ImageQuix and Fotomerchant executives interview

ImageQuix, a leading provider of software solutions for professional photographers, recently announced the acquisition of Fotomerchant, one of the most respected end-to-end workflow solutions for high-volume studios. In this special group interview episode, Gary Pageau of the Dead Pixels Society talks with Tim McCain, president, of ImageQuix; Elmar Platzer, CEO and co-founder, of Fotomerchant, and Derek Clapham, CTO and co-founder, of Fotomerchant, about what this combination means for the industry, for the companies and their customers.

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Transcript

Erin Manning: 0:02

Welcome to the Dead Pixel Society podcast, the photo imaging industry's leading news source. Here's your host, gary Peugeot. The Dead Pixel Society podcast is brought to you by MediaClip, advertek Printing and Independent Photo Imagers.

Gary Pageau: 0:19

ImageQuix, a leading provider of software solutions for professional photographers, recently announced the acquisition of Fotom erchant, one of the most respected end-to-end workflow high-volume for studios. In this special interview, I talk with Tim McCain, president of ImageQuix, Elmar Platzer, the CEO and co-founder Fotomerchant, and Derek Clapham, the CTO and co-founder Fotomerchant, about what this combination means for the industry, for the companies and their customers. Hi, we're here in Las Vegas, Nevada, at the SPAC show talking to the principals involved in the Fotomerchant erchant ImageQuix merger. We're going to talk a little bit about what that means and what it means for the industry for these two leaders to come together at this time. So first can you introduce yourselves, tell us about your roles in the company.

Tim McCain: 1:10

Sure, I'm Tim McCain, president of ImageQuix Right and happy to be here.

Elmar Platzer: 1:16

Thanks, Elmar Pletzer, co-founder and CEO Fotomerchant erchant, was happy to be here, of course.

Derek Clapham: 1:26

I could say something. Hey, Derek Clapham, co-founder and CTO Fotomerchant, and I'm excited to be here.

Gary Pageau: 1:36

So first, why don't we just keep the mic down there with Derek and Elmar and talk a little bit about your company, the technology platform those who aren't familiar with the technology platform where you started because you're a relatively new company compared to ImageQuix Then we'll talk a little bit about the ImageQuix history and how you guys came together.

Derek Clapham: 1:52

Sure, sure. So just a very brief amount of context and background. So Elmar and I founded the company in 2008, and it was built with a P, not an F Photo Merchant a PH and our focus then was to build a website, building an e-commerce platform for wedding and portrait photographers, and we ran that relatively successfully for many years. And in 2016, we came to our first SPAC. So I came along with another one of our long-term employees and we were just sort of sussing out the high volume industry. We hadn't really explored it much and when we saw what we saw, we thought, hey, we really should look at addressing this with our technology platform. And so at that point the company did a customer segment pivot and we basically turned all of our attention to the photography, high volume photography industry.

Derek Clapham: 2:50

But our technology platform was focused solely on e-commerce. That was it no website building, no workflow tools, no capture tools, nothing like that and we started on e-commerce. And then I got to know Tim a little bit and we went into partnership with PhotoLynx around 2017, yeah, around 2017, because they had the workflow tools that we didn't have and were rolling out PLIC Some of you might remember that at the time and so our technology tied in really nicely with that. And then, not long after that, photolinks was acquired by ImageQuix and Tim gave me a nice courtesy call and let me know. I remember where I was standing, I remember what it just eaten, and for Elmer and I that was a moment that was like oh okay, this queer issue because our largest partner has just been acquired by our largest competitor. So that's when we turned our attention to moving beyond e-commerce and basically into workflow capture and an end-to-end solution. So our platform is really focused on capture to sale within two minutes, sort of thing.

Gary Pageau: 4:06

And we want to talk a little bit about the capture piece later on. But why don't we go over to Tim and talk a little bit about kind of that journey right, the ImageQuix, photolinks combination and then kind of going on a recent little bit of an acquisition binge in the last year or so?

Tim McCain: 4:21

Yeah, so, like Derek mentioned, we did the merger and went with IQ. It was cool and we were definitely competitors at that point, but still friendly.

Gary Pageau: 4:35

Sure, it's a small industry. It's a small industry absolutely.

