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Thursday, Mar 28, 2024

Artkive’s Indirect Path to Growth

Jedd Gold jokes that it took eight years for his custom photobook printing business in Van Nuys to become an overnight success. Artkive, founded by Gold and his partner Jeff Lipp, prints hardcover scrapbooks of user-submitted photos. And today, business is booming. But the company model required some serious tinkering before it achieved profitability. Gold and Lipp conceived Artkive in 2012 as a way for parents to compile and store their kids’ art projects. The idea was to help families hold on to sentimental memories while freeing them of physical clutter. Artkive had two main lines of business: an app and a book printing service. The app served as a free digital archive – parents would photograph their child’s drawings or paintings, then upload the images to the Artkive server for storage. Once they built up a catalog of images, users could hit a “print” button to order an art gallery-quality book of their photos, made with professional cameras and lighting equipment. While the concept was popular – hundreds of thousands of people created accounts – “we just weren’t able to monetize our users in a meaningful way,” Gold said. People loved the free archive but weren’t paying to have books made. Without a steady revenue stream, Gold considered shutting the company down, but eventually decided against it, citing an “obligation to maintain these customers’ memories.” Gold hired one customer service employee to keep the archival app running, but otherwise relegated Artkive to the back burner as he and Lipp focused on consulting gigs and other side jobs. Then about three years ago, Gold said, “We started looking at the company and our database, and we saw there were over 100,000 registered users who had never uploaded any images. We were like, ‘What’s happening with those people? Are they too busy? Too lazy to do it themselves? Let’s see if we can offer a service where we do the work for them.’” In 2017, Gold and Lipp began testing a concept aimed at those accounts. “We’ll email you a (prepaid) mailing label, you stick it on any box of art you have, send it back to us, and we’ll photograph it and upload it to your account,” Gold explained. “We got enough of a response to say, OK, there’s something here.” Gold noticed that the users who responded positively to the idea were willing to spend quite a bit of money to have the photography and uploading done for them. “The convenience factor was huge,” he said. In 2018, Gold and Lipp formalized this offering with the Artkive box – an empty, company-branded box and prepaid mailing label users could fill up with files or knick-knacks that they wanted photographed in their book. The shipping kit costs $39, plus a second payment based on how much art the user wants photographed and printed – 25 pieces run $75, while 200 pieces cost about $300. The app hasn’t gone anywhere, either. Users can still upload their own photos for free and order a book for $25 for the first 25 pages. Gold and Lipp put a simple 40-second video on social media explaining the new mail-in service. That video attracted about 10 million views in just a few days. “That turned us around overnight,” Gold said. At the time, Gold was subletting a 500-square-foot space in the fourth floor of an office building in Sherman Oaks. When the boxes started rolling in, Gold said, he moved the company into a 1,500-square-foot space in the same building. To help with the workload, he started hiring moms of students at Sherman Oaks Elementary School, which sat just across the street from the office. But even that wasn’t enough. “I remember the day we filled up the entire (USPS) truck. We had to contact the Postal Service, which started sending 9-ton trucks. … We were taking over any available space in the building to store boxes,” said Gold. “Space had become a major limitation for growth.” To accommodate demand, Gold found vacant warehouse space near the Van Nuys Airport. He took over the unit and an adjacent one and knocked down the walls to form Artkive’s current digs. In the last year, Gold said, Artkive has sold tens of thousands of books and hired roughly 80 staff, including photographers, editors, book designers, customer service representatives, and shipping and logistics personnel. “We ended up promoting a lot of those moms into managerial roles to run the different departments of the company. The leadership team is made up largely of parents,” Gold said. “We’ve grown almost like a family business.”

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