Lessons for Entrepreneurs from Instagram’s Success Story

Lessons for Entrepreneurs from Instagram’s Success Story

Just like all other tech beasts, Instagram’s success was also expectable, and the whole story seemed to be a fairy tale. Instagram is one of the most used photos and video-sharing social media applications worldwide. The company’s success was observed when it gained over 1 million users only in 2 months just after its launch. Keep scrolling through to reveal the actual story behind the success of Instagram, who created it, and how it got so popular among Gen-Z.

History Of Instagram

When Instagram was first launched, it wasn’t in the form that we get to use today. Even its name wasn’t “Instagram” when it was first launched. So, who founded Instagram, and how did they do this?

Who Founded Instagram

Two coworkers in San Francisco named Kevin Systrom and Mike Krieger were working on a project called Burbn. In October 2010, they worked together on a larger concept, and in the start, they failed to catch the actual fire and then decided to peer deep into the idea.

Kevin Systrom – Founder Of Instagram

In 2009, Kevin Systrom was a 27-year-old graduate of Stanford University. He had a year of experience working at Google as a “corporate development associate” and did an internship at Odeo ( the company known as Twitter today). The aim and dream of doing something that he owns himself pushed him to work on this project.

Systrom didn’t have any formal training in software engineering. So, he went to Nextstop to learn engineering concepts at night and on weekends which will help in code programs.

Prototype App – Burbn

At the start of 2010, he was successful in creating a prototype application named “Burbn.” This name of the application was inspired by his personal interest in fine whiskeys and bourbons. Burbn allowed users to check-in, post photos, and plan. In this era when Burbn was launched, location-based check-in apps were quite popular among users, and the unique feature of photo-sharing attracted more users. Here is a screenshot of Burbn that can give you an idea of how Instagram idea looked first.

First Funding That Gave Kick Start

During a party, Kevin Systrom met some people with backgrounds of working in venture capitalist firms and found them showing great interest in collaborating for Burbn. This meeting with potential investors for Burbn demanded more focus, so he quit his job at Nextstop after the meetup. With the support of all these people, he raised $500,000 funds from venture capitalists firms two weeks later.

Collaboration Of Co-Founder – Mike Krieger

After collecting this amount, Systrom started to build his team to help him in his venture. Another Stanford University graduate, a 25-year-old – Mike Krieger, agreed to join him. Mike had experience working on the social media platform – “Meebo” as an engineer and UI/UX designer.

After joining hands with Mike, they observed that the application was quite similar to other mobile applications already available in the market. So, they thought of focusing on only unique things of the app, i.e., communication through images. They started their research on top-performing photography applications available in the market. At that time, they decided to take Hipstamatic App as their competitor because it was pretty popular and had some unique features and filters that users could apply to their images. But, this application faced a drawback as it lacked social media sharing features.

Thus, this gave Systrom and Krieger a clear vision to work on. It was to create a mobile application that combines Hipstamatic and social media apps like Facebook. Working on the new idea, they extracted all the features of Burbn except the image uploading, commenting, and liking. And then, the application was named “Instagram,” which referred to the fact that users will be using a type of instant telegram.

The success story doesn’t end here by naming the app its current name. They kept on improving the image-sharing experience and other features of the mobile app. Consequently, after consistent efforts of eight weeks, they invite one of their tech friends for beta-testing of the app and rate the app’s performance. Testing the application, they just came across some minor bugs, removed them, and made the whole app ready to launch.

Launch Of Whole New Product – Instagram

Working on the earlier prototype app – Burbn, Krieger, and Systrom were ready with their all-new social sharing app – Instagram. Both the successful entrepreneurs of all time launched this tech beast to the market on October 6, 2022. On the first day of launch, the app was downloaded 25,000 times by mobile users. At first, it was unbelievable for the founders, and Systrom thought there must be a problem with the count. But there wasn’t anything so, and the fact was Instagram went popular among users from the first day it was launched.