Tim McCain: 4:38

Kept things warm and talk, but knew that they were coming on strong and heavy and had some really great workflow tools, along with some kick-ass e-commerce stuff. So they were a very good competitor. So from there you're talking about the mergers and acquisition. When we started getting our feet under us and with our merger with PhotoLynx and IQ, and started find out, take some time to get to that and you like, you like CaptureLife.

Gary Pageau: 5:05

You had a few other people in there.

Tim McCain: 5:06

Absolutely. There's some, there's some small tuck ins that went in the fit right and expanded the tan force. But we'd always wanted to go and work with, you know, a photo merchant, and so, yeah, we did a little bit of an acquisition rampage, or whatever you want to call it. We picked up Skylab, we merged a photo photo merchant and Studio Ninja, which is CRM for the wedding industry.

Gary Pageau: 5:33

Yeah, that's when I kind of overlooked. I didn't hear much about it and then I saw that was part of, like, the brands you've acquired. When did that happen?

Tim McCain: 5:42

I actually think it's probably six months ago, okay.

Gary Pageau: 5:45

Yeah, yeah, yeah, yeah. So you're like a full featured platform now, almost from you know, wedding portrait and volume now.

Tim McCain: 5:52

Absolutely. Those are our three, three verticals that we're dealing with is, you know, high volume. And then we have the tool sets, like you know Skylab and stuff that can tuck in anywhere else, and then the wedding portraiture stuff.

Gary Pageau: 6:05

And plus, you've CaptureLife the piece, which is an event, the experience economy, absolutely, and you've got a piece of hardware that dovetails into that. Was that part of the discussion? Because you've got the hardware piece, which maybe you should describe a little bit, and that kind of can feed, capture life.

Tim McCain: 6:20

Yeah, it's an ongoing part of the discussion. We're in a lot of discovery right now.

Gary Pageau: 6:24

Right.

Tim McCain: 6:24

There's a lot of unknowns, but the whole team has been just going together and trying to figure out the best of everything and where we're going to go Right, and the one thing that's important is nobody's getting anything ripped out from underneath them, you know what I mean If you're working with something you're doing it right now.

Gary Pageau: 6:40

It's going to stay. Continue to do it. Yeah, because that is a concern when murder is real.

Tim McCain: 6:43

Absolutely, absolutely, and we're not doing that, and this is a very thought out, a well thought out approach. Over the last probably year, we've been talking about it and it's going even deeper now that we're all together and we can really experience each other.

Gary Pageau: 6:58

But Fotomerchant is going to stay in Australia.

Tim McCain: 7:01

Yeah, yeah.

Gary Pageau: 7:02

So I mean that's sort of the piece, because you know I mean for the near future. At least you're there's a lot of moving. Yeah, because there's, like, you know, because there's that sort of culture. I mean, that's one of the things I had heard about was, you know, people liked working Fotomerchant because of the culture, right and not, there's anything wrong with the image-credits culture, but it's just different. You know, they're different people. No matter what, you can't stop the accents.

Derek Clapham: 7:23

No, you certainly cannot. The other thing on that is we do have quite a lot of stuff anyway in the US.

Erin Manning: 7:31

Right, yeah.

Derek Clapham: 7:32

So we're pretty distributed. Yep, there's a fair few in Australia, but I would say it's about a 50.

Elmar Platzer: 7:38

It's almost a 50-50 split.

Derek Clapham: 7:39

It's almost a 50-50 split.

Elmar Platzer: 7:41

It's in New.

Derek Clapham: 7:42

Zealand and in Europe as well. Yeah, yeah.

Gary Pageau: 7:45

And did you have the presence in those air raid regions as well? I mean, is that sort of a way where the two companies are complementing each other, the European presence in the Asia Pacific?

Tim McCain: 7:55

That's part of the strategy is there's more of a European presence there. We did little stuff with books in Australia Right. But it was, I mean, that was their home base.

Gary Pageau: 8:06

So as far as competing with them.

Tim McCain: 8:08

They could just run over and do that.

Gary Pageau: 8:10

Right, yeah, but now no, I mean from a.

Tim McCain: 8:12

So there's a geographic advantage here for this Absolutely and it's truly a worldwide company right now, which is amazing.

Gary Pageau: 8:18

Right, it's amazing. From where it started. Tim, right From where it started. Oh, yeah, yeah.

