I wouldn't be surprised to see Instagram go the way of Twitter once more attention starts being called to the number of bots on IG. One of the big "value propositions" for IG is the advertising potential through influencers, but go to any influencer profile and you'll see that a significant portion of their followers are just paid bots. The "1 billion active accounts" number smells fishy to me.
I have a few friends that participate in the "influencer scene" (as influencers themselves and as marketing reps at companies who purchase posts from influencers) and it's basically an open secret at this point that aside from a select few celebs, any given influencer has an entire army of bots behind them to promote their posts. Getting on the top of the discover queue is basically just down to who has the bigger bot network.
I saw a hot girl with 1M followers. So I decided to check out her website.
Website looked like a bland woocommerce store, no soul, just the girl selling pictures of her and underwear.
I went to alexa's Site Info and saw her website was ranked top 5 million or something poor. However, her rank in india was top 100k. The girl was not Indian, she had botted/paid so much that her fake traffic was visiting her website more than her real traffic.
I guess I'm thinking I should start botting? I already make an instagram 'like' bot on friday in 60 minutes.
If it's an open secret then the advertisers will adjust for it. Radio and tv stations have been working with fuzzy audience numbers for years and advertisers go along with it.
I'm pretty sure most advertisers already do adjust for it, because they know how big of a problem it is. But that's not what I meant to focus on.
What I'm trying to say is that, like Twitter, IG will probably start to lose a lot of public respect and valuation if they keep boasting "we have 1 billion active users!" once the general public starts to get wind of the fact that the 1 billion number is bullshit.
Doesn't work like that. Return rates on assets average about 6% or so. i.e., if you invest $100, you expect a $6 annual income. In other words, a $100b investment would expect a $6b annual income.
Take average PE ratios for example, about 15 (so 6.6% earnings as a percentage of market cap).
That would require about $6 per user per year in profit. Facebook is at $6 average revenue per user (ARPU) right now, but >$25 for US users for example, and growing.
Instagrams revenues are currently around $7b with a fraction of that profit, and at current growth rates, the valuation isn't crazy.
If the average user spends 1 hour per day, that's 365 hours per year at $5 or about 1 penny per hour of use. It's not hard to squeeze in a penny worth of profit from ads per hour of use. This would get you at $6b net income. Given that's in the cards for the future, the valuation isn't crazy.
The only flaw investors can make is that growth either isn't sustainable (I think it is for quite some time), or that Instagram users will eventually move on to other things (e.g. Myspace) such that the years of profit will be shortlived (more likely). Nobody invests $100 to gain $5 per year for a short period, that's based on perpetual income expectations which would require Instagram to stay around for quite a long time.
Nice back-of-the-envelope analysis. But just wanted to let you know, the ARPU numbers are per quarter, not per year! For Q1’2018, from the official earnings report, has worldwide ARPU at $5.53 for that quarter. In US, for Q1, it was $23.59 ARPU.
It's exploding because apart from being a really good product, they made the UX super, super simple. With just enough little nuggets of complexity to make it feel whole.
On another note, what do you call this phenomenon, when something is super simple, but you can just tell how much work went into it? iA Writer, Instagram, Dropbox, iPhone, a great chair...they feel expensive, regardless of price.
Honestly though, building its functionality in a weekend is perfectly doable, the hard part is the ad tracking/stalking infrastructure that goes in the background.
I remember not thinking that it was overpriced, but amazed that it became a threat to Facebook worth that in just like 2 years. If I recall correctly, it was a team of 13 at the time of that offer.
> Well, I think FB has probably lost 100B in value, and as someone who stopped using FB this year because I dont enjoy it anymore-I moved to instagram and twitter.
I laughed too, I was thinking "Wow, $1B for a photo app that has some lame filters, take a semester of digital image processing and you could do that".
To their credit, the app was extremely simple back then, today it has managed to add complexity without being so overwhelming(although Instagram TV adds more eyesore to the screen), slowly they copied good, proven features and blended well into the Facebook ecosystem.
Monopoly? In 2012, Instagram had 40 million users and no revenue[1]. Hardly a monopoly.. Everybody mocked Facebook for buying up Instagram for the amount of money they were offering. Nobody (or, perhaps, very very few amount of people) at the time thought it would become a $100bn company. You really think the government should have had the foresight to block this? Wishful thinking on your part..
I don't think I misunderstand. In 2012, there were quite a few up and coming social media apps. Twitter, Vine (2013), Tumblr, Pinterest, Snapchat (2011), and even Google+. Plenty of competition from both small and big companies. I'm not saying Facebook isn't a monopoly but given the options, you can't possibly think that at the time Instagram was going to be the "Facebook killer".
In hindsight, sure, we'd all love that. But seeing the recent FB hearings with congress, it seems they are still figuring out what the internet is.
Shame on the government for allowing an enterprise to become so successful. We should all protest for a worse economy! Fewer goods and services! Unemployment! That's what we want!
It's either that or YouTube. I guess you could argue for Apple acquiring NeXT, but that's an acquisition that isn't really able to be measured in the same way.
Why not since Bloomberg is now pulling numbers out of its ass? A billion MAU with projected $10 billion annual revenue gives a 10x annual revenue valuation. Apple has long surpassed a billion iOS units sold, and annual revenue is $230 billion, give or take, so it should be worth $2.3 trillion. Not bad for an inflation adjusted acquisition worth $654 million.
And Apple is not a "fast growing business"? Have you looked into their "Services" category? IG's REVENUE is claimed to be $10 billion. Apple's Services NET SALES was $9.19 billion. In the last QUARTER. So, yes, Apple is a "fast growing business", and is growing faster than Instagram. If Bloomberg was fair, Apple's services alone is a $400 billion company.
Taking a long-term view, IG's revenue comes from advertising i.e. it's a one-trick pony, just like Facebook. Apple is a diversified company; even though iPhone makes up >60% revenue, is anyone with an iota of financial sense going to complain that it's a bad thing?
You do realize that Instagram has ads that companies pay money for right? That's where they make their money, when companies purchase ads on Instagram.
I think TheRealPomex' point was that the companies pay money for those ads because facebook has the user data to ensure the ads are appropriately targeted.
Even with professional marketers, total joke and waste of money. People do not click on ads, and those that 'do', might be fake facebook bots or actually facebook messing with numbers.
My new 'ad' is that I make content that people will search for on google. Then they can check out the rest of my website.
As much as I’d love to agree with you there are a lot of idiots out there that click on ads because they legitimately believe it’s a good product/service (hint: if they have to pay someone to shove their product in your face, it’s not a good one), or can’t tell the ads from real content (I guess that’s why “chumboxes” like Outbrain/Taboola are still a thing).
I had first-hand evidence of this when my friend fell for some weight loss scam ad of Facebook. We ended up charging it back, and despite all that she’s still not convinced and will happily participate in loyalty schemes, give out personal information to anyone that asks (she literally gets one spam email every few minutes in her Yahoo mailbox) and prefers buying from unknown/shady/scammy sites like Groupon rather than more reputable outlets.
You're doing it wrong. Hire an agency who knows what they're doing.
Your "ad" is just content marketing. This difference is you pay with your time (or others time) to create it, rather than paying for it to be put in front of other's eyes.
Some of the ads I get on Instagram are completely ridiculous. I've been taking screenshots of them because they are so likely ineffective for the people who place them that it's almost humorous.
For instance, an advertisement for a Chinese restaurant. I can't click on their name to go to their profile (that seems to be optional). Clicking on the action button asks if you want to dial their number immediately - remember at this point you don't even know what city they are in, haven't seen a menu. When I have checked out some of these restaurants they are often in other states.
> I can't wait for that to become an illegal trade.
Why would that ever happen? How could that ever happen? That would destroy everything (note: hyperbole) of value currently offered for free on the internet.
The worth of an ad impression or click is measured in fractions of cents and the adds up to peanuts per month.
Publishers can just charge those peanuts directly and I’ll be happy to pay up (plus they’ll get more without the dozens of middlemen in the advertising/cancer industry).
But seems like publishers are greedy and want more than what the ads pay them, so that’s why subscription-based content sites don’t work at scale. For example, “Le Figaro” (a French newspaper) asks 9€/month for their subscription, despite making less that 1€/month from serving ads to me, so obviously I don’t subscribe and get by with blocking their (really shit, think Outbrain/Taboola “related content”) ads.
On the other hand, I’ve recently started supporting creators on Patreon at the tune of 1$/video. It’s something I can afford to do for every creator I watch, and while being an insignificant amount by itself it would be a significant bag of money should every viewer pay (and definitely more than they can even dream of making from ads).
Instagram is the only effective choice for social networking and business promotion in a large social group I'm aware of - American alternative culture, both sexes, from 16 to 45. IG has also been adding features like stores.
I wouldn't make the assumption that millenials spend significantly more than that on the app. It's certainly possible, I guess.
