Grant Munro, Founder, Flashstock
Content in a Flash
How Grant Munro and Flashstock created an agile solution for on-brand, custom photo and video—and reaped a big windfall.
For Grant Munro, nothing felt right.
He had always aspired to start his own business, but never knew what to pursue. He went on to work for larger companies as a software developer and product manager, but those paths didn’t feel quite right either.
Despite not having an explicitly creative background (what with coming from tech and software development), Munro finally found a pursuit that excited him—helping brands express themselves creatively.
He first came upon the opportunity after major clients he was working with at a creative boutique kept asking for help with creating custom visual content. As photo and video on social media were taking off, and major brands were seeking solutions for creating unique content, Munro realized it was time to start his own thing.
“It got to the point, I was like well, if I’m gonna to start a company, this seems like a pretty good one,” Munro says.
Good turned out to be great. In 2014, Flashstock was born, and it was perfectly timed to the rise of Instagram as an advertising platform.
As a leading custom content creation company with a global network of freelancers and contributors, Flashstock’s proprietary platform allowed hundreds of brands across the Fortune 500 to streamline on-demand visual content (think photos, videos, GIFs, and so on). With its steady growth, unique software, and a list of high-profile clients, Shutterstock acquired the Toronto-based company in 2017, after it had been in business just four years, for $50 million in cash. Flashstock was subsequently rebranded as Shutterstock Custom.
However, had it not been for a former employer making a change to its business model, Flashstock may never have come into existence.
This Seems Like a Good Company to Start
After those early stints at major companies and acquiring his MBA, Munro took his first steps into the startup world, joining a boutique social media agency in Toronto. That’s when he really started to find some joy in his work.
With his experience in product development and software engineering, he joined the company’s product team with the hopes of coming up with new ideas to increase their SaaS revenue. Along the way, he learned that he enjoyed the customer development process, and understanding clients’ pain points and problems.
As the company’s product business grew and it became established as an early player in social media management, the team realized that they no longer wanted to focus on traditional creative agency services, such as content creation.
“They viewed that as something that wasn’t a good type of revenue that they wanted to continue, so they discontinued offering it,” Munro says. “And because we were providing content mostly for social at the time, and some digital stuff, the clients were very unhappy about this.”
Munro was surprised by his clients’ reactions. Although this shutdown may have provided a temporary inconvenience, he assumed that someone else would simply take over their content production, maybe another agency.
That wasn’t the case.
The agency had created a formula for creating low-cost, quick-turnaround content for social media, and clients loved it. They didn’t want to see it go away, and they kept asking Munro for different solutions around content, despite the agency no longer providing the service.
Realizing that these questions would never go away, and that companies were not finding a solution for their content production, Munro got creative and took a risk.
“I ended my role there and then sort of rolled over and started Flashstock pretty much the next week,” Munro says. “And went to some of the early clients from the previous company that had requested help on the content side and offered up a solution that would basically connect them, through some software that I wrote, directly to freelancers all around the world.”
By acquiring early customers and refining the product, it provided Flashstock with some growth and sustainability early on, but not without some changes.
Visual Identity Calibration
When Munro initially started Flashstock, the positioning for the company was that it was an alternative to stock photos and videos. The messaging was working with marketing agencies, but brands were not as interested. Munro knew he had to change it up.
As Instagram was making some changes and starting to take off, Flashstock’s positioning went in a new direction. It was no longer just an alternative resource for stock imagery—it was now a place where brands could go for help in telling their stories in unique ways, using differentiated content, but at a much lower cost.
More brands started to buy into this concept, recognizing that creating custom content on a large scale posed a great challenge. Major corporations didn’t have the time to find freelancers and manage the creative process, so they need needed a service to do that for them. They needed Flashstock to do this.
Munro first and foremost needed to come up with a way for a brand to communicate in a non-ambiguous way what it stood for and their target audience. And most importantly, all of this needed to be presented in a way that a freelancer could understand, despite never meeting the client.
“If you’re a big organization, it’s usually okay , because when you’re creating content, you’re usually with the people that are creating it,” Munro says. “But when you’re in this networked world where you’re communicating through software and you’re never talking to people, that level of ambiguity breaks the system. So we needed to come up with a way to solve that, frankly, for our own survival.”
Something Munro calls visual identity calibration.
This phrase describes a system in which a brand enters its information and describes its identity to Flashstock, and then the Flashstock team puts the brand through an exercise to pin them down on the right details. The end product is a well defined set of creative variables, which Flashstock then provides to their freelancers to create new, on-brand content.
The system garnered great feedback and has been praised for its innovation in solving this communication pain point. So much so, that some companies have even used a lot of these tools internally to communicate with each other, according to Munro.
Power of the ‘Gram
Around 2014, Instagram really began to open up its platform for anyone to be able to post and create company pages, and major brands wanted to get in on the action. In order to fully take advantage of it, brands would have to post often, but on the cheap for it to make sense for them financially.
This was right up Flashstock’s alley.
“Every organization wanted to be on the platform, but because there was no paid promotion behind it, they wanted the cost of the content to be as close to zero as possible,” Munro says.
This demand allowed Flashstock to be able to acquire new clients regularly, as many brands wanted to create content for Instagram, but not many agencies were offering this custom service at an affordable price. With Flashstock, brands could log in to the platform, find contributors around the globe, and receive on-brand content in a timely fashion.
“I was really able to complement what a traditional creative agency was doing and not really be a competitive threat because they didn’t want to create that type of content,” Munro says, referring to custom content at low cost.
