Instagram, the photo sharing service that your mum has likely heard of, was not necessarily the billion dollar company it is now, so let us take a short skip through the background of the business and the way Facebook came to purchase it for that princely sum.
The Instagram we know and love began life as a very different project, designed to educate Kevin Systrom, among those co-founders of what would later become Instagram, some programming skills.
However, being roboticists, they began searching for a mechanical solution for their problem. So rather than going for medication that may result in dependence, Jagtenberg and his group developed Somnox, a soft, cuddly robot built to help people fall asleep.
At the moment, Systrom was working (in advertising ) for the prior US Subway instructions app Nextstop but embarked upon creating a program named Burbn that was an HTML5-based blend of Foursquare’s check-in agency and internet game Mafia Wars.
After working on the program in the evenings and at weekends, Systrom needed a prototype to share one of his friends. A couple of weeks later, he ran into seed-stage capital companies Baseline Ventures and Andreessen Horowitz in a celebration for Hunch, another Silicon Valley startup trying to personalize the net one program at a time.
A quick presentation of the model persuaded the companies to meet more seriously to speak about Burbn and within fourteen days of the meeting Systrom had raised $500,000 in financing and thrown in his job to determine if he could create his program a reality.
Mike (or to use his proper name, Michel) Krieger, another co-founder of Instagram, and Systrom were not friends per se but knew each other from the San Francisco tech arena and would swap hints and tips when they saw each other.
With a good idea and the money set up, Krieger got aboard the concept of trying to turn Burbn to a real company. A whole native iOS version and feature-set afterwards (check-ins, future check-ins, earning points for hanging out with friends, posting of images and a lot more) and the creators pick Burbn really had too much performance and that it felt cluttered.
They chose to take the decision to start over, focusing instead on just one feature — the camera. It was a decision that could see it rocket to success in a little over two decades.
In accordance with Systrom, Krieger likes to say Instagram just took eight months to ship and construct, but was a product of over a year of work.
When Instagram premiered in 2010 it moved from a couple of users (friends and ancient testers, mostly) into the number one free photography program in just a couple hours. By December 2010, Instagram had over one million users.
Over the course of the next two years the popularity of the service continued to grow along with the Instagram team continued to add features, such as hashtags, new filters, higher resolution photo support and click rotate, amongst others. In August 2011, the 150 millionth photo was uploaded into the service.
From the end of the following month, September 2011, it had over 10 million consumers and had secured $7m in Series A financing in a deal that valued the firm at about $25m.
Conceived as an iOS program, Instagram remained accessible only on Apple’s platform before April 2012 when the Android version was released. Soon after, it was snapped up by Facebook for a cool $1bn in cash and stock, although the last amount was notably less after a fall in Facebook’s worth on the NASDAQ.
The deal was given the green-light from the applicable authorities by August 2012 and by December its owners were already causing controversy.
Focusing on changes to its Terms of Service that would give Instagram the right to market users’ photographs to third parties without notification or compensation, the company quickly found itself on the receiving end of a consumer backlash, with some vowing to not use the service .
In the end, it issued a statement retracting the contentious elements of the Terms of Service, but to some extent that the damage to its reputation had already been completed.
Today, although other providers have seen increased popularity, Instagram is still the go-to photograph app for iPhone and Android.