353: Turning Your Side-Hustle Into A $1B Empire: Shutterstock’s Jon Oringer

After launching 9 companies, Jon Oringer didn’t really think that his 10th company Shutterstock would be the one to stand out from the crowd. Started as a side-hustle, Oringer launched the stock photography business with $10k. Today, his estimated net worth is sitting at $1.5B. Safe to say that Oringer’s journey has been pretty impressive.

Based out of New York, Shutterstock is a global provider of stock photography, stock footage, stock music, and editing tools used by the world over.

In this Foundr podcast episode, Nathan Chan sits down to speak with Oringer to discuss how he launched Shutterstock, creating the first pop-up blocker, and what he believes will be the future of Fintech and entrepreneurialism.

Nathan: The first question I ask everyone that comes on is, how did you get your job?

Jon: I was in college. I was trying to not get a job actually and what wound up happening was Shutterstock was my 10th company in a row just trying to start different businesses. Shutterstock turned out to be the one that I did not think would be the one that became the standout, but there were several software companies that needed images. I spent time trying to find those images.

I eventually wound up just shooting those images myself. When I did, I then tried to sell them on a website. I threw them on a website called Shutterstock. That’s been my job for the past 17 and a half years.

Nathan: Yeah, crazy. Like I said, we’re a customer, love the service. We use your images a lot for a lot of the content we produce. Yeah. I’m curious, like you mentioned, and I was reading when doing preparation. You said this was your 10th or 11th startup that you tried. What were the other ones? What was the iteration process to go, “You know what? Move on to the next one. You know what? Move on to the next one.” Because I think, yeah, that’s a lot of tries.

Jon: Yeah. I mean, they each were teaching me something different. I was making progress. It felt like I was getting somewhere, and they weren’t all complete failures. A couple of them were software products. They were on the Windows platform. They sold hundreds of thousands of dollars a year in sales, but I was looking for that bigger company. I was trying to figure out how I could build something really big.

At the time I was working on a privacy and security software company called SurfSecret. That was when I needed the images to market the product. That was where I started to build Shutterstock. Again, Shutterstock was a side project, but I didn’t realise that was going to be the one that eventually became the big one.

Nathan: You said you were looking to build something big. What was different between Shutterstock and the others that gave you that kind of signal that it was going to be big?

Jon: It was the month-over-month growth, right? I wasn’t a photographer, but I mean, I can take a picture here and there, so what I was doing was I was putting my really bad photos on a website and people were buying them. Really large companies were buying my images to market their services, market their products. That was where it started to occur to me that if I could get professional photographers on the platform, I could build it even bigger. That was the data I was getting when I would talk to the customers, and so it grew from there.
Nathan: You saw the month-over-month growth. It was growing quite fast. Weren’t there stock photography websites around back then, or this was a newfound content?

Jon: No. No. There were a few and they were just starting to … I think, look, this was 2003. It was a while ago. Even the stock photo websites that existed had strange licensing terms. Like you could only use the images geographically in a specific place. The internet doesn’t care about geography, right? Some of the things we take for granted today that every business is very global. That was not the case.

I mean, initially out of the gate, all of my images were available royalty-free through a paid subscription for global use, which was a big unlock for the market. As I started to bring on other photographers, the value of that subscription just increased really dramatically.

Nathan: Yeah. See, that’s interesting because the licencing, that is a big component around your guys’ service. How did you work that out and work out the unit economics to get that to work and work out like, yeah, that scale? Because you’re dealing with … Yeah. It’s a two-sided marketplace in many ways. Not exactly, but you’ve got your talent on one side and then you’ve got the value prop and the consumer.

Jon: Yeah. It actually is a two-sided marketplace. Yeah. I mean, it grew pretty organically from both sides of the marketplace, right? More photographers upload their images, more buyers come in, download those images. That instant feedback between the two sides of the marketplace is what drives the network effect and builds the business from there. That is what happened over those years.

Nathan: Yeah. When it come to the licensing, because there wasn’t that many stock photography sites around, how did you know the best way to do it? Like whether it’s … Yeah. Because that is quite complicated.