But as I commute to work and back (hour by bus or train) - it's often 35+ aged people who have their eyes glued to instagram/facebook the entire length of the trip.
The other day in a plane, all the people next to me and in front of me were on FB/Insta before the flight. After landing, everybody turned off the flight mode and got back on FB/Insta!? The flight was 1-hour long.
> I have some adult friends spending 1 or 2 hours a day on Instagram. I can’t even imagine how much time millenials spend on it.
Millenials are now all adults. :) A good chunk of the millennial generation is now in the child-having and house-buying (well, maybe not the later, too many avocados) stage of life!
An improved, AI-powered browser extension that correctly does the Snake People transform would be a sweet Show HN. "A good chunk of the snake people generation are in the egg-laying and burrow-buying (well, maybe not the latter, too many baby mice) stage of life!"
Do you know what a breakdown of that time would be like? I can't imagine spending an hour on instagram, unless they follow a lot of people with stories and always keep up with them.
Millennial here, deleted my account a few days ago.
Unlike most platforms, Instagram cuts strait to the most depressing part: pictures. I've had enough with social media, and I envy those who never created a Facebook.
It has always been like that. The amount of energy, of pretending, we put into recreating past experiences through retelling, photo, movie, conversation... it almost always trumps the experience itself.
Facts don't matter. Only opinions, how we choose to see them and agree on its meaning as a group matters.
This is a pretty narrow Instagram experience. I follow my actual friends who post random things from their life, and then people from a few different hobbies.
Except for watch people, none of it is carefully curated 'look at me' experiences. Watch people are another stripe though.... $20k on the wrist, $200k steering wheel.
Photography has been a huge hobby for decades. Is the fact that it is so much more accessible now really mean that the entire basis is proving your experiences were amazing rather than experiencing them?
10 years ago, no one every would have accused someone who brings his DSLR onto a hike of "not experiencing" the hike. (Though you might have a point that it would have been pretty weird to have brought a camera to brunch just to get a great photo of your eggs benny)
A follower with a terminal illness wrote a heartfelt letter to a popular Instagram influencer that they followed and whose photos they enjoyed. When they passed away, the letter was sent on their behalf to the influencer.
When the influencer received the letter, they quickly skimmed through it, said “Cool” and tossed it in the trash with some other junk mail.
What should they have done? Reached out to the family of the anonymous follower? What does the "popular Instagram influencer" owe to someone who enjoys his/her photos?
Maybe no one sees anything wrong with it, and perhaps there is nothing wrong with it, hence the downvotes.
What's depressing though is not that people post pictures of a life you wish you had, they do it while not giving a shit about you, no matter how much you might admire them. If you have millions of followers, or maybe even a couple hundred thousand, then statistically a few die everyday, without even so much as a passing thought.
And yet we waste so much time looking at these people's content and letting it depress us, and not enough at those around us who matter more.
A starting point (at least it was for me) might be to unfollow (not unfriend) everyone. That way, your feed is empty and you'll get bored opening facebook after a while. You'll still get event invites and direct messages, so you're missing very little of substance.
Why do pictures depress you so much? Honestly, I think if that's the case, it says that you have some unresolved issues you probably should deal with. Part of what makes social media seem depressing is your attitude with it.
I like Instagram for the opposite reason. I only want pictures, and I definitely don't want anymore whiny rants, third-rate political screeds or fake news sharing.
And it probally is, and there's no accounting for taste.
The morons are in control, and the Internet sold out to the biggest paycheck.
As usual!
(Maybe for the better? I spent too much time on this medium. Time to venture out and talk to the strangers? And yes--the best of my Internet was around 2007.).
No wonder. Anecdotal of course, but I see my friends spending more time on instagram and people on the train or bus browsing instagram. I don't remember seeing FB on someone's mobile in the last 6 months.
It will only grow bigger and at some point when it becomes too big, you see less friends posts and more advts and people move on to something else. But for next 2 years, Instagram's going to be Yuuuge.(Huge)
If you travel to other countries (for me, Thailand most recently) you'll see almost everyone on Facebook. Most small companies over there don't even have a website, just a FB page.
At least in India and for me, it is exactly opposite. I never saw Instagram open on anybody's mobile. It is always facebook and whatsapp. Sometimes Twitter but never Instagram.
The amount of advertisement is already big. Constant interruption with sponsored stories, sponsored pictures, even "influencer" or anyone else who has more than 100k followers start using their images to advertise a product or a place.
Wonder if they will ever spin it off as a public company? Seems like Facebook is on the way out and shareholders are going to want to double down on the future.
I wonder about Instagram's success if they had decided to reject the Facebook acquisition. While there's no way to know who got the better end of the deal, it would be better for the tech ecosystem to have more large players and their success feels inevitable in hindsight.
I guess they could’ve made more effort to cater to professional photographers (and steal marketshare from Flickr and 500px and similar) and offered paid plans.
I feel like Facebook would have found an alternative to squash the competition, but also, in this case I agree that they were already bound to be successful given the ease of use.
Facebook probably would have copied them somehow, though I don't know if it would have been successful. FB's duplicate of Snapchat has been a huge success and is a major part of IG today. I don't know if FB would have been able to successfully replace Snapchat without using the Instagram app as a springboard.
Instagram Stories seem like a logical extension of Instagram itself. Adding a pure photosharing section to Facebook or something like that in order to copy Instagram seems much more redundant and difficult.
To be fair though, the minds of Facebook have much more incentive to find a good way to do so than I do
they did copy them, it failed. it was called "facebook camera"
edit: they also had a snapchat clone called, "poke" that too failed. the only reason they got to snapchat was because instagram was so popular and they just went ahead and copied the most popular aspect of snapchat: stories.
I think Instagram has much better business fundamentals than Snapchat though. There was nowhere near as much of a struggle to monetize Instagram as Snapchat from what I recall.
I've long had a theory (maybe it's not that revolutionary) that part of Instagram's success is it allowed people a free pass to be vain and show off-y. On Facebook, it was a bit stigmatized to post a picture of an expensive purchase, amazing house interior, fancy vacation, or workout picture of your physique. However, it's the entire point of Instagram. Couple that in with all the brands and other accounts of inspiration for whatever you're into and you have a lot of reasons to open the app constantly.
Edit: Also worth pointing out that you could argue Facebook's infrastructure was hugely important to their growth. Instagram was literally almost anonymous profiles. However, once FB got everyone to connect their FB accounts (which they may have been able to do with only a phone number as I did notice this became a requirement), they gave advertisers and brands a lot off resources and tools (and reasons) to devote money and energy to the platform.
For me, it's loading up Instagram and seeing just a bunch of interesting photos. Minimal memes, no link shares, and it's rare a comments thread that devolves into insanity.
Yeah, which is another reason they got rid of the chronological timeline. People were opening the app so often and frequently, they had to ensure fresh content. This way they can track which photos you've seen, and make sure to float to the top ones you missed.
Edit: All the points below are true too, of course. I do find myself subconsciously opening instagram a scary amount, so seems one reason to switch it up would be to always have fresh content. I do agree that once you get to where you last left off, you're likely to exit the app.
The real reason behind the non-chronological feed is to keep you longer on the app.
With a chronological feed, you remember where you left off, so when you scroll down to that point you know you’re all caught up and there isn’t more to see.
With a non-chronological feed, you end up scrolling down way more by fear of missing out, giving them the opportunity to show you way more cancer aka ads.
Your cynical explanation doesn't fit with the actual behavior. They sort it so things they think you'll like most will be at the top, but once you've seen everything, they don't change the order it again. If you always scroll down to where you left off, you will always see everything, and there won't be older content mixed in with the stuff you're seeing now.
Given a set of ordered posts you might see ACDB, then when you check in next you'll see HFGEACDB whereas in a chronological timeline it'd end up at HGFEDCBA, but once you've seen that out of order "DCBA>ACDB" section it stays in that order.
I honestly feel stories are probably one of the biggest drivers of current growth. It's kind of cool to have a easy way to scroll through my friends and get an update of "oh, I guess Jeremy went on a hike; Monica is harvesting blackberries; etc"
I can't emphasize how important it is that companies like Snapchat and Instagram have made this such a big business. Remember when people would Tweet out with text that they were doing this? For example, your friend Tweets: "Wow, what a nice hike today!" The reason I give so much credit to Snapchat is they changed the way we do this. Why would I give you this kind of update in my life with simple text, when instead, I could actually take a picture? Snapchat got so popular because they took the boring Tweets people weren't getting much attention for and made people's trivial daily tasks that much more interesting for your followers.
tl;dr — Every successful social startup should bend, but not completely violate, one or more social taboos, e.g. one of the 7 deadly sins.
Edit: When designing www.fwdeveryone.com, we purposely incorporated Pav's theory by building the platform around the taboo of getting involved in other people's relationships, in this case by letting people read (and reply to) other people's email conversations.
