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Instagram’s CEO

566 points by quanganhdo 8y ago

raheemm 8y ago
In the short-term, Zuckerberg maybe the CEO, but if he keeps prioritizing ads over product (which he has done with FB prod/privacy), then the long-term maybe dicey. Just as content is king, so product will always be king. The ads will follow whoever has the best product, and hence user attention.
- dragonwriter 8y ago
  > if he keeps prioritizing ads over product Ads are the product that Facebook sells
- tootie 8y ago
  Ad money is what lets him crush or acquire competitors. The thing that isn't discussed is how commodotized social media software is. Sharing photos and comments and likes is the core of these businesses and it's extremely easy to replicate over and over from a tech perspective. The hard part is acquiring users, scaling and monetizing and FB has won that game. That's how they can take anyone else's product or idea and best them at it so quickly.
indiesolver 8y ago
tl;dr : Zuckerberg - Instagram’s real CEO (from the author's "The difference from Zuckerberg — Instagram’s real CEO — is stark")
- teagee 8y ago
  Systrom and Krieger built Instagram the product, Zuckerberg built Instagram the business
  - indiesolver 8y ago
    and thus Zuckerberg - Instagram’s real CEO
  - disgruntledphd2 8y ago
    Sheryl Sandberg, a really good sales team, and a bunch of shit-hot engineers in ads built IG, the business. Zuckerberg tends to avoid monetisation, leaving that to Sales (i.e. Sheryl) and Ads.
    - mandeepj 8y ago
      Sorry, you got it wrong. Sheryl is not in to sales. And, zuck is all about business but he don't think about monetisation until that product have at least a billion users [1]. The real person behind instagram's monetisation success - https://finance.yahoo.com/news/meet-man-helped-facebook-bring-153034992.html https://finance.yahoo.com/news/meet-man-helped-facebook-brin... [1] - https://www.businessinsider.com/zuckerberg-products-need-1-billion-users-2014-10 https://www.businessinsider.com/zuckerberg-products-need-1-b...
      - disgruntledphd2 8y ago
        No offence, but Sheryl heads up sales and ops (the head of Sales, David Fischer, reports to her), and will go visit big clients to sell them on FB ads/new products (of which IG was a good case). I'm aware that Mark (he doesn't like zuck anymore, apparently) thinks that, but he focuses on product much much much much more than monetisation (there's an apocryphal story that suggests he said that ads weren't part of his vision for FB to an internal sales conference in about 2009-10). Finally, I would credit the engineers in Ads a whole lot more than Mr Weil (to my recollection, all of the stuff that ended up making IG money was in place before he joined). Source: worked for FB for a long time.
- carbocation 8y ago
  This tl;dr really skips over the insightful substance of the article.
- flunhat 8y ago
  Your tl;dr isn't _wrong_, per se. But the article is really well written, and I feel like there's more depth to it than what you've said. Plus, your statement comes off as kind of cynical and snarky ("no shit, guys" is the tone, even though you probably didn't mean it that way). The piece itself makes some pretty interesting, non-obvious points I think.
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- rficcaglia 8y ago
  I would summarize it rather: a good product can yield a large network but only when combined with a good monetization/business plan can it be a successful business.
mathattack 8y ago
Very hard to second guess such a well written article. Are there instances where the thesis that “folks who outsource the business side to the acquirer” stay? Salesforce seems good at keeping acquirees but enterprise is different. The acquired companies come with their own revenue and field sales.
- beat 8y ago
  It's kind of different for enterprise. The acquisition cycle is often to expose a good product to a more deeply entrenched sales system. Acquired companies have proven they have a product that enterprise companies are willing to buy (and go to some pain to do so), but they don't have the ability to sell anything anywhere that someone like Salesforce, IBM, or Atlassian can do.
- wgerard 8y ago
  > Are there instances where the thesis that “folks who outsource the business side to the acquirer” stay? Hsieh? I mean, I don't know too much about the inner workings of Zappos but I find it hard to believe that the FB->IG relationship is significantly different from the Amazon->Zappos one. Then again maybe he's just the exception that proves the rule.
  - AndrewKemendo 8y ago
    I find it hard to believe that the FB->IG relationship is significantly different from the Amazon->Zappos one Why? Zappos was minting money and sustainable in their own right well before the acquisition. IG had no datapoints showing they could sustainably make revenue when they were acquired.
    - wgerard 8y ago
      > Why? Hmm, I guess fundamentally I find it hard to believe that a large corporation would acquire a smaller one just to let them run completely independently - it just seems counter-intuitive unless the acquirer is a holding company, basically. It definitely also doesn't seem like Amazon's jam. Twitch seemed to have a pretty large upward trajectory (and path to profitability) right around the time they were acquired, and Amazon's still clearly guiding at least some of those major decisions.
everdev 8y ago
Not a positive trend for FB considering the What'sApp founder quit in April: https://techcrunch.com/2018/04/30/jan-koum-quits-facebook/ https://techcrunch.com/2018/04/30/jan-koum-quits-facebook/ Giving a single person full control of a company is great when they're on the right track. These have to be warning shots to employees and investors though.
