DRR and “What Happened?”

I am the former CTO of Digital Railroad, Inc. With the very difficult shutdown of DRR behind us, I’d like to set the record straight where I feel it is ethically OK to do so. Photo industry commentators, outside the fray and at times without a good understanding of what happens when a business is in distress, have attempted to lay out a time line and answer the elusive question, “what happened?” I’m writing this to correct some of the misinformation, and put forth clearly that the creators of Digital Railroad did everything possible to prevent the difficulty that our loyal customers are now enduring.

Among the things I cannot do are single out any individuals or companies, neither to praise nor criticize them, and please know that both praise and criticism are well warranted. I also cannot correct or clarify all of the misstated and erroneous information on various blogs, but I will make a few important points.

I hope that among the readers of this post are some of you with whom I had direct interaction through this difficult period. Each of you knows how the small DRR team that remained to the end (and beyond) fought hard to bring about a better resolution than was ultimately possible.

The most well-intentioned, objective explanation was posted by Allen Murabayashi of Photoshelter this week, and you can read it here. Allen was an insider to a degree because of his good work helping push for salvaging DRR photographer archives, which would have benefited our members and Photoshelter, both. As he reported in other posts, he also was in touch directly with investors and the DRR management team during this time. Nonetheless, his account gets some of it wrong. He writes:

“Portions of this document might be factually incorrect – I don’t vouch for the complete veracity, I’m just trying to shed some light on the situation, so that photographers can gain some understanding of the situation.”

True and honest. Thanks also, Allen, for not speculating on how DRR came to face financing challenges prior to the publishing of John Harrington’s post. DRR was a company with significant revenue and also significant investment. The economic downturn presented us with a time line for additional financing against which we could not deliver a solution. This despite strategic opportunities that never came to light publicly but were very much in play. Any of those opportunities would have resulted in a remarkable future for DRR and our members. But, they were not to be realized.

When Diablo Management was retained, it’s mission was not to liquidate the company, but rather to identify and accelerate any of a number of potential deals which would have preserved the business and the platform. Shutting down the company was called for only after the funds allocated to pursue potential deals ran out. Note that employees were not all let go simultaneously, and even some who were let go volunteered time to continue efforts to salvage the business, or minimally to export photographer and agency assets.

“Potential acquirers were asking questions, but there was no one at the company who had intimate knowledge of the business. Diablo tried to assemble answers, but they didn’t really know the entire situation.”

That’s not correct. I personally dealt directly with most of the folks asking questions, and with others indirectly. I am aware of every potential deal and did not turn my attention away from them until all were exhausted. During this time the team also made contact with a number of DRR members who had very difficult business situations to resolve, and these members were able to do so with the help of the staff who remained. I cannot sufficiently emphasize the fact that the dedicated team our membership came to know over the years went well above and beyond the call during DRR’s final days. Of course, I know this means little for those who have been dealing with major headaches as a result of what transpired.

Finally, Photoshelter’s assessment of the technical issue encountered exporting images via FTP syndication is close to what transpired. The syndication subsystem simply could not keep up with demand during peak times of the day. DRR staff (or former staff) were monitoring to a degree and taking action, but keeping systems healthy became impossible when access to office equipment, VPN’s, and DRR engineering tools was no longer possible. At no time was access to images deliberately blocked, as has been claimed elsewhere (not by Allen or Photoshelter).

“It is easy to see how DRR’s demise can damage people’s belief in the entire space for online archiving, portfolio, and digital storefront providers.”

Agreed. It’s my hope that faith in the space and innovation around it are not damaged for the long term by our story. DRR’s fate is not a result of the business we were in, or the platform we built, but a consequence of strategies and gambles often taken by early-stage business in order to grow. In our case, accumulated risk and recent severe economic developments combined to close off one opportunity after another, until none remained.

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