The Rise and Fall of a Multimillion Dollar Flash Marketplace in One Chart.
After nine years on the web, we’re closing down ActiveDen (nee FlashDen). It was a long time coming.
Shown above is the monthly gross sales for ActiveDen from the very start of Envato in August 2006 until August 2015, nine years later.
It reached its zenith in October of 2009 right when Adobe asked us to change the name (startup lesson learned: don’t name your product after someone else’s trademark!). The open web standards movement was already pressing Flash when Steve Jobs published his famous open letter Thoughts on Flash in April of 2010. From there it was a steady decline as Flash gave way to web standards.
It was pretty epic while it lasted, and is a lesson in building businesses in the tech space. In the movie Margin Call, the CEO of a Wall St firm played by Jeremy Irons delivers these lines:
I’m here for one reason and one reason alone. I’m hear to guess what the music might do a week, a month, a year from now. That’s it. Nothing more. — Margin Call
When we built our platform for trading Flash files we immediately tapped into a market of millions of Flash users and hundreds of thousands of Flash designers and developers around the world. There was a lively industry going already — we just added a new dimension to it: a marketplace for templates.
You could argue that the entire tech industry is built off each other’s tech to some degree. But the proliferation of platforms in social and mobile means there are many startups that have grown through particularly tight dependency. When it works, this can be a very fast way to grow. There are already hundreds of millions of users on these platforms, and mechanisms to reach large tracts of them in a very short order of time.
Building on a 3rd party technology platform means you’re not only open to changes in that tech, but also the business decisions of the the platform. Twitter’s ecosystem is rife with stories of how that dependency can be both a good and bad thing.
After Flash, we built many more digital marketplaces. A good counter example is AudioJungle which is the largest royalty free audio marketplace. There are lots of companies involved in tooling the audio space, but fundamentally it’s an open media with no owner. There isn’t a single company or format that dictates the direction that the stock audio market takes.
Ultimately the trade-offs of building a product tied to Flash were completely worth it. We got the time and oxygen to build up the rest of Envato. The lesson for any other startup following this path, is simple. Don’t be surprised that technologies and platforms have a life cycle, or that the businesses behind them have their own plans. Be ready, open and looking for change.
And enjoy the ride!