Growth And Success Rate Of Instagram

Within just a few hours after Instagram’s launch, a handful of users remarked that it is the #1 free photography app. In the first week of launch, the Instagram – social sharing application had been downloaded 100,000 times. As mentioned earlier, in the next two months, Instagram had 1 Million users.

This rapid rise on the slope of the growth graph of Instagram attracted many investors. On receiving more and more proposals, Krieger and Systron decided to meet these potential investors in January 2011. In February, both men collected around $7 Million, and the Benchmark remarked their company value at $25 million. Nearly in the mid of 2011, Instagram grossed 4 million active users and just four employees working on it, including the founders themselves. The number of users kept multiplying with time; around eleven months later, Instagram boasted 27 million users and dozens of tech experts working behind it. Besides, it had landed a $50 investment too. Acknowledging the rapid growth in Instagram’s success rate, Twitter showed its interest in the acquisition.

Why Did Instagram Become So Popular Early On?

Kevin Systrom just kept the motto of making a cool app while developing Burbn. However, the Burbn app idea didn’t go as it was expected. The actual success story started with Instagram – the social sharing app idea when Kriege learned what customers are looking for and what they like. During the mobile app development, Instagram was built extremely simple, focused, and easy to use.

Users widely liked the Instagram app, as it lets everyone capture photos like they are successful photographers. Thus, the primary reason behind the success rate of Instagram is its simplicity and the fact of being a data-driven app.

Kevin Systrom said a few words about Instagram early success; here are his words;

“The thing that I’m learning that has surprised me the most is you have a window of relevance and, unless you reinvent yourself within that window of relevance, you die. I call it ‘success syndrome,’ where you’re successful, you do all the things that made you successful and you keep doing those things thinking that that’s why you’re going to be successful in the future. Things change.”

Facebook Acquired Instagram

We all know that Facebook has now acquired Instagram. There was a slight downfall observed in Instagram’s growth rate over time. Shutterbugs from all over the world were snapping and instantly sharing photos on the app.

As mentioned earlier, Twitter CEO Jack Dorsey also wanted to acquire it when it was at its highest perks. Systrom already had good terms with Twitter’s CEO as they both worked together at Odeo. However, Facebook made an offer that was unable to be refused. It was a $1 billion amount and, on the big side, a chance for Kriger and Systrom to stay in the company as CTO and CEO, respectively. Therefore, on this extravagant offer, the founders sold the business just before going public.

Do You Know?

The first thing Mike Krieger did after making a successful deal with Facebook – was getting a BURGER!

“I distinctly remember — and I don’t know if most people do this — but I think I craved comfort. It’s a crazy decision we have been like talking about it for a couple of really intense days, and I went home to [now-wife] Kaitlyn and was like, ‘Let’s go to Nopa and get their burger.’ It’s my favorite burger in San Francisco. This is the most normal thing I can imagine doing.”

Competition Of Vine With Instagram

The CEO of Twitter- Jack Dorsey, on getting disappointed at not being able to acquire the photo-sharing application, planned to do something big. So, he started to build his own competing product and called his new social media app “Vine.” Users were greatly attracted to it as they could share snapping pictures, six-second videos and were not just limited to photos. In December 2015, the new social media app Vine swelled around 200 million users, threatening Instagram domination. To survive in the market, Facebook kicked innovation at Instagram into high gear.

Besides crossing the 200 million user threshold, the Vine app didn’t stay in the market. Then how is Instagram still going on? The main focus while developing Instagram is on three things; “First, simplicity. Simplicity really, that’s what really matters.” So, video is a complex thing that is hard to edit and hard to upload as well. Secondly, everything should be beautiful; if it isn’t captivating, then it isn’t Instagram. Third and last thing: community; from the day if they integrate this feature, around 130 million users will have access to record the world’s video.