Tim McCain: 8:25

It's amazing where it's going.

Derek Clapham: 8:26

Just to add to that. Sorry, just to add to that. Sure, the biggest challenge, I think, for any technology company, if you're going to go global, is that you no longer are just thinking about what it is you do. You have to now think about currency and tax, and there's so much of that, and because we've been, at the very least, a due or tri-country product, we had to think about that really really early on in technology development. So we're multilingual, multi-currency, multi-region already, just by nature of being an Australian company. If we had only done business in Australia, we can only grow so much Right, we have 26 million people, 5 million children in school.

Gary Pageau: 9:12

Right.

Derek Clapham: 9:13

And that's it Right. The US is that times 15, roughly, Then Canada is probably double Australia and then Europe is just like the US. So we were already poised for that and I think as blueprint and image-wix has grown and photo links and those things pretty much captured a huge percentage of the US market and Canadian market. So we bring some of that to the table just because we've had to.

Gary Pageau: 9:48

We didn't really have a choice, right? If you were going to do this, you had to be all of those things, yeah.

Elmar Platzer: 9:54

Just adding further to that. So we were actually. We already had a global mindset from the get-go Right and we were looking at expanding. Our next market would have been the European market, but obviously that requires resources and we didn't want to be spread to thinly as well either.

Gary Pageau: 10:08

Right.

Elmar Platzer: 10:10

So we were looking at capital raising and for a number of reasons we decided that that was not a good option for us at that point, and I guess the next obvious step for us was to partner with someone who has resources.

Gary Pageau: 10:21

Yeah, because I mean, from a macro standpoint, the way the world economy is, it's not a great time to borrow money.

Elmar Platzer: 10:27

No, look, what we actually found is we were looking to raise capital, but you've got two options private equity and VC. And private equity, the minimum check size is so large would have been highly diluted for us, and then if you want to raise less than that, you need to go down the VC market but, you're hitching your wagon to a horse that you don't necessarily want to be hitched to either, because they have a different set of expectations.

Elmar Platzer: 10:55

So when we evaluated that, we thought it would be good to partner with someone with the resources, expand the team resources so we can actually make a good vision. It's actually a shared vision that we have.

Gary Pageau: 11:11

Yeah, and you've recently had a new investment partner right. Was that part of the dialogue you had with them, getting them aboard saying, hey, we have this opportunity? Did it go that far back? Because when did the Charlesb ank thing happen?

Tim McCain: 11:25

The Charlesb ank thing happened 13 months ago.

Erin Manning: 11:28

Okay.

Tim McCain: 11:29

And yeah, that was part of the talks at the beginning. When you're doing all that, you have to put together a deal theory and where there was white space and where they could make money.

Gary Pageau: 11:39

Right, exactly.

Tim McCain: 11:40

And so, yeah, that was absolutely part of the discussion and there's a targeted list of people that you would hope to do business with and partner up in the future, and they absolutely were on it.

Gary Pageau: 11:51

Absolutely Okay. So, going forward, you've got like a hodge podge of identities, if you PhotoLynx Blueprint, ImageQuix, photo and caption, all the various things. How are you going? Is there a plan to bring all that together or is it like you know what's working? Great the way it is now. So let's not mess with the success.

Tim McCain: 12:13

So as far as the marketing side of that and branding and all that, james and Ann and they're doing a wonderful job and it's gonna be a one brand eventually.

Gary Pageau: 12:24

Right.

Tim McCain: 12:25

With different facets and there's whole yeah, there's big old theory about how to do all that right, it's a big, big job and they're tackling that right now. And then, as far as the tech, we've already talked about the tech and what we're planning on doing. Again, nothing is going. You're not gonna get, you know. You're not gonna log on to X Company. You're still gonna go through photo merchant right now. If you're doing photo merchant. You're still going through image quicks. If you're doing image quicks right now, eventually it will be one brand.

Erin Manning: 12:51

And one platform.

Tim McCain: 12:52

And one platform.

Gary Pageau: 12:53

Yeah.

Tim McCain: 12:54

One brand, one platform. Big job for both of those.

Gary Pageau: 12:56

Yeah, and that's not gonna happen any time quick.

Tim McCain: 12:58

No, it can't. I mean, even if we sat and said, hey, let's do this right now, there, right now would be as fast as we're gonna be able to go.