While I think I agree with the premise of this article, these examples seriously undermine the argument. WhatApp because of greed? Spotify because of gluttony? Spell check because of sloth? This seems like an awfully long stretch.
The list in the middle of the article (Applications of the formula) is the original list from John Pavley's talk, the ones at the end are just the author of the blog post trying to give his own examples. But yeah I agree about WhatsApp, that's not a very good example. And MS Word isn't really social software.
^ Very true; piracy became huge because it was free (greed) and easy (sloth), but streaming services like Spotify and Netflix changed those dynamics; it made it easier and safer (sloth), at the expense of making it cost some money, but still not as much as taking a gamble on e.g. buying a CD would.
Of course, it came at the expense of artists, who aren't making as much off of Spotify as they did off of album sales. Well, not the top X artists anyway, I like to think that the artists that used to be in the long tail are now doing pretty well for themselves. Relatively.
re Piracy, its Pride -- for the technical challenge of getting something gratis. the fact it cost money ('greed') doesn't factor into it. Proud of the ability to acquire at no cost to the individual.
For me that's what it was - I gathered quite a collection of shit I never even used or played (apps, media), just because I could (before Napster). For the friends of mine with no technical chops who I taught how to pirate, there was no pride, it was pure greed.
Ha, that's a good one! Let other people read your email. LOL. Hypothetically, you would 'reduce friction' by not sending email to the service, instead just give it the keys to your IMAP server! And users wouldn't need to inform people who email them that their email is public, because once it's on their screen they could post a screenshot to the web anyways.
...oh wait, that's a real thing that you did. You just didn't put the http:// in your comment to avoid self-promotion.
After reading your examples (which are a really helpful way of showing what your service does, BTW - thanks for not burying that in a video or forcing me to sign up), I can see the appeal for your service. It's Instagram for email: In exactly the way I keep every photo my phone takes backed up and organized on Google Photos, but selectively post to Instagram, I could selectively send mail on a "social email" account and keep normal transactions private. Fascinating! I suppose I have a small portfolio of emails helping some people solve problems (running/cycling tips, local routes, etc and some tech support) that I have meant to post to a blog but just never got around to it. Making that blogging automatic would be neat!
Nice idea and implementation, I apologize for mocking it! I'll definitely keep the principle in mind.
> Hypothetically, you would 'reduce friction' by not sending email to the service, instead just give it the keys to your IMAP server!
We currently use read-only OAuth, so basically the same in terms of friction but easier to secure.
> And users wouldn't need to inform people who email them that their email is public
We actually currently require double opt-in permission for each message contributor in a thread to share stuff publicly. That might change in the future, we're still playing around with the model.
The new best practice with social apps is basically to launch while erring on the side of having too much friction for the app to be successful, and then keep successively reducing the friction for people contributing positively to the community. Otherwise you risk gaining a bunch of immediate traction but going into the death spiral of negativity, which is the main way that social startups die if they already have initial traction.
This wouldn't have worked ten years ago, but it makes more sense in a world where things take off more slowly anyway due to increased network saturation.
> Spotify allows consumers to binge on music for a flat fee, however it is crucial to note that the musicians in this case significantly lose out on revenue.
As a side note, it amuses me to see this repeated so often, given that it's not true. If you do the math, Spotify pays about the same as a radio play. You just have to remember that each radio play goes out to a few hundred thousand to a few million people each time.
The reason artists don't like Spotify is not because they pay poorly, it's because they pay fairly. When you get a radio play, it's assumed that all the people the station reaches listened to the song. Spotify knows exactly how many people listened to a song, and pay accordingly. Unpopular artists don't like this because they get accurate counts.
One important difference is that, at least historically, radio play could actually stimulate the purchase of music so that you could listen to it at a time of your choosing (and without ads). Whereas, streaming on-demand music is increasingly a substitute for owning the tracks for a lot of people.
Again, this is something that is more fair to the consumer at the expense of the artist. The only reason you owned an album was because you couldn't listen when you wanted to, and were forced to buy it. Now it's better for the consumer, but not the artist.
Then we shall return to the times before the 19th century, when people created art because they loved art, not to get rich. I suspect it will lead to higher quality art, even if the quantity is lower.
I think artist will have to focus more on cultivating a strong fanbase globally and leverage it for merchandise and live performances. There is lots of money to be made being an idol.
What nonsense. I don't think there are many musicians today who don't love art. The problem isn't just being unable to get rich, it's being unable to afford to be a musician at all, and that was certainly not the case before the 19th century (there were plenty of paid positions for musicians).
Personally, I'm not totally sold on streaming music being better for the consumer although I do have a subscription. I like to own any music I really care about.
That said, it's an easy statement for me to make given that I was buying music on vinyl, then CD, then digital downloads before there was much in the way of streaming. So, even leaving aside the vinyl, I had a large collection of owned music before modern streaming hit in a big way. I still buy things every now and then but I have a large core of older music I care about--which is the bulk of what I'm interested in.
Spotify doesn't only replace the radio for me, it replaces CDs. I think on-demand plays should be worth more - and pay more - than ad-filled, ad-hoc, unpredictable radio plays.
I was similarly never willing to pay for HBO before on-demand streaming, but am willing to pay now.
> Spotify knows exactly how many people listened to a song, and pay accordingly.
From what I understand, they actually pay based on how many times a song is played, which is not the same as how many people listened to it. If I only listen to an unpopular artist, but I don't listen as often as other people listen to popular artists (lower play count, even though it's still my favorite artist), nearly all of my subscription fee goes to the popular artists.
In the old days of purchasing music, it didn't matter how many times a person played the disc/track - it cost the same. You might argue that each play represents the marginal utility to the listener (and should thus be the basis for compensation), but I'm not sure that's entirely true.
> From what I understand, they actually pay based on how many times a song is played,
Yes, I should have been more precise. Just like with a radio play, the second play in theory goes to the same mass of people, but is counted again. So I should have said "they know exactly how many people and how many times it was played, and pay accordingly". I believe they discount multiple plays from the same person, to prevent abuse.
> In the old days of purchasing music, it didn't matter how many times a person played the disc/track - it cost the same. You might argue that each play represents the marginal utility to the listener (and should thus be the basis for compensation), but I'm not sure that's entirely true.
You might argue that, but you might also argue that when you bought a CD, you bought 10-15 tracks, even if you only wanted one or two. So again, for a consumer, Spotify is more fair, because you only pay for what you consume, and artists liked the old model where you paid for 15 tracks even if you only wanted two.
> You might argue that, but you might also argue that when you bought a CD, you bought 10-15 tracks, even if you only wanted one or two.
My same argument applies to a single track purchased via iTunes - it doesn't matter how many times you play it; it costs the same. The bundling of tracks on an album is something all artists did/do, so it doesn't affect the fairness question in my opinion (at least, not fairness between artists).
If you look at the numbers of how many people listen to radio I think this is a fair number. Each song on the radio is pushed to thousands and more of listeners at once on a station. The daily listener reach of big stations is essily in the millions. Spotify is a drop in the ocean compared to radio
I think it could have been the other way around. Media and folks could have compared the growth of Instagram, which would have been a competing product with Facebook, and it could have given good mileage to Instagram, especially after the privacy fiasco and hate towards Facebook, Instagram could have been positioned as a Facebook replacement and there by shooting up it's value further.
Yeah, I think given their UI/model it is pretty difficult to have any long form discussion on Instagram. The "news" part of the newsfeed as always been FB's killer app. Or at least that and event planning, though I think it's not impossible for Instagram to develop a product around that.
The only "long form discussions" I frequently see on Facebook are bad political arguments. Most people don't really care what Uncle Billy has to say about millenials.
Agree on the event planning though. I think an Instagram Events would immediately get adopted by many young people.
I keep hearing (anecdotally, of course), that people are starting to prefer Instagram because long form discussions are more difficult there. They seem to be seeking an escape from the news.
Fair point about the event planning ... if FB were to cross-launch the sane event planning DB on instagram and whatsapp, I suspect that would be pretty much a killer app.
People in my circle of glass artist related accounts post a lot less politics on IG than FB. It is harder to repost articles, as well as have discussions as you noted (I think I lived through a week where IG was experimenting with adding threaded comments, though). I find FB’s curation of political posts to be poor and the venue to be an embarrassing one in which to discuss politics. So, I use IG when I want to connect with these folks.
Interesting, I've found Facebook's event management for large groups to be terrible. Our Jeep group has largely migrated from Meetup to Facebook, and the impact on event coordination has been largely negative.
The irony is that Instagram _still is_ thought of as a Facebook replacement. I saw several people in the past few months say something like "Hey fb sucks I'm deleting my profile you can hit me up by text, twitter, instagram, etc..."
Two people on my Facebook who went to Russia for the World Cup are basically posting photos from every game. I figure the games they haven't selfied are the ones they didn't buy tickets for.
