A digitizing David takes on photo-scanning Goliath

Startups


Mitch Goldstone loves photo scanning. His business, ScanMyPhotos, does what it says on the tin: you send photos to the company and, using high speed scanners and special software, his team digitizes your photos, sticks them onto a USB key or online, and sends them back.

He is proud of his business. Thanks to his scanners he’s helped users save their photos from tornadoes, floods, and theft. When the California wildfires rushed through homes he and his team, when they could, were able to recreate photo collections and restore entire photo libraries.

That made him feel good.

This isn’t about his successes, though. It’s about his battle with forces arrayed against a small founder by bigger companies and what he intends to do about it. And it’s a lesson to founders who find themselves against the wall. It’s a story about a digital David against a Google Goliath.

It began with an advertisement.

FastFoto cometh

For a few decades – at least since 1990 – Goldstone and his photo scanning competitors have faced little competition. Scanning massive numbers of photos is hard. It requires time and patience and most hardware available was poorly built and too slow to scan hundreds let alone thousands of photos. So he was sitting pretty.

Scanning hardware is essentially stagnant. The last great innovator – Neat and it’s specialized document scanner – has gone out of the hardware space entirely and only Epson and Fujitsu are the major brand names making and selling consumer scanners. Out of what was once a mighty industry, these two survivors kept going by making simpler, faster scanners for DIYers and lowering prices to rock bottom. After all, why buy a scanner with iOS contains one for free?

Then Epson built the photo-scanning Death Star.

Epson launched its FastFoto line in 2016. The claim was simple: these new scanners were the world’s fastest “in their class.” It was a DIY photo scanner aimed at home users that was priced under $1,000. They cost about $650 – far more than the average scanner – but they let you scan in all your photos and cut out the middle man. Epson claims that the latest model, the FastFoto FF-640, can scan up to one photo per second. It makes that claim in Google advertisements that were placed against Goldstone’s company.

These claims are fine if a bit misleading, said Goldstone, a trim man who has the calm demeanor of an East Coaster who moved to sunnier climes to pursue high-tech dreams and won. DIY photo scanning his hard, he said, and requires far more than a fast scanner. His business offers the “everything else” you need to get the job done. Worse, he claims Epson is spreading false advertising and that the company is also directly targeting his photo scanning business with its claims.

“Although Epson leads consumers to believe their scanner is more efficient,” said Goldstone. “The reality is it could take hours or days for an amateur consumer to take on this DIY project to digitize pictures, rather than with our more efficient and cost-effective services.”

Finally, Epson is also hurting his bottom line, something Goldstone can’t abide. He knows he makes a good product.

“Ever since last Fall’s Epson FastFoto FF-640 launch, sales at ScanMyPhotos have been diminished,” he said. “We believe that upwards of $150,000 in monthly sales may have been lost due to the misleading claims by the giant manufacturing conglomerate. Having pioneered the bulk photo scanning business, we have digitized 500 million pictures. In the case of Epson, consumers are thinking they are buying the fastest scanner, yet are out over $600 before scanning their first picture.”

Further, the scanning giant Epson doesn’t quite seem to know or really care where it’s ads appear. I asked Epson for comment and they were nonchalant about the placement.

“Epson America does use Google AdWords (as do other companies in the industry) across product lines using relevant industry search terms/competitive search terms,” said an Epson spokesperson. “Google serves up a variety of ads in this process, but all FastFoto ads link to the FastFoto landing page, where the claim is explained and supported.”

So the ads appear against Goldstone’s own ads and they suggest, in no uncertain terms, that Goldstone is replaceable. Goldstone doesn’t like that.

Human v. Machine, Part II

Goldstone is a consummate marketer and loves being a thorn in the side of big business. In 2005 he led a class action lawsuit against Visa and MasterCard for fixing swipe fees that merchants in the US paid card companies. He won a $7.24 billion settlement on behalf of merchants. It was the biggest private antitrust settlement in US history.



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