Jon Oringer turned a side project into a $2.5 billion photo phenomenon. Shutterstock is out to become the world's biggest image broker
Jon Oringer marches along the gutted 21st floor of the Empire State Building and ducks out a window onto a deck to pose for a magazine shoot, snapping his own photos as the photographer snaps photos of him. Starting this winter, the entire floor (and an identical one below it) will play home to Shutterstock, Oringer’s 295-person photo website whose shares have more than tripled to a $2.5 billion market value since their debut on the NYSE last October.
It’s an appropriate headquarters for New York’s first tech billionaire ($1.3 billion, to be exact) as he looks to ride the proliferation of screens, smartphones and bandwidth to turn Shutterstock into the world’s largest market place for buying and selling images. Right now that title belongs to the Carlyle Group-owned Getty Images, but over the last few months Oringer, 39, has inked a deal with Facebook for its advertisers, launched offerings of high-end photography and raised $276 million in a secondary offering—all while expanding and simplifying his library of 25 million images and a million videos searchable in 20 languages. What began 10 years ago with one $1,000 Canon Rebel and a 600-square-foot office has exploded into a platform that adds 20,000 new photos a day from 40,000 contributors in more than 100 nations.
“We’re moving faster and faster. Right now we sell two images per second,” Oringer says in his small, sparse office in Shutterstock’s current Wall Street location. His communications head interrupts to say that it’s now three photos. “That’s the new public number? Awesome,” Oringer says with a wide grin. “Three per second—that’s the first time I’ve ever said that.”
Thanks to this breakneck usage Shutterstock is on pace for $230 million in revenue this year (according to Jefferies), a 35 percent jump from 2012. Ebitda should be $49 million, up 39 percent from last year. Stock photography will be a $6 billion market, and Oringer is betting he can snag $1 billion of it. “If I wanted to do something else I wouldn’t have gone public.”
Programming always came naturally to Oringer, who grew up in Scarsdale, New York and started coding in elementary school. Soon he was using his Apple IIe to make simple games and plug-ins for bulletin board systems. “To make a computer do something that would take a human a long period of time was always interesting.”
So was making money. While studying computer science and math at Long Island’s Stony Brook University, Oringer created one of the web’s first popup blockers and sold thousands of copies. He graduated in 1996 and enrolled at Columbia for a master’s degree in computer science. “I wasn’t that into the master’s programme,” Oringer says. “I was trying to create products to complement the popup blocker. All these people were giving me their credit cards. I figured I could sell them something else.”
Sell he did, enough to buy a $450,000 apartment in Gramercy Park in 2002. Oringer continued to pump out products marketed through his massive mailing list: Personal firewalls, accounting software, cookie blockers, trademark managers. The emails he’d send out always did better with photos in them, and instead of paying for expensive stock photos, Oringer bought a Canon and shot his own. He quickly realised other web entrepreneurs might need images, too. He built a site, and in 2003 Shutterstock was born.
Over the next year he took 30,000 pictures. “I would shoot everything I could find—breakfast, lunch and dinner. I’d shoot my friends and make them sign model releases,” he says. “It turned out it was really easy to create commercial stock footage.” Eventually he hired a photo director to organise shoots and hired models at $100 per day through Craigslist to fill boardrooms, hold fake picnics in Central Park or pose with a newspaper and a mug of coffee.
For a subscription of $49 a month customers could download as many images as they wanted. Oringer bought ads on Google and in person pitched his site to creative types around the city. Soon images were being downloaded faster than he could upload them, so he hired contributors to increase his supply.
The emergence of microstock—the low-priced, generic images that customers don’t want to shoot themselves—knocked the photo industry on its heels. Shutterstock and a competitor, iStockphoto, were selling images that once cost $500 for $1. Incumbent Getty Images ended up acquiring iStockphoto for $50 million in 2006 and then took itself private in 2008 at a 65 percent discount to its pre-creditcrisis high. “All the trends line up with what Jon’s doing today, but he saw it when others didn’t—he saw it 10 years ago,” says Jeff Lieberman of Insight Venture Partners, which invested in Shutterstock in 2007.
That year Shutterstock grew to 30 employees, who handled web development, customer service and billing. Oringer was struggling to run the place. “I had never worked for a company before, so I spent a lot of time bringing on operational help,” he says. In 2010 he hired a chief operating officer, Thilo Semmelbauer, who’d done stints at Weight Watchers and jobs site TheLadders.com.
Oringer also ignored the West Coast hype and habit of raising funds from big venture capital firms. He didn’t need the cash; Shutterstock made money from its very beginning. That discipline paid off when Shutterstock went public in 2012 with Oringer still owning about 50 percent of the company. (He took some chips off the table in September, selling $145 million in shares in the secondary.) For Oringer, going public wasn’t an easy decision, but in the end he decided an IPO would strengthen the balance sheet, give Shutterstock more exposure and add legitimacy when dealing with large corporate clients.
But going public put pressure on Shutterstock to keep hitting its big revenue targets. Oringer is looking to expand Shutterstock’s foreign business, with an office now in the UK and one soon to come in Berlin.
He is also betting that video will be as ubiquitous in advertising and media as photos are now. When it is, he’ll have millions of cheap, highquality clips ready for download. “We create marketplaces,” says Oringer. “As we continue to grow, the question is, how do you keep the company as innovative as it was 15 employees ago? We’ve been able to do it up until now and will continue going forward, but it’s not easy.”