> I've long had a theory (maybe it's not that revolutionary) that part of Instagram's success is it allowed people a free pass to be vain and show off-y.
It's a fact, not theory because facebook is where you are friends with mom, dad, grandma, and aunt suzie. IG is where you like hot women, fetishes, gucci bags, and whatever nonsense mom /dad/aut suzie might disapprove of. You keep up appearances on FB and get nasty on IG.
For me instagram is facebook lite. I don't need the bloat of apps, rants, or links. I just want to see everyone's pictures. I got sick of FB long before the privacy scares.
I think Instagram works because it's not as viral as Facebook. It's difficult to get into political flamewars. Also reposts and forwards look pathetically lame on Instagram, so people tend to post more original content.
I don't really care for hilighting peoples past skepticism but this guy literally asked for it:
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[...]
This is not going to be one of the best tech acquisitions of the next decade. YouTube helped to propel Google into content. It also helped to commoditise web video in a massive way: reminiscent of the way which Google commoditised search (YouTube is probably just short of being a byword for online video at this point).
Instagram is a photo service in a sea of other photo services. Photography has been around on the web in meaningful ways for a long time. Flickr lost out to Facebook in the community stakes, and Instagram is doing great in whatever-the-fuck market it's in (the share-to-my-twitter-followers market?), but this is not Google acquiring YouTube.
Instagram is supposed to be at around 1.75B users and triple or quadruple their current revenue by then. Of course anything can happen, but chances are the user growth and revenue growth are going to happen. At least Instagram is only potentially worth $100B right now with only $500M a month in revenue.
He's not completely wrong though. Instagram was a photo service when it started. The focus was on photography. Interesting pictures of things happening in the moment. It was about taking the best picture you could in the moment and being forced to post it.
I'm not even sure I'd call Instagram as a photo service anymore. The original core functionality (using it as a digital polaroid and applying a filter) doesn't even seem to be something people use at all anymore. I'm not even sure the majority of the posts are even photos—what between the random images with text above them, screenshots, and the videos.
Instagram was a photo service in a sea of other photo services. Now it's a generic social network where you just post whatever.
>Advertising is a very legitimate way of making money
Yes, just not a way to make something that improves our lives.
Or even if you manage to make something that improves our lives, advertising is an incentive to pervert it and hold it back (e.g. you create a social network so people from all over the world can meet, then ads make you cripple it, force feed BS to them, milk them with spam, exploit their private data, and so on...)
I was able to build a legitimate business that improves people's lives. In order to make my product discoverable, I had to spend some money on advertising (not on Facebook in particular). There was no other reliable way to reach my target audience.
I have also bought many products from other businesses that have made my life better. In most instances, I have only become aware of these products because these businesses have spent money on ad campaigns.
>I have also bought many products from other businesses that have made my life better. In most instances, I have only become aware of these products because these businesses have spent money on ad campaigns.
That could have been a valid argument in 1970.
Today we have the internet. Instead of advertising it's not perfectly possible and easy to have other means of discoverability:
a) professional product reviews - a review site visit or Google search away
b) actual user reviews -- an aggregator site or Google search away
c) the product makers marketing material on their own website
d) blogs from people using the product
e) forums with people exchanging advice/complaints about the product
f) videos of people unboxing, using, showcasing, etc the product
g) the specs of the product, product manual, photos, etc online
h) online communities around a product category
i) for digital products, one could also try a trial/time limited/shortened /watermarked version of them
j) for products we encounter physically on some shop's shelves and want to know more about them, a quick Google search or QR Code can take us to the product page (and/or all of the above)
Unlike advertisement, none of these give an unfair lead to the maker than can spend more campaign money.
What's best, most of these add informational value (like scores, real world complaints, professional reviewing, etc) that ads, by definition, don't have.
We literally have more ways than ever to discover products, and to find the best products. Advertising is just random producers (random quality wise: just the company with the bigger pockets) shouting to make their wares stand out.
I like how you brought up all of those examples for means of discovery. However, I think that almost all of those are a form of advertising. Perhaps the forum where people are giving advice would not be advertising.
If any of these are on the internet, then people there will be pixel trackers, and people are going to measure the distinct number of impressions. I don't think this is a bad thing.
>I like how you brought up all of those examples for means of discovery. However, I think that almost all of those are a form of advertising
If we stretch the notion of advertising to mean "anything that can bring something to one's attention", then yes.
In that case I'm making explicit that by "advertising" in my first comment I referred not to these things, but to what's colloquially referred to as "advertising" -- namely paid tv ads, paid banners, sponsored posts on Facebook, and so on.
Not user forums, not legitimate reviews etc.
>If any of these are on the internet, then people there will be pixel trackers, and people are going to measure the distinct number of impressions. I don't think this is a bad thing
Well, I don't think "measuring the distinct number of impressions" in those kind of websites is a bad thing either.
What I said I consider bad is advertisements, that is getting money from a business for pitching THEIR message (as opposed to objective facts or a reviewer's/user's subjective review), selling your users' private info to them or using it to target them with ads, etc.
Let's imagine for a moment that it was made illegal for a content producer or social website etc to take money, in any kind of form, directly or indirectly, from any product maker, or anyone selling something (that is, no selling ads themselves, and no being paid to show ads).
What would remain on the web to discover products would be all the above I've described.
> Say what you want about Zuckerberg but the guy was well ahead of his time and could see how things would evolve and what tick with people brains.
Did he really predict that, or did he just see an upcoming potential competitive threat and buy it?
I feel bad for the founders of Instagram. They could have been the next Zuckerberg(s) (as Instagram seems to be taking over as Facebook seems to be starting to fade), but instead they're subordinates in Zuckerberg's empire.
You "feel sorry" for two people in their mid-twenties who made anywhere from $100M to $400M selling their 15 month old company (while making the other 11 employees rich along the way.)
Ok. Beyond that, why do you assume the valuation would be exactly the same had they not sold to FB?
yea, nothing to feel sorry about. What could anyone do with a few millions (or billions more) if they are already rich by half a million.. unless you are trying to climb the Forbes leaderboard.
>if they are already rich by half a million.. unless you are trying to climb the Forbes leaderboard.
That would be half a _billion_ and, generally, I don't "feel bad" for people who don't attain their dream of climbing the Forbes leader board (assuming that is even a goal for these two.)
Exactly. To be honest Instagram's hypergrowth probably couldn't have been sustained if the company didn't end up getting access to some of Facebook's engineering talent and hiring pipeline.
Having 11 people try to manage a site of that scale is just asking them to keep doggypaddling to avoid drowning.
> I feel bad for the founders of Instagram. They could have been the next Zuckerberg
Like Snapchat, you mean? The risk is that, failing to acquire Instagram, Facebook could have built a clone and turned their massive user base to it. Instagram could have been in a distant third place. We'll never know.
I am not sure if Facebook was already seen as the Pacman of social things. It could have been Google or MS (and had I been in the shoes of Instagram founders and reached for acquisition I would have had gone with Facebook: better long term perspectives).
Facebook went public so they have a board of directors now, therefore I would assume Mark has to find ways to keep them happy as well. I would guess the general vision of Facebook is like most corporations, to make more money.
Yeah. They should have gone for 5-10. I remember on one podcast, Kara Swisher was light-heartedly making fun if Kevin, saying "..He was crying..". Sort of like that. I believe it was a recode podcast
I think you're asking me to interpret my comment. Apologies if not.
The link I pasted simply had a list of Instagram's financing rounds.
April 5th, 2012, Series B $50m
April 9th, 2012 Purchased by FB, $1b
Several days before being acquired by Facebook, Instagram raised a $50m Series B on a $500m premoney evaluation, which gave investors 10% of the company.
Typically in order to grant 10% worth of preferred stock for a raise, the company has to increase the number of shares. If there were 100 shares prior to the raise, and a had 1, I would have 1/100 or 1%. If there are now 110 shares, and I still have 1, it's now 1/110 or < 1%
A few days later, the company was sold for $1b.
1/100 * 1b = $10,000,000
1/110 * 1b = $9,090,000
In my contrived example about dilution, with my 1/110%, I lost out ~$1m, and for seemingly no benefit to the company.
Bringing it back to my original comment, employees as a collective, would have lost out significant money, for seemingly no benefit, while Sequoia benefited tremendously.
I should caveat my post:
--This is pure speculation on a number of fronts. Any number of scenarios could be true (even if unlikely)
* IG could have had 10% shares already allocated in reserve for a Series B, and never had to issue more. Employees would still in effect lose out on money, but not because of dilution.
* With that $50m in cash, IG could have paid out hefty bonuses to employees. IIRC at the time of acquisition IG had ~19 people.
* IG could have issued anti-dilution to everyone, keeping relative % near the same.
* The SeriesB may have had to happen in order for Sequoia to agree to the sale.
