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Hi friends 👋,

Happy Thursday!

I’ve been writing about web3 a lot. There are a bunch of reasons for that, but one of the main ones is that I’m just a business model nerd, and new tools create opportunities for new business models. But I love digging into innovative and clever models wherever I find them, and today’s focus, Snappr, is a perfect example.

It started as an on-demand self-service marketplace for professional photography, and by listening to its clients, it’s built an enterprise SaaS and API offering uniquely enabled by the self-service business. It’s a model and product roadmap that you probably couldn’t have drawn up ahead of time, but that makes perfect sense looking backwards. And it’s a case study in how to build an API-first business, last, once all of the right pieces are in place.

Today’s post is a Sponsored Deep Dive on a company that I invested in through Not Boring Capital. As always, I only write Sponsored Deep Dives on companies I would invest in, and in most cases, I actually have. You can read my thought process on deep dives here. I’ll always disclose my conflicts. No conflict, no interest.

Let’s get to it.

Snappr: Building API-First, Last

(Hint: you can click this to read the full version online ^^)

Every big API-first business looks like it’s just software – just a few lines of code – until you look under the hood. There, you’ll find all sorts of complexity. Abstracting it away is the API’s raison d’être.

Most API-first giants, like Stripe, Twilio, and Plaid, start with the software and realize that getting the software right actually requires a lot of undercover schlep. 

Snappr, on the other hand, started with the hardest part first. It built an on-demand, self-service, B2C-centric photography marketplace before realizing that all of that work put it in the perfect position to build the software infrastructure for the lifeblood of the internet: visual content. 

Other companies have tried to build photography marketplaces or visual content workflow software to serve the enterprise, but starting upmarket or software-only has turned out to be a challenging approach. Counterintuitively, and surprisingly even to the Snappr team, the right approach seems to be to start by building out a self-service, on-demand photography marketplace serving mainly consumers, and then to work up to enterprises. 

Somehow, in 2017, that marketplace opportunity was still wide open. In the era of on-demand everything, booking a photographer was still a nightmare. I experienced it myself. 

If you’ve had to book a family photo shoot recently, this story might sound familiar. It was shocking to me. I almost … snapped. 

In the fall of 2020, about a month after Dev was born, I decided it would be a nice idea to book a photographer to do a family photo shoot. I searched on Google, found someone with pretty good reviews nearby, and hopped on a call with her. She seemed nice and the price was OK, something like $300. A little expensive, but for a couple hours and hundreds of pictures of our little man that we’d get to use for Christmas cards and keep and cherish forever, not bad! 

On the day of the shoot, we drove to a park all dressed up in our matching outfits. We met the photographer, we’ll call her Sally (not her real name), and she was lovely! Throughout the shoot, she showed us previews of the pictures, and they were great. What a day! 

At the end of the session, as we were saying our goodbyes and getting ready to go home, Sally asked us when we wanted to schedule a Zoom to see the pictures. “Oh no, that’s OK!” I said, “It’s 2020, you should be able to just put them in a Dropbox and send them over to us, thanks!” 

“I can’t do that,” said Sally, ominously, a shadow darkening her face. 

Turns out, the price that we paid for the photo shoot… didn’t actually include the photos! That was separate. We’d have to buy the prints. “Well, what if we just want the digital versions?” I inquired. Nope. We’d only get the digital version of whichever physical prints we bought. And each physical print cost a minimum of $150!!! 

I don’t get mad often, but I was fucking fuming. I went home and re-checked the price list and my emails with Sally. Neither the price list nor Sally ever said that we would have to pay per photo to get digital access to the photos. We’d been bamboozled!  

It was a racket, but what could you do, not keep those memories? I asked around and learned this is really how the market worked. I gave in and bought four prints and a 25 pack of Christmas cards. It cost $799.69 (nice, but not nice), in addition to the $300 we paid upfront. I even kept the receipt to prove it. I never keep the receipt. 

It was a jarring experience, partially because it’s such an uncommon one at this point. Today, practically everything that consumers spend money on is mediated through an online platform with full price transparency. We complain about Airbnb’s cleaning fees or DoorDash’s delivery fees, but we know about them before hitting the buy button. Price transparency is table stakes. 

