Seattle online hitmaker Jonathan Sposato shares his next big thing

Jenni Hogan went to a proven source for next big thing generation with this week’s guest on her Next Big Thing podcast. Seattle entrepreneur Jonathan Sposato is the first person in history to sell two companies to online giant Google, and he also took part in the creation of Microsoft’s Xbox.

It was at Microsoft, that Sposato says he learned a lot of the entrepreneurial skills that he employs today.
“We’re literally trying to decide what is this Xbox going to look like, what should be in it, what should be in the graphics chip, how should we make it so that it’s easy for game developers to do stuff on. That was an incredibly exciting time.”

After Microsoft, Sposato’s first big hit was Phatbits, a tech startup that created a platform for developing mini-XML apps or ‘Gadgets.’ Phatbits was purchased by Google in 2005 and became Google Gadgets.

Picnik was his next success story. The photo-editing startup launched in 2006, and gradually they watched as their numbers grew and grew.

“At our height, Picnik was 60 million unique users a month,” Sposato tells Hogan. “It blows the mind. I would say really anything past 10,000 unique users a month, it becomes so abstract.”

To keep the staff thinking about just how many people they were reaching, Sposato says he would use real world examples.

“In the early days, I used to put it to the team with some really concrete examples. I would have like a Powerpoint slide, and I would have last week, ‘You see this, this is Husky Stadium, this many people used our site last week,'” says Sposato. “I would kind of scale it that way and after a point you start using countries.”

An important thing he learned though with that high usage was how important it is to keep track of the needs of individual users.

“You have to be very careful that you don’t abstract it so much that you lose touch with why people use your product and why they love or hate your product. I think that you still have to operate at the individual level and think about the personas, think about the people, individual mommy bloggers, or students or architects that use your site and think about what their needs are.”

Picnik’s success got the attention of Google. The company purchased Picnik in 2010. Sposato says when you sell a company like that, of course it’s great to have someone acknowledge your great work, but losing authority over its direction can be hard.

“It was a nice return on our time and our efforts, but bittersweet because of the uncertainty of what often can happen when you sell a company to a buyer, especially a big buyer, big brand technology company, and they have other plans, they have other missions.”

After two years, Google sunsetted the project. “It was definitely a little harder to deal with than I expected,” says Sposato. “There’s all kinds of emotions.”

But the sales of those two projects definitely give him room to work on more. Today, Sposato uses funds from those two successes to help propel other startups. Looking at the projects he’s invested in now, he identified a few things he has on his next big things list.

“Of course GeekWire is one of them. There is Vizify down in Portland. I love these guys. These guys are kind of doing your canonical rich online persona and it automatically updates itself so you don’t have to curate it and it’s brilliant and visually stunning (See Sposato’s Vizify profile). I’ve also invested in Pokitdok which is down in the Bay area […] That’s innovating in a health care segment and really bringing greater transparency to end users to people who are in need of some sort of health care but they are trying to decide what their solution is,” says Sposato. “Then there’s EveryMove, which is Russell Benaroya’s.”

Another one he seems really excited about – he even brought Jenni a T-shirt for the site – is PicMonkey. “I would argue it’s the most fun you can have with a photo in a web browser,” says Sposato.

Of course there are already photo editing services out there like Instagram, but Sposato points out a lot of Instagram users’ photos end up looking alike. With Picmonkey he doesn’t see that being a problem.

“We give them all kinds of tools to do amazing, artistic, fine, nuanced things to their photos, making them really, really artistic.”

Sposato calls the tool brilliant, and Hogan trusts anything he says is brilliant must be so.

Listen to Jonathan Sposato’s full interview on the latest episode of Jenni Hogan’s Next Big Thing podcast. Listen anytime ON DEMAND at KIRORadio.com.