't want to host video. For a big company, if you don't host video, it's a dead end. For a small company like us, it's okay -- we don't host the video, we just make the book. You can't share it, we make the book, and you leave. A larger company might have to provide a broader service. That may change with time. We've gotten more progress talking with photo products people, whoa re willing to consider this now, though they might not have two years ago. Three years ago, they thought they'd lose money offering something like this.
We've looked around and it seems you can't get this kind of product from anyone else?
Bernard Chen: It's a cliche for a company to say they don't have any competition, but there actually is no other competition. There is no perfect bound product like ours which isn't made in someone's living room and cut with a straightedge and exacto knife. We have a professional, 3-sided cut, it looks like a little paperback book. There is no one else doing that. With higher quantities, say 1000 copies, you can always outsource it to a print shop, but that's always been true. We don't do over 2500 copies, where you might as well outsource it to a neighborhood print shop or China.
It looks like you have a fairly small team, how have you managed scaling out?
Bernard Chen: We've learned a lot in the last three or four years on the operations end. We have more than doubled the number of books per hour we are able to produce since we started this. It think we were at about 10,000 books a month when we started, and if were using the same amount of equipment we'd now be over 20,000 books a month on that same equipment. It's just learning what we wanted to do, it scale very easily, and the margins are very good. The process of making a book isn't super complicated, and we can train people very quickly. Also, fifty percent of our sales are in November and December, and for the rest of the year we don't need so many people and don't need a large staff. That's the reason for the flexible staff. Ten months of our business is business development. We also recently did a batch of books for the California Speedway for invivtations, and we definitely have periods around valentines and mother's day with lots of orders. However it does not compete with the Christmas season. The holidays are really big, and that's really when we need to scale up.
What's next for your company?
Bernard Chen: We've done a lot of PR, and are in as many magazines as we can--they really reach our market. We're going to be mentioned in Martha Stewart in a scrapbooking issue in April. That's about as much as we want to spend to grab customers. Because we're self funded, we don't have $500,000 to do a national campaign. Where we've decided to go is we've started to allow third party resellers to talk with our system directly. We signed the first of these in November of last year with Motionbox. They're an online video hoster based out of New York, and we make books for them -- Motion Book -- and they just send production orders to our server. It's been a great way to grow. Motionbox is clearly more dedicated to marketing than we want to be. It's a much better way to grow. Our brand is there as a flag to see that we exist, but there are lots of people who are interested in making flip books for sale and resale. That's a direction for us to grow.