Views from Phanfare CEO and Co-founder Andrew Erlichson

Link Phanfare Reaches Profitability

To our customers,

I am delighted to announce that Phanfare has reached profitability. We had our first profitable month ever in June 2010 and will continue to be profitable going forward on both a cash and accrual basis. This is a significant accomplishment for the company and I am incredibly proud of our team for making it happen.

Mark Heinrich and I founded the company in June 2004, six years ago. Our goal was to enable you to preserve your photos in original quality for generations to come. Like all startups, we have had our ups and downs. But we have never wavered in our commitment to you and preserving your photographic assets.

We raised prices in June to $99/year for Premium and $199/year for Pro to fix the economic model of the company and make the company sustainable.

We bet the company on that price increase. If significant numbers of you had quit, we would have had very few alternatives.

It took me a long time to get to the point of being willing to raise prices. I knew that raising prices would slow customer growth (it has), but I also knew that we were quickly running out of cash. My logic went like this: I will raise prices to a level where we will be profitable at our current size and let you choose whether we get to exist or not.

You have chosen to pay more for Phanfare and enable us to continue to serve you. Profit is not the purpose of business, but it is certainly a requirement. Peter Drucker believed the purpose of business is to create a customer, and I agree with that.

We have wonderful plans for Phanfare and we plan to be around a long time. We have visions of connected cameras and ubiquitous access to your photos and videos, all backed by a ultra-reliable service that preserves the fidelity of your images.

Thank you for taking this journey with us. It has hardly begun.

Andrew Erlichson

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  • Pkchina2005

    It was a steal at essentially $5 a month and at what amounts to $8.25 a month, it's still a great deal. For those of us who have trudged through the drama of multiple “free” sites, Phanfare is a great value. Everything I need and more.

  • bstring

    What great news! Congratulations! I hope to be able to help Phanfare grow for many more years. What looked like a gamble in the beginning has turned out to be a big win. Let's keep it going!

  • Article Submission Software

    Thats so exciting. Phanfare is great.

  • Ellen

    This is very good news 'cause I love Phanfare!!

  • technicallychallengedrelatives

    Hurray!!! I'm so glad we stuck around!!! (I finally just tried the new web organizer, too, and it rocks!)

  • Fourwhittemores

    We count on you …. don't let us down :)

  • erlichson

    All our photos and videos are on Phanfare too, only copy ;-)

  • Skosche3

    Very good news, great to hear! I am curious how you know if your customer base will stick with you after so little time at the higher fees. You said you were worried about growth at $99 and old customers don't have to decide until their membership is up for renewal whether their willing to pay the increase. Hope it all works out because I would like to see you guys turn a profit. Best for everyone.

  • erlichson

    We can extrapolate our attrition rate based on the attrition rate we
    saw during the first full month of higher prices. We also know how
    many people are scheduled to renew each month. After doing this for
    six years I have a fairly accurate revenue and cost model.

    Not that there isn't hard work ahead. Being break-even is different
    from driving strong revenue growth and generating lots of cash for
    reinvestment, but it's a necessary first step.

  • Skosche3

    Sounds like your on top of it. It is great to see a business run so well with awesome customer service and a fantastic product. Keep it up.

  • Alan

    Congratulations Andrew and the Phanfare Team!
    Here's to even greater success ahead!

  • chunkley

    great news! looking forward to many more years of phanfare.

  • Bob

    Congrats and thanks for a stupendous service. I have recruited several over to the Phanfare ranks and will continue to sing your praises. When I tell people they can get unlimited storage with original hi-res quality, and then they see my site compared to others they are used to, it's an easy sell. Well done.

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