I can see that as a possible scenario but without the real numbers of dilution, it might have not had such a significant impact. Nevertheless sequoia did made a bundle and that was paid either by founders or employees. There must be some sort of funny business in that deal.
You should listen to the How I Built This podcast with Kevin Systrom and Mike Krieger. I think it's Kevin that said something like "I could keep doing what I'm doing the rest of my life. Work hard, build the company, but then what? At the end of it, I write a book about business? I want to enjoy my life". Definitely don't feel sorry for them, they met their goals.
Reading the discussion at the time there wasn't too much prediction required:
>A few days ago it was rumored to be valued at $500 million. A few months ago it was $300 million. Its last round — just a year ago — valued the company at $100 million.
The few days ago $500M round was just done because it was known Facebook was acquiring it. You can’t really count that. That was just VCs quickly doubling their money.
The other numbers are good, but then other companies also grow at similar rates. How come Instagram is the $100B valued company with 1B users and Whatsapp has over 1.5B users? And both are growing still. You’d think there would be another company coming at them.
For Whatsapp as a messenger the only service close to them is Messenger with around 1.4B users (you could say WeChat or Line/KakaoTalk as well though they are mostly popular in east Asia only). And Messenger is a sister product.
YouTube is a similar knock out success. Huge mindshare beyond its huge numbers, but it isn’t a profit machine like Instagram.
So it’s just Facebook that controls the 4 biggest social networks/messengers outside China. Along with some of them being the fastest growing services as well to this day.
All of this is to again say it wasn’t completely obvious Instagram would become this big. Other companies also grow and get valued highly quickly. And almost no other companies or services get as big as Instagram, which is still growing.
Finally, the zeitgeist at the time of the purchase was of shock at the price tag. Almost no one thought it was worth the billion dollar price.
Kim Kardashian has a 110 million followers. After the Russians (or whoever...maybe just that "400 pound dude in the basement") get her to become the next president I am waiting to see what boywonder shows up and says to Congress.
We know what he and his exec staff thought about fake news before the election. Now who here thinks fake imagery is not a thing? Just take a look at the content produced by the top 100 accounts.
There is going to be a special place in history for the damage boywonder has done. People will have to invent new terms to describe it. Nothing like it has happened ever before.
The new term will be `zuckerbergism` if the whole thing can be pinpointed to him but I'd bet it's going to be something along the lines of `the social age`.
Well it might have played differently. If Facebook hadn't bought it then Facebook would have competed against it and that's not an easy fight. Look at Snapchat.
Is Snapchat the best example? Snapchat is getting killed.
Also, as it was made that Instagram only had 7 employees when they were purchased, that's actually one of major reasons why the acquisition worked so well. 7 employees for an application of that scale is not "swift and agile", it's criminally understaffed. After the Facebook acquisition, Facebook was able to easily redirect some of their hires to work on Instagram which allowed Instagram's original workforce to actually be able to worry about things other than just keeping their heads above water. It's definitely not ridiculous to credit some of Instagram's success to the acquisition itself.
If you're not pushing revenue (i.e. you don't need a sales team, ads team), you probably aren't going to need that many engineers to run something like IG. The original feature set was pretty basic, and it only ran on iOS for quite some time.
Yeah, but 7 engineers at that growth rate means your entire team is just going to be devoted to beating all of the scaling fires. That leaves little time for other product improvements that might enable more growth.
FB was pretty slow to monetize Instagram, and they still had hired 100s of people pretty quickly after the acquisition.
It’s quite possible to run a high-traffic app with a small staff if you have the right engineering talent and developed the infrastructure thinking about scale from the start.
Before facebook bought Whatsapp they only had 5 employees. But they had the best engineers for the task at hand. In fact they’re famous for handling 2 million TCP connections on a single server due to much of their engineering decisions (including choice of tech stack). And it’s not like they weren’t generating revenue. Before facebook acquired them, their $1 fee earned them $1billion the first 9 months.
And additional features are going to add massive complexity and decrease your ability to scale relatively quickly. Sure, with the right engineering you might be able to run a relatively light operation if you have a feature-set well thought out, but as soon as you want to add any other thing-a-mo-bob to the operation it gets much harder.
Also, they didn’t make close to $1B. More like 1% of that in the year before Facebook acquired them. If they actually made that much money they’d have more staff dealing with that.
WhatsApp had 50+ employees and made only tens of millions from their $1 fee. Where are you getting $1B from? It was never remotely close to $1B. FB publicly posted Whatsapp revenue from before the acquisition. It was a pittance.
Whatsapp also only had a couple hundred million users back in 2014. So they’d have no way to make a billion even if they charged everyone. Which they didn’t. They barely charged anyone.
I'm not familiar with IG's features except the filters. But to me it seems there is no new thing on it. So 7 engineers are probably all worked on scaling.
Isn't that exactly OP's point? FB might have counterfactually opted to bury Instagram rather than drop tres comas buying it. Conceivably this could have cost x < $1b. In that world, Zuck is a fool for wasting $1b - x dollars, rather than the one we live in where he's hailed as a visionary for making $99b off the deal.
To be fair, the whole thing could still prove to be the mother of all bubbles.
For one: we still don't really really understand network effects. There's huge value to being Facebook (you're forced to be there because all your friends are there and most nowhere else), but people also switch platforms for reasons that are not excellently understood. And when I say bubble I don't mean this or that company -- Silly Valley big money is basically all bet on network effects.
(I.e. Instagram is worth $100B under the premise that I can't build an Instagram killer (that actually kills it) in a short period of time. And jeez, it's not fundamentally different from Geocities + Frontpage, just has better UX)
It also depends on your investment timeline here. Facebook and other social media properties have historically traded at super low multiples compared to other companies with similar growth/profits. Facebook is trading at 15x it's projected 2020 earnings. That's extraordinarily low compared to any other tech giant. I'd say the risks of one-day being usurped are already substantially factored in.
I run ecommerce right now on them in a similar amount.
Before I’d run different affiliate offers through them. Though back then for those, Instagram wasn’t that big. Might start again if the opportunity works out.
The returns are good or it would be crazy to put that much money into the ads.
I have to echo austenallred. Depending on the month, I’ll spend a similar amount on Facebook and Instagram ads and get good results from them. Instagram‘s ad platform and revenue keep growing at a crazy pace too. They are also the only two social networks I advertise on.
The point is that due to network effects (which lock users in to a platform), ads are monopoly-priced. But network effects are not super well understood and platform collapses do happen.
So we know the ads market to be large -- or at least people on HN are testifying to that effect, but we don't know that Facebook or MySpace or Lycos get to appropriate it to a long enough period of time that current valuations make sense on a no-bullshit NPV basis.
A fair point was made elsewhere that multiples (which are more or less like stock market folklore, but still allow for comparison across multiple industries) in these companies are relatively modest.
That's when I started using the word "instagram" as shorthand for "billion dollars". A while ago, Facebook bought Oculus for two instagrams. (It kind of makes sense: one for each eye in their VR headsets.)
or he just got very lucky. it only seems like he was "ahead of his time" because the story worked out - when you look at other acquisitions like say Oculus or Parse, I would argue it seems quite the opposite.
of course it is win, no one is saying it's not a win, what im suggesting is there is a much higher probability that MZ got really lucky than assuming he some sort of clairvoyant genius.
Whatsapp has over 1.5B users now. Facebook paid for it mostly with stock back in 2014. That was a solid buy.
Oculus while not a huge success was also only bought for a few billion. Not a bad loss. Parse wasn’t bought for that much. It might’ve not been a loss either.
When two of their bigger acquisitions are slam dunk successes or just successes, that’s a pretty good record.
Similar to John Chambers, who used to run Cisco. He bought a tiny switching company called Kalpana (and a few others) for ~200MM back in 1994. Cisco dominated the switching market for a long, long, time as a result. It still accounts for nearly a third of Cisco revenues even today (~45 B total revenue in 2017).
Social pressure to be on instagram seems to be growing. For years I could get by with facebook, and my phone number / whatsapp for close enough friends. I'm now on instagram after a bunch of people I met independently in Berlin, Amsterdam and San Francisco in the last few weeks expected me to have an account there. I told the youtube UX person who I met in SF that I noticed this trend and don't fully understand it, and her response was that instagram is just how you write messages these days, as if this was totally obvious and not a side feature of instagram.
What if I just want to hang out with my friends? It’s easiest when everyone actually uses the same thing—people literally complain if I text them. The result is I lose touch with people because it’s exhausting keeping track of all the places my friends are.
I enjoy IG because I have narrower friends and family there. ...and Orvis. Love flyfishing and honestly I couldn't consume the content there or see amazing fishing or be "up" on their stuff by watching tv or browsing. It's condensed. I tried following some skiing stuff but just get spammed by people trying to hawk stupid ski sayings on tshirts. Mostly recycled junk. I now almost have more followers by people hawking ski t-shirts than friends. It's just stupid.
