Liz Gannes

Recent Posts by Liz Gannes

Online Photo Vet Jumps Back Into the Biz After His PicMonkey Investment Blows Up

Seattle-based entrepreneur Jonathan Sposato’s life seems to tend toward patterns and repetition. He sold two companies to Google in the past eight years — first the widget maker Phatbits and then the photo editing site Picnik, which had been the official photo editor for Flickr.

PicMonkey CEO Jonathan Sposato, lightly edited with PicMonkey (had to hold myself back on the galaxy textures and blush boosters)

PicMonkey CEO Jonathan Sposato, lightly edited with PicMonkey (had to hold myself back on the galaxy textures and blush boosters)

And then Sposato left Google twice, most recently in early 2012. And — as one does when one sells two companies to Google — he started making angel investments.

One of his portfolio companies, PicMonkey, was started by two Picnik engineers. As the name implies, this was not a brand-new idea: It’s another online photo editing site.

Turns out PicMonkey is already working, actually quite well. A year after launching, it has 20 million monthly active users, and it’s profitable.

So Sposato, who has provided most of the outside funding for the company, is jumping back in as CEO — though he prefers the silly title “Chief Monkey Officer.”

What’s PicMonkey and why might you have never heard of it? The company spread through “word of mouth based on rabid, vociferous mommybloggers,” according to Sposato.

PicMonkey’s internal metrics say 80 percent of users are women between the ages of 25 and 45.

01_homepageThese women head to the site — which offers some tools for free and more tools for those who pay $4.99 per month — to remove their wrinkles, add filters and effects and stickers, write captions and make collages of their photos. (PicMonkey is Web- and Flash-based and doesn’t yet have a mobile version.)

That founder itch to return to a past theme is so very common in the tech biz. In just two days this week, I talked to Sposato about the parallels between Picnik and PicMonkey, the founders about their new site Lumi — which extends their idea of recommendations-based-on-behavior from music to Web sites — and the co-founder of early Israeli Web mail provider Walla about his soon-to-launch mobile email app.

So what’s the difference between PicMonkey and Picnik? Picnik had about 60 million users when bought by Google in 2010 for an undisclosed price. It was profitable based on subscriptions and ads. After the team was conscripted to work on Google+ instead, they started leaving.

As for the tools themselves, PicMonkey is more modern and smooth. Picnik spent endless engineering resources and bumped up its storage bills by offering a key feature called “perfect memory,” where people could return to any project at any point and undo everything they’d done step by step. “As it turned out, a very small fraction of users used it,” Sposato said. PicMonkey doesn’t have that.

But as for Sposato’s goals for the startups, they are actually quite different, he said. Where he had dreamed of keeping Picnik independent and taking it public, he hopes PicMonkey can be a family-friendly company that’s flexible about things like kids at the office. “I want it to be a happy little island,” he said.

That’s the kind of thing he has trouble imagining selling to Google or someone else. “When you’re part of a bigger company, HR just wouldn’t permit it,” he said.

So how does PicMonkey fit into the pattern? “I feel more mellow about things,” Sposato said. “I just want this to be the world’s most popular photo editor.”

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