Shutterfly: It’s Picture Perfect

Housenbold came onboard in early 2005. He persuaded the board to call off the IPO. The company had the right idea, he said, but the culture was broken. The "nuclear winter" of the lean years had produced "a culture of survivorship," Housenbold says. "It was all about 'get as profitable as you can because some day you don't know if you're going to make payroll'."

What Housenbold offered instead was "a vision of what the company could be beyond photo-finishing." The first step: solidify its position as the high-end player. He broadened the product line (the catalog included only a few books and calendars) and forced the company to think broadly about photos as memories, stories and social connections. He also changed the culture to encourage risk-taking again. "Don't shoot people if they fail," he says. (The company finally went public in September 2006. Clark remains the largest shareholder, with 21 percent.)

Thanks in part to his eBay years, Housenbold boosted spending on user experience. He favors Web sites that involve what he calls "progressive discovery"—easy for a newbie but layered with features for old hands. For the CEO of an online company that successfully reinvented itself after just a few years in existence, that combination of new and old sounds about right. Even picture perfect.

© 2008