- mooreds 8y ago
  It depends. Do you still need product geniuses when you have distribution and monetization nailed?
  - briandear 8y ago
    Salesforce proves that you don’t.
    - qdigital 8y ago
      Consumer tech is a different beast though and subject to stronger reactionary market forces and whiplash vs enterprise.
    - traek 8y ago
      I'd call Bret Taylor a product genius.
jhabdas 8y ago
For those who covet money titles are more important than to those who covet building great products for users. As a product leader offloading your money challenges into the hands of VC funding is a surefire way to turn vision into greed and slowly destroy one's creative product vision.
- joejerryronnie 8y ago
  Or, it could be the only way to get a great product out of your basement and into the hands of millions of users. It's a tough balancing act but TANSTAAFL.
orliesaurus 8y ago
Great article, this is how I feel about Instagram personally: - Great app who turned a camera phone into a powerful camera for those who couldn't afford one of those expensive Canon/other brands of good cameras. - Democratizing photography made phone vendors spend more time build better camera, we're at a point where cameras on certain phones are as a good as stand-alone cameras for photography. - Filters have been around forever but with filters in instagram a whole generation became addicted to what they're able to do - turn a simple picture in a more interesting picture. To the point where people had to start create the #nofilter hashtag. Snapchat took the filters to the next level or rather the next iteration and also made itself a name because of them. - Instagram also has it's darkness too: some people say you can get depressed if you browse instagram too much, seeing all those happy pictures of delicious food, beautiful looking humans, cars, paradise-like places, etc. It sounds crazy right? :shrugemojigoeshere: Short aside: Friends of friends who used to work in the same building with the founders of Instagram told me that on the night of their launch they stayed up till the early morning hours to fix their server issues because their initial instagram app was such a success! Honestly, you can't get more real than that - almost like a movie! Thanks instagram co-founders for your creativity throughout the years: Although copying most of Snapchat's features wasn't a great move, it was a business decision that worked really well for your userbase..I can smell that being a very Facebook thing to do. I remember Snapchat turning down $3B acquisition offer, I guess that move really showed how much FB wanted Snapchat's features. Back to Instagram - were the co-founders good businessman? I don't know, instagram pre-acquisition was very cool and ad-free. Now it's ad-ridden and almost an annoyance. Every 3rd post/video/story has ads on it. Blocking those ads is a pain (I still haven't found a universal workaround since ad-blocking doesn't work as well). Another reason why I don't use FB's app. You can smell the FB influence on Instagram far 10 miles, I would also feel sad to see my own creation being taken over by a bunch of product managers who come from the company who acquired my app because they need to "ad-ify all the things". Finally, I think instagram is the only app I use on the daily, every single day (more than Uber/Lyft, more than Spotify and as much as Twitter but not as much as Chrome) ! Hope they can find something cool they're passionate about and build the "next" Instagram, even if it's not a camera-app!
- briandear 8y ago
mooreds 8y ago
This is a sobering look at what it takes to build a business vs a product (vs, even smaller scale, a feature). You have to be willing to put in the long hours (err, years) and the schlepping to do all the business-y stuff: * distribution * monetization * back end systems for admin users * sales channels etc, etc Or, you can cash out and assimilate, err integrate, with a larger company that has done that hard work and lose control of your destiny. That's OK, most of us don't have full control of our destiny, and building product can be more fun. It's just a choice you should make with your eyes wide open. I will say that I think he dismisses Snapchat's founders too quickly. Yes, they've been struggling, but they are trying to build a business rather than just integrate with an existing conglomerate. It will be very interesting to see if Systrom et al can build another product, and if so, if they will try to build a business as well.
- AndrewKemendo 8y ago
  No product controls it's own destiny. You initially lead with a use case, but end up following how people actually use your product, or competitive products, and iterate on them in order to retain and attract users. -------------- The broader point here though is that, at least with consumer software, you will not be able to compete with Google AND Facebook AND Snap AND Amazon in any category. Maybe your product can beat Google+ at social networking, you won't beat Facebook and they'll either buy you or siphon your users. You might be able to build a better enterprise messaging system than LinkedIn but Microsoft will bleed you dry with a better enterprise sales team. Even new categories that are subsets of broad categories eg. Social/Ephemeral Messages have no chance of surviving, as they are features to existing products that have BN of users. So the best chance you have as a software startup to compete is to sell to the Cartel (Facebook, Google, Apple, Amazon, Microsoft), and hope that you're given enough lattitude to see the product that you're ruddering play out as long as possible.
- SmellyGeekBoy 8y ago