Jon: Well, the twist in 2003 was subscription. Images were sold one-off but I was running dozens of A/B tests every week on different images. I needed what would look like a subscription so I built what I would’ve wanted. That’s how I’m building all the companies I’m building today, all the new incubations. They’re things over the years that I would have wanted myself that I felt like were missing from the market.

Nathan: Yeah. I see. You’re scratching your own itch. Okay. Interesting. The growth was really fast. Just month-over-month growth was really fast. Can you give us some kind of numbers of indication of what that looked like in the first year perhaps just for context?
Jon: Yeah. I mean, well, back in the day, I mean, there were months where we tripled month over month.

Nathan: Okay. Then, so what happened next? You started building the team, eventually ended up IPO’ing but yeah, what happened next?

Jon: Built the team, built the business, eventually moved from images to footage to music. I kept working on the workflow characteristics of the product. It is a workflow product. Yeah. Fast-forward 17 years later, now I’m executive chairman, hired a CEO. Now spending half my time on Shutterstock, half my time building some other stuff. Many images per second, hundreds of millions of dollars in revenue.

Nathan: I see. I’m curious around the IPO and yeah, eventually why you ended up stepping down. Was it because you felt that you could best spend your time elsewhere or?

Jon: What I started to realise … I mean, Shutterstock’s a really big company. It’s got a dozen plus offices. It has close to a thousand employees, at 650 million in revenue and growing. What I started to realise was my skill set is best used right now for building companies from scratch. I tried to do it inside Shutterstock. We had some success, but at the speed I wanted to move, it’s hard to do that in a thousand-person company.

I also realised that at the stage Shutterstock was at … I mean, and it’s unique even for a founder to go from start to 17 years later. I had run a good distance and it was time for someone to take over from there. When I met the right person, I put them in place. His name’s Stan and we worked very well together. I talk to him every single day and I’m very involved in the strategy of the business still as executive chairman, even though I stepped down as CEO.

I’m spending half my time as executive chairman of Shutterstock and the other half incubating several new companies per year. Finding entrepreneurs, matching them with ideas, getting them excited, getting them the initial funding, sometimes, which I do myself. I have weekly calls with them and we’re trying to drive several new businesses. Hopefully I build a few more Shutterstocks.

Nathan: Exciting. Yeah. I want to talk about what you’re up to at the moment, but I’d love to just delve a little deeper on the Shutterstock journey. I’m curious as well, when it comes to the scale-up phase, obviously incredible success. There are some key components there to take a company that has product market fit into extreme scale over nine figures in annual revenue.

What do you believe are some of the key components that you would share for anyone watching this or listening, that perhaps they have hit product market fit? They found something that’s just the growth is not a grind to get customers. It’s really strong. It’s like what you described. What do you think are some key things that you did strategically to really ensure that you had a really successful business on the scale-up phase?

Jon: Yeah. The scaling is important. I mean, you don’t want to scale too fast. You don’t want to scale too slow. There’s a sweet spot somewhere there in the middle. There were times that we would put our foot on the gas in a very aggressive way and then there were times we would ease off of that, get our back office in order and then go for another round. It involves pacing.

You need the right team at the right time. You have to spend the right amount of marketing. You have to raise the right amount. You don’t want to raise too much value yourself. You don’t want to raise too little and be constrained for growth. You don’t want to go too scorched earth because you can implode, but you also want to make sure you’re running as fast as you possibly can because there’s probably someone behind you.

All of these factors together are important to balance and to keep on a steady path of making the business get bigger and bigger. Yeah. Every stage is different, but that’s basically it.

Nathan: When it comes to team, you need certain senior team members that have seen the movie before. Do you agree with that? Depending on what stage you’re at?

Jon: Yeah. I mean, it depends. I mean, in the beginning, definitely you want people who have not seen the movie before, because you don’t want them to be jaded by the fact that there could be something lurking out there that may or may not stop us. I mean, in the beginning there’s a bit of recklessness in a startup, that’s actually why some of the stuff I’m doing today is so exciting and why I’m excited to be back into it.

In the earlier stages, you can be less organised about it and drive growth in more haphazard ways. As you get bigger and bigger, you want the entire team to be completely aligned and moving the boat takes a longer time to reposition it.

Nathan: Yeah. You need systems and you need processes, and you need predictability. Yeah. Yeah. You can’t just try random things for fun and come up with crazy ideas. You can all the time, but it’s got to be focused.