Soon thereafter, Instagram turned on its ad platform, allowing brands to really promote their content that they made native for the platform. Once Instagram flipped this switch, it really took off as an effective place for brands to advertise, and Flashstock’s growth took off with it. The rest, as they say, is history.
The company grew extremely quickly, and within just four years of operating, was acquired by leading stock photography company Shutterstock.
Today, Munro is the senior vice president of Shutterstock Custom, where he has been since Shutterstock acquired Flashstock back in 2017. The division operates as its own unit, where it continues to provide major brands with quick, authentic branded content.
As for Munro’s future, and whether he’ll ever return to entrepreneurship, he’ll never say never.
“Right now, I’m still with Shutterstock and I plan to be with Shutterstock for some time,” Munro says. “When you’re a startup, you’re out there doing it alone and sort of fighting for your life, and then when someone takes you into the fold like Shutterstock has, they provide you with a ton of resources. So, we’ve got a bunch of unfinished business that we have left to take care of.”
3 Tips For Scaling A Creative Company
When Grant Munro decided to start Flashstock, he was learning everything in real-time. Building a company culture and fostering creative talent were all new to him. Fortunately, Munro was a quick learner. He found the right formula for success and company growth, and in just four years, sold Flashstock to Shutterstock for $50 million.
Here are three of Munro’s tips for scaling a creative company.
Know Your Customer
During a stint at a startup, Munro learned how much he enjoyed the process of customer development and understanding what a company’s pain points were. By really diving in deep and talking with his clients about their problems, or even understanding your own company’s problem, it becomes easier to think of novel solutions, or to have “aha” moments.
When you’ve invested the time into knowing the problem and understanding the ecosystem of that problem, you open yourself up more to those flashpoints of creativity and resolution. If you don’t spend the effort doing customer development, you’re making it harder on yourself, maybe not now, but later.
“I feel like a lot of that gets overlooked at companies of all sizes,” Munro says. “Where they almost have to reinvent the wheel every time they want to launch a new campaign because they haven’t created that discipline around customer development.”
Go Chat With Someone Who’s Done It
When a person sets out to create a product or scale a business, they tend to focus first on what they’re good at and what interests them. And if there is a challenging task ahead that may be intimidating, it is quite natural for them to put it off and go back to working on something they’re good at. This can stunt the growth of your business and make it hard to scale.
Munro suggests that if you’re struggling with a component of your business, or need some guidance, go talk with someone who’s done that task before.
“When you talk through your current priorities with people who have sort of done it and been there, they can help you recalibrate those ,” Munro says. “And they can help you say, ‘No, no, you don’t need to write another line of code, or you know, you don’t need to tweak your designs anymore. What you need to do it is set up your accounting software.’”
Define Your Core Values and Mission
Flashpoint’s growth was very, very fast.
Within the company’s first few years, they had grown to around 80 people, so they had little time to set up any processes, let alone establish values or have a clear company mission.
It was when he was repeatedly asked questions about the company’s future, and he realized he didn’t have a hand in the interview process with some key employees, that he felt it was time to create a company mission and values.
With the help of a third party to facilitate a retreat, Munro and key members of the team came up with Flashstock’s mission and values. And immediately, he saw results across the company. It would help them formulate an employee handbook, and to use these values in the hiring process.
“It simplified everything,” Munro says. “We would reference them all the time. From a creativity perspective, people feel really comfortable, people feel really consistent, people feel really welcomed their ideas based on the culture and that sort of frees up their thinking.”
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Nick Allen
ATTENTION: Grant Munro is also featured in Issue 81 of Foundr magazine, The Creativity Issue, a special FREE edition focused on entrepreneurial creativity in all its forms. We teamed up with global creative platform 99designs to produce this bonus-sized issue that celebrates the creative vision and potential of all founders.
Throughout this issue, you’ll find spectacular artwork created by the designers working on the 99designs platform as well as inspiring features on the most innovative minds in the startup world—from Clark Valberg of InVision to Jack Dorsey of Square. We hope this edition gets your creative juices flowing!
This issue is open to anyone to read, whether or not you have a Foundr magazine subscription. Just go here to view this special edition. Note that you can also download the magazine as a PDF for future viewing. Enjoy!
- Why the creative boutique Munro worked at stopped offering custom social media content creation
- How this decision left his clients with an unmet need and led him to launch Flashstock
- Why Munro pivoted the focus of Flashstock
- The problem Flashstock solved for brands looking to tell their unique stories
- How Flashstock’s “visual identity calibration” works
- The impact that Instagram’s growth had on Flashstock’s business
- Flashstock’s rapid growth and acquisition by Shutterstock
- Why Munro doesn’t plan to return to entrepreneurship any time soon
Full Transcript of Podcast with Grant Munro
Nathan: The first question that I ask everyone that comes on is how’d you get your job?
Grant: My current role?
Nathan: Yeah, how’d you find yourself doing the work you’re doing today?
Grant: Right now I am SVP of Shutterstock Custom, and I got that role because Shutterstock, the world’s largest provider of stock photography, acquired a company that I started about four or five years ago in Toronto called FlashStock. At FlashStock, we helped large brands create marketing content, specifically images, videos, stop motion by using software and a global network of freelance contributors. So Shutterstock acquired us to basically compliment their product portfolio. If you think of stock photography, it’s all pre-shot, it’s all sitting there in the library. A lot of organisations want a unique look and feel, they want to tell their unique story, and so it complimented what they do by acquiring us.
Nathan: Yeah, amazing. So you were working on FlashStock for about four or five years.
Grant: Yeah, that’s right.