  Instagram was huge even before Facebook took over. It has gone from strength to strength in the 6 years since but I'm pretty sure that would've been the case without Facebook's involvement (see also: Twitter and Snapchat). You seem to be doing the founders and the team behind Instagram a huge disservice here by accusing them of not being willing to put in the work and riding on Facebook's coattails.
srinathkrishna 8y ago
Ben Thomson is one of the best folks writing about the business of tech. Such lucid writing and even someone who's fairly early on in their careers will be able to understand what's going on.
- pas 8y ago
  Usually his essays are information dense, but this was a bit of a let down. It would have been a fine tweet though. And the constant amazement at the IG founders' extraordinariness is very tiring. (They are obvioulsy not dumb, but they mainly got lucky, as it's not like there were no other apps with photo taking and filters trying to make it big in/on the Apple App Store at the time.)
ape4 8y ago
Slightly off topic is Instagram's new dating app. Will be interesting to see how that plays out.
- aylmao 8y ago
  It's Facebook's and it will live in the Facebook app, not Instagram.
krn1p4n1c 8y ago
Seems like they didn't know when to leave. Once they sold it was no longer their baby and should have started working on an exit strategy. It becomes a contest of egos. On the technical side, FB's methodology with acquisitions seemed the most rational. Rather than sucking the new company in they embedded PE's in there for the purpose of giving the tech teams a fast track to using FB resources.
- tyingq 8y ago
  It's a little over 6 years elapsed. Maybe they had to wait out some vesting?
  - krn1p4n1c 8y ago
    I'm sure. Everyone has to do the 4yr slog, but founders usually write in a parachute clause. I hope they stuck around to make sure their original team was taken care of, but it's naive to think they'd have C-level control at the parent company after acquisition.
- billmalarky 8y ago
  To be fair, they also had $700 MM in FB stock (now worth $4b according to the article), so there was incentive to help instagram succeed at FB.
  - kbenson 8y ago
    I've always wondered about this. How much inventive is that? When the person thinks "if I work really hard and this, I'll increase my huge pool of money from an amount I can't easily spend given the rest of my life to an amount almost six times as much!", does that really resonate? It's not like it's the same as $700 to $4,000, or even from $7,000,000 to $40,000,000. There are things you can buy to spend most of those amounts, but those are things it's not really worth buying multiple of (e.g. houses, super yachts), so at the point you have close to a billion dollars, what does another billion buy you, besides bragging rights? I imagine there's some impetus to stick around because you want to see what you built succeed, but at some point I imagine you realize it's not really yours anymore, so why not leave and do what you want, instead of what other people want you to do? I mean, you literally have "fuck you" money.
draw_down 8y ago
Selling means it belongs to someone else. No use being in denial about it. Figure out what you’re gonna do next while you do your time, then go do it when your time’s up.
projectramo 8y ago
"Still, as good as the Instagram Stories product was, it is difficult to overstate the built-in advantage that came from Instagram’s larger network, and impossible to overstate the importance of having a shared advertising backend with Facebook. To put it another way, Instagram’s two biggest advantages relative to Snapchat, or any other competitors that may arise, didn’t have much to do with product — Systrom’s speciality — at all." But the first advantage he mentions -- the size of the network -- is a direct result of the product. The point of a good product is to get people to use it which is what grows the network.
- luckydata 8y ago
  A direct result of another product, Facebook's.
teknopurge 8y ago
that really is a refreshingly well-written article. well done OOP.
m-p-3 8y ago
> Facebook had agreed to let it run independently as part of the acquisition deal. Sounds nice on paper. > It is about finding and developing a business model that lets you determine your own destiny. But when you sold the business to Facebook, you ultimately agreed to forfeit your ability determine your own destiny to obtain the ability to use their vast resources.
tootie 8y ago
I know I'm just being a grump, but I find it baffling that these businesses are so valuable.
- gm-conspiracy 8y ago
  It is the new television. Advertisers need to reach eyeballs.
matchagaucho 8y ago
It's easy to second guess... "if only they'd hung there, the $100B valuation today would be theirs". But how many first time entrepreneurs would turn down a $1B offer after 2 years of work? Guaranteed the writers of these articles have never been in that position.
- enitihas 8y ago
  I think Zuckerberg refused a 1B $ offer from yahoo.
  - overcast 8y ago
    Zuckerberg wanted power, not money, that's the difference. Only a fool turns down a billion dollars. That's live the rest of your life doing whatever the hell you want money. Holding out for more billions won't change that.
    - rokhayakebe 8y ago
      What if what you want to do for the rest of your life is run the company the way you see it fit for as long as you want?
      - overcast 8y ago
        That's fine, also not about more money.
    - dingo_bat 8y ago
      Or maybe Zuckerberg knew that FB would be worth half a trillion USD. If you have that conviction in your mind, turning down 1B seems easy.
- hectorr1 8y ago
