Encinitas Social Media Company Sold for Reported $10-$15 Million

Encinitas-based Plixi, a social media photo-sharing service, was recently purchased by Seattle-based Lockerz for a reported $10 to $15 million. That's not bad, especially considering that the company began with just two co-founders—Rodney Rumford and Sean Callahan—along with some offshore contractors just two years ago.

Since then, the company has grown to eight employees, 25 million users and 300 developers who use the Plixi platform.

What's the secret to their success? Rumford stresses the importance of bringing on smart people. "I surrounded myself with people who are smarter than me (by hiring) smart, innovative people on our team,"  he said.

Obviously, hiring a capable team is a key ingredient, but strategic deals with third-party developers was the company's real secret sauce to quickly gain market share. In 2009, Twitpic was the leader when it came to sharing photos on Twitter. Unlike Twitpic, which did not compensate developers, Plixi made a move to pay developers when their service was used to share photos.

"We wanted it to be win-win for the developers, so we did a handful of special agreements with them," Rumford said. Plixi has become so popular, however, that they no longer need to sign these deals, he said.

The financial arrangement was so successful, in fact, that the Plixi website (known as Tweetphoto until last summer) was overloaded as it doubled in size every 30 to 60 days. Instead of using offshore contractors, Plixi hired two former Google employees to rebuild the system. To fix the problems with their overloaded servers, they turned to a company that featured Apple co-founder Steve Wozniak as its the chief scientist and began using their high-end digital drives.

Even during this time, Plixi never stopped focusing on its customers.

"(We did this by) delivering a great experience to the user with fast response times so that pages loaded within one to one and a half seconds," Rumford said. "It's really nice when you knock one out of the park. But while it was actually happening, it was a wild ride because when the site was down, it was like trying to fix the wheels on the bus as it's moving."

So what does the future hold for Plixi now that it's part of Lockerz?  Is it time to relax and take a breather?

"I can't elaborate on what we're going to be doing and I don't see myself kicking back on the beach anytime soon," Rumford said. "But it's been really rewarding to see people in every country in the world using what we built."

After all, supporting the traffic generated by celebrities, such as George Lopez, 50 Cent and Snooki, while hundreds of thousands of new photos are uploaded daily is no easy task. There is no rest for the weary.