Gary Pageau: 13:06

Exactly so I'm not even gonna ask about the timetable on that, yeah, no there is.

Tim McCain: 13:10

it's too early, too early yeah.

Gary Pageau: 13:13

I mean, I would say I mean there's no point in asking for a timetable, so when we're back here next year there may be no visible progress, but that may not be a bad thing.

Tim McCain: 13:21

Yeah, and we'll tell you where we're at next year we're back here for sure. Can you tell some of the people out there that we can't give a timetable? We can't give a timetable, not yet.

Gary Pageau: 13:32

Well, I mean because you have an ongoing business. That's the challenge.

Tim McCain: 13:35

Absolutely so, and we'll be running that ongoing business the same way it goes If it shut down. This would be a bad move.

Gary Pageau: 13:40

Right, yeah, and we're gonna keep everything going.

Tim McCain: 13:43

And keep everybody happy and content and work towards our ultimate goal, which we're all excited about. And the biggest thing is that we're all going at this holistically, with egos dropped. There's no pride of ownership. We're trying to do what's best for the industry right now and best for us collectively, which is a neat way to go about it.

Derek Clapham: 14:04

And just Just on the branding we can give people a hint. So the new brand name will be based on the first letter of every current brand. So we'll take the P from photo link, the S from Skylab, the F from photo merchant, the I from ImageQuix and the S from Studio Ninja.

Elmar Platzer: 14:18

And that's what Derek is, not the man and find a way to jumble it, and that will be the new brand, it fits.

Tim McCain: 14:22

We're gonna jumble it, yeah, yeah yeah.

Derek Clapham: 14:25

I don't think there's any bales.

Gary Pageau: 14:26

James is having a coronary over there. You know that. So let's talk a little bit about the industry piece of it, because there's this side of it, right, which is, you know, consolidation happens in markets, right Creates opportunities for other people and other. But you've got also just in the customer base. There's a crazy amount of disruption happening there, with players, major players, struggling. There's you know, that's not a secret and new people getting into the business as potential customers and opportunities. So talk a little bit just about what's happening in the industry where you know, if you're looking at a someone private equity people's like this might be a great place to put some money into.

Derek Clapham: 15:05

Yeah, we noticed, because we've been in the market sort of over the last year or two, that there seems and, tim, I think you've probably seen the same thing but the private equity sector does seem to be interested in the photography industry in general at the moment. That isn't always the case, but it is at the moment and I think it extends beyond technology companies in the industry. It extends to other styles of business as well. Sure, and I think we'll probably continue to see more of that. In terms of the industry and the struggling studios, I think we saw everyone saw a big bump during and after COVID. I think there's a degree at a macro level of we're coming down off that bump and it almost feels like a slope downwards. But it's more of a just a shallow correction. Oh, that's my take on it.

Tim McCain: 16:03

I agree with that, I understand.

Derek Clapham: 16:06

Yeah, and so studios that have scaled up are now potentially having to think about scaling down a little bit, but the net result for them is still growth. Over the last four years. For the guys like us in e-commerce, we saw just a huge shift away from paper, which was why I think you're also seeing companies like ImageQuicks that are requiring, because there was a massive, a few years of extreme profitability because of the movement to e-commerce.

Erin Manning: 16:43

Yeah.

Tim McCain: 16:44

I don't know if anyone else wants to? Well, I would like to just address he hit it on the head and also with having 12 or 1,300 people out there right now at SPAC, which is the biggest SPAC I've ever been to like. I think that there's also an influx right now of people coming into the industry as well, which is good, and the money coming in the industry from private equity is good as well. It's exciting for us. Everybody should be excited to be in the industry right now.

Gary Pageau: 17:11

Yeah, well, that's part of the thing is, I mean, some people get concerned about that because they think private equity is. They may have a viewpoint on that, whether they just go in, take companies over, cannibalize them and cut people and then resell them, but it doesn't look like the people were getting involved in the photography segment are having that idea, because I think, kind of in a macro level, those people are looking for solid investments. They're looking for industries that are profitable, recurring revenue, maybe not crazy growth, but if you look at the global economy, profits are a good thing right now. So if you're investing in green technology or electronic batteries or whatever, you may not see a payoff on that for years, whereas if you're investing in something like relative material and just like photography, especially volume photography, but where there's a lot of opportunity, it could be a good investment, great.