At the time of the acquisition, people criticized the cost per user of the acquisition. $1B for 40M users was a cost of $25 per user. That analysis failed to take into account Instagram's growth, and the cost per user today is roughly $1.
The thing I wonder is whether some of this value is coming at the expense of people reading books. My guess is there's a significant overlap in the demographics. Which is too bad, because I view books as a positive for society while Instagram really seems to be a big net negative.
Facebook (the company) is in for the long haul and this is a perfect example of it. It's insane how Zuckerberg has managed to establish the company so well in a segment (social media) that is so susceptible to fads. Facebook.com's usage could very well plateau, but the company has Instagram, WhatsApp, and some bets that are yet to play out (Oculus VR). Zuckerberg isn't lucky here, he just has incredible insight about what matters in the social media business and what he has to do get there.
I recently started using Instagram (at first, to boost the number of followers for someone's organization's account). But it's actually kind of fun, every once in a while I see something interesting and instagram is a place I can post that without really bothering other people (since that's the point!)
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[ 0.23 ms ] story [ 280 ms ] threadI have a few friends that participate in the "influencer scene" (as influencers themselves and as marketing reps at companies who purchase posts from influencers) and it's basically an open secret at this point that aside from a select few celebs, any given influencer has an entire army of bots behind them to promote their posts. Getting on the top of the discover queue is basically just down to who has the bigger bot network.
I saw a hot girl with 1M followers. So I decided to check out her website.
Website looked like a bland woocommerce store, no soul, just the girl selling pictures of her and underwear.
I went to alexa's Site Info and saw her website was ranked top 5 million or something poor. However, her rank in india was top 100k. The girl was not Indian, she had botted/paid so much that her fake traffic was visiting her website more than her real traffic.
I guess I'm thinking I should start botting? I already make an instagram 'like' bot on friday in 60 minutes.
What I'm trying to say is that, like Twitter, IG will probably start to lose a lot of public respect and valuation if they keep boasting "we have 1 billion active users!" once the general public starts to get wind of the fact that the 1 billion number is bullshit.
Take average PE ratios for example, about 15 (so 6.6% earnings as a percentage of market cap).
That would require about $6 per user per year in profit. Facebook is at $6 average revenue per user (ARPU) right now, but >$25 for US users for example, and growing.
Instagrams revenues are currently around $7b with a fraction of that profit, and at current growth rates, the valuation isn't crazy.
If the average user spends 1 hour per day, that's 365 hours per year at $5 or about 1 penny per hour of use. It's not hard to squeeze in a penny worth of profit from ads per hour of use. This would get you at $6b net income. Given that's in the cards for the future, the valuation isn't crazy.
The only flaw investors can make is that growth either isn't sustainable (I think it is for quite some time), or that Instagram users will eventually move on to other things (e.g. Myspace) such that the years of profit will be shortlived (more likely). Nobody invests $100 to gain $5 per year for a short period, that's based on perpetual income expectations which would require Instagram to stay around for quite a long time.
Instagram's innovation strategy is working out nicely > new features are launched, and are loved by it's users.
On top of that they are now also focusing on SMBs (mostly in NBUs) with Whatsapp Business. (That branch could add >100M users)
I moved to instagram and twitter.
Mind you, 100B for an app that is filled with bots and corporate accounts makes me think whoever did the valuation has never actually used IG.
Well that's incorrect Facebook is only like $5 bucks per share off their all time high: https://finance.yahoo.com/quote/FB/
To their credit, the app was extremely simple back then, today it has managed to add complexity without being so overwhelming(although Instagram TV adds more eyesore to the screen), slowly they copied good, proven features and blended well into the Facebook ecosystem.
[1] https://techcrunch.com/2012/04/13/instagrams-user-count-now-...
> Monopoly? In 2012, Instagram had 40 million users and no revenue[1]. Hardly a monopoly.
I think you misunderstand. Facebook is the monopoly in the grandparent, not the independent Instagram.
I believe the GP's point is that the government should have blocked FB's acquisition of IG, so IG could have provided competition for FB.
In hindsight, sure, we'd all love that. But seeing the recent FB hearings with congress, it seems they are still figuring out what the internet is.
It's either that or YouTube. I guess you could argue for Apple acquiring NeXT, but that's an acquisition that isn't really able to be measured in the same way.
Also the value in NeXT came from Steve Jobs, not NeXT itself.
Taking a long-term view, IG's revenue comes from advertising i.e. it's a one-trick pony, just like Facebook. Apple is a diversified company; even though iPhone makes up >60% revenue, is anyone with an iota of financial sense going to complain that it's a bad thing?
Even with professional marketers, total joke and waste of money. People do not click on ads, and those that 'do', might be fake facebook bots or actually facebook messing with numbers.
My new 'ad' is that I make content that people will search for on google. Then they can check out the rest of my website.
I had first-hand evidence of this when my friend fell for some weight loss scam ad of Facebook. We ended up charging it back, and despite all that she’s still not convinced and will happily participate in loyalty schemes, give out personal information to anyone that asks (she literally gets one spam email every few minutes in her Yahoo mailbox) and prefers buying from unknown/shady/scammy sites like Groupon rather than more reputable outlets.
Your "ad" is just content marketing. This difference is you pay with your time (or others time) to create it, rather than paying for it to be put in front of other's eyes.
Why would that ever happen? How could that ever happen? That would destroy everything (note: hyperbole) of value currently offered for free on the internet.
The worth of an ad impression or click is measured in fractions of cents and the adds up to peanuts per month.
Publishers can just charge those peanuts directly and I’ll be happy to pay up (plus they’ll get more without the dozens of middlemen in the advertising/cancer industry).
But seems like publishers are greedy and want more than what the ads pay them, so that’s why subscription-based content sites don’t work at scale. For example, “Le Figaro” (a French newspaper) asks 9€/month for their subscription, despite making less that 1€/month from serving ads to me, so obviously I don’t subscribe and get by with blocking their (really shit, think Outbrain/Taboola “related content”) ads.
On the other hand, I’ve recently started supporting creators on Patreon at the tune of 1$/video. It’s something I can afford to do for every creator I watch, and while being an insignificant amount by itself it would be a significant bag of money should every viewer pay (and definitely more than they can even dream of making from ads).
I like IG, but I dont feel like there are more than a few real people using it.
But as I commute to work and back (hour by bus or train) - it's often 35+ aged people who have their eyes glued to instagram/facebook the entire length of the trip.
EDIT: Data shows that you're probably right, and millenials spend more [time]( https://www.statista.com/statistics/267138/social-media-usag...). A lot around 3 hours even.
O/T, but the millennials are born between 1980 to 1990/1992. The generation after are post-millenials, for lack of a better word.
Millenials are now all adults. :) A good chunk of the millennial generation is now in the child-having and house-buying (well, maybe not the later, too many avocados) stage of life!
Fantastic...
I have some adult friends regularly spending upwards of that. Boggles my mind.
Unlike most platforms, Instagram cuts strait to the most depressing part: pictures. I've had enough with social media, and I envy those who never created a Facebook.
Facts don't matter. Only opinions, how we choose to see them and agree on its meaning as a group matters.
Except for watch people, none of it is carefully curated 'look at me' experiences. Watch people are another stripe though.... $20k on the wrist, $200k steering wheel.
10 years ago, no one every would have accused someone who brings his DSLR onto a hike of "not experiencing" the hike. (Though you might have a point that it would have been pretty weird to have brought a camera to brunch just to get a great photo of your eggs benny)
A follower with a terminal illness wrote a heartfelt letter to a popular Instagram influencer that they followed and whose photos they enjoyed. When they passed away, the letter was sent on their behalf to the influencer.
When the influencer received the letter, they quickly skimmed through it, said “Cool” and tossed it in the trash with some other junk mail.
What should they have done? Reached out to the family of the anonymous follower? What does the "popular Instagram influencer" owe to someone who enjoys his/her photos?
What's depressing though is not that people post pictures of a life you wish you had, they do it while not giving a shit about you, no matter how much you might admire them. If you have millions of followers, or maybe even a couple hundred thousand, then statistically a few die everyday, without even so much as a passing thought.
And yet we waste so much time looking at these people's content and letting it depress us, and not enough at those around us who matter more.
what? is it some virus you can't cure from your mind now? just stop using it. I stopped about 6 years ago and have never missed it.
Damn free thinkers!
The morons are in control, and the Internet sold out to the biggest paycheck.
As usual!
(Maybe for the better? I spent too much time on this medium. Time to venture out and talk to the strangers? And yes--the best of my Internet was around 2007.).
It will only grow bigger and at some point when it becomes too big, you see less friends posts and more advts and people move on to something else. But for next 2 years, Instagram's going to be Yuuuge.(Huge)
They'd compare revenue and time since founding to acquisition price, and used it to dismiss the Silicon Valley bubble.
