Julie Whiteman lost her cell phone and years and years of photos were lost forever. What made her feel even worse is that she and her husband Brian owned a print shop and she could have printed out the “keepers” easily at any time. Brian made a photo album to cheer her up and came up with the idea for Groovebook: a smartphone app that lets subscribers print up to 100 photos every month and receive a 4.5” x 6.5” album in the mail for $2.99 a month, including shipping and handling.
Brian developed proprietary software and installed specialized printing equipment to produce the album. The problem was the mailing costs, around $4-$5 for each album. The Whitemans wanted to keep the album affordable. Bulk mail would cost a fraction of that, but the albums would have to be flexible. Brian, frustrated because he couldn’t figure out how to make the albums flexible, sat deep in thought one day while mindlessly beating on the spine of the album with his pen. It was his “AHA” moment! He found that by cutting a semi-circular groove into the spine, the album was flexible enough to send at the bulk mail rate, $.80. They could keep the subscription at $2.99 a month.
They did well with their new business. In 8 months, they had 18,000 subscribers, but they needed an infusion of cash to grow the business. They appeared on Shark Tank. Lori, Robert, Mark and Kevin all made offers. The Whitemans accepted a joint deal from Mark and Kevin for licensing rights.
Where Is Groovebook Now?
After Shark Tank, subscriptions shot up to 500,000, and the Whitemans were making $4,000,000 in annual profit. In only 11 months, Shutterfly bought the business for $14.5 million dollars. Julie and Brian stayed on as consultants.
With the growth, some disappointments have arisen. There are disillusioned customers who are “ranting” about how much they now dislike Groovebook.
- It’s very difficult to cancel the subscription—credit cards keep getting charged.
- Quality of the photos has declined.
- There is no easily accessible customer support.
More users feel that for only $3 a month and the convenience, Groovebook is worth dealing with glitches here and there.