Nathan: Was that your first company? Or how did that come about?
Grant: Yeah, so I’m sure like many of your listeners, for a long time I had an aspiration to start my own company. I worked at a big company, and decided to do an MBA, and nothing really felt quite right. Then I joined a startup in Toronto, Canada, and the startup was basically like a boutique social media agency. This was back in 2007, 2008, where Facebook and Instagram was this new thing. So I joined the company as a product person because of my background in software engineering, and product marketing, and product development to help them figure out if they could find any products to productize, and solutions to productize so they could build more recurring fast type revenue, because most of their revenue was professional services. So I was interested in the job because I really enjoy the customer development aspect of it, and I think that’s one of the key skills for any entrepreneur to develop, is really understanding the customer and what they need and what they do every day.
So I jumped at the opportunity, ad spent a bunch of time talking to a bunch of clients around some of the pain points around digital, and content management, and analytics. Even though they were providing just professional services, they had some really great logos and brands that they were working with, and basically built out the first set of requirements for what blossomed into the social media management category, of Sprinkler and those types of tools, we were a competitor of them at the time.
As that part of the business started to grow, so as the product revenue started to grow, they started to cut away some of the traditional creative agency professional services they were providing. So one of the areas was content production, and so they viewed that as something that wasn’t a good type of revenue that they wanted to continue, so they discontinued offering it. And because we were providing content mostly for social at the time, and some digital stuff, the clients were very unhappy about this. Which me, not having a true creative background, coming more from tech, I was quite surprised because I assumed that their agency would take care of it, or their other stakeholders that were part of the process. But there was something about social being a lifestyle, and being this sort of low cost, quick turnaround, really agile sort of shop we had created, it really hit home. So once they got rid of it, the clients were always asking for different solutions around content.
So I’m the VP of digital for a big brand, they’re going to be running contests and creating promotions all geared at acquiring all of this content, and so this niggling thing that just never went away, they got to the point and I was like, “Well, I’m going to start a company, and it seems like a pretty good one.” So basically, ended my role there, and sort of rolled over and started FlashStock pretty much the next week. We went to some of the early clients from the previous company that had requested help on the content side, and offered up a solution that would basically connect them through some software that I wrote directly to freelancers all around the world, and so I was able to acquire a few early customers, and then refine the product, and went from there and so pretty quick growth.
We were not really sure about the positioning for a while. We had some early customers sort of dabbling between agency and big brand, and then around 2014, 2015, Instagram was available for all to use, but they hadn’t really turned on the monetization piece yet. So every organisation wanted to be on the platform, but because there was no paid promotion behind it, they wanted the cost of the content to be as close to zero as possible. So this really nice window opened up where if you provided on-brand, on-brief custom content at a much lower cost, I was really able to compliment what a traditional creative agency was doing and not really be a competitive threat because they didn’t want to create that type of content.
Then, of course, as soon as Instagram started to turn on their app platform, then brands could promote, we started to see the dynamic shift where if you’re content really native to a specific channel, regardless of cost, you’ve got a pretty good advantage over some of the larger companies that have been doing it for a while. So it skyrocketed from that customer acquisition perspective, continued to grow, and then eventually we met with the Shutterstock team, and the rest is history, as they say.
Nathan: Yeah, wow, interesting. When it came to, I guess you said the early days you had a few years on the platform. What changed? Did you speak to them? What created that kind of pivot?
Grant: Yeah, so when I initially started the company, the positioning was all around an alternative to stock, and that’s sort of what the first press release was, and that was what the product was geared to, and we were trying to sell the solution to heads of marketing. And actually, this was the first time where marketing positioning really hit home for me in terms of the ability to tweak the positioning to see the product, and the product doesn’t change, but the positioning changes, and all of a sudden you’re selling much faster and much easier.
So I noticed the value prop would kind of resonate with an agency, and so, “Hey, why are you using stock? There’s all these challenges with the rights management. Why don’t you create your own custom content? You own the style, you own the creative, you own the messaging, you own everything. It’s a better alternative.” It was doing okay with the agency folks, but the brands were not interested in it at all.
This was more of the big corporate clients, who didn’t really probably have a lot of experience with stock, and so they kind of heard the term stock and sort of immediately shut down and weren’t overly interested because they probably had a provider, and they didn’t really go too deep.
As Instagram came about, and crazy growth, brands were really late onto the platform, the narrative was more about storytelling, and visual storytelling, so started to see that if we tweaked the positioning and started to talk about helping brands tell their stories in a unique way using differentiated content at a much lower cost than at scale, we could potentially sort of escape this stock thing that was bogging us down from a positioning perspective.
We did that, and it, overnight, sort of changed the sales velocity. Then, you know, really started to double down on if you’re a brand and you want to create content, you’re going to have a unique look and feel, and so you want your creative assets to look visually different, and consistent, than the competitors. So we spent a lot of time and engineering effort really trying to figure out a process to help a big brand explain to us what they meant by their look and feel, and the brand guidelines, and the style guides in a really condensed and concise way, so that we could then use that to communicate to the contributors and the freelancers who were all around the world creating the content based on these brand-specific briefs.
Those two things really started to accelerate on the go-to market side.
Nathan: Yeah, I see. When it comes to kind of the content that the freelancers and influencers, et cetera, would create, is it more kind of … I know it’s custom and visual. Was it kind of usually UGC type stuff?