Jon: Yeah. That’s right.

Nathan: When it comes to, I guess, team in those days, as you’ve built at the various levels, all the way to multiple nine figures, what do you think has been critical for finding and attracting great talent and retaining great talent?

Jon: Yeah. Build a great business, build a great culture around that business, continue to foster innovation, allow for entrepreneurship, and keep the team motivated through all of that.

Nathan: When it comes to keeping the team motivated, that depends on the person, right? What advice do you have there?

Jon: I mean, it’s different for everybody and it’s different for everyone you’re managing, but you need to find people that are excited to solve the problems ahead. You need to find people that match your drive. If you’re starting a company, generally you have a certain level of expectation as to where you want to be in a certain amount of time. You need other people to be on the same page with that and if you get all that stuff right, it’s a lot of fun and the upside can be huge.

Nathan: Yeah. I agree. How’d you find and meet your CEO? Yeah. The CEO of Shutterstock now.

Jon: It’s actually very difficult to find … The transition from founder to outside CEO is a very complicated one. Companies obviously do it at all different stages along their lifespan. Yeah, I mean, I started thinking about this three or four years ago now, so it took a while to make that happen.

You bring people in and you test them. Maybe start with them as chief operating officer and see how they are able to put together plans and develop teams and build strategic plans and differentiate the business against the competition and see who the people they bring in are.

How they build a team is really an interesting characteristic across different people. You won’t always get it right but when you find the right person, I think it will make sense at that stage.

Nathan: Yeah. No. That’s a really interesting take around bringing on an outside CEO and testing them out, maybe as COO or just as even consulting or in some way, shape or form, and just trying on a test project.

Jon: Yeah. [crosstalk] it comes from a board member. Sometimes it comes from a consultant. Sometimes it comes from a different position within the company, but having someone come in cold is not the most ideal way to do it, in my opinion.

Nathan: Hey guys, I hope you’re enjoying this episode and learning a tonne. As you know, in this series, we interview some of the greatest founders of our generation to find out how they did it.

However, if you’re thinking of starting your own business and you want to hear from some incredible stories from everyday people like you or I, who are actually in the trenches, only been building their business for maybe one year or two years, that are building right now and they’re really the early stages, but they’re getting success, you should come and check out our new podcast From Zero to Foundr, hosted by our community manager, Mollie Flynn.

These are in the trenches stories from our very own successful students that have gone through some of our programmes. People just like you, who are deep within the process of building their very own successful business. These are the founders of tomorrow. You can find the From Zero to Foundr podcast on all platforms. Remember it’s Foundr without the E.

All right. Now let’s jump in the show. Let’s talk about what you’re working on now, because it is a common thread when I speak to founders where they’ve gone and they’ve had incredible success and the company’s massive, a lot of employees. I miss the early days of just the scrappiness and just getting on the ground again, rolling up your sleeves and not getting in people’s way. I’m curious, what are you working on right now?

Jon: Yeah. Right now I am incubating several companies at once. I’m working with some people I trust on these businesses and different ideas, different people. Essentially, I’m taking my list of ideas that I’ve built over many years, and some of them come to me just about every day. I have a list of people I’ve worked with. I have a list of people that I’ve targeted on LinkedIn and other places I think could be entrepreneurs.

I try to get them to essentially stop what they’re doing and start something brand new. Often they haven’t been entrepreneurs before that. I’m not always successful, but they need to take on some more risks than they took on before. Usually get them a salary, and if we can get them to a good place, sometimes you see it workout really well really quickly.

Nathan: Yeah. Wow. This is an interesting model. It’s kind of like your own very private Y Combinator?

Jon: Yeah. Exactly. It’s my own private incubator.

Nathan: I see. How many are you working on right now?

Jon: There’s about five of them right now that I’m working on and they’re all at different stages. They’re all in different areas from FinTech, to telemedicine, to big data, to consumer products. They all have CEOs. They’re all funded the first round with me and a few other people, and we are trying to essentially get them off the ground.

Nathan: Are they all in stealth?

Jon: For the most part they are right now. I mean, I transitioned to this role on April and started pretty fast, but to have five of them in less than five months essentially is pretty aggressive. Yeah. They are in stealth right now. One of them is doing a private fundraising round, but yeah, they will be out there soon. They are products that people are going to be using.

