There was a company called Everpix that launched in late 2011. They were a photo sharing and organizing app/service that was seemingly well liked — I'd seen them mentioned on Daring Fireball and in tangential circles — and provided unique tools to help you organize your photographs. Unlike a lot of internet-based companies that take on VC funding, they were trying to be profitable from the start and didn't offer their services for free. The prices were something like $5/mo or $40 for a year and no practical limits for the number of photos you could upload.
For an interesting comparison's sake, Dropbox starts at $9.99/mo or $99/year if prepaid for 100GB, Google will extend your storage limits across all of their services to 100GB for $4.99/mo and Apple will charge you $100/year for an extra 50GB of iCloud storage. These comparisons aren't particularly fair, but I mention it only to establish that Everpix's pricing scheme seems seasonable in relation to other cloud service prices, if a bit on the low side.
They ended up going under in late 2013. What's really interesting is that they released all of their data: finances, service metrics, notes from conversations with investors. You can peruse it all here: https://github.com/everpix/Everpix-Intelligence
The month before they shutdown was their best month they'd ever had : 8,900+ new users, $41k in sales and 86 million photo uploads. See: https://github.com/everpix/Everpix-Intelligence/blob/master/Investor%20Reports/2013-08.md.
It's all interesting stuff to someone like me who is peripherally lumped-in with startup culture and business. Reading through it answers a number of long-standing questions and confirmed some long-held suspicions on the ephemeral nature of such enterprises.
This is the most interesting document to me:
Over the lifetime of their business Everpix made $280,696.38 but had operating expenses of $2,665,192.34. Their income doesn't even cover the cost of their server infrastructure which came in at $394,588.35 via Amazon Web Services.
In the end they had 45,000 users and 5,500 subscribers but would've literally had to add a zero to their pricing plans to achieve profitability. Suddenly a $50/mo and $400/year service doesn't compare so favorably.
I think it's fascinating and crazy to get a peek into the numbers behind startup culture. It seems to kind of confirm much of what I've often feared, wondered and assumed; selling out to one of the big companies (Google, Facebook, Apple, Twitter) isn't just the most viable option, it's essentially the only option with this kind of approach. What seemed like the most probable endgame is the only endgame. It's not even close.
I've always been a bit skeptical of VC-funded startups with "free" offerings, but this sheds a whole new light on that fear. Everpix looked like one of the good ones: a company that focused on actually making money from the start. But looking at the numbers... They were so much farther from profitability than I'd expected it was shocking.
I'm going to be exceedingly skeptical of an VC-backed company going forward I think. Using these services is starting to feel like some kind of bizarro, Kickstarter audition for which service one of the big web companies should buy-out next.