Grant: Initially, it definitely was a bit more heavily weighted to feel like UGC. I’ll give you an example. Our first customer ever, and this was when I kind of felt we were onto something, is when I was able to sign a contract with Anheuser-Busch Budweiser for a three month pilot. And if you think of Budweiser, they’re a big national brand, global brand, everywhere. The way they sort of set up the marketing structures is they’ll have the global brand, then they’ll have the national level brand, and then they’ll have the regional brands. So if you think of the continental United States, similar to Australia, it’s a huge country with very diverse regions. They thought that rather than taking the national level content, so the same piece of content that you would use no matter what US state you were in, rather than doing that, they would create regional content, specific to a region.
For example, if you are on Coast of the United States, it’s very, very cold winters, so tonnes of snow. If you’re on the West Coast at the same time of year, it’s sunny and beaches. Thought, “Hey, if I’m serving my East Coast consumer with ads that show people playing beach volleyball drinking Budweiser, would that perform better or worse than if I serve them ads of people drinking beer in the snow when it’s snowy on the East Coast?” So the pilot was all around creating this lifestyle-like content with real people consuming their product in certain scenarios, but really, really regionalized to that area, and then serving up ads based on those regions to test out if local content and lifestyles content really performed better. And it did, and then we went on, had a big relationship with Anheuser-Busch.
But that’s an example where it’s like high-quality UGC, where it’s the consumer telling the story of the brand with the product, with the right requirements, and with the right safety regulations, and all the stuff that goes into branding. That’s kind of the holy grail for them, is the quality is right. In order to get the quality right, you can’t take any piece of UGC, it has to be at the right production level.
If you think about alcohol as a category, for example, you can’t show more than one beverage per person in the photo. Like, you can’t show a table of six empty Budweisers, because responsible drinking, and the bottle has to be full. So there’s all these requirements that make it really hard to get actual UGC content. But when you nail it using freelance photographer, and real people who they know, and they’ve got that authentic flair, and they can style the photo, it works really well.
Nathan: I see, interesting. So yeah, this two-sided marketplace is quite unique in that aspect because, yeah, you work with brands to create custom content and visual content at scale. So tell me around kind of two-sided marketplaces are difficult because you’re marketing, and you have to get users on both sides of the table, from a supply side, and also a kind of demand side. How is it different between the two? And which did you find easier in the early days to add onto the marketplace?
Grant: Yeah, good question. So a couple things, sort of a couple principles in that. First and foremost, if we sort of segment different types of marketplaces, so really simply, there’s marketplaces that are created for large organisations to use, and then there’s marketplaces that are created for individuals to use. I’m a huge fan of 99designs, I think they’re a great product, great company, great people. But they actually designed the logo for FlashStock.
Nathan: There you go!
Grant: Yeah, which existed, which hopefully exists for a long time now. But if you think of the process where I’m a freelancer, and I’m using a marketplace to add additional services, “I need a logo,” or, “I need some design work,” or, “I need a photograph,” the way that that marketplace dynamic works is I post a request or a search through the directory and pick a person, and then negotiate the delivery dates, requirements, and then they provide me the deliverable, and I make a decision about whether or not I take it. So I take a lot of the responsibility on, and the marketplace obviously provides a lot of value, but at the end of the day, I’m responsible for quality control, I’m responsible for all these aspects.
On the enterprise side, what we see is big organisations, they don’t want to do that. They basically want to think of a marketplace as almost like a staff augmentation, where they want to ensure that the quality is high, so they don’t want to spend time searching directory, they don’t want to spend time QAing assets, they don’t want to spend time negotiating all this stuff for individual things, they want it more like a service.
So for us, we try to categorise it as content as a service, where we’ll basically put a layer of management and quality control between you and the marketplace, and so there’s no notion of bidding, or contests, or spec work. It’s like you give us the requirements, and then we’ll use our network to fulfil it. So from the client’s perspective, they could ensure that the quality was there, the quality was consistent. Why that’s important is obviously for us to acquire an enterprise customer takes a lot of work, and so you think of the cost of acquisition there can be quite high because they’re big enterprise brands, and there’s procurement.
So for us, in order to do that, we have to provide those guarantees of that level of service. In doing so, we acquire a customer, and then once we’ve got the customer, we’ve basically got a job that we have to do on their behalf. So when you have that job, it’s relatively easy, and I say relatively because it’s not that easy, but it’s relatively easy to go around and find someone who’s willing to do it. The nuance is in the quality and the consistency.
So when you think about do you start on the demand side or the supply side, because our target from day one was the enterprise customer, the hardest part of that workflow tends to be the acquisition of that customer, so getting that customer to commit to a body of work. Once they’ve done that, you’re basically tendering a job to a large number of people, and based on their skillset, quite a few people will ultimately quit if they’re ahead.
So even in the early days, when we were pretty short on the photographer side, and we were trying to scale up our operations, offering people paid work that wasn’t spec work was a bit of a feather in our cap, and made things very, very easy, and then we could be relatively picky in terms of who we chose to ultimately work on the project. Whereas when you’re doing more on the consumer marketplace, although I don’t have a tonne of experience, my sense is that you sort of have to balance those plates a little more closely, versus us, where you get 10 or 20 big customers, and that would get us a tonne of work that we could then use to build up the supply side.
Nathan: Yeah, got you. So you’re using the software to facilitate the, you would say, kind of the up and back, and the account management, but you were still using it kind of like as a productized service with the software. Right?
Grant: Yeah, exactly. For example, if I’m a brand manager working on a big global brand, I don’t want to spend time going through 100 assets where I’ll only use 25. I want you to show me the best 25 because I’ve got 50,000 other things to do. So there was a human element in them, but the data, the workflow, the tools to interface with the brand, that’s all productized, but there’s still the need for someone who understands what a good image is, look at that image, and make a judgement . Our clients aren’t bogged down with unusable content.
