Setting up the deal
on it with me. That turned into an accidental company; that turned into an accidentally bigger company that ended up changing the world in a really meaningful way.”
Systrom grew up in Holliston, a suburb of Boston. His family “wasn’t well off, but wasn’t worst off”. His parents, Doug, a human resources executive, and Diane, a marketing manager at the car sharing service Zipcar, sent him to Middlesex, a Massachusetts boarding school. Systrom was president of the photography club and was hyper-competitive thanks to cross-country running.
It is this competitiveness he credits for a key characteristic. In Silicon Valley, they call it being able to “pivot”, which means abruptly to change the focus of a business. To everyone else, it means realising when you have screwed up and trying something different – fast. Systrom can pivot like no other.
That was first evident when he went to Stanford University. He had intended to study computer science, but found he wasn’t good enough. “I wasn’t used to getting a B-minus, so I thought, ‘[forget this] I’m going to find something I’m good at,’” he says. He switched to a degree in management science and engineering, providing a solid understanding of business. At Stanford, he made key connections that gilded his future. He first met Zuckerberg at a fraternity party. Zuckerberg tried to convince Systrom to give up his degree to build a photo service for the growing social networking site. Systrom passed.
During one term, he decided to go to Florence to study photography. His teacher convinced him to abandon his high-spec Nikon SLR camera in favour of a plastic Holga that took square photos, a shape now synonymous with Instagram shots.
Systrom took an internship in Odeo, the company that would morph into Twitter.
He shared a desk with Jack Dorsey, who would go on to become chairman of Twitter. The two bonded over deli sandwiches. (Dorsey would help get Instagram off the ground, becoming an early investor and posting filtered photos from his much-followed Twitter account.) When subsequent jobs at Google and a travel start-up called Nextstop failed to inspire, Systrom founded his own company, Burbn, a “location check-in service” that allowed users to tell people where they were and what they were doing. Working from the free Wi-Fi provided at San Francisco coffee houses, he kept bumping into Mike Krieger, a computer programmer Systrom knew from Stanford.
The pair began trading tips. Systrom convinced Krieger, a more technically proficient coder, to abandon his job and come on board as a co-founder. Despite gaining plenty of funding – $500,000 (Dh1.84m) from venture capitalists – Burbn was struggling. Rivals such as Foursquare had gained too much buzz. Once again, Systrom chose to pivot. “We locked ourselves in a tiny room in our start-up space and laid out where we were,” said Krieger.
The one part of Burbn that people loved was the ability to share photographs from their phones. So they renamed the service Instagram and rounded on that. In the summer of 2010, Systrom had a final idea. He and his longtime girlfriend Nicole Schuetz took a holiday to an artists’ collective called Todos Santos in Mexico, and during a stroll on the beach, she mentioned a friend’s photographs were better than hers because they’d had filters applied to them afterwards.
Systrom spent the rest of the day in a hammock creating the first Instagram filter.
Instagram was an insta-hit. Within 18 months, 30 million iPhone users were hooked. By comparison, Facebook took more than four years to get a similar-sized audience. Analysts now consider it to be the fastest-growing social network yet. It has helped to create the phenomenon of “selfies”, self-portraits of wannabe aesthetes who use coloured filters to make their lives appear more exotic. Sports stars, actors and musicians joined Instagram in droves, giving fans a window into their worlds. Zuckerberg, whose social network went stratospheric once it allowed photos to be uploaded, was watching with interest. Instagram could become a powerful rival, exploiting an area of vulnerability for Facebook – its appeal on mobile phones. So Zuckerberg called up his old friend. Systrom says he doesn’t much like the way the deal has been reported, so here’s the short version. In April 2012, Systrom turned up at Zuckerberg’s home in Palo Alto, California. Reports suggest he opened by mentioning $2bn as a suitable price tag. Three days later, they settled on $1bn – $300m in cash, the rest in Facebook stock, a generous deal because Facebook was on the verge of its stockmarket debut, which would value the company at more than $100bn. Not only that, he wouldn’t have to give up control. Instagram would remain “independent”, run by Systrom but under Facebook’s supervision.
“Maybe we’ll use this opportunity to set the record straight,” he says. “I never asked for $2bn. It was a process of negotiation.”
It is the deal that has most changed his life. The size and speed of it brought Systrom a level of attention that he says it has taken time to cope with. Suddenly, he went from Kevin Systrom, start-up founder, to Kevin Systrom: zillionaire party animal. The New York Post described how he had partied in Las Vegas and reported on the star-studded soirées at a (non-existent) second home in New York.
He appeared on the cover of Forbes magazine in August. (Systrom’s estimated wealth, by the way, is $400m.) “That Forbes cover was interesting because most of my friends said, ‘You don’t look like that’.” He struggles to explain what bothered him. I suggest maybe it’s because it appeared as though he had stepped