Interview with Emotion co-founder Michael Warshall

My name is Dustin Betts. I'm the content editor at the Founder Institute, and I'm here this morning with Michael Warshaw, the founder of Emotion. It's a rapidly growing FI Silicon Valley portfolio company whose wedding and event photography platform currently offers services, I believe, across the entire country of Australia. Michael Warshaw, thanks so much for joining us today.

Well, good morning. It's a very cold morning in Melbourne, Australia, and I thought I'll have a coffee outside, and I'm going to talk to you from from outside. So I've been involved in photography for nearly 40 years. I started when I was a young kid. Prior to that, I studied chemistry and I didn't like it, so I've been in photography. I started printing my own work back in, in the mid-'70s. I started running a lab, ended up running the largest photographic lab in Australia for 30-odd years. Run multiple studios, photographed overseas, and about About 3 years ago, I decided to semi-retire and sold up all my businesses, and I found myself being very bored. So at that, ja, we started looking at what to do. And obviously, being in the photographic industry and photographing thousands of weddings myself, I noticed that there were changes in the industry. There was a new type of customer. When we had the lab, we printed for over 3,000 photographers in Australia and New Zealand, so we saw the changes going on. So at that stage, I sat down with my close friend Vittorio Natoli, who still operates a chain of franchise studios in Australia, and we said, so have a look at the opportunities in the photographic market. And reading what we call the IBIS report in Australia, there was lots of writing about the portrait industry being shrinking, but there was growth in the wedding industry. So let's have a look and see what the actual growth— I found it difficult to understand because at the lab all of my photographers were printing less and less. As we started looking, we read that there was, you know, the size of the market was growing due to a new generation of photographers, which we sort of knew, but it talked about taking photographs and delivering digital files. So that's it. There's an opportunity. So who is the customer? That was the first question I'd say. And what do they want? So we purchased a number of lists from bridal fairs and we surveyed over 1,000 brides and they told us what they wanted. So they said they wanted, in our case, they wanted unstructured, unposed photography to capture the moment. and what they wanted was digital files, very quickly to share on social media. And they didn't want to— it wasn't $2,000. So, there was, there were 3 criteria. So, I said, "Well, I think we can do that." Because in, in our lab, I've always been at the forefront of automation. I said, "What if we automate the whole process?" In communication and spending time talking and, and going backwards and forwards. And have the photographer as the human intervention turning up to the wedding, taking the photos and uploading directly to our servers, and we use our software and go through and edit the files and deliver them directly to the customer's mobile device. So basically that was the idea, and we started working on it. So that was just over 2 years ago, we got all excited, we're ready to go-to-market really strongly back in February last year, and COVID hit in March last year. So in Australia, they shut everything down.

Yeah, exactly. Talk to us about how that impacted your, I guess, your go-to-market strategy or the start of your business, and what happened with the photography, especially with weddings, when COVID hit in Australia.