  Very few people turn that down, and even fewer are capable of running $100B companies. But those who are in the second camp are also probably in the first camp, because being an effective CEO requires the irrational confidence of first believing you are an effective CEO with limited evidence. It's a little tautological, but the fact that they took it means they probably wouldn't have succeeded.
rakibtg 8y ago
Doing a misjudgment here but the fact is "Companies like facebook don't need founders, they will eventually make the product that people might use in everyday life, they will do it anyhow; by either copying that product or to buy it. Remember that the 'poke your friend' feature is only unique from facebook everything else is someone else's things" this evil face of facebook will hurt more and more companies day after day and in a result a chain reaction that will affect the life of general people.
vezycash 8y ago
Seeing as established giants can just kill a start up by copying them, I'm left to wonder. Could Snapchat have patented/trademarked Stories?
- gm-conspiracy 8y ago
  ...and then litigate against Facebook for 8 years? Or, license the patent, but why wouldn't Friendster have done the same?
jenks 8y ago
This article does a great job illustrating how it is easy to have IDEAS, but its hard to develop them to a point where they are bold enough to work yet feasible enough to where they're worth working on. Instagram never would have done stories if they were concerned about how a large group of users would think that they are: > entirely stolen from snapchat > a total sellout but look what a bold idea and strong leadership brought to instagram!
Yhippa 8y ago
> Controlling one’s own destiny, though, takes more than product or popularity. It takes money, which is to say it takes building a company, working business model and all. How true this is for life in general.
tschellenbach 8y ago
I started using Instagram to publish to Facebook back in the days mainly because Facebook's mobile upload functionality was buggy and often failed to upload.
rajacombinator 8y ago
What a silly article with a preposterous attempt to define “CEO.” IG would have had access to unlimited funding if they wanted. I’m sure they were under a lot of pressure from FB to sell when they did, but it was a clear blunder. And one of Zuck’s best moves as CEO. The train had already left the station at that point and IG could have been sold for $20 billion a year or two later.
- pas 8y ago
  Who knows. Startups are require very high degree of focus, long hours, etc. not everyone can do that for just one more year.
1290cc 8y ago
They traded their company for hundreds of millions of dollars. Good on them for turning a product into something that was so lucrative for FB and a real enjoyment for so many people the world over. I think it can't be understated how Instagram has become a pillar of so many brands and online businesses today. But in reality their departure is really part of the business of software, the founders sell out, become exceedingly wealthy. After a few years the disillusionment with being part of a corporate machine (and not in control) sets in and they quit to spend time on their burning man floats. Its always been this way and theres nothing wrong with that. I think many of us would do exactly the same given the option of struggling for a decade to profitability or a $10m+ exit with a comfortable VP level role. I find it interesting that Instagram would want to include more adverts, as I find myself drawn to brands/interests without the help of annoying ads.
- TAForObvReasons 8y ago
  At the end of the day, as the article correctly points out: > Letting Facebook build the business may have made Systrom and Krieger rich and freed them to focus on product, but it made Zuckerberg the true CEO Instagram's decision to include advertisements is best understood from Zuckerberg/Facebook's view. Even if the local view is that IG adverts are negative, they are likely accretive from the perspective of the entire Facebook enterprise.
- spr1ted 8y ago
  Timing; Law signed to penelize social sites that facilitate sex trafficking. Instagram founders step down https://www.reuters.com/article/us-facebook-instagram-executives/instagram-co-founders-step-down-from-company-new-york-times-idUSKCN1M505Q https://www.reuters.com/article/us-facebook-instagram-execut... and more CEOs will follow..
tardo99 8y ago
Instagram is very successful. But, I think people shouldn't lose sight of the fact that it's turned a substantial fraction of our teenage and 20-something population essentially into zombies. I believe it is a significant social negative.
- emtel 8y ago
  Hysteria. Do you know any teenagers? I have a teenage daughter. She's not on instagram, but most of her friends are. They have rich, full lives, are engaged at school, spend tons of time together in person, play sports, decorate each other's lockers on birthdays, etc. Is instagram a net negative? Maybe. Are they zombies? No.
  - tardo99 8y ago
    I realize the plural of "anecdote" is not "data," but more than once I've watched 20-something women spend hours on end swiping through Instagram and commenting on photos. One particular time I sat on a train in Europe for 4 hours while a woman did that the entire time. Wall to wall. I respect the fact that you have countervailing experiences, but I do think you're underestimating the negative impact here.
    - jarjoura 8y ago
      Meh, just a decade ago those same women would have been flipping through Vogue and Cosmo. Media has always been a net negative for female body issues and relationships. At least with Instagram for the first time, they can chose to follow more enlightening things. Also seems far more empowering to allow comments on photos.
    - pas 8y ago
      Some people spend that much time reading books printed on deas trees. Is that better?

