Monday, November 20, 2006
Interview with Michael Sawtell, The Family Post
Michael Sawtell is the Founder of The Family Post (www.thefamilypost.com), a company that operates a web-based service that allows families to create their own web sites to share photos, blogs, videos, and more. Michael is also the former President of Interchange, where he took the firm to an IPO in October of 2004. We caught up with Michael to talk about his new company, how it fits into the whole Web 2.0 movement, and plans for the future.
Ben Kuo: Where'd the idea for The Family Post come from?
Michael Sawtell: I am forty eight, and I just had a two year old, who at the time was thirteen months old. I had a lot of digital media--from a Sony Camcorder, a Canon PowerShot--and no place to put it. My wife asked me if we could put something together, and I had someone make us a web site for $1,500. It was okay, but the website developer told me that every time we wanted to make a chance we'd have to call. That's just crazy. I was sitting in my office, not really in any hurry to start anything new after Interchange, but I had wanted to take a few months off. It then hit me like a lightning bolt--families need a service to put their digital media all in one place. They needed something--not like Shutterfly, where there are all of these links and pressure to buy prints; plus, you wouldn't want to put a family video of your two year old on YouTube. The idea was to have one destination for families to put their digital media in one place, which is safe and secure, private, password protected, and backup up. We even backup our data to Iron Mountain for that additional security. So that's when it hit me, and being an operational kind of guy I started recruiting people and came up with a general idea of what it would be. We started building our beta, and launched in October of 2005, coming out of beta in March of 2006 with the B2C site that you see today at TheFamilyPost.com. It's a subscription model, with the idea that for a significant destination like this, to share your digital media with close friends, you don't want that free plasma television ad popping up on your screen, and that's worth a few bucks to have password protection and security that we offer.
Ben Kuo: It seems like that's a bit different than most of the Web 2.0 companies turning up now--who seem to be giving away their services in hopes that Yahoo or Google will buy them?
Michael Sawtell: Maybe I should have done that (chuckle). Since the whole new freemium model, we have started looking at that, but are not looking at being ad supported. Instead, we're coming up with a limited version of The Family Post for free, which allows you to build a site with various links, but when they go over a threshold it will ask for a subscription. We think our experience is so unique and so compelling, that once people put up a few pictures that the value of $5 to $15 per month is very fair. They get a web site with thirteen pages of functionality, and it's not just a photo sharing site by any stretch of imagination. It includes a Flash message board, calendars, ways to add pictures, blogs, text, headlines, news, and a history section where you can put more photos and information. There are actually a lot of people putting deceased members of their family and text describing who they were and their contributions to the world. It's pretty significant. Because of that, it's so much more than a photo sharing site. Sometimes, when we're talking with venture capitalists who don't understand the space, they'll just put us in that bucket.
Ben Kuo: So what's your background--maybe tell us about Interchange?
Michael Sawtell: I was president of Interchange for five years. I joined in March of 2000--and you probably remember that month, which was shortly after the whole tech wreck. We had to cut that staff, and we were payroll to payroll for four years until we got our IPO done by Roth in October of 2004. My other past is I worked at Northrop Grumman on the B2 stealth bomber, so I'm a former aerospace person. I hooked up with Heath Clarke at Interchange in 2000, and left there in April and May of 2005 on amicable terms. Heath is on my advisory board.
Ben Kuo: It seems like there are a lot of Web 2.0 companies starting up in this space--I think I just saw two in the last week--it seems this area is really heating up?
Michael Sawtell: Yeah, no doubt about it. I've been on some Web 2.0 panels, including one in Las Vegas where we were on a panel with YouTube. If you think about it, YouTube and MySpace are just the tip of the iceberg. They cater to the techno-savvy 17 to twenty eight year olds, who are very adept at putting media up. If you use MySpace, you see that it's somewhat clunky--you need to know some HTML to put pages up. As the rest of the world comes down the curve of plugging in their Nikon D50 into a USB port and downloading pictures, they need a place where they can have self-expression as well--to a smaller, more closely knit group than some place like MySpace. Everyone has digital media, and that does nothing but grow larger in mass. Once they have all of this media, they need some place to put it someplace other than their hard drive, where no one can see it. It's one of the biggest transformations happening now in photography. The PMA has some statistics, which found that 35% of all digital cameras in 2005 do not yield a print. That being said, it's taken the whole paradigm of photography industry, which was to put a package together with a 8x10 photo at big risk as a philosophy. They have to look at other solutions on how to capture the market in forthcoming years. If you look at what's going on, with Kodak buying EasyShare, HP's acquisition of Snapfish, they're starting to cover their bases.
Ben Kuo: Let's talk about your funding -- how are you funded?
Michael Sawtell: We've raised about $800,000 so far, from friends and family. I personally put in $150,000, our CFO put in $75,000, and our VP of business development also put in a lot of money in the venture. The rest came from friends and family. We've also been talking with venture capitalists. I should also mention that Darin Brannon is on our advisory board. Darin is the founder of Verio, which he sold in 1999/2000, for $5.5B in cash. He's also the founder of Web Site Pros, the leading web site template company for businesses for SMBs--that's how we got him on board. Our VP of Business Development pitched him a consumer play, and he was so impressed with our technology he wanted to be part of it.
Ben Kuo: It looks like you're very different that the others in this space, since you're looking to make money?
Michael Sawtell: In pitching venture capitalists, we tell them we're a re-brandable platform for other companies in other verticals. Not only do we have the viral TheFamilyPost.com, we're selling more and more sites for partners all the time, around the country every day. The beauty about that is we get paid for them. We've also got the freemium strategy too, and a whole B2B play, where you can rebrand the platform and alter the URL for the partner. It can be very sticky, people go back to their URL to access their family websites, and there are different ways to keep the brand in front of those users. We're peeling back the onion. Putting up a Web 2.0 site and hoping to get viral has never been our strategy. We've got ninety-four percent retention, because of the user experience. We recently got a comment from a user, from the user experience industry, who said that this is really a great user experience. That's typical of what we hear.
Ben Kuo: Thanks for the interview!