Nathan: I see. In the early days, like you talked about, kind of that slight pivot in positioning, and you’ve seen that positioning can be very, very powerful in a way to kind of turn on the tap to really get traction. I’m curious around kind of what are some other specific roadblocks to look out for when you are scaling a business?
Grant: Yeah, I think the biggest one, the biggest thing I see, I think this is across companies of any size, from the person sitting in a basement trying to figure out what they want to do, is it’s depending too much on serendipity and luck when they come up with a product idea, and so not really taking the time to build their expertise and confidence around how you talk to a potential customer, how you find out what they do every day, how you find out what their pain points are, how they talk, how they think, the emotions when they’re speaking. So all of this sort of sits in that customer development space.
For me, that has always been the path to success for a startup, your ability to talk to a bunch of different people that you think are your potential customer segment, and be able to assess if the thing that you’ve got as a solution that sits in your head is going to solve a really important problem fr them. I see a lot of people who also come up with an idea and think that that’s the idea, and then just frantically trying to find a home for that idea, but the reality is that it’s very, very rare that anyone comes up with a product or a solution on a whim and doesn’t continually iterate on it. And if you don’t really spend a tonne of time thinking about how you actually talk to customers and validate that what you’re doing actually solves an important problem, you’re going to face a tonne of challenges down the road.
This is, like when you’re a small company, thinking about how do you talk to customers, how do you teach the other employees to talk to customers, to ask them questions, to get them comfortable asking questions? Where do you store that information? How do you use that information to look at your product roadmap, to your sales enablement, to your marketing positioning? Super simple example, you raise some money, you build a product, you acquire first few customers, now you need to acquire more customers. What do you do? How do you reach out to them? So with those early customers, if you’re asking them, “What marketing events do you go to? How did you find us? What blogs do you read?” All of hat stuff becomes super important to feed into the go-to market.
I feel like a lot of that gets overlooked at companies of all sizes, where they almost have to reinvent the wheel every time they want to launch a new campaign because they haven’t created that discipline around customer development.
Nathan: Yeah, I think that’s so, so key. Yeah, even like that lean startup methodology and mindset is so, so important.
Grant: Exactly. But systematising it across your organisation is really, really important. Actually, an interesting thing happened with FlashStock. I told you that story where I was working at this other company, and basically servicing the exact same customer that FlashStock ultimately served. That was my customer development, so that was my time with the potential customer, really earning my insight, and really understanding what some of the challenges were, and how they speak, and what they care about, and what they don’t care about so that when I finally went to market, I stood a little bit ahead of the pack because I had spent so much time thinking about them.
When the company started to grow, so when FlashStock started to grow, I went from being the voice of the customer, and so when we were three or four people, a new employee would start, and I would spend a bunch of time with them, and I would explain to them about the customer, and why they buy, and the problems that we solve, and I would do that until they got it. Then, the bigger we got, we went from 10 to 30, 30 to 60, and 60 to 100, I was spending less and less time with the customer because I was starting to focus more on if you were a big customer, and a lot of internal stuff.
I felt that because we hadn’t implemented any sort of structure and cadence around enabling other people to absorb that language and that knowledge from our customers, it became a real hindrance in product, and culture, and basically every function. So the need to think about that early on, and make sure that, “Hey, if this salesperson is talking to a customer, and learns something new about that customer, there’s a way for them to feed that learning back into the machine, and it doesn’t get lost in a Salesforce report, or just goes out the person’s other ear.” That is something I think is really important.
Nathan: Yeah, I agree. Often overlooked, often neglected, and something people don’t really want to do. It’s kind of scary, right?
Grant: Yes, totally. It’s like compounding interest. You don’t really see the immediate benefit, and it benefits you a little down the road, so it really takes a lot of discipline to do it, but also a lot of confidence that you’re going to be around when it’s going to pay off in the future.
Nathan: Yeah, that’s right, because we’ve got to okay ours, and it’s all about what are the projects, what is the theme for the quarter, how are we going to increase revenue, reduce churn, et cetera, et cetera.
Grant: Exactly, yeah.
Nathan: Okay, well look, I’d love to kind of switch gears, because I want to talk to you about creativity. When you first started out, you had your co-founder, Mindy, and across the two of you guys, you guys had to wear many different hats. I’d just love to know kind of how you used creativity around wearing those different hats to kind of get traction, because so many people are starting businesses, but it’s often very, very tough to get traction. I’d love to hear your take there.
Grant: Yeah, I mean, I think creativity kind of comes from a couple different parts, so I’ll kind of address this on two sides. I think sort of to be truly creative, you need to … In this sense, it’s like creatively solving a problem for your client, so it’s offering them a novel solution that they haven’t necessarily seen before that’s solving an important problem. From an invention, innovation perspective, sort of address that.
Not to beat a dead horse, but when you have a deep … when you have that aha moment, the typical time that you have it is when you’re having your shower, and you’re thinking about something that’s not very cognitively challenging, and your cognitive load is very low, and then all of a sudden you’re like, “Oh yeah, I should sort of do that.” To get to that state, you really have to spend a lot of time thinking about a problem, understanding the ecosystem of that problem, and making all of that stuff super intrinsic so that when it kind of opens up your opportunity to have those flashpoints, and then because you’re so familiar with it all, you can sort of dive into the solution.
