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3 Things Vanity Fair's Instagram Story Missed
 

Instagram's journey from launch to acquisition to continued growth is a Silicon Valley dream--and a well documented one, at that. Here's a few things you might not have realized.

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On the night of Instagram's launch, in December 2010, founder Kevin Systrom sat by his computer, watching the users sign up.  "Are we counting wrong?" he asked himself. They weren't. By the end of its first week on the app store, Instagram had been downloaded 100,000 times.

Less than two years later, without generating a cent of revenue (but attracting some 27 million users), Instagram was acquired by Facebook for a staggering $736.5 million--now the subject of a recent Vanity Fair feature by long-time tech writer Kara Swisher. 

Couched in a 4,500-word feature story, the 18 months in the life of this small company might seem like a roller-coaster ride. But the reality, perhaps, is a bit more mundane.

Reflecting on his meeting with Mark Zuckerberg--a meeting that would lead to Facebook's eventual acquisition of his company--Instagram co-founder Kevin Systrom muses that "some of the biggest decisions get made relatively quickly, without much fanfare." The Social Network, this wasn't. 

But there were, of course, other story lines at play--some of which the casual observer may not have realized. For the curious, close followers of Instagram's rise, here's a few nuggets Vanity Fair leaves out. 

1. Instagram won a battle for check-ins. That's ironic.

Early on, before Instagram was called Instagram, it was Burbn, a location-and-photo-sharing app based on the concept of "checking in." But the feature was clunky, and Systrom and Krieger decided to streamline the service. When they eventually pivoted to Instagram, they scrapped the check-in.

"Instead of doing a check-in that had an optional photo, we thought, Why don't we do a photo that has an optional check-in?" Systrom tell Vanity Fair. 

Two other start-ups were fiercely competing for user's check-ins: Foursquare and Gowalla. This battle has been heavily documented (Gowalla was eventually acquired by Facebook) but Instagram's name rarely pops up. Perhaps it should.  Josh Williams, Gowalla's co-founder and former CEO, writes on Medium:

It turns out there was another app that shared a similar vision called Burbn. They were building yet another check-in type service loaded with every feature but the kitchen sink. But early user feedback, coupled with a desire to avoid the check-in battle shitshow already in progress, led them to drop everything to focus on one simple feature: photos.

They made the act of taking and sharing photos (many of which just happened to be location-tagged) fast, simple, and fun.

They made their own rules. They called it Instagram. That whole see the world through the eyes of their friends thing?

Turns out Instagram did a pretty good job of this.

While we were busy playing tug-of-war over check-ins, someone else found a path to the goal with less friction.

About a year after the launch of Instagram, Gowalla's service would shut down and several of us would join Facebook. Others would move on to new endeavors of their own. Ironically a couple from the team would join Instagram.

2. Instagram's well-funded competitor shut down three months after Instagram's acquisition. That's a more typical Silicon Valley tale.

Here's a sobering reminder of the even more quintessential Silicon Valley story: that of the well-funded start-up, ripe with all the right connections and investors, all the right ideas--without the serendipity.

PicPlz, a mobile photo-sharing app that was perhaps Instagram's biggest competitor, raised $5 million from Andreessen Horowitz--a move that essentially said Andreessen had "chosen" PicPlz over Instagram. ("Andreessen Horowitz was a big name … and it was like, It sucks to get turned away," Systrom recalls.)

After the acquisition, in April 2012, PicPlz's founder, Dalton Caldwell, went on to say that though "PicPlz didn't win," he has "ZERO shame or regret for doing my best...The fact is, I saw the writing on the wall that we wouldn't win early and pivoted out of photo sharing which I had ~90% of my series A cash still in the bank."

In July 2012, PicPlz shut down.

3. Forget about the $57 million. Instagram didn't even need the $500,000 it raised in March of 2010. 

Vanity Fair does a nice job explaining the investment process--from the $500,000 initial seed round, to the $7 million Series A round led by Benchmark, to the $50 million investment just days before the acquisition. But it leaves out one crucial detail: The scrappy Instagram team might not have needed the money, at least initially.

"You can go off and raise $40 million in a Series A, but it turns out you don't need a lot of money to get off the ground these days," Systrom says in a 2011 Stanford talk. "We spent like $60,000 to launch our first version of Instagram. Sixty-K. We had raised 500 [thousand dollars] and we were kicking ourselves the second day after... not after we raised, but after things started taking off. We were like, 'We have all this money left over and we got this far.' It turns out you can bootstrap yourself with Amazon Web services. You need two engineers these days to do things well. And it turns out that you can get a lot done on a shoestring budget."

IMAGE: Getty
Last updated: May 6, 2013




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