566 points by quanganhdo 8y ago

In the short-term, Zuckerberg maybe the CEO, but if he keeps prioritizing ads over product (which he has done with FB prod/privacy), then the long-term maybe dicey. Just as content is king, so product will always be king. The ads will follow whoever has the best product, and hence user attention.

dragonwriter 8y ago
> if he keeps prioritizing ads over product Ads are the product that Facebook sells
tootie 8y ago
Ad money is what lets him crush or acquire competitors. The thing that isn't discussed is how commodotized social media software is. Sharing photos and comments and likes is the core of these businesses and it's extremely easy to replicate over and over from a tech perspective. The hard part is acquiring users, scaling and monetizing and FB has won that game. That's how they can take anyone else's product or idea and best them at it so quickly.

indiesolver 8y ago

tl;dr : Zuckerberg - Instagram’s real CEO (from the author's "The difference from Zuckerberg — Instagram’s real CEO — is stark")

teagee 8y ago
Systrom and Krieger built Instagram the product, Zuckerberg built Instagram the business
- indiesolver 8y ago
  and thus Zuckerberg - Instagram’s real CEO
- disgruntledphd2 8y ago
  Sheryl Sandberg, a really good sales team, and a bunch of shit-hot engineers in ads built IG, the business. Zuckerberg tends to avoid monetisation, leaving that to Sales (i.e. Sheryl) and Ads.
  - mandeepj 8y ago
    Sorry, you got it wrong. Sheryl is not in to sales. And, zuck is all about business but he don't think about monetisation until that product have at least a billion users [1]. The real person behind instagram's monetisation success - https://finance.yahoo.com/news/meet-man-helped-facebook-bring-153034992.html https://finance.yahoo.com/news/meet-man-helped-facebook-brin... [1] - https://www.businessinsider.com/zuckerberg-products-need-1-billion-users-2014-10 https://www.businessinsider.com/zuckerberg-products-need-1-b...
    - disgruntledphd2 8y ago
      No offence, but Sheryl heads up sales and ops (the head of Sales, David Fischer, reports to her), and will go visit big clients to sell them on FB ads/new products (of which IG was a good case). I'm aware that Mark (he doesn't like zuck anymore, apparently) thinks that, but he focuses on product much much much much more than monetisation (there's an apocryphal story that suggests he said that ads weren't part of his vision for FB to an internal sales conference in about 2009-10). Finally, I would credit the engineers in Ads a whole lot more than Mr Weil (to my recollection, all of the stuff that ended up making IG money was in place before he joined). Source: worked for FB for a long time.
carbocation 8y ago
This tl;dr really skips over the insightful substance of the article.
flunhat 8y ago
Your tl;dr isn't _wrong_, per se. But the article is really well written, and I feel like there's more depth to it than what you've said. Plus, your statement comes off as kind of cynical and snarky ("no shit, guys" is the tone, even though you probably didn't mean it that way). The piece itself makes some pretty interesting, non-obvious points I think.
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rficcaglia 8y ago
I would summarize it rather: a good product can yield a large network but only when combined with a good monetization/business plan can it be a successful business.

mathattack 8y ago

Very hard to second guess such a well written article. Are there instances where the thesis that “folks who outsource the business side to the acquirer” stay? Salesforce seems good at keeping acquirees but enterprise is different. The acquired companies come with their own revenue and field sales.

beat 8y ago
It's kind of different for enterprise. The acquisition cycle is often to expose a good product to a more deeply entrenched sales system. Acquired companies have proven they have a product that enterprise companies are willing to buy (and go to some pain to do so), but they don't have the ability to sell anything anywhere that someone like Salesforce, IBM, or Atlassian can do.
wgerard 8y ago
> Are there instances where the thesis that “folks who outsource the business side to the acquirer” stay? Hsieh? I mean, I don't know too much about the inner workings of Zappos but I find it hard to believe that the FB->IG relationship is significantly different from the Amazon->Zappos one. Then again maybe he's just the exception that proves the rule.
- AndrewKemendo 8y ago
  I find it hard to believe that the FB->IG relationship is significantly different from the Amazon->Zappos one Why? Zappos was minting money and sustainable in their own right well before the acquisition. IG had no datapoints showing they could sustainably make revenue when they were acquired.
  - wgerard 8y ago
    > Why? Hmm, I guess fundamentally I find it hard to believe that a large corporation would acquire a smaller one just to let them run completely independently - it just seems counter-intuitive unless the acquirer is a holding company, basically. It definitely also doesn't seem like Amazon's jam. Twitch seemed to have a pretty large upward trajectory (and path to profitability) right around the time they were acquired, and Amazon's still clearly guiding at least some of those major decisions.