One of our biggest differentiators, as I mentioned, was this notion of visual identity. If I’m a big organisation and I have this abstract notion of what the brand is, and the typical thing is we’re selling to millennials, and we are aspirational, and really, really, really generic things that are really hard to understand in terms of very, very technical terms. And if you’re a big organisation, it’s usually okay because when you’re creating content, you’re usually with people that are creating it. But when you’re in this networked world, where you’re communicating through software and you’re never talking to people, that level of ambiguity breaks the system.
We needed to come up with a way to solve that, frankly for our own survival. So in looking at the problem and having the deep understanding of the problem, we could be pretty free and creative with the solutions. So we came up with this really simple thing called visual identity calibration, where the brand inputs all that stuff that they have, and then we take them through an exercise where the output is a really defined and succinct set of creative variables, like technical aspects, like lighting and angles, to environments, to the types of people so that I could hand basically a one-pager to any photographer anywhere in the world, and they’d quickly understand it.
So for the customer, they thought that was amazing. They thought that was super creative, and it solved a huge pain point, and they started to use a lot of the tools internally to communicate with each other versus just through us. That is a differentiator for us, it continues to be a differentiator, and it continues to be referenced as a sort of innovative solution to a well known problem. But where that really stemmed from was deep, deep knowledge of the problem that we’re solving, and the freedom to go out and solution against it. If you’re trying to copy a competitor or you just come up with an idea but you didn’t really earn that insight, you’re really not going to be able to be innovative or creative because you don’t have the foundational understanding of what the problem is.
Then, from another perspective, one of the really interesting things that I learned through FlashStock is we were ultimately a photography business, a video business, and so we were dealing in the creative. So there is a group of people that love working in the creative field, be it music, be it art, be it painting, be it photography, be it videography. And I found that, for the first time ever, the company culture was all centred around creativity. You would have salespeople, sales development people going to lunch with software engineers.
And I had never been in a company where that happened so fluid, and it was because they had this common interest around creativity, and a lot of the people that we were attracting were attracted to that field. Then when we got the whole group together, which obviously was wonderful, but it took me by surprise, and we had a lot of people coming into the office and commenting on it, being like, “Ah, I can’t believe how well everyone gets along.” And I couldn’t take any credit for it, it was more because we were working in a domain that tended to attract a lot of like-minded people across all these different disciplines. So it was this really nice, cross-functional, diverse group, which again seeds a lot of the creativity, and seeds a lot of the other things.
Nathan: Yeah, that’s fascinating. So because you guys were working with creatives, effectively was that, do you think, also fostering a culture of creativity?
Grant: Yeah, for sure. I mean, everything from the marketing collateral, to the style, everything, if you have that creative eye, and you are critical of creativity and aesthetics, and you’re thinking about it, it bleeds in. There’s no way it’s not bleeding in. And managing hundreds of creative people is exhilarating. It can be more challenging, but it’s pretty wild.
Nathan: Yeah, that’s amazing. For anyone listening that is building their company, is there any kind of experiences you could share besides having a product that is working with creatives around creativity? How can people foster culture of creativity in their organisation? Because I think that’s where some of the best ideas come from, where people are in the same room, and they’re just kind of having like idea sex, and just you get the things that can take you to the next level.
Grant: Yeah, the thing that comes to mind there is, so I kind of told you how I started the company, and I was working at this company, and I saw the problem, and iterated on a few solutions, and all of these external things happened, like Instagram, and started to get a lot of traction. So our growth was very, very fast. In 2014, at the end of 2014, we were five people, at the end of ’15, we were 15 people, and at the end of ’16, we were 80 people.
Nathan: Yeah, wow.
Grant: The hiring growth was pretty high. In order to do that, you have to have a lot of systems in place, which we didn’t have. And I remember, it was early in 2016, and I think we were 50 or 60 people, so it was people overflowing in this small office space, out the window, and I was getting a tonne of questions around, “What are we doing? What’s the strategy? What’s the longterm vision?” I would see people that were behaving inappropriately, that I wasn’t necessarily directly involved with the interview, and I’d think, “Why is that person here?” So I realised that we had never actually formally defined any of this stuff, and it wasn’t a natural thing for me to do. I never worked in a company that had no culture, that had no foundational stuff done, so I didn’t really appreciate it.
But talking to a bunch of people, they said, “Yeah, just go and define your vision and your mission and your values.” So keep in mind, we were 60 people at this point, 60, 70 people, and so it felt kind of awkward to go and do that, because we’re already sort of in the race, and off and running. But I decided to do it, and we basically took some of the original founding team, so some of the early people, as well as some of the more senior people who had just joined, and we went off-site, and we said, “Hey, we’re going to spend a day, and we’re going to get a third party facilitator, and we want to fortify our vision, our mission, and our values.”
So we went through this exercise, and I was honestly a little sceptical of the process. I was doing it more because, for me, it was I keep getting these questions, so if I can stop that, that’s a win. And I felt the culture was good, and I honestly felt the vision question was a little … I get personally frustrated by it. So we ended up doing it, and I was recommended a facilitator that turned out to be amazing, and it completely changed the company in a matter of weeks.
So we formally defined the vision, which was revolutionising the global exchange of creativity. We formally defined the mission. And we formally defined five or six values. These were really important to everyone who was part of it, because they were part of the communication, and they were part of the ones that were developing it, so they really owned it, and they really internalised it, which was big.
Then we came back to the office, and the other 45, 50 people knew we were doing this, so there was a bit of suspense, and it felt a little anti-climatic, but we presented it all, and then we ran some exercises where we got the team to read the values, think about them, and list behaviours, good and bad, that you would think would meet this value or that wouldn’t meet that value. We used the output of that to formulate an employee handbook.
