I don’t think all of the other photo sharing sites are “unnecessary,” no. SmugMug isn’t for everyone (or, in fact, isn’t even for most people – most people want free and that’s not us). We don’t even want to build SmugMug to be for most people. No desire to be the market leader.

So, yes, the other photo sharing sites are necessary. They actually help us – more than 50% of our customers are refugees from other photo sharing sites. They learn both how powerful photo sharing can be as well as how sucky some of our competitors are. When they discover us, they’re thrilled – because we remove the suck.

As for being a small family business, we’re growing at about 80% per year, so I doubt it’ll remain in that particular category long. We happen to like that growth rate quite a bit – it’s not so fast that we lose our ability to scale, but it’s fast enough that we’re able to grow in the directions we want to.

90% of our customers stay after their first year, so that first sale is incredibly valuable.

The equation isn’t $40 * 150,000, though. 20% of our subscribers are Pro level ($150) and 20% are Power level ($60), so it’s a little more complicated (and a little healthier). Still not enormous by any stretch of the imagination, but we’re happy with it. Show me some other so-called ‘Web 2.0′ companies doing as well – I’m not aware of many.

I realize we have the exact demographic advertisers want – but our customers expressly DO NOT want advertisement, so we don’t care. We’re not gonna piss our customers off.

Don

If you know of any non-blogs that we’re treating as blogs, please drop me a line at dsifry AT technorati DOT com and let me know which ones they are…

Dave

Nice to meet you. Don’t you think all the sites, other than yours of course are “unnecessary” photo sharing sites?

If your photo sharing site is profitable, great, excellent job! I’m impressed with what you did against the stiff competition. However, your post talked mostly about press coverage issues and that was my first impression of you. Honestly, if the commitment ends after one year of paying $39.95, how vauable is it, what happens if someone becomes deceased? Do those photos no longer have value? Is your true customer the poster or the viewer?

You apparently have figured that out and made a nice family business ($40*150,000 users). Will it ever be much more than that? What is funny about it is that by managing to find 150,000 people willing to pay your fee, you have the exact demographic advertisers would want!

To me, photo sharing and video sharing sites are such an overdone segment that I skip almost every post on Techcrunch about them generally. That’s what I want – less attention to the segment because there are large opportunities out there going ignored due to the “noise” – your post yesterday and the valleywag point only confirms that noise is alive and well. That it is what is annoying to me, the whole segment gets 10x more press than it deserves in the first place…

Or am I just mis-understanding that sentence? It reads as if all photo sharing sites aren’t necessary, and that they all get tons of traffic, both of which sound wrong.

FYI, my blog isn’t a site discussing photo sharing sites, as your post seems to imply. It’s my personal blog, and I run one of those “unnecessary” photo sharing sites. One of the few (only?) with a solid, profitable business model, as a matter of fact, which might explain the thought provoking comment.

Don