BorrowLenses.com is a successful start-up (recently acquired by Shutterfly) that rents photography equipment to hobbyists and professionals online.
BorrowLenses.com was created when the founder, Max Shvyakov, realized that there was a high level of demand by professional photographers to rent instead of buy expensive (often upwards of $10,000 each) lenses for professional assignments but there was no satisfactory place to rent from. Professional photographers are typically self-employed and the equipment required for their profession can often be worth over $50,000. Given the wide variety of lenses available that are often only useful for certain projects photographers have struggled to justify the cost of expensive specialty lenses for only one assignment. Existing rental establishments had unpredictable inventory availability (and what inventory they did have was rarely aligned with what consumers actually demanded), required customers to make sizable deposits, and required picking up and dropping off of rented equipment.
BorrowLenses.com’s business model is to own a wide variety of photography tools and rent them to customers on a daily, weekly, or monthly basis. The company differentiates itself from the competition by delivering lenses to the customer’s door without requiring the hassle of deposits and with the service of a professional staff.
Operating Model and its alignment with the Business Model
To create value, Max first acquired the lenses that professional photographers actually demand. He scoured professional photography forums, conducted interviews and focus groups, and acquired a set of lenses (and now cameras, flashes, and other photography/videography equipment) that photographers would rent. He then set the company’s initial price on par with brick and mortar competitors. To generate inbound interest on the site he offered free rentals to key influencers in the photography world in hope that they would blog about the company and generate buzz. His bet paid off and demand for his products quickly accelerated as word of the quality and convenience of his business spread.
As demand outpaced supply of lenses, BorrowLenses.com began to hold customer’s lenses on consignment and rent the lenses to other customers generating revenue for both BorrowLenses.com and the supplier of the lens. This unique method of funding growth enabled the firm to quickly gain market share and become the market leader with over $10 million in annual revenue.
BorrowLenses.com aligned its operating model with its business model by creating a website that has the same look, feel, and performance of BandHphoto.com or Amazon.com where photographers are familiar with acquiring their equipment.
Also important to the business model’s alignment with the operating model is having an inventory of valuable lenses that can be leased to customers multiple times without damage to the expensive and fragile inventory. Most competitors used large deposits to insure their products against damage but BorrowLenses.com used both credit algorithms examining inbound orders but more significantly its professional photographer staff to call and vet potential clients to prevent theft or fraud of equipment. A seasoned photographer can quickly tell over the phone if a potential client understands why they need to rent a $10,000 lens and what the equipment’s capabilities are. In the event of loss, damage, or theft the verified customer is held financially liable for the equipment (unless he/she purchases insurance covering the rental).
Key to the operating model’s alignment with the business model and what likely is the reason for BorrowLenses.com’s competitive advantage is the firm’s exclusive hiring of professional photographers to operate the business. The founder had no knowledge of photography when he started the company, but by hiring knowledgeable professionals he was able to provide consultation service to potential clients over the phone helping them rent the right lens for the right occasion. The personal service that BorrowLenses.com boasts generated significant repeat sales and enormous brand equity in the eyes of the photography industry. Photographers generally purchase expensive equipment from specialty stores, so by having a staff of photographers BorrowLenses.com has created an online photography store which can still cater to the same clients because of their knowledgeable staff.
As the company has expanded it now actually serves as a market maker for independent brick and mortar retailers to rent their inventory using the BorrowLenses.com infrastructure by letting price sensitive (to the cost of mail delivery/pick-up) customers pick up and return rented equipment in person at participating retailers. By utilizing the company’s professional and reputable operating model the firm has solidified itself as the source for all rented photography equipment by not only utilizing its own distribution centers but also using existing photography stores as distribution hubs nationwide.
BorrowLenses.com has become the industry leader in photography equipment rental by taking an existing business model and creating an aligned operating model by conducting every aspect of the business with the customer in mind through the use of expert staff. The professional execution of the operating model has enabled BorrowLenses.com to now demand a premium in rental rates for photography equipment further driving revenue and profitability growth.
 Both images taken from www.borrowlenses.com
*This post was inspired by the blogger’s own experience as a hobbyist photographer and a conversation with his sister-in-law, a professional photographer