So last July, I was in the right state of mind when Basis Set’s Lan Xuezhao, a Not Boring Capital LP, asked me if I wanted to meet Matt Schiller, the CEO of one of the fastest-growing and most fascinating businesses in her portfolio: Snappr.

Snappr started its life in the US in 2017 as a B2C photography marketplace. I don’t know how I missed them when I was doing my photographer search, but it was exactly what I’d needed. I mean, check this out: 

Online booking! Price transparency! All-inclusive!

If I’d booked with Snappr, the whole thing would have cost me less than a quarter of what Sally cost. As a consumer, that’s exactly what I needed. 

But as a professional newsletter writer who needs to write about new models, a B2C photography marketplace probably wouldn’t be enough to do the trick.

The web2 marketplace model is tried and true. I even dunked on it a little bit when I wrote about Braintrust last week. If Snappr were following the familiar B2C Marketplace playbook – build up supply and demand, win the market, raise take rates by raising fees on both sides – we probably wouldn’t be here talking about it today. 

But we are here, so what’s up? 

Snappr is running a B2C2B2PLG model to perfection and writing a new playbook.  

Haven’t heard of the B2C2B2PLG model before? That’s probably because I just made it up. I should explain. 

Snappr has two business lines: Snappr Shoots and Snappr Workflows. Snapper Shoots is the photography marketplace business that’s open access, self-service, and asks customers to book and pay for one shoot at a time. It’s a consumer-like experience whose revenue is roughly ⅔ consumer and ⅔ businesses (mainly SMB). Snappr Workflows is the visual content SaaS and infrastructure offering for enterprises. With Workflows, enterprises can automate their visual content pipeline from beginning to end with Snappr’s APIs, and source, edit, and manage visual content in bulk.

Workflows is a bold expansion. In four years, Snappr has become the leading on-demand photography marketplace: 

• It’s processed over 120 million photos and edited more than 40 million of them. 

• Its network covers 90% of the US population, 95% of Canada, 88% of the UK, and 77% of Australia, among others  

• Its revenue has grown at a 14% compound monthly growth rate (CMGR) since it started earning money.

• Its gross merchandise value (GMV) is in the tens of millions of dollars, and it captures a strong percentage of that as revenue. 

• The company has raised $13 million and has only spent a fraction of it to accomplish all that. 

• The majority of the company’s revenue now comes from enterprise (two-thirds of the company’s revenue now comes from B2B use-cases more broadly).

The company could have kept its head down and built a really nice photography marketplace business. Instead, it’s taking all of the resources it’s built up and launching Snappr Workflows, its SaaS and API product aimed at the enterprise clients who demand it and the mid-market clients Snappr hasn’t yet been able to serve. 

The secret to Snappr’s success is that the Shoots business feeds the Workflows business, in four main ways: 

1. Solves the Chicken and Egg Problem for Enterprises. Enterprises need national supply (photographers and editors) overnight, which is impossible to build on its own. When they call, you need to be ready, or you blow your chance. So you might try to build up the supply network ahead of demand, but then supply gets burned waiting around with no work. Self-service demand fills the gap. 

2. Self-Service Increases Liquidity. The higher density the bookings are in an area, the stronger the network effects. There’s more supply density, less photographer travel time, and a greater chance of matching the right photographer to the right booking. 

3. Keeps Photographers Happy. Most photographers like being able to mix it up and do B2C and enterprise shoots in the same day. 

4. Shoots is the Biggest Channel for Workflows. 48% of Workflows enterprise customers today made a self-service booking with Shoots before becoming Workflows customers.

This last point is where that lovely acronym – B2C2B2PLG - comes from: people who book Shoots, both as consumers and for their businesses, end up becoming the fuel for Snappr’s Workflows product-led growth engine and often grow into larger enterprise accounts.

And Workflows is a game changer for Snappr’s business. It turns the product from on-demand to API-first, like a Zapier for the visual content pipeline. Snappr’s story is an accidental playbook for building an API-first business, backwards. So today, we’ll dive into the evolution by covering: 

• Started Down Under Now We Here 

• Was the Picture Clear from the Beginning? 

• B2C2BPLG

• Snapping into Focus

So grab a Fosters, throw some shrimp on the barbie, and let’s hop to a land down under. 

(I’m very sorry.)

Started Down Under Now We Here 

Somehow, certain pockets of the world become really good at producing things that, on the surface, have nothing to do with their environs. 