Why that had such an immediate change is vision and mission was like number one, are you passionate about that? Is that something that’s meaningful to you? You could explain it to someone, and you could ask them, look them in the eye and say, “Is this important to you? If it’s not, then you shouldn’t be here. You should find something that is important to you. But if it is, fantastic.” Then you’d have a set of values that were basically the rules of the road, you either follow them or you don’t. So we would hire by them, we would fire by them. If there were internal questions around whether or not we should share a piece of information, it could be financial, it could be board, one of our value things that we would reference these things to make decisions.
So what that did is it simplified everything. We would reference them all the time. So what that did, from a creativity perspective, people feel really comfortable, people feel really consistent, people feel really welcomed their ideas based on the culture, and it sort of freed up their thinking, not worrying about all that little stuff, worry about the real stuff. So by providing those guardrails and that framework, it freed up the right part of the brain so that they could ultimately go out and be creative.
Nathan: Yeah, wow, that’s incredible. Thank you for sharing. One more question on the creativity side is what’s your advice for creatives or people that have a creative talent to start a business? Because I think, you know, you talked about that one side of the brain that’s really creative, and then the other side is kind of, you got to be structural, right? And there’s things that a lot of creatives may not be interested in, like finances, invoicing, going out there, getting clients, dealing with clients, dealing with customers. Like the fun stuff is the building the product, you know?
Grant: Yeah. So we’ve heard of that. It’s not something that sits just with creatives, it’s with highly technical people as well, and I think it’s just a human trait. When things start to get challenging, what you tend to do if you don’t have any help is to revert back to what you’re most comfortable with. So I’m a PhD researcher in computer science, working on cutting edge machine learning algorithms, but I’ve had a technical breakthrough. If I go out and try to acquire customers and that becomes difficult to me, when I get really frustrated, I’m going to go back and start coding. It’s like, that is not going to help you move your business forward, and help you commercialise your idea.
I see the same thing on the creative side, where people … In that engineering example, the engineer says, “Well, I’m a technical person. I’m not doing that.” And so you basically just labelled yourself as this technical person, that you’re not willing to do that, and you almost create these rigid blocks around yourself. Same thing on the creative side. You say, “Ah, I’m a creative. I don’t want to deal with finance.” In many respects, that feels like a bit of a bias and a bit of a cop-out.
So in these cases, I would highly recommend that if people are struggling with that, to find someone that is not a creative or not a technical person, who has sort of commercialised the business, or has done something in the area that you’re struggling with, and talk through your priorities. What we tend to see, and you see this all the time with startups, is they want it to work, they’ve got the energy, they’ve got the hustle, but they’re just prioritising the wrong things because they haven’t necessarily spent the time thinking about how to sell, or thinking about how to set up finance.
So when you talk through your current priorities with people who have sort of done it and been there, they can help you recalibrate those, and they can help you say, “No, no, you don’t need to write another line of code. You don’t need to tweak your designs anymore. What you need to do is set up your accounting software.” It’s just like, “You got to get these invoices out, so you got to get cash in.” But I’ve seen that be really, really effective in helping people get over those humps and those biases.
Nathan: Yeah, I see. I’d love to just kind of switch gears and work towards wrapping up, Grant. I could talk to you all day, man, but mindful of your time. Want to talk to you about kind of post-acquisition, you sold your baby. How come you came to that decision? Do you feel comfortable with change of name to, obviously, Shutterstock Custom? Just curious.
Grant: Yeah, the process of deciding to sell, at the time that we sold, we sold in June 2017, we hadn’t done any formal fundraising, so we had raised about three million in seed funding from friends and family, and angel investors. We were at the point, so we were about 100 people, cash was obviously an ongoing concern, we were living off our customer receipts. And we felt that we were adding too much risk on the business to keep running it, and continuing as we were running it, we were growing like crazy, so we decided, “Hey, we should probably look at different ways to get cash into the company.”
Obviously there was the traditional VC route, with a formal Series A, which we were well-positioned to do, or there was bank loans, and loans against AR. So there’s all these different vehicles to go out and raise money, and so we were probably most geared toward venture capital. As we were talking to … An interesting thing that I learned is if you’re a VC and you’re trying to find a company to invest in, one of the tricks is they go to LinkedIn, and they’ll have a sort of thesis on the geography. So we’re Canadian, and they’ll say, “Show me all the companies in Toronto that have had high headcount growth that haven’t raised a lot of money.” That sort of allows them to identify companies from the sweet spot.
But because, interestingly, because we were a freelance company with a global network, a lot of our freelancers were putting themselves as employees of ours on LinkedIn, and so it made us look like we had this crazy high headcount, and only raised this tiny amount of money, which wasn’t actually true. I mean, we still had a big headcount and very little money, but it was exaggerated. So the inbound for venture was through the roof, and I was getting 10 inbounds from 201 VCs. So having conversations with them and sort of explaining what we were doing, and they were getting very excited, and they were talking about check sizes.
Then, a thing when you raise money, is it sort of set the goalposts. You push the goalposts out further, and further, and further. So if you were to raise 25 million, 50 million, an acceptable valuation when you raise that type of money is a significant one, and the probability of the sort of liquidity advance at that size, the bigger you get, get smaller, and smaller, and smaller. So I sort of, personally, because we hadn’t taken on much capital, and there was very little dilution, I was sort of struggling with whether or not I wanted to do this. I mean, can I go for the fences? Or I just kind of keep building this sustainable growth?
