With its billion-dollar sale to Facebook, Instagram instantly became the latest poster child for startup success. In just 551 days, the photo-sharing mobile app zoomed from zero to 30 million-odd users, and 10 million U.S. visits by March 2012, up 1000% since December 2011. Its valuation outstrips that of the 116-year-old New York Times.
An amazing run, and it wasn’t all just luck, though the company enjoyed plenty of that. To boost its chances to win the startup lottery, Instagram did eight very important things right.
1. Instagram Operated as a Nimble Start-up
Despite its meteoric growth, Instagram kept its overhead low with a total of only 13 employees, and its headquarters weren’t anything to brag about, either. Instagram is housed in Twitter’s old digs on 164 South Park Street in the trendy but still slightly seedy SOMA neighborhood of San Francisco.
More important, it stayed nimble enough to switch gears from its original idea of a location-based social network called Burbn to an iPhone app focused solely on photo-sharing. And instead of hiring workers or looking for revenue, the company was able to focus on growing the platform, its community and its aesthetic offerings.
2. Instagram Cashed in on the Mobile Explosion
Instagram’s timing was perfect, capitalizing on a historic increase in smartphone use. Starting out as an iOS app, it successfully targeted the burgeoning legions of hip iPhone-app users. It waited until Android reached nearly 50% mobile marketshare to launch the long-awaited app on that platform. Meanwhile, Instagram mostly ignored the no-longer-as-hot Web space, although there is a Web version called Webstagram.
3. Instagram’s Interface Stayed Junk-Free
Spend 20 minutes on Instagram and chances are you’ll be hooked. Beautiful pictures filtered through hazy lenses flow down an otherwise cold, glass screen. Instagram charges up a smartphone screen, filling it with emotion – not piles of distracting controls and icons. On Instagram, the image stands alone. Instagram successfully created a new world where images – not functionality – are the main focus.
4. Instagram Didn’t Get Creepy
Instagram managed to keep its creep vibe low. It doesn’t push users to post, to share or even to like – it is an open space, available to use as you wish. Stay on the sidelines and just observe – no one will ever know. Pop into a conversation and then quickly leave. You won’t be the only one: Instagram users are notoriously fickle.
That’s why Instagram’s easy follow/unfollow option doesn’t require a commitment as heavy-handed as “friending” on Facebook. Follow whomever you want, or just wander off and find new images to look at. You won’t accidentally see some old fling pop up in the Instagram stream, unless you purposely follow that person.
5. Instagram Married Visceral, Visual Communication & Community
Instagram built a devout community based on a single idea: capturing and sharing beautiful images. Powerful images are inherently emotional – think about The Atlantic’s In Focus section.
Instagram gave people an easy way to connect around images, without the added pressure of complex social relations. Communities popped up organically around filters, around using too many filters and around just friends.
“There are a lot of things in [a] photo that someone can respond to, [that] promote conversation – then you get a wonderful interaction out of it,” says Piictu Community Manager Zachary McCune. “I hope that continues, because that’s what’s beautiful about being able to relate to photographs.”
A talented photographer can capture a single emotion in a square image, and make the viewer stop and feel something, if only for a moment. Instagram makes that moment easier to share.
6. Instagram Created a Valuable New Data Set
Every time an Instagram user snaps a picture, the app can capture a rich set of data, including location, time of day and other data points that can be associated with a smartphone’s sensors, explains ReadWriteWeb’s Dan Rowinski in How Instagram Will Help Facebook Monetize Mobile.
Instagram may not have been monetizing that data, but you can bet Facebook will. “Facebook is adding another crucial set of data points/edges to analyze people’s activity online,” says Pixable CEO Inaki Berenguer. “With Instagram in the fold, Facebook can now quantify what people are taking photos about based on the tags they put on their photos.”
7. Instagram Didn’t Worry About Making Money
In its short 15-month lifespan, Instagram focused on building its community, user base and functionality rather than worrying about how the platform was going to make money. By not chasing the dollar, it was able to focus on making the app better.
Of course, Instagram did pay attention to acquiring VC funding. Right before the Facebook acquisition, it closed a $50M Series B round from Sequoia, Thrive, Greylock and Benchmark, valuing the company at a sweet $500 million.
Figuring out revenue streams is now something that Facebook COO Sheryl Sandberg and her team will have to worry about.
8. Instagram Embodied a Cultural Shift Toward Photo Inboxes
As the future of photo-only inboxes approaches, and more people use photo-sharing apps to connect with their friends, the need for more visual communication will only intensify. The idea that social interactions will increasingly become visual and mobile is attracting widespread interest.
“Increasingly, we see people using photos to share an experience with a friend, whether it’s to tell them what they had for lunch, show them a cool spot in their city that they found or to share special moments like birthdays or weddings,” says Pixable’s Berengeur. “The ultimate goal of sharing mobile photos is to broadcast your life to your friends instead of keeping a memory. The rise of smartphones, photo apps and social networks have made taking and sharing a photo easier than ever.”
What Other Startups Can & Can’t Learn From Instagram
What worked for Instagram isn’t guaranteed to work for every startup. It’s always easier to look back and uncover the right and wrong strategic moves. Only in retrospect is it clear that Instragram did everything right. Along the way, there were plenty of critics carping at just about every decision the company made.
There is, however, one thing that other startups can certainly learn from Instagram: Timing is everything. If Instagram had come along six months later, things might have turned out very differently. Some other company might have already executed on its ideas and it would be the one preparing to cash some very big checks.
Instagram images via @bralts.