everdev 8y ago

Not a positive trend for FB considering the What'sApp founder quit in April: https://techcrunch.com/2018/04/30/jan-koum-quits-facebook/ https://techcrunch.com/2018/04/30/jan-koum-quits-facebook/ Giving a single person full control of a company is great when they're on the right track. These have to be warning shots to employees and investors though.

mooreds 8y ago
It depends. Do you still need product geniuses when you have distribution and monetization nailed?
- briandear 8y ago
  Salesforce proves that you don’t.
  - qdigital 8y ago
    Consumer tech is a different beast though and subject to stronger reactionary market forces and whiplash vs enterprise.
  - traek 8y ago
    I'd call Bret Taylor a product genius.

jhabdas 8y ago

For those who covet money titles are more important than to those who covet building great products for users. As a product leader offloading your money challenges into the hands of VC funding is a surefire way to turn vision into greed and slowly destroy one's creative product vision.

joejerryronnie 8y ago
Or, it could be the only way to get a great product out of your basement and into the hands of millions of users. It's a tough balancing act but TANSTAAFL.

orliesaurus 8y ago

Great article, this is how I feel about Instagram personally: - Great app who turned a camera phone into a powerful camera for those who couldn't afford one of those expensive Canon/other brands of good cameras. - Democratizing photography made phone vendors spend more time build better camera, we're at a point where cameras on certain phones are as a good as stand-alone cameras for photography. - Filters have been around forever but with filters in instagram a whole generation became addicted to what they're able to do - turn a simple picture in a more interesting picture. To the point where people had to start create the #nofilter hashtag. Snapchat took the filters to the next level or rather the next iteration and also made itself a name because of them. - Instagram also has it's darkness too: some people say you can get depressed if you browse instagram too much, seeing all those happy pictures of delicious food, beautiful looking humans, cars, paradise-like places, etc. It sounds crazy right? :shrugemojigoeshere: Short aside: Friends of friends who used to work in the same building with the founders of Instagram told me that on the night of their launch they stayed up till the early morning hours to fix their server issues because their initial instagram app was such a success! Honestly, you can't get more real than that - almost like a movie! Thanks instagram co-founders for your creativity throughout the years: Although copying most of Snapchat's features wasn't a great move, it was a business decision that worked really well for your userbase..I can smell that being a very Facebook thing to do. I remember Snapchat turning down $3B acquisition offer, I guess that move really showed how much FB wanted Snapchat's features. Back to Instagram - were the co-founders good businessman? I don't know, instagram pre-acquisition was very cool and ad-free. Now it's ad-ridden and almost an annoyance. Every 3rd post/video/story has ads on it. Blocking those ads is a pain (I still haven't found a universal workaround since ad-blocking doesn't work as well). Another reason why I don't use FB's app. You can smell the FB influence on Instagram far 10 miles, I would also feel sad to see my own creation being taken over by a bunch of product managers who come from the company who acquired my app because they need to "ad-ify all the things". Finally, I think instagram is the only app I use on the daily, every single day (more than Uber/Lyft, more than Spotify and as much as Twitter but not as much as Chrome) ! Hope they can find something cool they're passionate about and build the "next" Instagram, even if it's not a camera-app!

briandear 8y ago

mooreds 8y ago

This is a sobering look at what it takes to build a business vs a product (vs, even smaller scale, a feature). You have to be willing to put in the long hours (err, years) and the schlepping to do all the business-y stuff: * distribution * monetization * back end systems for admin users * sales channels etc, etc Or, you can cash out and assimilate, err integrate, with a larger company that has done that hard work and lose control of your destiny. That's OK, most of us don't have full control of our destiny, and building product can be more fun. It's just a choice you should make with your eyes wide open. I will say that I think he dismisses Snapchat's founders too quickly. Yes, they've been struggling, but they are trying to build a business rather than just integrate with an existing conglomerate. It will be very interesting to see if Systrom et al can build another product, and if so, if they will try to build a business as well.

AndrewKemendo 8y ago
No product controls it's own destiny. You initially lead with a use case, but end up following how people actually use your product, or competitive products, and iterate on them in order to retain and attract users. -------------- The broader point here though is that, at least with consumer software, you will not be able to compete with Google AND Facebook AND Snap AND Amazon in any category. Maybe your product can beat Google+ at social networking, you won't beat Facebook and they'll either buy you or siphon your users. You might be able to build a better enterprise messaging system than LinkedIn but Microsoft will bleed you dry with a better enterprise sales team. Even new categories that are subsets of broad categories eg. Social/Ephemeral Messages have no chance of surviving, as they are features to existing products that have BN of users. So the best chance you have as a software startup to compete is to sell to the Cartel (Facebook, Google, Apple, Amazon, Microsoft), and hope that you're given enough lattitude to see the product that you're ruddering play out as long as possible.
SmellyGeekBoy 8y ago
Instagram was huge even before Facebook took over. It has gone from strength to strength in the 6 years since but I'm pretty sure that would've been the case without Facebook's involvement (see also: Twitter and Snapchat). You seem to be doing the founders and the team behind Instagram a huge disservice here by accusing them of not being willing to put in the work and riding on Facebook's coattails.