Well, it's the same everywhere, actually. Australia, we were more fortunate, but because the lockdown was really tough the wedding industry come to a standstill. You couldn't have any weddings all of a sudden. So our photographers, when we started at Emotion, we realized that we'll have two types of customers. We have the actual bride and the photographer, because the photographers were finding it really tough to get regular work. And in fact, when we started advertising, we had over 700 applications, and we've got a fairly rigorous process to get through. And we found most of them had another job, so photography was either a subsidized income or something they really loved doing and made some money. But the majority of the people we interviewed had other jobs. So I said, okay, we have a new type of photographer. And they said, so our system has to cater to the photographer, so they will work when they want to work. It's sort of, sort of like Uber. Uber. We give them a digital calendar, and the calendar is filled in by them when they're available, when they're not available. And our software basically was developed to— it matches the bride's needs to the photographer based on location, customer reviews, and the number of jobs that's completed. So we continued working. We still ended up booking 170 weddings throughout since we launched. But, um, we were lucky because we had multiple states in Australia, so some of the states were less affected, so they still had weddings. And then they'd have a case in one state and they would shut the borders down, so that disrupted the wedding. But at the end of the day, that gave us time to fine-tune the system. We have over 100 photographers on board who actually passed the rigorous testing and They all do pastel photography and our ideal customer, and this is something that was for me even difficult to comprehend. If you would have told me 4 years ago that a bride would book a photographer online without meeting them, I would say that's highly unlikely because my businesses were high-end studios and personal one-on-one. But when we surveyed the brides, they told us they were so time poor, they haven't got time to go from it's too complicated. They never knew what they were gonna get. They didn't know what the correct price was. Most photographers wouldn't give them a straight answer. It was complicated. You have to call them. Usually there'll be no answer. You wait for a callback or an email and text. And what we did is said, we'll make it very transparent because the questions were always the same when the bride inquired, are you available on my day? And how much? So we say, okay, that's a fair question. So we set up software so the bride puts in her location and the date, the software goes through the database, and within 10 seconds they get an answer about photography. And in most cases, because we have so many photographers, we're always available. So if the bride wants to, she can actually book online. So the difference between what we've worked on, which is an e-commerce site, and everyone else, a website with pretty pictures, the bride actually wants to book straight away. And that was difficult for me personally to understand. But to give an example, the week before last we booked 6 weddings. 3 never came to us, never spoke to us, just booked online and paid. So that's the ideal customer. And because the brides are so time poor, and in fact we found that After weddings were shot, were very different to my world. So the people have been living together between 4 and 10 years, they already had kids, they had the house, they had the mortgage, they had the cat and the dog, and now they want to get married. So, and most of the weddings that we've done have not been church weddings, they've been civil, so celebrants in the garden, in the beach, in the park, you know, it's very, very different. So we continued building Emotion and it's fully workable. I mean, we've proven it now. It's a matter of scaling. And as COVID minimizes its impact on— in Australia anyway, we will work very hard to scale here. And our plan eventually is to go to the States where the potential market is much bigger. Australia is a $500 million market. And when we quickly looked at USA, England, and Australia, it's a $6 billion market. And everyone gets married even now, and even though only 90% of the cost of the brides are photography professional, still a humongous market.

Yeah, yeah. And so interesting the way that you just recounted sort of across your career how much it's changed, um, just from, from the, I guess, the meeting the photographer. Now one of the biggest customer challenges is time, uh, pricing. They didn't want like really clear transparency, which is something when you land on your website, it's like very clear, you know, what are the options and standardized prices. And as well as what you mentioned about being outside of churches and just people getting married at kind of a different stage in life. So yeah, really interesting, I think, how much it's changed from your personal recounting that, right?

When I rang a few of the brides, because I personally found it hard when they were just, you know, having the weddings after they've had kids and they've had a house and I rang a few and I said, why are you getting married? We wanted to have a great time with the closest friends and family. I said, well, that's different. Where I'm situated, I'm just outside of Melbourne, we have 62 vineyards within 15 minutes of where I am. And on a Saturday before COVID everyone would have a wedding in, you know, in vineyards, by the beach, very casual. Mind you, there were still what I call formal high-end weddings, but that's a very small market. That's probably, you know, what's left of it, maybe 5 8%, and it will exist for those people who want what I call high-end stylized photography. And many photographers who still do that, but it's a very difficult market because the number of weddings have dissipated. So it's a challenging time.

Another thing I want to just get you to re-emphasize again is the photographer side of your marketplace. You mentioned how many photographers applied right away, and you currently have already 100 on the platform. What was that narrowing from how many reached out interested to 100?

So I've been involved in the Australian Institute of Professional Photography from the beginning, and I was a judge. I judged portfolios. I was a chairman of the ethics and complaints committee. So we had a rigorous process for someone to get into the institute. So I said, well, we'll continue the same process. So in our case, the first thing the photographer has to do is supply a portfolio of a whole wedding that they've shot unedited. So we can— I can have a look and see. At this stage, I've been doing most of the vetting, but we have a number of people who are capable. I said, so they need to understand what needs to be photographed for a wedding. So we'll look at the whole sequence. If they pass that test, and many didn't because they— what they would show you is a dozen really nice images where they've spent hours editing. I said, that's not how it works. If they passed the first test, I would then call them and personally talk to them. I need to understand their personality and how they, how they talk to people, because the personality of the photographer is probably more important than the photography itself. So if you happen to have someone who's a good communicator and they produce what the customer wants, you've got that. Then the third thing they had to have is a, is a national crime check. So they have to go through to be checked for any previous misdoings. If that was the case, we would then explain the workflow and what's expected on their side because they need to shoot and upload the images to us within 24 hours. They don't need to do any editing, they need to finish when they come home. We're looking at around 600 images. In my world, when I started, we would shoot exactly what we had to shoot. We were given 10 rolls of film you had 144 pictures, and if you didn't produce 140 good ones, you wouldn't do the job, you wouldn't be given any more opportunities. The new generation, because of digital, they shoot thousands of pictures. And we say we don't want duplicates, we don't want rubbish, we don't— if you can't shoot properly, when I say properly in terms of what we need, you need to cull them before you upload them. We're looking around 600 good pictures, just upload them to the service and that's all that has to be done.