Nathan: Exciting. Yeah. Can you take us through that process of what that would look like? I find it even interesting that you said on LinkedIn you find people that you … Like, who are these people? How do you find these people that aren’t entrepreneurs that you want to convince them to be?

Jon: Yeah. I mean, it’s been an interesting process so far. I’ve probably reached out to 50 people on LinkedIn, probably talked to about 30 of them. I’ve reached out to probably 20 or 30 at Shutterstock employees who they don’t work at Shutterstock anymore and, well, I thought they would be interested. I have an idea list of about a hundred ideas. Some of them I cross out. They turn out to be bad ideas. Some of them I add. At any one time, there’s between 80 and a hundred on there.

I try to see what the people are interested in, what they would want to build, how they would build what they’re going to build. I mean, I’m looking for people that will run through walls. I’m looking for people that will do whatever it takes to get a company off the ground. I’m looking for people that can bootstrap. I’m looking for people that are willing to quit their jobs if they have them right now, which most of them do.

It’s a pretty good job market right now and so finding these people often involves taking them out of their current position. I backstop some of their risk. They’re not going to be making as much base salary as they did before, but they’re going to own a big chunk of a company, sometimes 20, 30, 40% of the business that they’re going to get to run as CEO.

Nathan: You strategically don’t match their salaries, what they might be on because they’re probably maybe at an executive level or senior management position, right?
Jon: They’re not usually that senior. They can be. I haven’t found anyone that senior yet. I mean, they’ve often been young hungry engineers that want to be founding CTOs or CEOs. Some are in management, mostly are engineers. Look, I intentionally don’t want to pay them exactly what they were making before, because they’re taking a bit more risk. They should be able to do that because they’re getting a large piece of equity.

It’s not about being able to afford paying them the … I mean, we can as a startup. It’s just, there’s a different mindset in being a founder and switching from a job to being a founder. You are trading salary for equity.

Nathan: Yeah. Makes sense. When you canvas or prospect these people, are these people generally people you haven’t met before and they have a certain kind of profile, or is it mainly people in your network ex-Shutterstock, or?

Jon: It’s been mostly people in my network, although I have been getting to know some people that I didn’t know before, and it’ll take me a little bit longer to get comfortable with them. When I do, I think there will be some people outside of my network that’ll become founding CTOs or CEOs of these companies.

Nathan: The conversation looks like, “Yeah. Look, what do you think you’re doing? This is what I’m thinking of doing. I’ve got this list of ideas. What excites you?” Then you see where that person gravitates? Or you as a collective? Yeah?

Jon: Yeah, exactly. Yeah. Throw out some ideas. Usually we can triangulate around an area that they’re interested in. All the ideas are organised by category. If AI comes up, I can focus on that area. If it’s a consumer product, I can zoom in on that area. If it’s big data, if it’s low-code/no-code et cetera, we can narrow it down.

Nathan: Got you. Then what is the expectation around going from really solidifying that idea and going to a working prototype or MVP, having something to go to market on, or at least test? What does that kind of timeline look like?

Jon: It’s fast. We’re usually looking to get to MVP in a few months’ time.

Nathan: It tends to be someone like a technical-

Jon: Lately it’s been technical, but I have found someone who just has a good business mind, and I feel like can hire the technical co-lead to them.

Nathan: If that is the case, you would provide the funding to pay that person as well, yeah?

Jon: Yeah. Usually the first pre-seed round I’m doing with one other person.

Nathan: Then you guys would work on your list and then off you go. Then what are you looking for when it comes to knowing that there might be some early-stage traction? Do you have parameters that you’re looking for? Do you say, “If we get to a hundred customers in the first week like with Facebook …” Yeah.

Jon: Yeah. There’s always a certain number of KPIs involved and we match those KPIs to the weekly size in business, right? If you’re looking for orders, we want to make sure that we’re hitting our targets. If we’re looking for traffic, we want to make sure we’re hitting those targets. Yeah. It’s classic lean startup stuff. You have KPIs. You’re driving them to try to match your targets and you’re iterating quickly and often.

