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Start-up Focuses on Future of Photography On World Wide Web

Greg White got a charge from creating a Web site containing family snapshots, and sharing those images.

Yet he also knew the time and skill needed to build a similar photo site was something few people had.

“The process of scanning photos, getting them up to Web, building Web pages was a long, tedious, technically challenging project,” White said. “I realized that, gosh, there’s got to be a better way.”

In an effort to find the better way, White and eight other investors formed kablink, a company that operates a Web site that allows users to post their digital images, manipulate and customize those images, and send them to friends, family or business contacts.

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Since December, kablink has been in a beta mode, but already the results are making some people believe White and friends are onto something big.

“Everything is evolving away from print and paper,” said Richard Custard, president of the San Diego Software and Internet Council, and a kablink tester.

“It’s a little different retraining yourself to use this, but it’s easy,” Custard said. “They’re using some of the latest techniques and technology to personalize a Web site.”

Just as the music industry has been undergoing a technical revolution spurred by the use of the Internet, similar change is occurring in the photo finishing world because of the proliferation of digital cameras.

The new cameras don’t rely on film, and instead store the images on a digitized chip. Converting the images so they can be viewed on a computer isn’t always easy.

Crowded Field

While White said kablink is the first company to allow digital camera users to upload the images directly to the Web site, about a half-dozen companies are competing in the new arena of digital photo hosting, says one analyst.

“Web photo sharing is getting to be a really crowded field right now,” said Paul Worthington, managing editor of Future Image, a San Mateo-based publication covering the digital imaging industry.

Worthington said unless a new company can offer something new or different, it might have a difficult time capturing a sizable piece of the market.

Jim Neumann, kablink’s vice president of marketing, said while some companies may offer some similar services, such as photo sharing and storage, kablink is providing the full gamut of services from taking the picture to transferring the images and printing them.

The most common feature offered on the image hosting sites is the ability to turn the digital images into prints. Besides giving users this service, kablink’s site allows users to manipulate the images with various templates or formats, create personalized E-mails, postcards and albums, and store the images at a secure site, Neumann said.

Plus, as long as a user maintains a library of less than 50 megabytes or some 2,000 pictures, the service is free.

For those needing more space, such as a business, kablink offers premium memberships at about $10 a month. Revenues will also be generated from online advertising, the sale of personalized photo products, such as T-shirts and coffee mugs, and joint venture marketing relationships.

Neumann said the company is talking with several large corporations and retailers regarding a variety of cross-selling opportunities. For example, kablink plans to give users the ability to order prints, but the actual photo work would be done by a large photo processing retailer, which would share payments.

The market for digital cameras is still relatively small today, but growing exponentially every year, Neumann said.

Of the 230 million people using the Internet today, only 10 percent to 12 percent have used a digital camera. But the experience of converting the images so they can be viewed on a computer, or converted to prints, turns off many, he said.

“Every Christmas over the last several years digital cameras are the among the biggest selling electronic items, but every January, they are among the largest number of items returned,” Neumann said.

Kablink’s goal is to simplify the digital photography process, giving users all the tools they need to take pictures, upload them onto the Web site, edit the pictures and send them.

To that end, the company plans to sell a complete kit, including a digital camera, a CD-ROM containing all the necessary software, and instructions on its use, through a major retailer. The price tag will be under $100, Neumann said.

The company already has a deal with a camera company and is in the final stages of negotiating a deal with a major brand name, White said.

Besides the obvious consumer appeal that accompanies the ease of transmitting photos to friends and family, kablink’s technology could also have enormous benefits to commercial users.

When Stephen Games, the owner of Prudential California Realty, one of the nation’s largest real estate firms, saw the site and how it worked he became an investor.

Games, whose San Diego firm includes 67 offices and some 3,000 agents in Southern California and Las Vegas, said he invested more than $250,000 into the company.

This is White’s second go-round as a founder of a software start-up. He was one of the founders of now-bankrupt TriTeal Inc., a Carlsbad firm that produced software allowing different computer systems to interact with each other.

At its peak in 1997, the company had about 150 employees, and its stock was trading about $23. But TriTeal got into trouble regarding its sales results. A series of class-action suits alleged the company exaggerated the results and other improper actions. In 1999, TriTeal filed for Chapter 11 bankruptcy protection.

White, who left TriTeal in 1997, said he and eight others, “all technical professionals,” formed kablink last April. White said he put up $50,000 in advance of kablink’s initial capitalization round of $2.5 million from venture investors in San Diego and Texas.

Rising From The Ashes

Custard said White’s past involvement with a now-defunct tech firm would likely be viewed as a positive, rather than a negative.

“In Silicon Valley, something like that is seen as a badge of honor,” he said. “Veteran entrepreneurs are likely to find getting funding much easier if they are known to have tried something and failed than those who are doing something for the first time.”

Mike Krenn, administrator for a local group of venture capital investors called the San Diego Angels that generated a big share of the initial round, called the amount “fantastic.”

“Most Angel rounds are between $500,000 and $1 million,” he said.

White said the company is planning another venture capital round this year with a minimum target of $15 million.

As kablink moves beyond the beta testing stage of its site and begins operating full bore, it expects to expand from its current 20 employees to at least 100 by the end of the year. The bulk of the new staff will be software engineers, programmers and technicians.

As for the future, White expects kablink’s fortunes to coincide with the expansion of digital cameras, and easier consumer access to viewing and sending those pictures.

“Images are going to rule the Web,” White said. “It’s just a question of which applications, and how those images will be used in our daily lives.”

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