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Instagram c. 2012 was just burning VC money and had no plans for how it could be profitable. It wasn't until Facebook bought them that there was some thought a

by shagie 4y ago

Instagram c. 2012 was just burning VC money and had no plans for how it could be profitable. It wasn't until Facebook bought them that there was some thought about how to make it profitable. https://www.fastcompany.com/3019351/will-instagrams-vogue-like-ads-spoil-the-user-experience https://www.fastcompany.com/3019351/will-instagrams-vogue-li... > On Thursday, the company announced that it would begin introducing photo and video advertisements on the service, its first attempt to generate revenue since Facebook acquired the startup for $1 billion. > ... > It’s a sentiment Systrom has repeated to me for years–and an idea that many revenue-free startups have begun parroting. For entrepreneurs without a business model, it’s become almost fashionable to declare that they’re simply creating a new model altogether: Whatever it is–by god–won’t involve pesky traditional ads. No! The ads won’t be disruptive or annoying–they’ll be wanted and loved! (I’m waiting for the call, SnapChat.) But when push comes to shove, more often than not, the ads turn out to be nothing more than, well, traditional advertisements. See: any Promoted Tweets. Yes, it was on track to be something big... but it wasn't on track to be able to make any money and was more likely to flounder once it ran out of VC interest and get bought for cheap by Twitter. https://www.businessofapps.com/data/instagram-statistics/ https://www.businessofapps.com/data/instagram-statistics/ There's a reason that chart only starts listing revenue in 2015. While Instagram might have been keeping Zuckerberg up at night with nightmares - one shouldn't pretend that it had a path to making money and being able to keep running.

passwordoops 4y ago
And in a world where competition is allowed to see its course, Instagram would have disappeared. And further down the line, Facebook's poor decisions would have spelled oblivion for them too. It also means the 2010s may have perhaps seen investors print billions into businesses that actually matter and deliver real innovation
- scarface74 4y ago
  Or it just would have copied Instagram’s feature set like it’s done dozens of times with other competitors. Or it would have just hired all of its founders to recreate it. Do you now also want to stop acquihires?
- fallingknife 4y ago
  If Instagram would have disappeared on its own, Facebook would have just built it in house. They spent $1 billion on it because it was cheaper to do that than to start from scratch. And how could anti-trust possibly stop that?
  - mrkurt 4y ago
    The point of antitrust is to encourage that. That's competition. We want Facebook to build net new things. Facebook's not all that good at building new things, though. Most big companies aren't. Partially because they don't need to be.
    - scarface74 4y ago
      And how would that be a better outcome for the startups? If you haven’t noticed, Microsoft and Apple have both been around for over four decades “creating new things”.
      - mrkurt 4y ago
        I don't mind startups failing. I would prefer that startups fail. I would prefer big companies fail. It's healthy for companies to die. Apple and Amazon are more of a vertical integration problem. They expand their market power by monopolizing the vertical supply chain. Microsoft acquires companies to increase their market power. Skype, GitHub, LinkedIn, now Activision.
        fallingknife 4y ago
        Monopolizing a vertical supply chain isn't even a concept that makes sense. The point is that with a monopoly customers have only one purchasing option. This condition does not exist when a company integrates vertically.
        mrkurt 4y ago
        You're arguing the semantics of a monopoly, but you should just mentally replace the word "monopoly" with "market power". When Apple buys components from a vendor, they have less market power. When they build their own components, they have more market power. Both Apple and Amazon shipped their own ARM chips. This increased their market power. Because they're the only companies with access to those chips. Meanwhile, independent ARM vendors go out of business about once every 3 months because the biggest companies using ARM aren't part of their addressable market. Which means small companies have limited access to ARM CPUs. When Amazon builds their own delivery company, they increase their market power. When they buy from Fedex and UPS, they decrease their market power. And, when they do their own deliveries, they limit competitors market power. You can be fine with all of this. Those of us who are interested in competitive markets worry about it a lot. You don't have to be worried about competitive markets, though. It's totally valid to not think increased competition is a good thing. There is a lot of nuance here. If you're stuck on the word monopoly, I don't think you're going to really hear the things antitrust folks have to say.

by shagie 4y ago

passwordoops 4y ago

And in a world where competition is allowed to see its course, Instagram would have disappeared. And further down the line, Facebook's poor decisions would have spelled oblivion for them too. It also means the 2010s may have perhaps seen investors print billions into businesses that actually matter and deliver real innovation

scarface74 4y ago
Or it just would have copied Instagram’s feature set like it’s done dozens of times with other competitors. Or it would have just hired all of its founders to recreate it. Do you now also want to stop acquihires?
fallingknife 4y ago
If Instagram would have disappeared on its own, Facebook would have just built it in house. They spent $1 billion on it because it was cheaper to do that than to start from scratch. And how could anti-trust possibly stop that?
- mrkurt 4y ago
  The point of antitrust is to encourage that. That's competition. We want Facebook to build net new things. Facebook's not all that good at building new things, though. Most big companies aren't. Partially because they don't need to be.
  - scarface74 4y ago
    And how would that be a better outcome for the startups? If you haven’t noticed, Microsoft and Apple have both been around for over four decades “creating new things”.
    - mrkurt 4y ago
      I don't mind startups failing. I would prefer that startups fail. I would prefer big companies fail. It's healthy for companies to die. Apple and Amazon are more of a vertical integration problem. They expand their market power by monopolizing the vertical supply chain. Microsoft acquires companies to increase their market power. Skype, GitHub, LinkedIn, now Activision.
      - fallingknife 4y ago
        Monopolizing a vertical supply chain isn't even a concept that makes sense. The point is that with a monopoly customers have only one purchasing option. This condition does not exist when a company integrates vertically.
        mrkurt 4y ago
        You're arguing the semantics of a monopoly, but you should just mentally replace the word "monopoly" with "market power". When Apple buys components from a vendor, they have less market power. When they build their own components, they have more market power. Both Apple and Amazon shipped their own ARM chips. This increased their market power. Because they're the only companies with access to those chips. Meanwhile, independent ARM vendors go out of business about once every 3 months because the biggest companies using ARM aren't part of their addressable market. Which means small companies have limited access to ARM CPUs. When Amazon builds their own delivery company, they increase their market power. When they buy from Fedex and UPS, they decrease their market power. And, when they do their own deliveries, they limit competitors market power. You can be fine with all of this. Those of us who are interested in competitive markets worry about it a lot. You don't have to be worried about competitive markets, though. It's totally valid to not think increased competition is a good thing. There is a lot of nuance here. If you're stuck on the word monopoly, I don't think you're going to really hear the things antitrust folks have to say.