CHAPTER 5:Customer Creation

To every thing there is a season, and a time to every purpose under the heaven.

Ecclesiastes 3:1

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PHOTOSTOYOU WAS A PRESCIENT IDEA. Way before others saw the opportunity in the late 1990s, Ernie, Chen, and Dave, the founders of PhotosToYou, realized that sales of digital cameras were starting to take off. Back then, the only way to see digital pictures was to print them out at home. It dawned on Ernie, Chen, and Dave there was an opportunity for a service to provide photo printing for digital pictures via the Internet. Not just the type of prints one would get from a low-end ink jet printer at home, but 35 mm-quality prints from high-quality photofinishing equipment. PhotosToYou would then mail the prints directly to customers.

When PhotosToYou was founded, the photography market was in rapid transition from film-based to digital. At the time, 82 billion photos were being taken annually with traditional cameras, and more than $37 billion was being spent to develop those photos. At the same time, sales of digital cameras were starting to skyrocket. Growing at a rate of over 50% annually, the installed base of digital cameras was projected to be 25% of the consumer camera market by 2004. In fact, as PhotosToYou got started, digital cameras were projected to be one of the top two consumer electronics sellers over the next three holiday seasons. To ...

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