Okay. Yeah, yeah, that's so interesting. I think just with how you said most of these photographers are doing this part-time, but this really extensive vetting process and what their deliverable is on their end, it's quite a bit easier through the platform as well.

The reason they're doing part-time in Australia, all the major— there are no major brands, okay, as far as anyone controlling, once I'm controlling, having multiple studios doing hundreds and hundreds of weddings. When the industry started changing, it was quite complicated for the photographers. So many started going back to the original, you know, what they knew, their original jobs. But a lot of the major big studios started shutting down. And in fact, you don't really need a studio in the new world because most photographers, when they were doing weddings, they would meet customers, you know, in the cafe at McDonald's. So the high-end photographers still would have beautiful studios, and they should because there are customers for them. But they're not the customers we want. The customers we're after is 90% of the weddings, okay? The top, the top, they will go to people like I used to do. I mean, we used to do the high-end weddings. I photographed all the who's who in Australia. I spent 10 years working in Southeast Asia photographing the royalty and, you know, everybody from Mother Teresa down. So I understand high-end, but that's a difficult market to get enough weddings. So in this particular case, it's what we've said, we give the photographers work so they can get good work without having to worry about getting jobs because we're able to— all they need to do is turn up and take the pictures. They don't need to advertise, they don't need to spend days editing, they don't need to, you know, look for customers. So we give them a customer automatically, our software automatically matches the photographer to the Bright Boston location, and they turn up, take the photos, upload the photos, and that's it.

Perfect. I want to ask you next about a question that maybe it's a little tangential, but I want you to address it because you're really like an industry professional, as you've talked about your whole kind of experience over your career. So the question is about, you know, social impact or environmental impact. And at Foundry Institute, we have this kind of For Progress company framework How are you as a founder in this industry thinking about your own company's social or environmental impact today? Is that a consideration? And if so, how are you thinking about that?

In our case, basically we started with gender equality because many of the weddings we started doing were same-sex weddings, which was unheard of back then. I'm saying a lot of my friends are like, that's a terrific— I said, we'll, we'll do that. The same for diversity as far as photography and giving everybody fair pay for fair work. So we have, it's all preset, it doesn't matter who they are, what color they are, we have everybody. And Australia is a very multicultural country, you know, it really is. So in my previous business, I had a laboratory of photo lab, we had 100 staff at one stage. You name a nationality and they were working for me. We have everybody, okay. And everybody worked together, there were no issues. So, you know, to us it was nothing special because we did that in, in my previous, you know, in the lab, we were the only green sustainable laboratory in Australia. We worked hard to get green sustainability because my background being a chemist, I said it's important not to put chemicals and poison down, down the track. And in fact, we were one of the first labs to change— we were the first lab to change from traditional silver highlight chemistry, which is, you know, it's poisonous, to indigo high-end digital printing. So, like, you know, we had a lot of resistance, but we changed, and we worked— I worked with HP for, you know, a long time, had to travel to Israel several times to help them develop the technology to enable the indigo print press to produce the same as silver highlight. So we've been— I've been pushing boundaries home or not, because I believe you've got to do the right thing.

Yeah, yeah, that's so interesting because now it's of course like mostly, as you mentioned earlier, DSLRs and digital photography, but so interesting to get your scope of your career and how it's changed when they were physically printing to move away from that silver and towards more general materials.

Yeah, yeah, it's still changing every day. We'll learn new things and So, in our case, we were very fortunate because when COVID came in, we both were in a position where we could spend all of our time. In fact, when I started with Founders, I mean, they said you need to have 30, 40 hours a week and they were right. So, if you have a full-time job, it's very difficult and we didn't have to because we were, you know, what I call semi-retired in financial, I'm saying, well, What we need to do is concentrate and find out the problem. And that's when you find out what the problem is in any industry and you can solve the problem, you then have a solution, which is the important thing. But it's finding the problem. The problem in, in the wedding industry was brides are time poor, they want transparency, they want it quick. Most of them want to have files to share on social media. Which is the most important at the beginning. They still will order, in our case we only offer photo books and albums, but we're putting all the products because there are many saying, oh, you know, my mom asked me, why, you know, where's my album? I'm saying, there you go. So yeah, there are lots of things that are changing and will continue to change.