I found the story of Instagram interesting, if you're curious. Link to the "How I Built This" podcast episode on Instagram: https://www.stitcher.com/podcast/national-public-radio/how-i...
To be fair though, the minds of Facebook have much more incentive to find a good way to do so than I do
edit: they also had a snapchat clone called, "poke" that too failed. the only reason they got to snapchat was because instagram was so popular and they just went ahead and copied the most popular aspect of snapchat: stories.
Edit: Also worth pointing out that you could argue Facebook's infrastructure was hugely important to their growth. Instagram was literally almost anonymous profiles. However, once FB got everyone to connect their FB accounts (which they may have been able to do with only a phone number as I did notice this became a requirement), they gave advertisers and brands a lot off resources and tools (and reasons) to devote money and energy to the platform.
Edit: All the points below are true too, of course. I do find myself subconsciously opening instagram a scary amount, so seems one reason to switch it up would be to always have fresh content. I do agree that once you get to where you last left off, you're likely to exit the app.
With a chronological feed, you remember where you left off, so when you scroll down to that point you know you’re all caught up and there isn’t more to see.
With a non-chronological feed, you end up scrolling down way more by fear of missing out, giving them the opportunity to show you way more cancer aka ads.
Given a set of ordered posts you might see ACDB, then when you check in next you'll see HFGEACDB whereas in a chronological timeline it'd end up at HGFEDCBA, but once you've seen that out of order "DCBA>ACDB" section it stays in that order.
tl;dr — Every successful social startup should bend, but not completely violate, one or more social taboos, e.g. one of the 7 deadly sins.
Edit: When designing www.fwdeveryone.com, we purposely incorporated Pav's theory by building the platform around the taboo of getting involved in other people's relationships, in this case by letting people read (and reply to) other people's email conversations.
Of course, it came at the expense of artists, who aren't making as much off of Spotify as they did off of album sales. Well, not the top X artists anyway, I like to think that the artists that used to be in the long tail are now doing pretty well for themselves. Relatively.
Just last week I was belittled, because I didn't want to come to office two times a week at 9am.
...oh wait, that's a real thing that you did. You just didn't put the http:// in your comment to avoid self-promotion.
After reading your examples (which are a really helpful way of showing what your service does, BTW - thanks for not burying that in a video or forcing me to sign up), I can see the appeal for your service. It's Instagram for email: In exactly the way I keep every photo my phone takes backed up and organized on Google Photos, but selectively post to Instagram, I could selectively send mail on a "social email" account and keep normal transactions private. Fascinating! I suppose I have a small portfolio of emails helping some people solve problems (running/cycling tips, local routes, etc and some tech support) that I have meant to post to a blog but just never got around to it. Making that blogging automatic would be neat!
Nice idea and implementation, I apologize for mocking it! I'll definitely keep the principle in mind.
We currently use read-only OAuth, so basically the same in terms of friction but easier to secure.
> And users wouldn't need to inform people who email them that their email is public
We actually currently require double opt-in permission for each message contributor in a thread to share stuff publicly. That might change in the future, we're still playing around with the model.
The new best practice with social apps is basically to launch while erring on the side of having too much friction for the app to be successful, and then keep successively reducing the friction for people contributing positively to the community. Otherwise you risk gaining a bunch of immediate traction but going into the death spiral of negativity, which is the main way that social startups die if they already have initial traction.
This wouldn't have worked ten years ago, but it makes more sense in a world where things take off more slowly anyway due to increased network saturation.
As a side note, it amuses me to see this repeated so often, given that it's not true. If you do the math, Spotify pays about the same as a radio play. You just have to remember that each radio play goes out to a few hundred thousand to a few million people each time.
The reason artists don't like Spotify is not because they pay poorly, it's because they pay fairly. When you get a radio play, it's assumed that all the people the station reaches listened to the song. Spotify knows exactly how many people listened to a song, and pay accordingly. Unpopular artists don't like this because they get accurate counts.
That said, it's an easy statement for me to make given that I was buying music on vinyl, then CD, then digital downloads before there was much in the way of streaming. So, even leaving aside the vinyl, I had a large collection of owned music before modern streaming hit in a big way. I still buy things every now and then but I have a large core of older music I care about--which is the bulk of what I'm interested in.
I was similarly never willing to pay for HBO before on-demand streaming, but am willing to pay now.
From what I understand, they actually pay based on how many times a song is played, which is not the same as how many people listened to it. If I only listen to an unpopular artist, but I don't listen as often as other people listen to popular artists (lower play count, even though it's still my favorite artist), nearly all of my subscription fee goes to the popular artists.
In the old days of purchasing music, it didn't matter how many times a person played the disc/track - it cost the same. You might argue that each play represents the marginal utility to the listener (and should thus be the basis for compensation), but I'm not sure that's entirely true.
Yes, I should have been more precise. Just like with a radio play, the second play in theory goes to the same mass of people, but is counted again. So I should have said "they know exactly how many people and how many times it was played, and pay accordingly". I believe they discount multiple plays from the same person, to prevent abuse.
> In the old days of purchasing music, it didn't matter how many times a person played the disc/track - it cost the same. You might argue that each play represents the marginal utility to the listener (and should thus be the basis for compensation), but I'm not sure that's entirely true.
You might argue that, but you might also argue that when you bought a CD, you bought 10-15 tracks, even if you only wanted one or two. So again, for a consumer, Spotify is more fair, because you only pay for what you consume, and artists liked the old model where you paid for 15 tracks even if you only wanted two.
My same argument applies to a single track purchased via iTunes - it doesn't matter how many times you play it; it costs the same. The bundling of tracks on an album is something all artists did/do, so it doesn't affect the fairness question in my opinion (at least, not fairness between artists).
This is not true IMHO. You need approximately 4 million plays per month to get the equivalent of Californian minimum wage! [1]
[1] https://mashable.com/2018/01/31/copyright-court-rules-stream...
Edit: You might get might more if you own all the rights yourself but not many artists do.
Interesting concept, but that one is a bit of a stretch...
I agree that Instagram could not have grown to this size without being part of Facebook.
Instagram has always been supplementary to Facebook, it was never a candidate to replace it.
Agree on the event planning though. I think an Instagram Events would immediately get adopted by many young people.
Fair point about the event planning ... if FB were to cross-launch the sane event planning DB on instagram and whatsapp, I suspect that would be pretty much a killer app.
I mean that's about as 2018 as it gets. I'm not entirely sure if that's a permanent trend though.
This acquisition was genius on Zuckerberg's part.
It's a fact, not theory because facebook is where you are friends with mom, dad, grandma, and aunt suzie. IG is where you like hot women, fetishes, gucci bags, and whatever nonsense mom /dad/aut suzie might disapprove of. You keep up appearances on FB and get nasty on IG.
https://news.ycombinator.com/item?id=3817840
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[...]
This is not going to be one of the best tech acquisitions of the next decade. YouTube helped to propel Google into content. It also helped to commoditise web video in a massive way: reminiscent of the way which Google commoditised search (YouTube is probably just short of being a byword for online video at this point).
Instagram is a photo service in a sea of other photo services. Photography has been around on the web in meaningful ways for a long time. Flickr lost out to Facebook in the community stakes, and Instagram is doing great in whatever-the-fuck market it's in (the share-to-my-twitter-followers market?), but this is not Google acquiring YouTube.
Bookmark this comment. See you in 2022.
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https://news.ycombinator.com/item?id=3818055
I'm not even sure I'd call Instagram as a photo service anymore. The original core functionality (using it as a digital polaroid and applying a filter) doesn't even seem to be something people use at all anymore. I'm not even sure the majority of the posts are even photos—what between the random images with text above them, screenshots, and the videos.
Instagram was a photo service in a sea of other photo services. Now it's a generic social network where you just post whatever.
Say what you want about Zuckerberg but the guy was well ahead of his time and could see how things would evolve and what tick with people brains.
Yes, just not a way to make something that improves our lives.
Or even if you manage to make something that improves our lives, advertising is an incentive to pervert it and hold it back (e.g. you create a social network so people from all over the world can meet, then ads make you cripple it, force feed BS to them, milk them with spam, exploit their private data, and so on...)
Instagram would have died an early death if you had to pay for it, and hiding certain features behind a pay wall would alienate 90% of the users.
That would be a bonus.
>hiding certain features behind a pay wall would alienate 90% of the users
Only before they have conditioned differently from an industry that has been legally allowed to trade private information for ad money.
I honestly don't think that would be a loss for humanity.
I have also bought many products from other businesses that have made my life better. In most instances, I have only become aware of these products because these businesses have spent money on ad campaigns.
That could have been a valid argument in 1970.