Japan is unmatched at turning out valuable media franchises, with five of the top 10 highest grossing of all time, including the #1 and #2 spots. 

The Nordics produce a disproportionate share of hit video games, including Candy Crush and Angry Birds. Goals is next. (They’re also excellent at EDM).

Australia’s superpower may be visual content software. 

Sitting in sixth place of the world’s most valuable startups with a $40 billion valuation – right next to giants like Bytedance, SpaceX, Stripe, and Epic – is a graphic design platform founded in 2013 in Perth, Australia: Canva. 

Snappr is gunning to be the next Aussie visual content software atop the global leaderboard.

Matt Schiller was born in the Outback on a little farm 15 minutes outside of a little town of 3,000 people called Hay. Growing up, Matt wanted to be a doctor. When it was time for uni, he went to The University of New South Wales (UNSW Sydney), which matter-of-factly calls itself “One of the best universities in Australia” in its Google preview. 

At UNSW Syndey, Matt studied philosophy and medicine, graduating with a BA in Philosophy, a Bachelor of Medicine, and a Bachelor of Surgery. He also took an elective term in Neurosurgery at Oxford, and received a graduate certificate in tertiary teaching from Curtin University. Slacker.

With all that education, the moment during his educational journey that had the biggest impact on Matt’s career was the last one: seeing his mum’s emotional reaction to his med school graduation pictures. Hold that thought. 

Before going to residency, Matt decided to do two non-doctory things: 

1. He founded GownTown, now “Australia’s largest online university graduation retailer” 

2. He took a “12 month break” to follow his wave of friends going into consulting. 

For his “gap year,” Matt joined McKinsey to see the world, travel around, and work in healthcare from the business side. By year two, he deferred residency again and started doing non-medical consulting work. By year three, when McKinsey sent him to the US to work on tech and education clients, he realized that he was never going to go back to being a doctor. 

Instead, he refocused on GownTown, and realized, both thinking like a consultant and remembering his mom’s graduation emotions, that there was an even bigger adjacent opportunity: graduation photography. 

Snappr was born.

Was the Picture Clear from the Start?

Let’s pause here for a second. 

Whenever I see a strategy that looks brilliantly constructed, I try to figure out whether it was all part of the plan from the beginning. Sometimes, companies go to great lengths to tell a coherent narrative that makes the company’s history look like the unfolding of a masterfully orchestrated master plan. That’s rarely the case. 

In Snappr’s case, all of the ingredients were there for a smart consultant to piece together. 

There was the market trend. Digital photos were becoming a bigger part of both consumers’ and businesses’ identities. The internet had become more visual. Airbnb was a case study for the value of high-quality photography. People and businesses alike would need, and be willing to pay for, higher-quality photos. 

Then there was the market structure. I didn’t know this until Matt told me, but there was only one services industry more fragmented pre-marketplaces than the photography industry: taxis. Putting a digital marketplace on top of that industry resulted in multiple multi-deca-billion dollar companies, including Uber, Lyft, and Didi. 

Unlike those companies, though, who would need to await the arrival of self-driving cars to produce software margins, the margin expansion opportunities for photography were manifold, from editing to storage to asset management to distribution. 

You’d just need to grab the consumer market as a wedge, build up liquidity, write some code, sell the whole package to enterprises, and Bob’s your uncle.

Well, I got to ask Matt directly whether the plan all along was to go from B2C to B2B to SaaS and infrastructure. 

The answer was a resounding, Australian-accented “no.” (noyr?) 

Through his experience running GownTown, Matt just saw that there might be an opportunity to build a marketplace for graduation photographers. Then, McKinsey moved him to the US, and when he got here, he said that he  started thinking bigger. Instead of just graduation photography, Snappr wanted to make it easy to book any professional photographer on-demand. They applied and got into Y Combinator. 

At that point, what the B2C product would become was actually pretty clear. In the February 2017 TechCrunch article announcing Snappr’s YC acceptance, they laid out the customer value prop that has remained central to the Shoots product today: on-demand, affordable, high-quality, and transparent. 

To learn how Snappr survived COVID, evolved from Shoots to Workflows, how the business model is a mashup of a bunch of others, the big vision, and more cheesy photography and Australia puns…

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Thanks for reading and see you on Monday,

Packy