Yeah, perfect. That actually leads really well into the next question that I actually want to ask you, which is to have you go out on a limb and make a prediction for us. So thinking, I guess, even farther into the future, 5 or 10 years from now, what What's your prediction for how the industry will continue to change, whether that be photography or other, like, for weddings or for other maybe events? Yeah, predictions for where it's going?

We're photographing, we're concentrating on weddings. I mean, and I think what's happening already, we're finding there's a lot of automation and artificial intelligence as far as communication and image making. So, um, I, I still believe that the photographer, uh, will be required. However, I've seen technology where it's scary, but a drone would fly in with artificial intelligence and take the photo and follow the bride and groom and upload them and be live as we speak. So the technology exists. It's not there yet, but the same happened when in my photographic background when we were printing. So we were the first lab to bring digital technology into Australia back in the '90s. Everything was analog, and my customers said, oh, digital will never work. Well, then everyone went digital. When I saw new technology, especially not using chemicals, and we, you know, invested in Indigo presses, everyone said it could never be as good as silver halide prints, will never You know, we'll leave you, we'll never use you. Well, guess what? We did have issues with the technology, but we pushed the boundary, the technology got fixed, and now it's standard technology. And it's a clean process, so there are no— there's no pollution. And so all things are possible, it just depends on your belief and perseverance. It's pretty— change is very difficult for people, they don't like change. Because it's the unknown. And when something's unknown, it's like, what if it doesn't work? And this is what I understand. Whereas I'm very different. I've always— that's my personality. I've always pushed the boundary. I said, when someone said to me, um, you know, it can't be done, I'd say, why? You can't do it, but why can't it be done? And you can do it. Yeah. So the premise of what we did in Emotion, as I said, when we launched the professional photographic market in Australia, the high-end, they really got angry with us. They said, you're going to— what did they say— uberize the industry. I said, No, we're going to give the bride what she's asking for. I said, we're not doing anything special, we're not innovating in terms of— we're giving her what she told us. We serve about 1,000 of them, they told us what they wanted, and that's what we started doing. And that's what they want. In our case, they told us what they want and they're booking, therefore we know that what they told us is the truth. They wanted, in our case, they want to capture the moment, photojournalistic, don't pose us, but that's difficult. So you still need a photographer who can communicate and tell them what to do. And we want our files, you know, in 24 hours to 48 hours. Well, most photographers work full-time, so they would take weeks to produce the files and upload them. Whereas we said, yeah, we've got artificial intelligence. We— I've come across this technology a long, long time ago. I said it can be done. So in our case, The photographer photographs, uploads, and within 48 hours the bride wakes up and all the images are sitting on her mobile device. So yeah, it can, and it does work.

I want to ask you next, that you mentioned about like perseverance and being somebody who, who will stick to it, uh, that's, that's the next sort of topic. I mean, you've obviously done a lot to build Emotion to where it is right now, but, uh, what are some of the biggest challenges, uh, that you've overcome as a founder in building Emotion to where it is today?

Well, the first was actually finding out what the problem was so we could tailor a solution to exactly what the problem is. Okay, that was the first thing. And then producing a product within a budget that the client told us they wanted to pay. Okay, so that took a bit of thinking and then working on the software. So the previous business, I had full-time developers in my business, so In our case, we don't have full-time developers. We have teams of people in various countries, so we give each one a module to work on based on what we believe from experience is necessary. Okay, so that was quite difficult. The next part was the amount of money involved. We've spent, I don't know, half a million bucks at least on software development, and it's a never-ending process. So When you get into it, it's every day, so we should do this, and then you realize it's, say, you know, 200 hours of coding or 100 hours of coding or whatever. So first of all, working out what you need to do and then getting it automated, and obviously all of automation is to do with software development. So that was a challenge. Finding the right photographers we thought would be a challenge. It wasn't a challenge. There are a lot of really good photographers out there who can take really good photos, communicate really well, they're just not business savvy and they're time poor. So we said we'll solve that problem, we'll give them the work and they just have to turn up and we pay them. And we solved the problem for the bride because she wants beautiful photos delivered in 48 hours. So we had 2 customers when we started. So when you have the photographer and we have the bride. So, at this stage we've been able to satisfy both of them and we will continue evolving as we learn more things. In terms of, as things evolve, we don't put a blanket over and say, "No, no, no." We'll say, "Okay, well, what is it that you want?" And if something needs to be done, it can be done. People are very clever, they can do anything if they want to.

