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The morning after

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Flickr co-founder Stewart Butterfield is a free agent again. After creating the world’s premier online photo-sharing community, selling it to Yahoo and spending three years working inside the walls of that now troubled internet giant, he’s out and ready for something new. Paul Ryan sat down with him in Melbourne at the recent X|Media|Lab conference.

Stewart Butterfield has a hangover.

If it’s a bad one, brought on by one too many liquor shots at an X|Media|Lab networking soiree the night before, he’s hiding it quite well. Then again, he is 30 minutes late, sauntering through a queue of shrill school children at the Australian Centre for the Moving Image. He approaches with an insouciant ‘where do you want me’ demeanour, much to the collective relief of an ad hoc coalition of media minders, event organisers, photographers, newspaper journalists and me.

The digital media crowd that has gathered in Melbourne on this dreary August weekend considers Butterfield something of a rock star. He has already done what so many of them are trying to do – make the internet pay.

In 2003, Butterfield and his wife, Caterina Fake, created Flickr, a side project that quickly grew to become the global benchmark for photo-sharing websites. In March 2005, Flickr was acquired by Yahoo for US$35 million – a measly sum in light of the subsequent big-buck acquisitions of MySpace (US$580m) and YouTube (US$1.65b). But Flickr was the first big web 2.0 acquisition. It paved the way for all that followed and reignited the hopes of digital media entrepreneurs across the globe that the dot-com demons had finally been exorcised; that a new era had dawned.

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Butterfield is short – maybe five feet eight – with red hair and uncurated facial stubble that exists simply because he feels no compulsion to shave. After all, he’s between jobs… in the best possible way.

At Butterfield’s request, we begin our conversation outside where he can smoke. He’s certainly no prima donna. In fact, he’s surprisingly devoid of vanity, impatience and everything else in the bag of affectations that celebrities tend to haul around.

Born and bred in Vancouver, Canada, Butterfield is not your typical entrepreneur, if such a thing even exists. Not many entrepreneurs have a Masters Degree in Philosophy from the University of Cambridge. When asked whether his philosophical education has helped him as an entrepreneur, Butterfield doesn’t hesitate. “The start-ups that are run purely by business people generally aren’t very good.”

SNAPSHOT

inside_2Butterfield came up with the idea for Flickr during a bout of severe food poisoning on a visit to New York in 2003. The technology was a novel component of the massive multimedia online game that he, Fake and their team at Ludicorp were trying to develop but struggling to fund in the post-dot-com malaise. The plan was to build Flickr, sell it quickly and use the profits to fund the development of the game. By mid-2004, Flickr had taken off and the game project (called “Game Neverending”) was dropped. Later that year, investors began to take more interest in web 2.0 companies and Flickr, the web 2.0 poster child, started to attract serious investment suitors. The Yahoo acquisition was finalised in March 2005, not long after Flickr’s first birthday, and Butterfield and his team went to work at Yahoo headquarters in Sunnyvale, California.

Given that Google paid US$1.65 billion for YouTube just 19 months later, does Butterfield regret selling when he did?

“Things still looked different in the beginning of 2005,” he says. “Flickr was the first of this new wave of acquisitions. Four or five months later it was MySpace. YouTube hadn’t even been started at that point. Had we known how things were going to turn out, we probably wouldn’t have sold when we sold.

“I can’t say that I have any regrets about selling when we did…. It all worked out well and we still got to make Flickr. There were 400,000 users by the time we were acquired and now it’s 29 million registered users and 50 million uniques [visitors] a month.”

EXPOSURE

For a web 2.0 application to emulate the kind of popularity that Flickr now enjoys, it needs to do two things. First, it needs to address a significant consumer need, and to do so simply. It’s no coincidence that Flickr’s meteoric rise was achieved in the slipstream of mainstream broadband uptake and the growth to near ubiquity of personal digital cameras. Virtually everyone in the developed world now owns or has access to a digital camera. And they all want to share their digital photos.

The second thing a successful social media web application needs to do is create a platform on which users can create a digital representation of themselves – however brilliant, mundane or kooky. Having done that, it needs to get out of the way and let the users define the experience.

You might expect Butterfield to take a sanctimonious line about Flickr being a meeting place for cutting-edge artists to exhibit and discuss high art. Quite the contrary. He freely admits that the vast majority of photos posted to Flickr fall into one of four categories: sunsets, flowers, babies and pets.

“Obviously Flickr is a little bit broader than people trying to upload their best artistic photography,” he says. “Most of the people don’t care about art. They might care about art in the broader sense but they’re not on Flickr for purposes of creative expression. They’re there because they like the tagging system or think the organising is good – whatever reason it is, they find it’s a good place to host their personal photos. The people who are there to explore their own creativity or collaborate with other people are a much smaller group.”

But, of course, Flickr isn’t all ‘sunshine, lollypops and rainbows’. It’s a tool that has helped change the face of media. When the Australian embassy in Jakarta was bombed in 2004, the first photos of the event were posted on Flickr, almost 10 minutes before the mainstream news agencies. Flickr again scooped the agencies after the London bombings in July 2005, when users in close proximity to the four blasts posted photos taken with their mobile phones and cameras. In response to this challenge to their relevance, CNN (iReport) and virtually every major news agency have introduced online features where users can submit their personal media of newsworthy events, in return for acknowledgement. And in July this year, Getty Images entered into a partnership with Flickr that allows Getty to offer Flickr photographers licensing and payment contracts in line with those held by existing Getty freelancers.

