I’m really enjoying finding interesting leaders who can share compelling stories via this video series. Earlier this week I chatted with Andrew Stadlen, former VP of Product at Flickr, about what can only be described as a Matryoshka dolls series of M&A:
2005: Yahoo buys Flickr
2013: Flickr buys IQ Engines (Andrew’s company)
2016: Verizon buys Yahoo
2017: Verizon rebrands Yahoo + AOL into Oath
2018: SmugMug acquires Flickr from Oath
The number transactions and speed of transitions are enough to give you whiplash, but Andrew did a great job of organically telling the story of multiple strategy pivots and peeling back the layer of the onion on how diligence and integration actually work.
Check out the whole conversation in this video episode. Note the full video is only for paying subscribers, so if you haven’t upgraded yet, you can do so via the link below.
We started the conversation talking about the original niche that Flickr carved out in the photography community, with Andrew sharing an example of the depth of content that was available (and still is).
Flickr became this thing where people could come together over their topic of interest around photography and form community and form relationships and friendships there.
But at some point during Yahoo’s shepherding of Flickr, multiple simultaneous growth strategies were employed, pulling the product in different directions:
become a stock photo licensing business competing with Getty Images
become a mass-scale consumer photo sharing application like Instagram
become the de facto personal photo storage platform ala Google Photos
Somewhat confounding, none of these strategies were designed to leverage Flickr’s core differentiators around content authenticity and community engagement. And it was all compounded by a culture that was not oriented around talking to and learning from users (who had originally made the platform what it was).
Our discussion also covered a really interesting tension around the importance of Flickr as a brand to Yahoo compared to the cost to run Flickr as a service. Eventually risings infrastructure costs, legacy user promises, and tricky licensing agreements painted Flickr into a corner and led to Verizon / Yahoo looking to spin out the product.
You have to watch the whole video to hear about all the potential suitors, their strategic hypotheses, and why their plans eventually didn’t pan out. But when SmugHug enters the picture (get it!) you immediately know there is a match:
SmugMug’s “irrational love of the product” was a ray of hope and the start of a new chapter. What I found a bit counter-intuitive about the SmugMug + Flickr thesis discussions was the focus on possibility instead of probability. Is there a scenario where this works versus all the reasons it can’t work? We touched on a similar theme in a recent 60 Minute Stories episode (Like a Bullet Hitting JELL-O) which also covered how M&A deals get constructed and executed.
I asked Andrew the same question I had asked Jack (Butter.ai CEO) / Joel (Box Head of Corporate Development) about post-deal integration in the prior episode, and he had a 3-part framework for a successful merger:
