Startups Compete to Become No. 1 Memory Archivist

Several small businesses are competing to convert old slides, snapshots and home movies into digital formats that will stand the test of time.
Business Writers
November 20, 2012

When Jim Simon’s dad died seven years ago and he inherited the Nebraska family’s archives which included snapshots, slides and hours of tape featuring birthday parties, anniversary dinners and comedy routines from the 1970s. Jim decided to convert all the old media to DVDs and CDs. Soon, friends and family asked for help with their projects and a summer camp in Maine paid him to convert thousands of images.

In 2010 Peggy Bank was born.

Simon’s company employs 15 people who preserve the pre-digital memories of customers, most of whom were born before the Ford administration. The corporate name is derived from a play on words—or rather a play on the abbreviations MPEG and JPEG, two popular digital formats. Each day, thousands of slides, negatives, reel-to-reel film and video tapes pour into the Omaha, Neb. headquarters to be scanned, those images swept into a password-protected online account, easily shared on mobile devices and through social networking sites. “All of a sudden they’re in a form that’s relevant in the era we live in,’’ Simon says.

Scanning T-Shirts 

Peggy Bank says it will capture just about anything. “We had person who sent us bunch of T-shirts,” Simon says. “We’ve got giant scanners, sure.’’ Simon says the company prides itself on hand scanning the items. Customers have sent in photos in frames or entire scrapbooks, wary of destroying the snapshots or items pasted in by removing them from the pages. “We sort of like the challenge.”

But it wasn’t easy. Simon says it was tough finding the right equipment and employees. Money remains tight. In some months the company is in the black and sometimes it’s not, he says.

Peggy Bank has joined a flurry of digital companies that are reviving memories by converting old media to new, primarily by preserving them on DVDs and flash drives while some upload converted content to the cloud. While Peggy Bank focuses on fine tuning its online storage—called a bit clunky by one tech reviewer—one of its biggest competitors, ScanDigital is growing, despite its insistence on hand scanning every item that arrives, a commitment that kept one founder pulling an all-nighter.

A Well-Funded Competitor

Both are competing against the well-funded iMemories with its 100 employees and $20 million in venture capital, allowing the company to buy the fastest automatic scanners and, its founder says, allowing it to deliver new apps in the race for chief digital preservationist.

Anderson Schoenrock, CEO and c0-founder of ScanDigital is undaunted. Dreamed up by his Dartmouth buddy, Mike Mothner, the company has grown to 85 employees since it started in 2007. It now scans one million images a month. “We’ve built a culture and trained people to treat the materials as their own,’’ says Schoenrock, speaking from the company headquarters in Torrance, Calif. “Every one is treated as a unique and individual memory. Which means we’re not the cheapest in the market.’’

Another challenge: ScanDigital doesn’t ask the customers to count the materials before they’re shipped. The company does that for them and bills after. That means they have to float the cost of processing a lot of orders.

The partners at ScanDigital started small, determined to use only their own money. Schoenrock worked in investment banking for two years, cashing in his Lehman Brothers shares in 2008 before that company imploded.

DIY Ethos

With one employee, Schoenrock tested the machinery, processed orders and acquired new customers—slowly.  “We always wanted to stay self-funded and not be under the pressure of the board,’’ Schoenrock says.

“We underestimated how difficult it was to raise awareness—and we continue to face that,’’ Schoenrock says. “People have this [film] stuff and don’t know what to do with it.’’ Part of the challenge is giving them a sense of urgency. “A lot of times people say, ‘I definitely should do that,’ but their photos have been sitting in the closet for five, 10, 15 years. What’s going to motivate them to ship them today?”

Even after hiring a dozen people, Schoenrock and his first employee, Matthew Stone, now the company’s COO, would scan material themselves. Two years ago the company received a huge order. They promised the customer a fast turnaround time. Matt stayed all night, scanning throughout, to meet the deadline.

“Looking back, that was a huge benefit that came out of being self-funded,’’ Schoenrock says. “Had we gone out and raised money, I would have hired a bunch of people and moved on. Because we didn’t raise money, meant Matt and I had to roll up sleeves and do everything start to finish. We wouldn’t have understood what they were doing as employees. Even today, we don’t ask employees to do something we haven’t done ourselves.’’

Is Bigger Better?

Big is what will make a company survive—so believes Mark Rukavina, founder and CEO of  iMemories. A veteran of two previous tech startups, Rukavina says his newest venture has attracted $20 million in venture capital since its start in 2006, allowing him to hire more than 100 employees in the company’s facility in Scottsdale, Ariz.

While many of ScanDigital’s customers prefer their memories to be stored on DVDs, Rukavina laughs at such a concept. iMemories is totally cloud focused. The other way, “You’re taking one dying format and moving it to another dying format,’’ he says. With his decision, “I’m leading the way.”

He’s doing that by digitally converting all the images and uploading them to the cloud, allowing customers to access them through Facebook. “I’ll be sitting around talking with friends, talking about the ‘80s, and with five taps on my phone, I will pull up video, streaming it through 4G,’’ he says. The reaction is almost always, “oh my gosh, it’s incredible.’’

Getting everything digitized and streaming it onto the cloud in an easy-to-use web application has been the company’s biggest challenge, he says. The project took the company three years. Another challenge? The company is finishing work on an app that will allow customers to view, organize and edit material online and instruct the company’s robotic DVD burners to make DVDs or Blue Ray discs.  That’s means an enormous amount of network designs and grid computing. “The technology was insanely difficult to build,’’ he says. “Most people do it all of it by hand. We said, ‘we’ll build technology to do it for us so we can scale up. ‘’’

Next up? Apps that will allow customers to auto upload digital photos and videos to iMemories. Rukavina envisions entire family libraries of videos—from Super 8 movies to iPhone videos—all in one area, accessible at any time from a smart phone.

“It’s a memory and they should be on your fingertips on your devices,’’ Rukavina says. “If it makes you smile and other people need to see this, we want to participate.’’

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