The story of Instagram: lessons for the young entrepreneur


In April 2012, Facebook acquired Instagram for 1 Billion dollars. Yes I know, this information is famous and widely known. But do you know the story of Instagram? In this story, we will learn about where it came from and how it got where it is today. Most importantly, we will draw some lessons for the young entrepreneur who is currently looking up to the vast future of possibilities.

The story of Instagram interests me greatly not just because it was sold at a billion dollars in so short a period but because there are many useful lessons buried within that can be applied to almost anything in life. I have applied it in business and in my personal life since learning it and today, I’d love to share it with you.

Kevin Systrom, who was born in 1983 in Holliston, Massachusetts was an ordinary kid with love for computer games and reading. He later found the idea of using a computer to solve real-life problems fascinating.

Kevin later went to Stamford University where he was approached by a certain man with a proposal to help build a social media platform. Of course, Kevin turned this deal down. This man was Mark Zukerberg and you guess right, the proposal Kevin turned down happens to be Facebook.

Kevin joined the Mayfield Fellowship Program and was assigned to work for a company called ODEO which went on to become twitter. So Kelvin was somewhat always around social media.

After graduation, and following his passion Kevin went to work for a startup. By day he was working and by night he was learning to code. It was around this time that Kevin ran into Mike Krieger, a guy he had met during his time at Stamford. They met at a place called ‘Just for you’ cafe and they came up with an idea to develop an app. But it wasn’t Instagram.

Just For You Cafe, San Francisco: Breakfast and Lunch Diner. 732 ...
Just for you cafe where Kevin and Mike met after their Stamford days.

The app was called BURBN which was a Checkin-in app with photo sharing capability. At a bar, Kevin showed their app to an investor called Steve Anderson. Steve said ” yeah! I like your app, I will put in $50,000. He became the first investor.

The news of the $50K investment went around Silicon Valley and more investors wanted to jump in. It wasn’t long before Steve’s $50K investment became $250,000. Andreessen Horowitz, a venture capital firm invested an additional $250K pegging the total investment at $500,000.

Kevin and Mike now had half a million dollars on themselves to start this relatively new company. And up to this point we have not mentioned Instagram, you must be wondering, what happened to BURBN with all this money.

This is where the lessons begun!

Lesson number 1

No amount of money can change how the market reacts to your product.

BURBN just couldn’t take off. With all their hard work, they only got 400 users on the app. It wasn’t long for them to realise the app was not going anywhere. Thankfully, they had only spent $5000 on the app and was left with $495,000 in their bank account.

So what happened? What changed everything for these two guys and their financial backers? This leads us to our next lesson.

Lesson number 2

Ask the right questions

One of the mistakes many entrepreneurs make is asking the wrong questions. Why are people not using our app? Are we not being noticed? This app is so great why can’t people just see? These questions though might be right under certain circumstances, is mostly not the right questions to ask.

Kevin and Mike did something very different. They went to their few users and asked: “Why are you using BURBN?” Almost all the users told them they loved the photo-sharing aspect of the app and not the checking in aspect.

So what then did they do with all these information they had collected? This leads to the next big lesson.

Lesson number 3

Fall in love with the problem you are trying to solve and not your product

Falling in love with your product has the potential to blind you to facts that lie bare before your very eyes. It gives you false confidence which can lead to frustration and start-up depression. Many start-uppers fall for this trap and think if they just stick long enough or spend the right amount of money on publicity, the product will work. Sometimes this approach may be required but there is a very thin line between the right amount of waiting time and sheer stupidity.

As a startup, you should have some planned metrics against which you will measure the success of your project. Once it does not work, you need to think deeply about pivoting. Whiles the problem you are trying to solve is one, there can be 1000 solutions. When one solution fails, provoke the next and the next till you find the right fit then you can persevere.

Kevin and his team made a very good decision to pivot. They took what their 400 users loved and built the next solution around it. This leads to our next lesson.

Lesson number 3

Fail fast

It took them 8 weeks to develop their next app which was now a photo-sharing app. At this time, there were many photo-sharing apps in the AppStore but according to Kevin, what set them apart was that their app was built around a problem and not the other way around.

Many start-uppers in the tech field today build apps to look for problems and this approach makes it difficult for you to fail fast. The opposite approach makes it very easy for you to fail fast because you can easily test if it is solving the problem from the user’s perspective.

On tour with his girlfriend, Kevin asked her about their app. She said it was okay but she wasn’t going to use it because her photos were not good. This was a problem identified and Kevin was determined to do something about this. He inquired more from her further and she mentioned that her photos weren’t filtered.

CEO of Instagram Describes the App's First Photo Ever | Time
Kevin got to work immediately to add filters to the app. He took a photo of his dog and added a the first filter and captioned it ‘test’ and that became the first ever photo on Instagram .

After the vacation, Kevin went back to Mike and they got to work, it took 8 weeks and the app was launched to the public on October 6, 2010. And within 24 hours, Instagram got about 25,000 users. This is a crazy fit for any app. Within the first month, they got up to a million users (It took Facebook 10 months).

In the first 18 months, the app was discussed all over the world with celebrities signing up. This caught the attention of the now Multi-Billionaire Mark Zuckerberg. He bought the company on April 9, 2012, at $1 billion. At this time, Instagram had only 13 employees including the two co-founders.

According to the founders, they sold because they knew Instagram will do better as part of Facebook than when it is with them.

More comments from me…

Kevin was certain he wanted to be an entrepreneur, he didn’t like the idea of having to work for someone all your life with no real chance to have your own go. He didn’t have everything figured out. He had to go through the process of growth.

He turned down an opportunity to be a co-founder of Facebook with Mark but that was not anything to sit down and complain about. We have to make decisions and live with them. Sometimes we make the right decisions and other times the wrong ones. That is so because no one has it figured out.

Instagram was an overnight success, or was it? This shows us that sometimes it takes more than a decade to get an overnight hit. All those periods of tough work and rejections are not seen but the more recent success. Kevin worked a job while learning to code. He knew this was an essential skill needed to make him more valuable as we discussed in the previous article.

Tech Instagram's Snapchat clone now has more users than Snapchat ...
As of March 2019, Kevin was US$1.4 billion and he is currently the CEO of a multi-billion company that he founded, Instagram.

Successful people are not gods, or perhaps they are but so are you. It is very easy to think that you are not created for anything great and that those who achieve greatness are some special breed of people. Yes, there may be some factors that support some people in their pursuit of greatness. But what you need to realise is that those factors would be useless if those people didn’t take action on their desires.

You might not know the factors that are around you today till you push hard on your desires. Take action and leave what you cannot control to nature. You can go far, but you need to take the first step. Learn to solve problems and money and fame will chase you. That is the formula to wealth. Nothing else works in the long run, well, except inheritance.


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