srinathkrishna 8y ago

Ben Thomson is one of the best folks writing about the business of tech. Such lucid writing and even someone who's fairly early on in their careers will be able to understand what's going on.

pas 8y ago
Usually his essays are information dense, but this was a bit of a let down. It would have been a fine tweet though. And the constant amazement at the IG founders' extraordinariness is very tiring. (They are obvioulsy not dumb, but they mainly got lucky, as it's not like there were no other apps with photo taking and filters trying to make it big in/on the Apple App Store at the time.)

ape4 8y ago

Slightly off topic is Instagram's new dating app. Will be interesting to see how that plays out.

aylmao 8y ago
It's Facebook's and it will live in the Facebook app, not Instagram.

krn1p4n1c 8y ago

Seems like they didn't know when to leave. Once they sold it was no longer their baby and should have started working on an exit strategy. It becomes a contest of egos. On the technical side, FB's methodology with acquisitions seemed the most rational. Rather than sucking the new company in they embedded PE's in there for the purpose of giving the tech teams a fast track to using FB resources.

tyingq 8y ago
It's a little over 6 years elapsed. Maybe they had to wait out some vesting?
- krn1p4n1c 8y ago
  I'm sure. Everyone has to do the 4yr slog, but founders usually write in a parachute clause. I hope they stuck around to make sure their original team was taken care of, but it's naive to think they'd have C-level control at the parent company after acquisition.
billmalarky 8y ago
To be fair, they also had $700 MM in FB stock (now worth $4b according to the article), so there was incentive to help instagram succeed at FB.
- kbenson 8y ago
  I've always wondered about this. How much inventive is that? When the person thinks "if I work really hard and this, I'll increase my huge pool of money from an amount I can't easily spend given the rest of my life to an amount almost six times as much!", does that really resonate? It's not like it's the same as $700 to $4,000, or even from $7,000,000 to $40,000,000. There are things you can buy to spend most of those amounts, but those are things it's not really worth buying multiple of (e.g. houses, super yachts), so at the point you have close to a billion dollars, what does another billion buy you, besides bragging rights? I imagine there's some impetus to stick around because you want to see what you built succeed, but at some point I imagine you realize it's not really yours anymore, so why not leave and do what you want, instead of what other people want you to do? I mean, you literally have "fuck you" money.

draw_down 8y ago

Selling means it belongs to someone else. No use being in denial about it. Figure out what you’re gonna do next while you do your time, then go do it when your time’s up.

projectramo 8y ago

"Still, as good as the Instagram Stories product was, it is difficult to overstate the built-in advantage that came from Instagram’s larger network, and impossible to overstate the importance of having a shared advertising backend with Facebook. To put it another way, Instagram’s two biggest advantages relative to Snapchat, or any other competitors that may arise, didn’t have much to do with product — Systrom’s speciality — at all." But the first advantage he mentions -- the size of the network -- is a direct result of the product. The point of a good product is to get people to use it which is what grows the network.

luckydata 8y ago
A direct result of another product, Facebook's.

teknopurge 8y ago

that really is a refreshingly well-written article. well done OOP.

m-p-3 8y ago

> Facebook had agreed to let it run independently as part of the acquisition deal. Sounds nice on paper. > It is about finding and developing a business model that lets you determine your own destiny. But when you sold the business to Facebook, you ultimately agreed to forfeit your ability determine your own destiny to obtain the ability to use their vast resources.

tootie 8y ago

I know I'm just being a grump, but I find it baffling that these businesses are so valuable.

gm-conspiracy 8y ago
It is the new television. Advertisers need to reach eyeballs.

matchagaucho 8y ago

It's easy to second guess... "if only they'd hung there, the $100B valuation today would be theirs". But how many first time entrepreneurs would turn down a $1B offer after 2 years of work? Guaranteed the writers of these articles have never been in that position.

enitihas 8y ago
I think Zuckerberg refused a 1B $ offer from yahoo.
- overcast 8y ago
  Zuckerberg wanted power, not money, that's the difference. Only a fool turns down a billion dollars. That's live the rest of your life doing whatever the hell you want money. Holding out for more billions won't change that.
  - rokhayakebe 8y ago
    What if what you want to do for the rest of your life is run the company the way you see it fit for as long as you want?
    - overcast 8y ago
      That's fine, also not about more money.
  - dingo_bat 8y ago
    Or maybe Zuckerberg knew that FB would be worth half a trillion USD. If you have that conviction in your mind, turning down 1B seems easy.
hectorr1 8y ago
Very few people turn that down, and even fewer are capable of running $100B companies. But those who are in the second camp are also probably in the first camp, because being an effective CEO requires the irrational confidence of first believing you are an effective CEO with limited evidence. It's a little tautological, but the fact that they took it means they probably wouldn't have succeeded.

