[ny times] In Silicon Valley, the three words on the tips of everyone’s tongues are mobile, social and local.
Add a fourth word and venture capitalists get excited: photos.
A flurry of new start-ups is focused on mobile photo-sharing, some of which plan to make money from local advertising. The smartphone apps transform cellphone photos so they look better, tag them with location data and post them in real time to social networks on phones and the Web.
The apps, like Instagram, Hipstamatic, DailyBooth and PicPlz, are generally free or cost a small amount. So far, they have been small-time projects for the people who built them. But now a few are trying to transform themselves into real businesses.
Mixed Media Labs, the company that makes PicPlz, will announce on Thursday that it has raised $5 million from Andreessen Horowitz, a prominent venture capital firm.
“It is annoying to take photos with your cellphone and have them look good and get them off your phone,” said Dalton Caldwell, co-founder and chief executive of Mixed Media who previously co-founded Imeem, the now-closed music site. “That solves a real need.”
PicPlz offers an Android and iPhone app and a Web site. People take photos with their phones and can apply eight different filters to change their look, such as “the ’70s” or “Russian toy camera.” They can upload them to PicPlz, where others can view photo streams from a particular user or location, so it is like a visual version of Twitter. They can also send them to Facebook, Twitter or Foursquare.
PicPlz is one of the newest wave of consumer tech products being built first as mobile apps, with the Web site as second priority — an idea that would have seemed foreign just a few years ago.
“I think for the next generation of companies, the application they deliver on the mobile side is way more important than the Web site,” Mr. Caldwell said.
He and some of the other photo app developers talk about still-vague goals of expanding the apps into mobile networks, based on location or groups of friends. Mixed Media plans to build many location-based apps.
Though Mr. Caldwell says he still doesn’t know exactly what the company will do, he knows what it will not do — repeat the mistakes he made at Imeem.
He sold Imeem’s assets to MySpace last year at a loss. He blames its failure on the impossibility of negotiating with music companies for digital music, but also said he made every mistake in the book while running it.
For example, he said he waited too long to figure out how to make money at Imeem. He plans to make revenue his first priority at PicPlz, possibly with location-based advertising.
He is also trying to avoid peaks and plunges in PicPlz’s growth. The app has been downloaded 130,000 times since the Android app was introduced in May and the iPhone app in August. Instagram, a competitor, was introduced last month and already has more than 300,000 users.
But Andreessen Horowitz chose PicPlz over the company that makes Instagram, called Burbn. Earlier, the firm invested small amounts of money in each, before Burbn scrapped its original mobile check-in service to focus on the photo-sharing app. But since venture capitalists avoid investing in competing companies, Andreessen Horowitz can’t invest in both as they are now.
As part of the investment, Marc Andreessen, co-founder of Andreessen Horowitz and of Netscape, will join Mixed Media’s board, a rarity since the other boards he serves on are much bigger companies: eBay, Facebook, Hewlett-Packard and Skype.
Even beyond the other photo-sharing apps, there are many other competitors. Facebook and Twitter are already hugely popular on cellphones, as are mobile services like Foursquare. And other apps, like TwitPic and Yfrog, let people upload photos from their phones to Twitter and other sites.
“It’s very hard to get people to pay attention when there’s so much noise,” said Greg Sterling, an analyst who studies the mobile Internet. “I think, by and large, they’re not going to be very successful, but there will be one or two that break out.”
Photo Sharing on the Go Is the Latest Hot Investment Niche in Silicon Valley