There's two levels to the scale problem: (a) sufficient scale for a successful small business, and (b) sufficient scale to repay a whole VC fund, with interest. VCs agreed that (a) was achievable, but they really need (b) and didn't see that with us.
Tools for private photo collections are important, but don't have the same sort of explosive viral growth curve of, say, a public social network. Even private social networks have a more difficult time scaling up quickly compared to the more open but less privacy-respecting alternatives.