New Instagram Innovations And Features

It’s fair to say that Kevin Systrom realized at the right time that early success has the greatest threat of retaining longevity. The only way to keep Instagram stay on top is to keep introducing new products and features. The first upgrade made by developers in Instagram after its launch was to go from the famous square format to let users post images in any ratio. However, the decision wasn’t this easy, as it had many detractors in the beginning.

Despite contradictions, the change brought even more engagement from Instagram users. Moreover, the founders believe that their willingness to change before the change was necessary has helped Instagram stay ahead of its competitors in the market.

Controversies Faced By Instagram

Rapid growth with an increase in fame also brought many inevitable challenges in the game. Hackers found several ways to discover the private information and addresses of celebrities by using their Instagram accounts. They also hacked many famous celebrities’ accounts and posted inappropriate content.

Instagram Founder Stepping Down

After working under Facebook, the founders Kevin Systrom and Mike Krieger resigned from Instagram in September 2018. However, it was totally unexpected. The founders of WhatsApp (another Facebook acquired app) also stepped down around the same time.

Systrom wrote the following words after resignation;

“We’re planning on taking some time off to explore our curiosity and creativity again. Building new things requires that we step back, understand what inspires us and match that with what the world needs; that’s what we plan to do.”

What Is The Future Of Social Media App – Instagram?

Instagram seems to be progressing much faster than its parent company, Facebook. And like other social media communication apps owned by Facebook, it is getting wrapped up tighter and tighter into Mark Zuckerberg’s collection, which he calls “a family of apps.” This is the way of Zuckerberg to prevent antitrust regulators from breaking up his company.

Although TikTok and YouTube are drilling the base of Instagram, the social media platform’s future still looks bright and vast enough to thrive. Today, Instagram has 500 million daily users and around 1 billion monthly users. Furthermore, stats show that 25% of businesses maintain their Instagram pages, and 32% of users are on the site.

Features like influencer marketing, shopping, and IGTV are expected to strengthen the app; mainly, Gen Z will be influenced to set up their Instagram account.

What Lessons Business Owners And Entrepreneurs Should Learn From Instagram?

Instagram success story offers plenty of lessons for entrepreneurs who are looking to invest in mobile app development.

  • Data Follow up: When Systrom and Krieger observe that Burbn isn’t working out the way it is expected, they look at facts and figures. They learned that the app wouldn’t succeed as a cool app; rather, it should be simple and easy to use. And it was the concept they used to make Instagram popular among the users.
  • Simplicity: Everything feature and functionality of Instagram is kept as simple as they can. From the concept, design to strategy, every aspect of the app is in basic form. Instagram founders can explain in 30 seconds or even less than what they did in the project to investors and prospective users.
  • Pivot Early and Often: A business owner shouldn’t wait for the right time to change things and upgrade the previous one. If one does so, then they’ve waited too long and will never spot the right time to upgrade.
  • Concise But Passionate Team: Instagram successfully grossed millions of users before Krieger and Systrome hired more employees than themselves. Until and unless their project started to give them profit, they didn’t get onboard a team as it sounded hip and fun to lead a team. So, they hired a team when they were able to manage their wages from the profit, and they hired the best people they could get their hands on.

The Bottom Line

Instagram’s success story is remarkable for all entrepreneurs who give up in early days watching the steep graph slope. However, one should also learn when the owners sold their application and on what conditions they sold it. Even if your idea cannot make you a billionaire, it can bring you good successful business only if you focus clearly on innovation. A business owner should consider serving their customers’ desires over their own interests and build a team with a motto that suits the company before serving anyone’s ego.

If you’re not confident that the team you will gather can bring your business the actual values. Then approaching a reliable mobile app development company will be the best solution to give working structure to your idea. Clustox – the top software development company, understands the dreams of entrepreneurs and has the best resources to turn them into reality. Discuss our next project idea with our consultants and get free consultancy of all possible solutions. Get in touch today!

 

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