Why and How Users Edited Pixite Out of Their Lives
Everyone loves a good selfie. It’s hard to walk into a café without seeing a person extending their arm out, trying to find the perfect angle to capture their beauty, and inevitably post on Instagram or Snapchat. While many self-professed selfie junkies are aware of Facetune, there was actually another app out on the market that came out pre-Facetune. If you’re wondering why you haven’t heard of it, there’s a good reason: its revenues fell by a third in 2015, leaving Pixite to re-assess its entire business model.
But how did a company whose apps were featured by the Apple Store as a “Best New App” end up getting edged out of the market by newcomers?
One word: patents. We summed this story up in our video as well:
You may not believe that a patent could be the make-or-break for a company, but imagine the following:
You’re Pixite. You have an amazing first mover advantage in the App Store, with a product that was truly innovative — there were no other products on the market that had the same photo editing capabilities at the time. You have a ton of new customers, and your app downloads increase every day.
A bit of background on the company: Pixite was founded in 2009 as a product for viewing photos online through a native iOS app called “Web Albums.” It was the first native iOS app that allowed users to browse photos that were stored online — and it had a unique advantage over its main competitor at the time, Google’s Picasa, because users were able to view unlimited photos.
It had even more competitive advantages: while other apps only allowed users to post photos to cloud storage utilities like Dropbox, Pixite had developed multi-platform capabilities, which allowed users to share photos to multiple social networks like Facebook and Flickr.
Pixite was on the path to becoming a unicorn-startup tale.
However, in the rush to get-to-market, Pixite left itself wide open to be taken advantage of by competitors.
We forgot to mention one vital component of business success: marketing. And that’s where Pixite’s story began to take a darker turn.
Pixite’s apps were undeniably popular — and with user popularity, why bother investing in marketing? As Pixite learned, there will always be a competitor with better venture capital funding, and bigger marketing spend, lurking in the shadows. While Pixite was popular, there was no guarantee that it would remain on top of the market.
Oh, and Pixite forgot another important component to business success: patents.
Without a patent, Pixite left itself defenseless against competitors like Lightricks, which created photo apps with similar functions — and then super-sized their success by using venture capital money to develop an algorithm to predict how much it should spend on Facebook marketing to retain its success.
Without a patent, Pixite left itself to engage in a marketing spend war — an inevitable loss for whichever company has less venture backing.
Now, imagine a different world: Pixite had applied for, and secured a patent to protect its ideas, essentially securing its first mover advantage — but with an actual enforcement mechanism. When all of its competitors try to bring the same idea to market, they are blocked out — which would have retained Pixite’s position at the top of the pack.
Fast forward to today: Pixite is still struggling. While it had a small hit with Pigment, an app that acts as an adult coloring book, a new competitor emerged with a similar idea, and usurped much of Pigment’s market share.
And the cycle continues: each time Pixite creates an app, a better-funded rival emerged from the shadows to steal it — and Pixite’s core set of consumers.
With patents, Pixite could have written itself a different future — one where it was protected from rivals — and retained its position in the market.
At KISSPatent, we help entrepreneurs and innovators to monetize their ideas. We put the power of patent protection for your unique idea in your hands. We help startups increase their valuation, keep from getting blocked, and protect their ideas and their communities. Contact us to get started here.
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