Nathan: Just because the people listening right now might find this really valuable because they might be in that stage, I’m curious, how do you define those targets? If it’s a direct-to-consumer brand like versus an enterprise SaaS, how do you measure or know what is a good target to know you’ve hit product market fit or you’ve got really early-stage traction?

Jon: Yeah. I mean, it depends on the business. If you’re a consumer brand, it’s going to be number of orders per week, visits to the website, cart abandonment, returns. If you’re a SaaS product it’s going to be what does your way to pipeline look like? How many inquiries are there? How many conversions are there? All along the pipeline, where are the different people in the pipeline? It depends on the business.

Nathan: Yep. Got you. That makes sense. Then I guess working towards wrapping up, because I’m really interested around this idea. I’ve never heard anyone doing this kind of concept of this kind of your own personal incubator working on like five, or probably more, right? Where do you look to cap out? Or you just want to…

Jon: There should ever be a cap. I mean, there are lots of ideas on that list. I think there’ll often be pivots, right? There could be entrepreneurs that work on one idea. We don’t actually get some traction on that idea and then they pivot to another one. We’ve already had one of our founders do that actually. The second idea is getting a lot more traction than the first one got.

Nathan: Yep. Got you. Would it be difficult with your time to focus? Even like you’re splitting across five, you have in a way CEOs running these incubated ideas but yeah, eventually you would cap out, right? Or you just want to … Yeah. What is the goal here?

Jon: I mean, there’s no goal. There could be dozens of companies. Eventually they get to their own sustainable place. Yeah. All of these companies, I mean, the ones that are done right, the one where the CEO is executing appropriately should be able to get to their own exit velocity. They should be able to get to a point where they’re sustainable on their own and then could be sold. They could be IPO’d. They can be cashflowed.

Nathan: Yep. That makes sense. Is one of the reasons you’re doing this now is because of everything that’s happening? They say that one of the best times to launch a company is during a recession and we’re going through that right now. There’re just so many problems to be solved and a lot of opportunity. Is that one of the reasons that you’re doing this right now?

Jon: Yeah. Well, look, in tech it doesn’t necessarily feel like a recession, but Shutterstock was started in 2003. That was right after the bubble burst for tech. That was right after 9/11. That was definitely a hard time. Nobody was starting companies in tech back then.

I do think that when there are times of distress, those are times you double down, whether it’s a recession, a global pandemic, whatever the issue is, getting to work during that time you can create some crazy value out of that.

I think it helps everyone. You create jobs. You’re staying focused. You’re creating value. It’s a good time to do that.

Nathan: Yeah. No, that makes sense. Yeah. Because look, I’m seeing a lot of interesting companies being started during this time. A lot of deal flow around there I’m sure. Like I know you’re an investor as well. Yeah. There’s a lot of things popping up, interesting things people are starting. It’s quite fascinating.

Okay. Look, we have to work towards wrapping up mindful of your time, Jon. This has been a great conversation. A couple of last questions, one just around outside looking in you’ve built an extremely successful company. You’ve IPO’d it. You’ve put in a CEO now and many could say like, “You could just retire right now?” Right?

I think sometimes people outside looking in would think, “Well, it’s enough.” I want to ask you, is it ever enough?

Jon: I mean, you become an entrepreneur because you like creating companies, you like building businesses, you like seeing things grow that you’re involved with. Even though I’ve been successful with previous businesses and I can retire, that doesn’t seem appealing. I want to build more. I want to build more than I did before. I want to build several Shutterstocks.

Nathan: Love it. Then last question is … Or two more, one more. One is just, any final words of wisdom for our audience of early-stage startup founders? Then second, where’s the best place people can find out more about yourself and your work?

Jon: Sure. I would say words of wisdom, I mean, in every case that I’ve been successful, I took on every job myself before I handed it off. Early on in Shutterstock I was the first photographer, first customer service rep, first engineer, first UX designer, first marketer. It’s important to do those things before you hand them off, because even now I think back to those times and they taught me a lot.

They taught me who to hire. They taught me how to manage those people that we hire. Then where to find me? All these different social networks. Instagram and Twitter are two great places that I’m often posting stuff and you can find me there.

Nathan: Amazing. Well, look, thanks so much for your time, Jon. I really appreciate it.

Jon: Thank you. It was great meeting you.

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