Instagram, a cautionary tale
Sometime in April 2012, cofounder of Instagram Kevin Systrom gathered his team at 8 a m in the start-up’s Silicon Valley office to make an important announcement — that the company was being acquired by Facebook for a whopping $1 billion. Employees of the tiny start-up were stunned. Some reacted with gasps and surprise, others with laughter and tears. But mostly, they were in disbelief that Mark Zuckerberg, CEO of Facebook, was paying such a steep price for a photo-posting platform that had, till date, managed to generate a great deal of hype but no revenue.
This incident marks a crucial milestone in the journey of Instagram, the evolution of which is recounted meticulously by Sarah Frier in No Filter: The Inside Story of How Instagram Transformed Business, Celebrity and Our Culture . Ms Frier, who is a business journalist with Bloomberg, spoke with hundreds of employees, business leaders and app users to bring out this inside story of Instagram, the company whose mission is “to capture and share the world’s moments”. She eventually demonstrates that Facebook’s 2012 offer for Instagram was a real bargain and another astute step towards Mr Zuckerberg’s goal of global domination.
The key protagonist of this story is Kevin Systrom, a Stanford graduate, who built a mobile website called Burbn in 2009. With the help of another Stanford student, Mike Krieger, Mr Systrom transformed Burbn into an app for photos and named it Instagram, a combo of the words “instant” and “telegram”. They originally intended it to be a place for users to discover beauty, art and creativity, with a variety of filters available to enhance low-quality photos taken with mobile phone cameras. But once inside the Facebook fold, Mr Systrom’s insistence on quality and curation would place him on a collision course with Mr Zuckerberg who valued growth and virality. The differences between them was exacerbated when Instagram’s success threatened Facebook’s dominance and Mr Zuckerberg seemed willing to let Instagram languish in the face of “cannibalisation”. It then seemed inevitable that the frustration resulting from the constant friction of running a company within a company would lead Messrs Systrom and Krieger to part ways with Facebook eventually.
In tracing Instagram’s trajectory, Ms Frier skillfully weaves in commentary on the downsides of Instagram and social media in general. She touches on all the ills permeating society through digital apps such as fake followers, cyberbullying, fake news, election rigging, drug procurement, and manipulation of human behaviour. In 2017, Instagram, which introduced the word “influencer ” in the popular lexicon, was even named the number one worst app for mental health for youth by the Royal Society of Public Health in the UK. The push for revenue would result in Instagram pivoting from a place of art and creativity into a marketplace for branded posts and sponsored ads, where enhanced reality became a norm and users would have to create a special hashtag #nofilter to specifically point out photos that were real and untouched. But it’s not as if business leaders are not interested in plugging these evils; it turns out that the issue boils down to a constant struggle between control and growth.
Being based in the Silicon Valley, this story of Instagram offers many key insights into the inner workings of the tech startup industry. For instance, entrepreneurs get to decide whose investment they will take. In September 2011, when Instagram had 10 million users, actor and singer Jared Leto asked in bewilderment: “You mean if I left you a bag of money at your doorstep right here, you wouldn’t take it?” Also, investors occasionally pick up stakes in competing companies. Mr Systrom was livid when Andreessen Horowitz, the firm that had invested in Instagram, pumped funds into a competitor called Picplz. Later, Mr Zuckerberg would attempt a similar strategy while pursuing Snapchat, another photo-sharing platform, despite his acquisition of Instagram. As Ms Frier writes, “Unbeknownst to him (Systrom), Zuckerberg was interested in finding other Instagrams to buy.”
As apps such as Instagram and Facebook become part of our daily lives and culture, this carefully researched book by Ms Frier offers a behind-the-scenes peek into the companies that run these apps. We, as readers, come face to face with the motivations and challenges faced by their business leaders and employees. Most importantly, as Ms Frier states, “social media isn’t just a reflection of human nature. It’s a force that defines human nature, through incentives baked into the way products are designed.” It is such analysis that makes this book a compelling read.