rakibtg 8y ago

Doing a misjudgment here but the fact is "Companies like facebook don't need founders, they will eventually make the product that people might use in everyday life, they will do it anyhow; by either copying that product or to buy it. Remember that the 'poke your friend' feature is only unique from facebook everything else is someone else's things" this evil face of facebook will hurt more and more companies day after day and in a result a chain reaction that will affect the life of general people.

vezycash 8y ago

Seeing as established giants can just kill a start up by copying them, I'm left to wonder. Could Snapchat have patented/trademarked Stories?

gm-conspiracy 8y ago
...and then litigate against Facebook for 8 years? Or, license the patent, but why wouldn't Friendster have done the same?

jenks 8y ago

This article does a great job illustrating how it is easy to have IDEAS, but its hard to develop them to a point where they are bold enough to work yet feasible enough to where they're worth working on. Instagram never would have done stories if they were concerned about how a large group of users would think that they are: > entirely stolen from snapchat > a total sellout but look what a bold idea and strong leadership brought to instagram!

Yhippa 8y ago

> Controlling one’s own destiny, though, takes more than product or popularity. It takes money, which is to say it takes building a company, working business model and all. How true this is for life in general.

tschellenbach 8y ago

I started using Instagram to publish to Facebook back in the days mainly because Facebook's mobile upload functionality was buggy and often failed to upload.

rajacombinator 8y ago

What a silly article with a preposterous attempt to define “CEO.” IG would have had access to unlimited funding if they wanted. I’m sure they were under a lot of pressure from FB to sell when they did, but it was a clear blunder. And one of Zuck’s best moves as CEO. The train had already left the station at that point and IG could have been sold for $20 billion a year or two later.

pas 8y ago
Who knows. Startups are require very high degree of focus, long hours, etc. not everyone can do that for just one more year.

1290cc 8y ago

They traded their company for hundreds of millions of dollars. Good on them for turning a product into something that was so lucrative for FB and a real enjoyment for so many people the world over. I think it can't be understated how Instagram has become a pillar of so many brands and online businesses today. But in reality their departure is really part of the business of software, the founders sell out, become exceedingly wealthy. After a few years the disillusionment with being part of a corporate machine (and not in control) sets in and they quit to spend time on their burning man floats. Its always been this way and theres nothing wrong with that. I think many of us would do exactly the same given the option of struggling for a decade to profitability or a $10m+ exit with a comfortable VP level role. I find it interesting that Instagram would want to include more adverts, as I find myself drawn to brands/interests without the help of annoying ads.

TAForObvReasons 8y ago
At the end of the day, as the article correctly points out: > Letting Facebook build the business may have made Systrom and Krieger rich and freed them to focus on product, but it made Zuckerberg the true CEO Instagram's decision to include advertisements is best understood from Zuckerberg/Facebook's view. Even if the local view is that IG adverts are negative, they are likely accretive from the perspective of the entire Facebook enterprise.
spr1ted 8y ago
Timing; Law signed to penelize social sites that facilitate sex trafficking. Instagram founders step down https://www.reuters.com/article/us-facebook-instagram-executives/instagram-co-founders-step-down-from-company-new-york-times-idUSKCN1M505Q https://www.reuters.com/article/us-facebook-instagram-execut... and more CEOs will follow..

tardo99 8y ago

Instagram is very successful. But, I think people shouldn't lose sight of the fact that it's turned a substantial fraction of our teenage and 20-something population essentially into zombies. I believe it is a significant social negative.

emtel 8y ago
Hysteria. Do you know any teenagers? I have a teenage daughter. She's not on instagram, but most of her friends are. They have rich, full lives, are engaged at school, spend tons of time together in person, play sports, decorate each other's lockers on birthdays, etc. Is instagram a net negative? Maybe. Are they zombies? No.
- tardo99 8y ago
  I realize the plural of "anecdote" is not "data," but more than once I've watched 20-something women spend hours on end swiping through Instagram and commenting on photos. One particular time I sat on a train in Europe for 4 hours while a woman did that the entire time. Wall to wall. I respect the fact that you have countervailing experiences, but I do think you're underestimating the negative impact here.
  - jarjoura 8y ago
    Meh, just a decade ago those same women would have been flipping through Vogue and Cosmo. Media has always been a net negative for female body issues and relationships. At least with Instagram for the first time, they can chose to follow more enlightening things. Also seems far more empowering to allow comments on photos.
  - pas 8y ago
    Some people spend that much time reading books printed on deas trees. Is that better?