MONTAGE

Flickr certainly enjoyed the advantage of being an early mover, but it wasn’t the only photo-sharing site available. It spread like wildfire partly because, like most successful social media sites, the community tone was established early on. This was achieved by exercising some good old fashioned autocratic control that many people would consider anathema to the culture of open, democratised media that defines the web 2.0 movement. In short, when a web service is built around the free expression of users, it’s hard work keeping the trolls and spammers at bay.

They took a carrot and stick approach to fostering community. There was zero tolerance for users who uploaded pornography, behaved in an anti-social manner or attempted to make commercial use of Flickr. “The internet at large is full of spam and porn and bad advertising, and Flickr was kind of a bastion of purity in that sense. We were pretty controlling, actually,” says Butterfield.

But on the carrot side, the team – especially Fake and Australian George Oates – spent an inordinate amount of time in those early days individually welcoming new Flickr members and seeking their feedback about the service. It had the double effect of engendering a positive community feel and converting those early adopters into Flickr evangelists, spreading the Flickr gospel through blogs and word-of-mouth.

Pleasant online communities are notoriously difficult to create and maintain. Too many developers assume that the elixir resides in technology. As a result, most become too restrictive and sterile or they descend into free-for-alls. Flickr’s success in this area calls to mind the famous quote by Samuel Goldwyn: “The harder I work, the luckier I get.”

RED TAPE AND BLUNT SCISSORS

Flickr founders Stewart Butterfield and wife Caterina Fake
Flickr founders Stewart Butterfield and wife Caterina Fake

Yahoo didn’t buy Flickr because of its number of members or level of web traffic in early 2005 – both of which were humble by Yahoo’s standards. Flickr was hot property because it had created a simple yet powerful web application around which a vibrant and fast-growing community had coalesced. Yahoo’s more progressive executives were so impressed with what Butterfield and Fake had created that they began talking about the “Flickrisation of Yahoo”.

“It didn’t really come out that way, but we fucking tried,” says Butterfield with a slight shake of the head.

“I had never worked in a big company before…. Before, if we had to make a decision, we’d just make it. If there was risk involved, it was up to me to determine whether we were going to accept the risk. I’d think about it for a little while and then do it or not do it. Instead, it became a process where we would have three or seven or 12 lawyers involved and things became a lot slower.”

The attrition rate for start-up entrepreneurs who join the big companies that acquire them is high. Daily battles through reams of red tape and corporate politics is usually enough to send them packing after less than a year. Butterfield admits to regretting joining Yahoo many times during his three years at the company. But in the end he stayed because of his love of Flickr and because its success helped them win a lot of arguments.

“We were in a special position, partly because the weight behind any argument that we got into about how things should be done came from demonstrating success. There were 300,000 people when we were first acquired, but it wasn’t long before we were 800,000 then two million then 10 million…. We won most of the arguments most of the time, but that’s because it was working. It’s harder when it’s an unproven, untried and untested idea that you’re arguing for.”

WIDE-ANGLE LENS

In my research prior to meeting Butterfield, I noted the word “cantankerous” used more than once to describe him – most prominently in a Valleywag blog post introducing his leaked resignation letter to Yahoo management in which he deployed a “bizarre” tin-smithing metaphor to describe his relationship with Yahoo and his decision to leave. (If you haven’t read it, you really should. It’s hilarious.)

Butterfield immediately dampens my speculation that his resignation letter was a penetrating allegory about his disaffection with Yahoo and, by extension, explaining why Yahoo executives have been departing en masse and why the company became a takeover target for Microsoft.

“To be honest, there wasn’t much of a message hidden in that letter,” he says, explaining that it was a play on an internal memo written by his boss, Brad “Peanut Butter Manifesto” Garlinghouse, about Yahoo spreading its resources (‘peanut butter’) too thin. “Brad said that HR needed me to send an email saying when my last day would be. And I figured that someone has to read that shit, so I might as well make it funny for them.”

When Butterfield and Fake joined Yahoo they made a commitment to each other that they would only stay for three years. Butterfield is adamant that they both left because those three years were up. “It was very difficult to leave Flickr for me. But, at the same time, if you start from the very beginning with Ludicorp, it’s was six years, and that’s longer than I’ve done anything else in my life…. It’s time to do something else.”

Butterfield had a front row seat during Microsoft’s failed hostile takeover bid for Yahoo earlier this year. “Who knows what Microsoft’s intentions really were?” he says. “Whatever they were, the result was that Yahoo was pretty badly damaged and maybe that gives Microsoft a better chance of becoming number two. Maybe that was the intention all along…. But I think, never mind the last six months, it was sad that Yahoo was in the position that Microsoft could even make a bid to acquire it. Yahoo had excellent potential when we joined and we were very excited about the future, but it failed to execute on a lot of those things. It’s too bad, because it didn’t have to be like that.”

TIMELAPSE

inside_4Butterfield is taking the northern summer off, practicing yoga, riding his bike, teaching himself classical guitar, baking bread – all the things he has always wanted to do but didn’t have time for.

He admits that he is looking forward to working on another project in the future, but is just enjoying his success at the moment and feels in no rush. “You see this in Silicon Valley – people don’t get any pleasure from their success. They just feel challenged to do it again to prove that it wasn’t a fluke; to prove that they are really clever. I’m trying not to get sucked into that, you know?”

I leave him to prepare the keynote presentation he is due to give at the X|Media|Lab conference in an hour’s time. But before I leave he shows me a photoslide from his presentation – of Barack Obama addressing a crowd of over 200,000 Berliners. The shot is taken from behind Obama, revealing the sea of people.

“Look closely,” says Butterfield.

In virtually every audience member’s hand is a digital camera pointed at the US presidential candidate. A million shards of history, many of which were uploaded to Flickr that night.

“That makes me smile,” he says.

Paul Ryan is Editor of Anthill Magazine.

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