Instagram’s (Very) Recent Past

It’s difficult to consider that certain “newer” items have a past, but social media is developing quite an intricate history. Similar to the book that became a movie about Facebook (which figures into our current topic prominently, eventually), the story of Instagram has its plot twists, protagonists, and controversy.

Simply put, Instagram is a photo and (15-second max) video sharing platform (square shape vs. a 4:3 typical photo ratio). Created by Kevin Systrom and Mike Krieger and launched in late 2010, in less than 2 years it had over 100mm users (with 300mm as of about 4 years later); in between (in 2012), Facebook purchased Instagram for about $1B (!)…

In greater detail, Instagram began in San Francisco with a $500K seed funding round. Mobile photography was the platform, and search was facilitated using hashtags (implemented circa 2011); subsequently, entry into the Apple Store about 8 months later facilitated greater distribution; this was aided previously with a $7mm Series A funding from Benchmark Capital and others, valuing Instagram at $25mm in February, 2011… this subsequently was followed by a $50mm fundraise in April, 2012 (a year later), with Google Play rating greater than one million times around May to July of 2012.

This success resulted in interest from Facebook, with a $1B offer (with 13 employees at Instagram, with the company being independently managed) – with the pre-IPO Facebook spending about 25% of its cash in acquiring Instagram.

Instagram is Today’s Instant Telegram

As surprising as it may seem that a company which takes capabilities already existing (e.g. taking photos and emailing them directly, e.g. using a feature called “Direct” that allows sending from app) and combining them to create a $1-billion company, small innovations continued to increase value. However, the maximizer attitude backfired when an additional business opportunity, namely selling users’ photographs to third parties, was instituted (albeit briefly, withdrawn due to consumer complaints). The competitive environment was highlighted by users switching quickly to rivals such as Pheed (and even Flickr, a Yahoo acquisition for a much smaller $35mm).

By the end of 2014, Instagram had a monthly access rate of 300mm users (equivalent to the estimated U.S. population, but of course a worldwide number). With over 1 billion photographs uploaded, a user or more gained more each second despite the 13 year old age restriction, demographics are equal among major phone systems (iPhone:Android) with predominantly female (2/3) ratio and 90% under age 35.

Trends were hash-marked with themes, with “weekend hashtag projects and Throwback Thursday” (allowing older pictures to be marked as posted via TBT). Celebrity use has also popularized Instagram significantly.

Features such as geotagging, searching others’ photographs via “Explore,” and use of filters (e.g. 1977 with the year’s corresponding red tint look; Amaro (focused light in center), Kelvin (to give a glow), Rise (softer subject lighting), Willow (purple tones), Nashville (nostalgic with pink tint), X –Pro II (vibrant), Aden (blue-green natural look), and Perpetua (pastel, for portraits) being some of the many offered. Similar to Adobe Photoshop and other programs, Instagram also allows contrast and exposure adjustment (similar to already-existing and newly innovated phone settings for camera/photo processing). Finally, features such as “hyperlapse” show past-vs.-future time lapse picture quick-transition, especially interesting in showing buildings with historical significance (such as the White House).

Instagram Future: 300 million users+

Variations on the Instagram theme are already present, and will likely grow significantly. For example, multi-media incorporation (with photos and video already present, but some allowing live-stream feeding) exist in versions. However, there is a delicate balance between what one should do and what consumers do use – for example, apps abound which allow far greater than 140 characters for communication, but Twitter continues to be popular.

Instagram has far exceeded Twitter its user rate of adoption, and Facebook saw its potential beyond Flickr’s acquisition by Yahoo (with Facebook perhaps contributing as well to its significant recent growth). Nonetheless, recent hybrids (e.g. Iconosquare – allowing likes, usage statistics, etc.), Hyperlpse (time-lapesed video), and some of the features (e.g. geo-location) noted already all likely add to increasing popularity.

The future of Instagram will undoubtedly evolve with increased features and copy-cat apps, but there are 3 important lessons to learn from Instagram:

  • it is perhaps the Goldilocks of apps, similar to Twitter (and now exceeding its user growth) – with 140 characters being “ideal” to communicate, as is Instagram’s picture (worth a thousand words, perhaps…) and put into the right mood via editing features (to further communicate);
  • it is difficult to argue with use – people want something easy to use, to share, without the hassle of uploading/etc. but being able to be individualized and grown with new features… in short, it works, barrier to entry is low, and it accomplishes many a user’s goals apparently;
  • the story of Instagram teaches us perhaps just as much about Facebook – the decision to acquire it at a $1 billion price, the determination and execution to keep management separate, and brand the product where consumers may not all have known (or were not instantly reminded, regarding the affiliation with Facebook).

Combination of various social media programs has significant potential for communication (e.g. in communities, organized responses), business (e.g. commerce), and education, among other categories. In the past year, for example, Omnicon made a deal as an advertising agency with Instagram.

Very few, if any, could have predicted in 2008 the likely success of Instagram – but its success may well highlight the concept that a few already-available features (e.g. phone, i-messaging, etc.) carefully combined with maybe a few new added features, can create the next billion dollar company. Similarly, such a company could well be in the making now…

(information in this report was acquired from various sources, including, Adweek,, and Wikipedia)