Today we have the internet. Instead of advertising it's not perfectly possible and easy to have other means of discoverability:
a) professional product reviews - a review site visit or Google search away
b) actual user reviews -- an aggregator site or Google search away
c) the product makers marketing material on their own website
d) blogs from people using the product
e) forums with people exchanging advice/complaints about the product
f) videos of people unboxing, using, showcasing, etc the product
g) the specs of the product, product manual, photos, etc online
h) online communities around a product category
i) for digital products, one could also try a trial/time limited/shortened /watermarked version of them
j) for products we encounter physically on some shop's shelves and want to know more about them, a quick Google search or QR Code can take us to the product page (and/or all of the above)
Unlike advertisement, none of these give an unfair lead to the maker than can spend more campaign money.
What's best, most of these add informational value (like scores, real world complaints, professional reviewing, etc) that ads, by definition, don't have.
We literally have more ways than ever to discover products, and to find the best products. Advertising is just random producers (random quality wise: just the company with the bigger pockets) shouting to make their wares stand out.
If any of these are on the internet, then people there will be pixel trackers, and people are going to measure the distinct number of impressions. I don't think this is a bad thing.
If we stretch the notion of advertising to mean "anything that can bring something to one's attention", then yes.
In that case I'm making explicit that by "advertising" in my first comment I referred not to these things, but to what's colloquially referred to as "advertising" -- namely paid tv ads, paid banners, sponsored posts on Facebook, and so on.
Not user forums, not legitimate reviews etc.
>If any of these are on the internet, then people there will be pixel trackers, and people are going to measure the distinct number of impressions. I don't think this is a bad thing
Well, I don't think "measuring the distinct number of impressions" in those kind of websites is a bad thing either.
What I said I consider bad is advertisements, that is getting money from a business for pitching THEIR message (as opposed to objective facts or a reviewer's/user's subjective review), selling your users' private info to them or using it to target them with ads, etc.
Let's imagine for a moment that it was made illegal for a content producer or social website etc to take money, in any kind of form, directly or indirectly, from any product maker, or anyone selling something (that is, no selling ads themselves, and no being paid to show ads).
What would remain on the web to discover products would be all the above I've described.
Did he really predict that, or did he just see an upcoming potential competitive threat and buy it?
I feel bad for the founders of Instagram. They could have been the next Zuckerberg(s) (as Instagram seems to be taking over as Facebook seems to be starting to fade), but instead they're subordinates in Zuckerberg's empire.
Ok. Beyond that, why do you assume the valuation would be exactly the same had they not sold to FB?
That would be half a _billion_ and, generally, I don't "feel bad" for people who don't attain their dream of climbing the Forbes leader board (assuming that is even a goal for these two.)
Having 11 people try to manage a site of that scale is just asking them to keep doggypaddling to avoid drowning.
Like Snapchat, you mean? The risk is that, failing to acquire Instagram, Facebook could have built a clone and turned their massive user base to it. Instagram could have been in a distant third place. We'll never know.
That's like feeling bad for someone who sold bitcoins at $10. The company they sold was worth $1bn (to Facebook) at the time. It was not worth $100bn.
https://www.crunchbase.com/organization/instagram#section-lo...
The link I pasted simply had a list of Instagram's financing rounds.
April 5th, 2012, Series B $50m
April 9th, 2012 Purchased by FB, $1b
Several days before being acquired by Facebook, Instagram raised a $50m Series B on a $500m premoney evaluation, which gave investors 10% of the company.
Typically in order to grant 10% worth of preferred stock for a raise, the company has to increase the number of shares. If there were 100 shares prior to the raise, and a had 1, I would have 1/100 or 1%. If there are now 110 shares, and I still have 1, it's now 1/110 or < 1%
A few days later, the company was sold for $1b.
1/100 * 1b = $10,000,000
1/110 * 1b = $9,090,000
In my contrived example about dilution, with my 1/110%, I lost out ~$1m, and for seemingly no benefit to the company.
Bringing it back to my original comment, employees as a collective, would have lost out significant money, for seemingly no benefit, while Sequoia benefited tremendously.
I should caveat my post:
--This is pure speculation on a number of fronts. Any number of scenarios could be true (even if unlikely)
* IG could have had 10% shares already allocated in reserve for a Series B, and never had to issue more. Employees would still in effect lose out on money, but not because of dilution.
* With that $50m in cash, IG could have paid out hefty bonuses to employees. IIRC at the time of acquisition IG had ~19 people.
* IG could have issued anti-dilution to everyone, keeping relative % near the same.
* The SeriesB may have had to happen in order for Sequoia to agree to the sale.
>A few days ago it was rumored to be valued at $500 million. A few months ago it was $300 million. Its last round — just a year ago — valued the company at $100 million.
It was already the hot thing when he bought it. (https://gigaom.com/2012/04/09/here-is-why-did-facebook-bough...)
The other numbers are good, but then other companies also grow at similar rates. How come Instagram is the $100B valued company with 1B users and Whatsapp has over 1.5B users? And both are growing still. You’d think there would be another company coming at them.
For Whatsapp as a messenger the only service close to them is Messenger with around 1.4B users (you could say WeChat or Line/KakaoTalk as well though they are mostly popular in east Asia only). And Messenger is a sister product.
YouTube is a similar knock out success. Huge mindshare beyond its huge numbers, but it isn’t a profit machine like Instagram.
So it’s just Facebook that controls the 4 biggest social networks/messengers outside China. Along with some of them being the fastest growing services as well to this day.
All of this is to again say it wasn’t completely obvious Instagram would become this big. Other companies also grow and get valued highly quickly. And almost no other companies or services get as big as Instagram, which is still growing.
Finally, the zeitgeist at the time of the purchase was of shock at the price tag. Almost no one thought it was worth the billion dollar price.
Kim Kardashian has a 110 million followers. After the Russians (or whoever...maybe just that "400 pound dude in the basement") get her to become the next president I am waiting to see what boywonder shows up and says to Congress.
We know what he and his exec staff thought about fake news before the election. Now who here thinks fake imagery is not a thing? Just take a look at the content produced by the top 100 accounts.
There is going to be a special place in history for the damage boywonder has done. People will have to invent new terms to describe it. Nothing like it has happened ever before.
Also, as it was made that Instagram only had 7 employees when they were purchased, that's actually one of major reasons why the acquisition worked so well. 7 employees for an application of that scale is not "swift and agile", it's criminally understaffed. After the Facebook acquisition, Facebook was able to easily redirect some of their hires to work on Instagram which allowed Instagram's original workforce to actually be able to worry about things other than just keeping their heads above water. It's definitely not ridiculous to credit some of Instagram's success to the acquisition itself.
FB was pretty slow to monetize Instagram, and they still had hired 100s of people pretty quickly after the acquisition.
Before facebook bought Whatsapp they only had 5 employees. But they had the best engineers for the task at hand. In fact they’re famous for handling 2 million TCP connections on a single server due to much of their engineering decisions (including choice of tech stack). And it’s not like they weren’t generating revenue. Before facebook acquired them, their $1 fee earned them $1billion the first 9 months.
And additional features are going to add massive complexity and decrease your ability to scale relatively quickly. Sure, with the right engineering you might be able to run a relatively light operation if you have a feature-set well thought out, but as soon as you want to add any other thing-a-mo-bob to the operation it gets much harder.
Whatsapp also only had a couple hundred million users back in 2014. So they’d have no way to make a billion even if they charged everyone. Which they didn’t. They barely charged anyone.
For one: we still don't really really understand network effects. There's huge value to being Facebook (you're forced to be there because all your friends are there and most nowhere else), but people also switch platforms for reasons that are not excellently understood. And when I say bubble I don't mean this or that company -- Silly Valley big money is basically all bet on network effects.
(I.e. Instagram is worth $100B under the premise that I can't build an Instagram killer (that actually kills it) in a short period of time. And jeez, it's not fundamentally different from Geocities + Frontpage, just has better UX)
Before I’d run different affiliate offers through them. Though back then for those, Instagram wasn’t that big. Might start again if the opportunity works out.
The returns are good or it would be crazy to put that much money into the ads.
The point is that due to network effects (which lock users in to a platform), ads are monopoly-priced. But network effects are not super well understood and platform collapses do happen.
So we know the ads market to be large -- or at least people on HN are testifying to that effect, but we don't know that Facebook or MySpace or Lycos get to appropriate it to a long enough period of time that current valuations make sense on a no-bullshit NPV basis.
A fair point was made elsewhere that multiples (which are more or less like stock market folklore, but still allow for comparison across multiple industries) in these companies are relatively modest.
Oculus while not a huge success was also only bought for a few billion. Not a bad loss. Parse wasn’t bought for that much. It might’ve not been a loss either.
When two of their bigger acquisitions are slam dunk successes or just successes, that’s a pretty good record.
At times, I just give up on my ability to participate in society because of shit like this.
Report them for spam. Instagram nukes a lot of them, and either way you end up blocking them.
Yeah, good luck with that. I'm still not following back.
Wouldn't the world be a much better place if Facebook had to compete with Instagram? (And Snapchat, and Twitter, and WhatsApp...)
:D