Shutterfly's Improbably Long Survival (and Success)

Jeffrey Housenbold, the chief executive officer of Shutterfly, sat down recently for a meal at Il Fornaio, a popular Italian restaurant in Palo Alto. He says he watched as a diner at a nearby table pulled out a smartphone and began uploading pictures of his steaming plate of cioppino onto Instagram. After describing the scene, Housenbold says: “I don’t have photos of people’s dinner on my service. I have 16 billion memories.”

Housenbold uses anecdotes like this to help explain why Shutterfly isn’t insecure about its place in the world. The Redwood City (Calif.)-based company is making money by turning digital snapshots into tangible things: Sales of custom photo books, calendars, greeting cards, wedding invitations, and even wall decals totaled an estimated $600 million in 2012. Yet there’s a feeling that the company has been passed by. After all, investors value Shutterfly at $1 billion—the same price Facebook paid for Instagram, a startup with no revenue.