Gary Pageau: 18:05

So let's talk a little bit about one more thing that's kind of come up as sort of the topic of the show is like AI, right, ai, how is it affecting the industry and how are you guys looking at it? I mean, I know on the capture side you might have some technology that might play a role, but that seems like the talk of the government trying to figure out how is AI going to influence services. So, from your standpoint, how is it going to affect your business going forward?

Tim McCain: 18:33

Well, we bought Skylab for-.

Gary Pageau: 18:34

Right, exactly, exactly, so we believe in the AI stuff.

Tim McCain: 18:40

I would say educate yourself on not you personally, but whoever's listening educate yourself on AI and what it can be used for. You see the fear-mongering stuff that pops up and says this mom was mad because you touched this kid's image without. We're doing it in a very structured, complete way. It's not anything different than what we've always done and it's like in the way or group photos they used to take kids with hands, I retouch them and put different heads on different like fixing things. We're just doing it automated now. So I would. We're doing it in a very nice, structured way, but we believe in AI. We just invest a lot of money into AI, just adding something to it.

Elmar Platzer: 19:20

I'll talk about the technology, because that's your full say LAUGHTER.

Elmar Platzer: 19:25

Now, just generally on AI, I think what we'll see is we see a huge influx, we see a mushrooming of AI companies popping up. You said it again mushrooming of AI, mushrooming of AI, mushrooming. It's actually difficult. You know, we're not from Austria, remember? I'm not Australian, no, but I think we see a huge influx of new market entrance into the space. We will also see at some point this will become commoditized as well. Oh sure, but you'd be crazy not to leverage AI, because it's a productivity multiplier and you just really need to. But I think we're still very early days especially in our industry.

Derek Clapham: 20:02

Yeah, you know, I've answered the same question 16 years ago on e-commerce.

Tim McCain: 20:10

Right.

Derek Clapham: 20:10

We're seeing an influx of e-commerce. What do you think about that? I mean, people are going to lose jobs and so on and so forth. And paper's reliable and what happens if my credit card number gets stolen, and these are really big issues to consider. And because we're so early on in the widespread adoption of AI and the fear mongering that Tim was talking about in the photography industry, we're not using artificial intelligence to try and gather as much information about people for any other use other than to be smart at doing the productive things you know, like retouching images, removing braces, whatever.

Derek Clapham: 20:52

It might be Right, but it's so untested like the boundaries of it technology-wise are huge, like they're almost boundless, but the legalities of it are still untested, right. If you look at e-commerce 20 years ago, it was like the Wild West, right? You look at e-commerce now and the laws and the regulations and all of that. I think that's what we haven't seen yet with artificial intelligence.

Tim McCain: 21:18

One of the big things is generative AI versus the AI tool sets.

Gary Pageau: 21:24

Right, exactly.

Tim McCain: 21:25

Two very different things. If people get them confused and they think that we're gonna make your kid a cartoon character or something without your consent or we're gonna do whatever, and that's just ridiculous, we're doing tool sets, color correction, cropping you know, stuff like that, like last glare, last glare, knockouts, you know. And if a mom wants braces removal or something like that and she pays for it, then there's the consent right. So it's not a generative AI.

Gary Pageau: 21:49

Right, so, but I think if you look at what's happening just from an employment standpoint right, people being able to find employees at work and labs it's this sort of thing that's gonna keep photographers, volume photographers and studios competitive is they have access to these tools, whereas, you know, nowadays it's harder to find somebody.

Tim McCain: 22:07

There's also still somebody to like. People think like you were just talking about the e-commerce thing and how many jobs are gonna be. Let you take that there's somebody that has to oversee all that. There's somebody that has to look at that AI. You know even chat GPT. It's a start to something. You don't let it write your paper, but you let them give you a couple ideas. It's the same thing with this, and there's somebody that has to look at that right now and somebody has to manage that, yeah exactly Cool.

Gary Pageau: 22:32

Well, thank you so much for your time, guys. It's been great, great conversation. Looking forward to hearing more news and thank you so much. Thank you Appreciate it.

Erin Manning: 22:44

Thank you for listening to the Dead Pixels Society podcast. Read more great stories and sign up for the newsletter at wwwthedpixelssocietycom.