Son rules roost at SmugMug

Son rules roost at SmugMug

By Jefferson Graham, USA TODAY
Feb. 18, 2008

MOUNTAIN VIEW, Calif. — John Higham knew
something was different about the SmugMug photo site when he sent an
e-mail to tech support and got a zippy reply from CEO Don MacAskill.

By Jack Gruber, USA TODAY
MacAskill, left, is CEO of photo storage and display site SmugMug,
founded in 2002. His father Chris MacAskill reports to him as president.

"I learned real quickly that it was a real mom and pop operation," Higham says.

Not exactly. SmugMug is actually a "son and pop"
shop. Don, 30, is founder and CEO, and dad Chris, 54, the president who
reports to Don. Also answering to the eldest son: Mom, two brothers, a
sister, an aunt and various in-laws.

"We’re not aware of other companies like this," MacAskill says. "But it’s worked really well for us."

Founded in 2002, SmugMug has grown into a $12
million-a-year operation with 100,000 subscribers who pay from $39.95
to $149.95 yearly. The company says sales have doubled each year for
the last two years.

SmugMug has thrived in a competitive market by
serving a specific niche: passionate amateur and professional
photographers seeking an alternative to photo-sharing sites such as
Shutterfly (SFLY) and Kodak Gallery (EK), which are designed to sell prints.

"They are one of the big winners in the online
photo space," says Chris Chute, an analyst at researcher IDC. "They’ve
always known what they wanted to be, and never aspired to be more than
that. They serve their niche and make money."

SmugMug customers display their pictures on big
and bright pages without ads or promotional offers. And they get
unlimited photo storage as well.

The company says it became profitable in the first year, after it reached 10,000 subscribers.

"We always knew Don was bright, but to have
pulled this off is such an accomplishment," says his proud dad. "He’s
done this in the face of enormous competition, without any venture
capital backing, and no debt."

SmugMug competes with Phanfare, a similar
premium service that costs $54.95 a year, and with Yahoo’s Flickr,
which costs $24.95 a year for unlimited storage and ad-free displays.
(Flickr and Phanfare also have free versions.)

Flickr is by far the most popular of the three
sites, but it operates more as a social network for viewing photos from
around the world. Phanfare, which has 11,000 subscribers, and SmugMug
are designed to share photos among families and photo communities.
SmugMug also helps professional photographers resell their prints

Members love SmugMug.

"You get a level of service and care I’ve never
seen before," says David Rosenthal, a Hollywood video editor who
displays his photos on SmugMug.

"It’s rare to send questions to a help desk and get a reply back immediately," Higham says.

Just don’t expect to speak to anyone at SmugMug
on the phone. "If we did phone support, it would break our business
model," Don MacAskill says. "Doing really good e-mail support is
cheaper than really lousy phone support."

The SmugMug offices here are small and crammed
with computers and tech gear, but then, it’s a big step up from where
they were for the first four years. In April, SmugMug finally moved out
of Chris and Teri (Mom) MacAskill’s five-bedroom Mountain View home,
where power was continually going out due to the excessive amount of
computers in use.

The SmugMug offices are a gearhead’s
fantasyland. Don bought iPhones for all 30 employees, and Chris
recently plunked down $8,000 for a Sony high-definition video camera.

The purchase was needed, Chris says, tongue in
cheek, because of SmugMug’s new foray into video sharing. "It’s my
passion, what can I say?"

SmugMug now offers top-paying members (at the
$149.95 level) the ability to share 10-minute clips in high-definition.
The video quality is markedly superior to that seen on top
video-sharing sites such as YouTube and MySpace, where clips are shown
in low resolution.

SmugMug is such a family operation that the
owners blog, answer questions on message boards and even point members
to high-def video clips of the MacAskills’ recent Thanksgiving

Don, the eldest of five children, began his
career at age 17 working for Best Internet, a now-defunct Silicon
Valley Internet provider. He tried a semester of college but quit to
return to tech. He started a video-gaming company, Ritual, with some

"One of the things I learned was to get some really good talent on board early on," he says.

After Ritual went bust and he decided to start
SmugMug, he reached out to his dad, who invested $200,000 and agreed to
be president.

Chris MacAskill is a founder and a former CEO of online bookstore Fatbrain, which Barnes & Noble (BKS) acquired in 2000 for more than $60 million.

In interviews, son and dad finish each other’s sentences, with Pop mostly deferring to Don.

"Don was the alpha son growing up," Chris says. "He always wanted to be in charge, and the boys all knew that."

While other start-ups have struck gold by selling out to larger companies — like Flickr (Yahoo), YouTube (Google) (GOOG) and Photobucket (Fox) — the MacAskills say they want to remain independent.

"It’s not a typical company where you can yell
at the CEO," says Don MacAskill. "But believe me, everyone walks into
my office and yells at me when I do something stupid or wrong, and I
love it that way."

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