I love the way you described the marketplace and having these, you know, two different customers basically, and how your solution has, you know, basically the matrix, the nexus of, you know, solving those problems for both sides. So yeah, I think that's really, really interesting. My final question is, you know, just for updates or, you know, news to share with the FI community, anybody who might be watching, where's Emotion headed next, or any asks for the audience?

Well, as far as the motion is concerned, we want to scale quickly, especially as COVID subsides. So we currently are fundraising. We want— we've got some ideas in terms of consolidating and, and helping the market quickly. In Australia, we have 100— an average of 120,000 weddings a year. So Australia has been our testing ground. America's got, I think, 2.2 million weddings a year. So the market is humongous, very similar market. And so we want to be the brand leader, starting off with English-speaking countries, then scale to other countries. There are huge markets in India. In fact, it's the biggest wedding market in the world, just beats America slightly. I've been to all these countries. I spent many— I spent nearly 10 years working throughout Southeast Asia photographing all the who's who. So weddings are weddings. People will still get married. In the Westernized countries, the weddings are slightly different. For the majority, they're much smaller, but people still want beautiful photographs. In fact, when I started photography, I've come to America, I was a young kid, and I spent many years studying with the best photographers. I remember one of them, it was a profound moment for me. And he said, "What do you want to be?" I said, "Well, I want to be a wedding portrait photographer." He said, "It's a really, really, really, really important job." I said, "Really?" He said, "You're gonna document people's existence and love." I mean, I was a 23-year-old kid at home, and then I realized he was right. Because what you had, all you have are the photographs that are left behind. So we have a digital world, it's, it's, that's where it is, but to me they're still not real because you can't hold them. I'm old school, I need to hold beautiful photographs and You know, if you look at my house, I've got portraits of the kids, I've got families, I've got dogs. You've probably heard a few barking. I mean, and that's it. So that's all you're going to have left. So to me, documenting people's existence in life is very important. And Emotion, that's what we do. We document people's existence in life the way they want to be documented, which is slightly different to the way we were documented. I mean, I've got beautiful portraits of myself by the best portrait photographers in the world. I know them all and they would photograph me. And I'd say, wow, you know, you look at the portraits and how you change. You can't even see how you change in life because every day you're with yourself. But when you look when you were 20 and you have a portrait at 30, at 40, at 50, you know, I did that for my kids. I photographed them from the minute they were born and on their 21st birthday made them an album of the first 21 years. And they didn't remember half the things that they said because they were young. So yeah, to me it's very, very important and The only difference is the new type of customer is requiring new things. To them it's more, you know, they're very time poor because both, both the couples, you know, they usually work and if they have a house they have a double commitment. So then they decide to get married and they want, you know, many times we'll have their kids who are in the, you know, the bridal party. So you have to know what's important and delivering it in a way that they're asking us. And they want a new way of delivery. And that's all.

So, yeah. I love that you shared that story of having that experience as a young photographer, because I think it speaks to the name that you've chosen for the company as well, Emotion, and that connection that having that portrait is like one of the biggest days of your life and that they always are going to be able to look back and have that memory. So I think that really speaks to what you're doing as well as you know, connect.

Sometimes people don't realize that. They say, "Oh, we don't have the budget." I say, "You don't understand." I say, "This is for the rest of your natural life. If you don't have it, you can't go back." It's not one of these things if you miss out on the sale, you know, they have another one. Here, if you don't capture it, you won't have it. There's no way to go back. So, that's probably a challenge sometimes. A lot of the young couples that— they're poor, time poor and money poor, because they have commitments. And they say, "Our photography, you know, we'd love to have it, but we just can't afford it." Well, that was the other reason, we want to make it at a price that they can afford it. So everybody can have it, and that's the majority of the market. The fortunate people who have the budgets, they can have whatever they want. And I did that, as I said, in my studios, we photographed all the who's who around the world. And that's a different market, so that market exists still, but it's very small. We decided to, to produce great photography and deliver it to the majority of the customers in the method that they told us they wanted, and that's it. You don't need a PhD to do that.

Yeah, exactly. Um, well, this has been really interesting for me, you know, learning, uh, about how the wedding photography industry is changing, where it came from, and getting your ideas about where it's going now. We're all really looking forward at Founder Institute to keeping up with the motion and where you're headed next. Michael Warshaw, thank you so much again for joining us today.

Thanks, Dustin.