A snapshot of success

FotoHub has gone from photo printing to providing digital imaging services such as B2C online printing, report GCK, LSW, PYN and TWP

FOTOHUB, a digital imaging service provider, once made such a strategic blunder that it nearly went under. But a stroke of luck and founder Vincent Tan's fortitude and quick thinking saved the day.

FotoHub had started as a partnership of five kakis with a deep love for photography. They tied up with Kodak and offered photo printing services on the third floor of Coronation Plaza in Bukit Timah. Business was brisk, given that FotoHub was a stone's throw away from Hwa Chong Institution, their alma mater. Moreover, residents in the Bukit Timah area are generally wealthy and love to travel, so there were rolls and rolls of holiday photos to be developed each year.

Then, in the 1990s, the digital age arrived. The working relationship with Kodak was still going strong, and the business won numerous awards and accolades. Seeing FotoHub's success as a signpost for greater things to come, Kodak offered Mr Tan the opportunity of marketing a new product, the Photo CD. Mr Tan accepted and started a retail outlet that provided this service.

But not many consumers were exposed to digital media; they had neither the knowledge nor the means to pay for a service that converts film into CDs. As a result, FotoHub almost went bankrupt, having invested heavily in the retail outlet and the required specialised equipment.

Just when all seemed lost, Mr Tan got a referral from Kodak - a Caterpillar corporate trainer who had come to know of the Photo CD technology at a conference. He wanted Mr Tan to convert 100,000 slides into digital images for a training session.

With the completion of that order, Mr Tan went on the offensive, pitching the service to the corporate and government sectors, beginning with the Singapore National Archives. After a pilot test of three years, the body awarded a five-year contract to FotoHub, a job that is ongoing today. At last count, 1.7 million of the nation's most valuable images have been scanned and stored in the digital dimension. Mr Tan quips: 'This is FotoHub's national service.'

Next up was a contract with the National Library Board to scan the latter's collection of antique books, a job that's also still ongoing.

Just as things were coming along nicely, Mr Tan got another call. This time, it was the Caterpillar corporate trainer, who wanted to know if Mr Tan would venture beyond Singapore. The trainer's contacts at Shell headquarters in Brunei had been impressed by his digital slides.

But upon touching down at the Brunei airport, Mr Tan could not find the trainer. Being in unfamiliar territory and unable to speak the local language, he contemplated taking the next flight home.

However, he decided to press on instead. Stepping out of the airport, he spotted a booth with the Shell logo. It was a pick-up point for Shell expatriates. So Mr Tan hitched a ride to Shell's headquarters. Upon arrival, he met the Caterpillar trainer and scheduled a meeting with several Shell executives. The meeting was a great success and Mr Tan clinched a flourishing deal which runs to this day and which opens up opportunities in government agencies.

With its inroads in the government and corporate sectors, and the increasing use of digital cameras, Mr Tan felt that it was time to push digital services into the retail realm. Following the lead of first movers such as Snapfish and Shutterfly, Mr Tan set up a B2C online printing business.

Fotohub.com was an overnight success, chalking up users in a short period of time. And unlike its rivals, Fotohub.com allows its users to upload pictures in their original sizes and resolution, not re-sized to save data space.

Mr Tan then pushed for retail stores to be set up all over the island to supplement FotoHub's online offerings. FotoHub's flagship Kodak store was opened at Raffles Place in 2000. Other retail stores soon followed, in Suntec City, Beach Road, Golden Shoe Carpark, Coronation Plaza, Raffles City and Tampines One. These locations were chosen for their high human traffic and high-end customers. Today, the retail business accounts for 40 per cent of FotoHub's revenue, while the corporate and commercial divisions make up 45 and 15 per cent, respectively.

Another area where FotoHub is preparing to enter is content management. Here, FotoHub plans to work with academic institutions to explore new opportunities. It recently upgraded its corporate retail website, www.fotobankonline.com, to allow it to handle images, videos, and documents, including annual reports. FotoHub has also shifted to using Java running on Sun hardware to further enhance its content management capabilities. FotoHub also aims to develop a facial or object recognition tool in the future. With these technologies, Mr Tan aims to position FotoHub as a leader in its field.

Looking ahead, Mr Tan has set a turnover goal of $10 million by 2010, and he believes that FotoHub is well on its way to achieving the target. He also sees an eventual public listing for the company.

The writers are students of the NUS Business School

CHEERIOS to my beloved xiong dis! 6 more reports to go tho.. =.=