He saw the potential of mobile and the huge explosion of apps focused on location-based check-ins (this was when the Foursquare app was the hottest thing around), and got hacking
Instagram was just a group of 16 developers hacking some software in a poky office above a pizza shop in Palo Alto. They hadn’t made a cent in revenues. But they had attracted more than 30 million users in record time. And, unlike those of most of their competitors, those users were actually sticking around. A few years after the acquisition there is hardly a soul in the business world who would disparage – or even vaguely question – Zuckerberg’s had well over 150 million active users12 by the end of 2013 and the momentum hasn’t stopped. It launched an advertising product for brands on .13 So let’s take a moment to dive into the details of Instagram’s famous journey and understand a bit more about how Silicon Valley thinks, and why the billion-dollar acquisition of the company by Facebook actually does make sense. The face of Instagram Instagram has two cofounders. The first is Kevin Systrom, who is the app’s best-known public face.14 Systrom grew up in a rather nice Boston suburb called Holliston. He was a pretty smart kid, fascinated by computers and photography, which led him to enrol at Stanford – but Silicon Valley had always been on his mind. While at Stanford he snagged a summer internship at Odeo, the company that would later evolve into Twitter. It’s there he made friends with Jack Dorsey, who sat at the neighbouring desk. Systrom graduated from Stanford in 2006 with a double major in engineering and management. He then pulled a two-year stint at Google working on Gmail, Google Reader and then eventually worked for the Corporate Development team.15 Next he worked at a travel site called Nextstop (not long after he left Nextstop it was acquired by Facebook). But Kevin wanted to do something of his own. Whiskey and Burbn In early 2010, Systrom launched his first tech startup on his own, and, because he was a programmer, he was able to get away with it.
Dorsey and Twitter would play a fascinating – and tense – role in the future of the photo app
Burbn. Systrom had a fondness for fine bourbons, so he followed that mantra of building something that you truly love (in name at least). Kevin raised half a million dollars in seed funding from two venture-capital firms: the prestigious Andreessen Horowitz and Baseline Ventures. He seemed to be off to a good start. However, despite his efforts, he knew he was pushing a boulder up a mountain with his me-too site and he had a limited runway to prove himself. Its tagline was pretty uninspiring too: ‘A new way to communicate and share in the real world’. I think it could apply to anything. Cofounder inspiration But the story of Instagram is not just of Kevin Systrom.16 As often happens, there is another cofounder, in this case Mike Krieger. According to Kevin, despite being invisible to the public, Mike was very much the soul of the app. Mike grew up in Brazil, and moved to the United States in 2004 to study engineering at – you guessed it – Stanford. He was the more conservativeengineer type, but possessed a strong creative and design edge. After he graduated from Stanford he joined the super-hot startup Meebo, a clever browser-based chat platform that would explode in popularity. But what Mike really wanted was to branch out and do something new and different. Systrom knew that he had to break out of a rut with Burbn – and turn it into something amazing. He also knew he needed a cofounder to help him to do that. Having both attended Stanford, he and Mike Krieger knew of each other but had never clicked. However, given how small the community – and coffee-shop scene – is in Palo Alto, it wasn’t much of a surprise that they would frequently encounter each other. And so, on one normal caffeine-fuelled day in 2010, he approached Krieger to join him at Burbn: ‘Hey, this is going to be a real thing – are you interested in being my cofounder?’ Krieger was immediately interested. It was a bit of a risky strategy because Kevin knew he was about to do a ‘bait and switch’. Kevin was planning to do something completely guaranteed approval installment loans Newburgh different once Krieger was on board: a perfect time for the greatest of Silicon Valley euphemisms – the pivot. Pivoting your business is admitting the failure of your current (and currently funded) idea, clinging on to whatever remaining investor money you have, and trying your next new idea. Funnily enough, investors (at least in the Valley) aren’t too upset about this strategy. At the seed stage it’s much more about investing in people, and accepting that