Instagram’s meteoric surge to prominence in only a few short months is the stuff of Silicon Valley legend. Social media program for sharing photos and videos was developed by Apple’s software engineers in just eight weeks, debuting in October 2010 on iOS devices. Less than two years after its founding, the company was acquired by Facebook (META) for $1 billion (in cash and shares). However, the process was fraught with setbacks and victories, disagreements and collaborations, and even a little luck.
Backstory of Instagram
In 2009, Kevin Systrom, then 27 years old and a graduate of Stanford University, was employed by a travel recommendations business called Nextstop. Before starting Twitter, Systrom was a corporate development associate at Google (GOOG) and an intern at Odeo (TWTR).
While working at Nextstop, Systrom taught himself to code in his spare time. After much thought, he developed a concept for a web app he calls Burbn, which was motivated by his appreciation of high-quality bourbon and other whiskeys. Users could use the Burbn app to exchange their locations, schedules, and images with one another. Even though location-based check-in applications were all the rage at the time, Burbn stood out thanks to its innovative photo-sharing feature.
Financial Support for New Businesses
Systrom’s life took a dramatic turn for the better in March of 2010 when he went to a party for the Silicon Valley business Hunch. Two venture investors, one each from Baseline Ventures and Andreessen Horowitz, were among those Systrom spoke with at the gathering. They decided to grab a coffee and talk about his app after he showed them a prototype. Systrom met with them for the first time and immediately quit his work to devote himself to Burbn. He was able to secure $500,000 in startup funding from investors like Baseline Ventures and Andreessen Horowitz in just two weeks, allowing him to move forward with the development of his business.
With this first finance, Systrom was able to hire Mike Krieger, then 25 years old, to help with the startup. Krieger, a former engineer and user experience designer of the social media platform Meebo, is another Stanford alum. As fellow Stanford students, the two were familiar with one another.
Make a Change to A Photo-Sharing Program
When Krieger joined the team, they rethought Burbn’s priorities and zeroed in on pictures taken using mobile phones. They did extensive research on the best photography apps available at the time. The Hipstamatic app stood out to Krieger and Systrom due to its widespread use and unique photo-editing tools, such as retro-style filters. It could not share photos on social media, though, so Systrom and Krieger recognized an opportunity to create an app that connected Hipstamatic with services like Facebook.
They regressed to the use of only photos, comments, and “likes” on Burbn. They decided to combine instant messaging and telegram into one moniker, and the result was Instagram. As a result, they shifted their attention to enhancing how images could be shared. They wanted the app to be simple so that users would have to perform a minimum of tasks to make full use of it. After eight weeks of tweaking, they shared the app with their social circle for feedback. They finally got the software ready for release after fixing all the bugs.
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Introduction to Apple’s I Os
- Instagram was released as an app on October 6, 2010, and within 24 hours it had 25,000 users.
- One hundred thousand people had downloaded Instagram by the end of the first week, and by the middle of December, the app had amassed a total of one million users.
- Considering that the iPhone 4, which boasts a better camera, was released in June 2010, the app’s introduction couldn’t have been more timed.
The exponential growth of Instagram’s user base has piqued the curiosity of more financial backers. Instagram’s Series A fundraising round, which ended in February 2011, brought in around $7 million. Benchmark Capital was one of their investors, and they set the company’s valuation at roughly $25 million. Institutional investors weren’t the only ones interested; social media technology giants like Twitter and Facebook also showed interest.
Even though Systrom and Krieger could have expanded their team with the money from this round of funding, they opted to keep things lean and hire only a dozen individuals at most.
Systrom worked with Twitter co-founder Jack Dorsey at the music streaming service Odeo. Dorsey pushed the notion of acquiring Instagram after showing serious enthusiasm for the company. Reportedly, Twitter made a formal offer of roughly $500 million in stock, which Systrom turned down.
- Instagram is Acquired by Facebook
- As of March 2012, the app had amassed a user base of almost 27 million people.
- Instagram’s Android app launch in April 2012 had over a million downloads in its first 24 hours.
- Furthermore, a fresh funding round with a $500 million valuation was on the horizon at the moment.
Systrom and Facebook’s Mark Zuckerberg became acquainted through Stanford events and were in touch at the outset of Instagram’s meteoric journey to fame.
Instagram was offered a $1 billion buyout from Facebook (then Meta) in April 2012, with the essential stipulation that it maintain its independence under management. After that, and right before its IPO, Facebook went ahead and bought the company for $1 billion in cash and stock.
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Instagram’s Online Interface, but With Fewer Features, Was Released in November 2012
The first version of the app was released in June 2014 for the Amazon Fire device, and in 2016, the business released a version of the software that was compatible with Windows tablets and desktops.