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Ryan Sit: Dropshots, Inc.

SP: Can you tell our readers a little about your background?

RS: I went to UCSD and got a BS and MS in computer science. Business has always been an interest and I picked that up through reading news, books, research, and practice.

SP: What type of service does DropShots offer?

RS: DropShots is a unique service that helps people keep relationships connected through photos, videos, and conversations. Since DropShots was intended to primarily support communication and connection between close friends and family it had to be simple and easy to use for any level of computer user. Most of our aunts, uncles and grandparents tend to not be that computer savvy. My greatest computer engineering challenge was to finally make available a personal media sharing service that was usable by anyone so everyone could keep connected through it.

SP: How do you differentiate yourselves form other video sharing services like YouTube, Vimeo and Sharkle?

RS: 1. DropShots was designed for an entirely different purpose - a means to improve human relationships and the emotional bonds between people. DropShots is not just another technology solution for the purposes of posting digital photos and videos to be viewed on the Internet. DropShots uses the sharing of life experiences captured on photo and video to support or "anchor" the relational part of the process; the interactive communication module of the site - where close friends and family keep in touch and discuss the happenings what is going on in their life. You will notice that the conversation/interaction is the centerpiece to the site, not simply the photos and videos.

See sample site: http://www.dropshots.com/moorefamily

Additionally, many other photo sharing sites are really just fronts to entice you and your family to buy prints. That is their business model and agenda, so it is not really designed to be an ongoing relationship portal so to speak.

2. Because DropShots was designed specifically to connect families together it had to be incredibly easy to use and accessible by every member of the family - including grandma and grandpa. As a result DropShots is by far the easiest to use system to share personal digital media with the entire family.

Most every other service for photo (esp. video) was originally designed by and for the technically savvy, the generation Z market, or as a place to host photos for the online bloggers. You are right, there has been a plethora of them and as a result they have tried to out-feature each other ultimately making their systems more complex and intimidating for novice users.

3. Private versus Public. The big technology interest and trend at the moment is to catalogue and index all the digital media on the Internet - user generated photos and videos. Most all the photo and video sharing services display and make available your images to the Internet at large. At DropShots it is exactly opposite. The purpose is to be able to share personal life experiences with an invited close circle of friends and family. None of our user`s pages are indexable by search engines and none of the "tags", descriptions, captions or comments are searchable outside one`s personal page. This is a huge distinction for family users.

In summary, DropShots is much more than a place to upload your photos and videos; it is a destination to connect, share life experiences and keep in touch with family and friends - privately. This is why before it was even commercially available more than 50,000 people joined DropShots by word of mouth alone - there is much more to it than photo and video posting.

SP: Throughout the development process, what was the biggest obstacle standing between you and your dream to make DropShots a reality?

RS: I think the main thing is you need to keep yourself motivated, most obstacles can be solved if you are motivated enough to go through the problems. If starting your own business has always been a lifelong dream of yours that can help fuel motivation. Before we got funding, finding time to work on DropShots after my full-time job was hard. Developing the business took time. Finding investors took a lot of rejections. Through all that I learned how to keep motivated to get past all the obstacles that come up.

SP: What were your start-up costs?

RS: Our main start-up investment was buying a new $500 web server. From there we bootstrapped from serving our website from my home DSL internet connection, then to a friend`s home cable internet connection, then finally to a co-location facility. We never spent more than we earned on recurring monthly costs. That gave us good motivation for us to improve our business model so we could pay for more bandwidth and continue our service. Only when a new marketing plan pushed our user growth faster than our bootstrapping model could sustain, and increased competition was foreseen, did we seek outside investors.

SP: How did you fund the cost to start this business?

RS: I used my own cash and time, and bootstrapped for the rest of the costs. I must mention that you can`t bootstrap every type of business. When deciding to start a business, finding one with a business model that can be bootstrapped should be a important consideration. Furthermore, because of my background I was able to do the programming myself. When choosing to do a business it can be easier to start with an idea that builds upon a skill you or a business partner already possess or can quickly learn.

SP: What was the thought process behind the design of the DropShots website?