That’s when Shutterstock reached out to us, and I met with the team, and they were explaining their vision, and their mission, and it seemed very similar to us, and they had a very similar culture, and decided that the probability of us achieving what we wanted to achieve was probably higher if we’re together than if we’re doing it alone. And so just … to go that route.
Nathan: Yeah, fascinating. Okay. Awesome. Do you plan on working on something new in the future? Or what is your thoughts there?
Grant: Yeah, so right now I’m still with Shutterstock, and I plan to be with Shutterstock for some time. One of the great things, when you’re a startup, you’re out there doing it alone, and sort of fighting for your life, and then if someone takes you under the fold like Shutterstock has, they provide you a tonne of resources. So we’ve got a bunch of unfinished business that we have left to take care of, but once you’re an entrepreneur, it’s very, very hard to go back, so I’m sure there’ll be new ventures in the future, but for the time being, I’m going to keep building with Shutterstock.
Nathan: Yeah, amazing. So do you still run Shutterstock Custom? Do you still run that particular product?
Grant: Yeah. So Custom is a business unit within Shutterstock, so Shutterstock is trying to build a bunch of different products to serve the creative professional. Custom is one of them, and it is structured as a business unit. When they bought us, they changed our name from FlashStock to Shutterstock Custom. So yeah, no ego there, that is … you know, you bought it you do what you will, but it makes sense from a brand hierarchy perspective. Yeah, it’s kind of nice to see how it’s all sort of fitting in together.
Nathan: And did you think that this would happen fairly … you know, four or five years isn’t that long a period of time. One thing that one of my mentors has often shared with me is he says, “Nathan, it takes at least seven to 10 years to build anything of true worth and significance.” You guys-
Nathan: … yeah, fairly fast.
Grant: Yeah, it was super fast. So a couple things there, I think in total, it was just under four years, so our growth was very fast. And then you have the relationship after the acquisition, so it’ll be closer, I think it is now closer to six or seven. So understanding that timeframe when you come out is super, super important. But now that I sort of talked to a bunch of startups who are just getting started, one of the things that becomes important in that conversation is the type of company that you want to build. And I didn’t think about this, and most people don’t think about this because they’re thinking about survival, but there’s a very few number of companies that should be venture-backed. If you think of what the profile of what a venture-backed company is, they’re in a huge market where you’re going to get crazy growth, and quick scale, and there’s going to be a huge, hundreds and hundreds of billion dollar return.
But the reality of that happening is so low just based on statistics and base rate that you really have to think about what you want to sign up for, because when you take that big check, that big valuation, you’re limiting your options, which may be fine if that’s what you want to do, but it may not be fine. So one of the things, once we were acquired, I got a tonne of inbound from other companies in a similar situation that were looking to sell that had raised a lot of money, didn’t really quite hit their milestone, and they kind of wanted to know what was our secret.
We didn’t have a secret. I met the Shutterstock team years before, and just kept in touch with them, and was having coffee. And the probability that a company will acquire another company, in my head, just seemed to low. Strategically, it has to make sense, the size of the company has to make sense, the cashflow has to be there, all these things have to line up, so you can never really bank on it, or you can’t really run a … it’s really hard to run a process and get a bunch of value.
Yeah, so for me, I was never really looking for … When it happened, it just sort of made sense from a liquidity perspective. If I had raised money, it would have never happened, so it’s just interesting things to think about.
Nathan: Yeah, no, it is, and I agree with you. It is hard to know kind of what kind of business do you want to build, because usually you’re building that business to solve a problem, but also because you’re looking for work that’s more meaningful a lot of the time when you’re experiencing some sort of pain.
Grant: Yeah, totally. Most entrepreneurs and founders are massively dissatisfied with their previous life, and have some mental health things they want to deal with, and they’re not a normal cohort, but it’s life. So the other thing, I really enjoyed my time in Australia because you don’t seem to be as eco-chamber as you are here in North America. And you spend time in Silicon Valley, it’s like there is only one path, and it’s to raise a bunch of money, and raise as much as possible, and run as fast as possible, and sort of run right directly into a brick wall. It’s really easy to get caught up in that and say, “Oh, there is only one path. We’re a startup, we’ve got to raise venture, and that’s the only path.”
In fact, it’s not true at all. It’s like, 98% of the businesses in the world have never raised any capital, and they’re big, successful businesses. When I’ve seen people sort of sit down and have that realisation that, “Hey, I don’t have to raise venture money, there’s other ways, and there’s always pros and cons to it,” it’s really eye-opening. You can see how people just get into that mindset where raising money is the wind. And it’s like, “No, raising money is … that couldn’t be further from the truth.” It’s like, “Raising money is you’re signing with blood to be committed to hit this huge valuation as quickly as possible.”
Nathan: Yeah, I know, there’s definitely two sides to the table, eh?
Grant: Yeah, yup.
Nathan: Okay, awesome. Well look, we’ll work towards wrapping up, I’m mindful of your time. One last question, Grant. Where’s the best place people can find out more about yourself and your work? And we can wrap there.
Grant: Yeah, so I’m on LinkedIn, and you can also go to shutterstock.com/custom and you can learn all about the product, and my contact details are there also. So yeah, feel free to reach out.
Nathan: Amazing. Well look, thank you so much for your time, mate. You’ve shared a tonne of gold with our audience. I know that’s going to provide a lot of value to people, and a lot of lessons from your experiences thus far. So yeah, thank you so much for your time, I really appreciate it.
Grant: Yeah, no problem. Thank you, I enjoyed it.