How Jon Oringer became Silicon Alley's first billionaire
- 12 August 2013
- From the section Business
Jon Oringer, 39, founded 10 companies before he hit on the idea for Shutterstock, the successful stock-photo website that has made him Silicon Alley's first billionaire.
"I'd failed a whole bunch of times before that and I was willing to fail again," says Mr Oringer of his decision to go into the photography business, something he knew nothing about.
Now, after a successful stock market debut in October 2012 and with more than 28 million photos, videos and illustrations in its vast database, shares in Mr Oringer's Shutterstock are soaring.
With an ownership stake estimated at more than 55% of the company, Mr Oringer has become the first billionaire to come out of Silicon Alley - New York's thriving tech sector - with an estimated net wealth of $1.05bn (£682m).
Mr Oringer did not start out aiming to get involved in the stock photography trade.
He had been working on software that would stop unwanted windows from opening while browsing the internet - so-called pop-up blockers that are now automatically installed in most browsers like Firefox and Chrome.
"I was creating software at the time and I was trying to get people to renew their subscription. I needed images of just general stuff to send out and I started to realise that this stuff was hard to get," remembers Mr Oringer of the way he came up with the idea for Shutterstock in 2003.
At the time, there were just a few companies who specialised in the creation of the generic images of places and things that are used to illustrate so many websites today.
Those companies, like Getty Images, were tailored mostly for news agencies and were expensive for smaller companies just looking for a simple photograph of an apple or a skyline.
So with a couple of thousand dollars and no real formal photography background, Mr Oringer bought himself a good camera and started placing adverts on Craigslist for models.
He wandered the streets of his hometown, New York City, and eventually, the globe, looking for pretty much the exact opposite of what most tourists are after - the most mundane shot, the most generic view.
That first year, he took over 30,000 pictures which he then posted on Shutterstock's website. To generate traffic and users, he advertised his product cheaply using platforms such as Google AdWords.
"The turning point was when I couldn't keep up with the demand any more," says Mr Oringer.
He did all of this from his home base in Manhattan.
"People were wondering why I didn't go out to Silicon Valley and enter the start-up machinery right away," he says of his decision to stay put in New York - a radical idea for a start-up, particularly back in 2003.
"Part of it was that I was fortunate that I didn't need to raise money."
Unlike many technology companies, Shutterstock was founded with no initial outside investment, in fact with barely any investment at all, just the few thousand dollars needed to buy a camera and to rent a tiny office space.
At first, Mr Oringer did all the jobs - shooting the pictures, designing the website and even answering the phones.
He would listen to customer complaints and offer refunds, noting areas where he thought the business could be improved.
Even when he hired his first employees, he did not go for the obvious and recruit photographers. Instead, he employed engineers, a challenge in New York, before relinquishing any control of the rest of Shutterstock's product.
"I wanted to create this thing the way I wanted to create it," says Mr Oringer.
"At the time it worked and I was able to do this with thousands of dollars, not millions of dollars."
Putting profits first
In addition to allowing him control, by refusing the cushion of often-lucrative outside funding, Mr Oringer says he was focused on profits from the very start - unlike tech companies such as Twitter and Foursquare, who have struggled with revenue generation.
It is an approach that has paid off.
Shutterstock now sells images to 750,000 customers in more than 150 countries, and raked in more than $47.5m in profits last year - a 117% increase.
And the future looks bright. The company estimates that the market for digital images - photos, videos and illustrations - will grow to be more than $6bn in 2016, from $4bn now.
"Photography's changing and lots of different things about photography are changing all the time," says Mr Oringer, noting that as newspapers and traditional outlets for photographers have shut down or pared back, Shutterstock has provided a valuable source of revenue generation for its members.
More than 40,000 artists submit images and videos to the Shutterstock marketplace, responding to real-time data that tells them what the site's members are looking for - a picture of a cat, for instance.
As those cat photos are downloaded, the photographer takes a cut of the fee that Shutterstock's members pay.
The company estimates that more than $150m has been paid to its contributors, allowing many to make submitting images to the site a full-time job.
Qualified to fly
While Mr Oringer's wealth has obviously spurred headlines and congratulatory pats on the back from New York's biggest tech boosters, he remains modest about his success.
When asked about his billionaire status, he grimaces - and tries to change the subject.
The only real extravagance he has allowed himself has been the pursuit of his passion - helicopters.
He recently became a certified pilot and bought himself a helicopter, which he flies to areas including the Hudson River valley, just north of the city.
He is fascinated by helicopter machinery and likens it to his first "business" - repairing computers in his parents' house as a teenager.
That business model "wasn't scalable", he says with a laugh.
The reality is, beyond a summer internship in college, he has never had a traditional job.
Although he admits: "This may be a real job now."