RS: Simplicity, value, and solving problems. We started with the idea of making something that is valuable but hard to do as simple as possible. Then we continued to build more and more value on top the solution. We started with photo sharing, but found more problems and added automatic organization, a conversation system, video sharing, and more. The initial idea turned out to be just a starting point for the design process.

SP: What was the most important element of the website to you at the time you were designing it? Why?

RS: One of the most important elements of the website is our video sharing. Before starting the feature we already had a really simple photo sharing experience, just drag and drop. We realized that in order to add video and not decrease our simplicity, sharing videos on DropShots would need to be as simple as photo sharing. After days of researching many different solutions we pioneered a new way of sharing video online. We found a way to convert many different video formats into a single Flash video format that is playable on 98% of web browsers. We knew we were doing something revolutionary 2 years ago when we first designed the feature. Now our video sharing solution has been widely copied and is currently driving the recent demand for personal video sharing online. That is exciting to see.

SP: I`d imagine that DropShots would need a very fast data transfer method to support all of the 150,000 video clips and over 2 million photos that are uploaded and downloaded on your website. Do you support this in-house or do you outsource this service?

RS: The normal way to support a large amount of bandwidth is place your servers at a co-location facility designed for pushing large amounts of bandwidth. You can place a server in a co-location facility for as low as $100 a month and it is the most cost effective way to buy bandwidth.

SP: Can you talk a little bit about your marketing strategy method for getting DropShots into every family`s living room?

RS: Our primary marketing strategy is viral growth. There is no other strategy as effective viral growth. One of the key considerations when developing a company is how you are going to get your customers. If you have a great product, but no good way to market your product, you don`t have a good business. You need both. Our viral growth has been astounding to me. We are growing at a rate of more than 35% month to month on viral growth alone. Now we continue to add tools to enable and support viral activity but beyond an adword or two we have not spend a single dollar on advertising yet.

SP: What avenues do you utilize to advertise DropShots? Which of these avenues has proven to be the most successful?

RS: As mentioned above 98% of our growth has come from one DropShots user uploading their memories then inviting their friends and family to keep in touch using DropShots themselves. Beyond that I would say for the start-up entrepreneur, the most effective way I have found to advertise online is through search engines. I would recommend that all entrepreneurs learn how to advertise through search engines. Increasingly search engine advertising is one of the most effective ways to advertise for almost all types of businesses.

SP: What kind of strategies are you implementing to support the future growth of DropShots?

RS: Since search engine advertising can only provide a constant amount of traffic each month, we are implementing more and more features to improve viral growth. Viral growth seems to be the only way for our company to sustain compounded user growth. We also are being approached by a variety of partnership opportunities that will provide us free exposure and new membership growth.

SP: The DropShots core concept is built around the Human-Computer Interaction; can you talk more about this?

RS: HCI (human-computer interaction) is the study of how people interact with computers and to what extent computers are or are not developed for successful interaction with human beings. Basically it is a study of how to make software simpler for people.

SP: Do you have any partners in your business? If so how did you establish the relationship and more importantly, how do you maintain it?

RS: I brought in 2 investors that are now the CEO and COO of the company. After contacting many different investors, one that I had met a year earlier was impressed by our progress and continual development of the business and recommended his organization to find us a mentor. That mentor turned out to also be a good match for an investor. After a few months of business development with our mentor a relationship grew and an investment was made. Before you even agree to take on a partner you must make sure you are socially compatible. A business partnership is much like a marriage.

SP: Do you have any paid employees?

RS: Yes, we have a number of paid employees and software contractors.

SP: What kind of business did you form? (S-Corporation, LLC, etc.)

RS: S-Corp.

SP: What is your projected revenue for the year?

RS: We are a closely held private company and do not disclose that type of information.

SP: What words of wisdom do you have for aspiring entrepreneurs?

RS: DropShots was a side project since spring of 2002 until an investment was made in the fall of 2005. If you are an aspiring entrepreneur don`t be afraid to start your own startup today on the side. It is better to have something that you can experiment with and learn from, than to start nothing and just keep aspiring and not practicing. Also don`t let rejections and obstacles stop you, instead use it for your energy to continue and improve your business.  


Sole Proprietor Stats:

Businesses Owned: Drop Shots
   
Total Employees: 11
   
Incorporation Type: S-Corp

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