This is a sobering look at what it takes to build a business vs a product (vs, even smaller scale, a feature).
You have to be willing to put in the long hours (err, years) and the schlepping to do all the business-y stuff:
* distribution
* monetization
* back end systems for admin users
* sales channels
etc, etc
Or, you can cash out and assimilate, err integrate, with a larger company that has done that hard work and lose control of your destiny. That's OK, most of us don't have full control of our destiny, and building product can be more fun. It's just a choice you should make with your eyes wide open.
I will say that I think he dismisses Snapchat's founders too quickly. Yes, they've been struggling, but they are trying to build a business rather than just integrate with an existing conglomerate.
It will be very interesting to see if Systrom et al can build another product, and if so, if they will try to build a business as well.
I am a daily reader of Stratechery. It's a very "MBA" publication: the emphasis is always on strategy, distribution channels, markets, sales and marketing, etc.
It's a soberingly different worldview than product-obsessed, hacker/maker/developer-centric worldview you get on HN a lot of the time. HN definitely skews toward the entrepreneurial/business end of software, but there's still a real emphasis on building great products, talking to users, and faith in the idea that in the long term, the best product will win. Whereas the Stratechery worldview is more like, "figure out sales and do enough of that engineering mumbo-jumbo, and everything will fall into place". I think there's more truth to this than is commonly acknowledged on HN. Eng/product isn't always the center of the damned universe.
I find both views important. I think the best products do tend to win. But reading stratechery has also given me an appreciation for the difficulties inherent in fighting an entrenched competitor, and bootstrapping distribution (how customers discover/use/buy something) from scratch.
On the other hand, Ben (stratechery author) says almost daily, "It's not the technology that matters, it's the strategy". I don't think that's right. A big talking point that comes up over and over with Instagram was how well-built the app was. There was genuine craftsmanship in terms of usability, performance, and a lot of other things that made it a joy to use. That matters.
Ben also said in today's update that the "relative importance decreases over time as things like network effects and business models come to bear". This is another way of putting Marc Andreesen and Steven Sinofski's point that if you have product / market fit, then you can do almost everything wrong and it won't matter. I think Ben gets that the tech and product are the only thing that matters pre-PMF, but post-PMF, all the grungy business stuff becomes the high order bit in order to build a business.
I think I'd simplify even further, and say this this way:
If you assume a startup has the technology, as it's nothing without it, then by definition the differentiated recognition of business potential will be achieved through business performance, not technology.
IOW, you've got nothing without the tech, but you don't have a successful business if all you have is the tech.
Yeah it was funny, I wrote this after reading about half of the update and saw that quote after the fact, which almost perfectly articulates what I said here (albeit better than me, as is most of his writing)
Very interesting perspective and glad you tied together the disparate lines of thinking. Merit in product is, unfortunately, a variable not predictive of success. The strategy component is critical - that is a beautiful, great product that is solving a non-existent problem is probably doomed. There's no path to riches designing the best roller skate wheel marketplace platform, but even a poorly designed gambling tool could probably find a way to profitability.
The only thing I think is outside both of these elements - product quality and viable strategy - is the component of luck be it right place, right time, or catching an unforeseen wave of buzz. The most well known success stories typically owe a non-insignificant amount of debt to good fortune out of the control of the product or strategy. It's a real elephant in the room and it's difficult for ego to acknowledge either in success or failure, but it's real.
Another point: we're actually talking about strategy (Stratechery/MBA worldview) vs. operations (build the best product, do things well -- HN view). This is a well-worn argument in business circles and it's funny to see it manifest here under a different name. http://www.davidralbrecht.com/notes/2018/09/strategy.html
Hackers are operators :)
I get the sense that strategy vs. operations matters differently depending on the characteristics of the business. I don't really have a coherent articulation of this point yet. It might change over time (something Ben suggests in today's post), or perhaps based on industry maturity or type of product, or market concentration. But it feels like something where people are arguing and are both right, because their arguments are insufficiently qualified/scoped (X is true vs. X is true when Y, Z are true).
Hackers are not operators, in the context of hn at least.
If there's anything you see every day on HN, it's people relentlessly arguing about "building what people want", and "solving problems".
One of (the?) most popular HN member, patio11, got a lot of this massive amount of karma because he gives a pragmatic and clear view of generating sustainable revenue in business. This is what the HN crowd likes.
The old fairy tale of hackers only focusing of products and ignoring strategy is long gone, and most people here know this.
It's not necessary to differentiate hackers and strategy people.
Also a daily subscriber to Stratechery. Ben (Zuck?) under-indexes on the feeling of good will associated with a good product experience. But I agree that we over-index on it here on HN. IG won on speed, usability and UX over early competitors like Hipstamiatic and Flickr. But for sure the network was the addictive glue that brought users back, new users in and made the entire product grow. FB feels like the opposite experience to me - crappy product decisions, bloated UX, bad will. My best guess is FB pushed IGTV on Mike and Kevin. They did their best to implement it, but it feels tacked on, like a FB feature, and it became clear that more and more feature pressure was going to be put on the product until it too became bloated and incomprehensible. I don't think Ben sees this, but the poor product choices (in deference to business and strategy) will pile up and the vein will collapse, just as it is starting to do in FB's main product. IG had a good run, it's hard to imagine a future where it gets better from here.
Facebook ran an experiment where they intentionally crashed their Android app to discover the threshold at which users would give up and go away. But someone familiar with the experiment said: “The company wasn’t able to reach the threshold. People never stopped coming back”.
That's when you know you're peddling a powerful drug, eh product I mean. & simply right there that's Facebook's moat. I don't use FB, but gotta give to them anywhere I peek at someone's smartphone in public spaces, they're using a FB product e.g FB, Whatsapp or Instagram. Hell, right now FB pays my rent, cause of the tools I make at work that integrate with FB
It's funny you call out FB for having a bloated product. Early in its history Facebook was the restrained option vs Myspace, Friendster, etc. The fact that you couldn't add custom CSS, sparkly unicorn gifs, and auto playing music was a major differentiator from the other personal homepage / social networks of the early 2000s. In a similar way, Instagram was very restrained compared to the other photo apps of the time. No albums, no video, no stickers.
I think this is a classic case of the Innovator's Dilemma: you start by making something worse than existing products on the market but that completely address the features your customers care about most. Eventually your customers demand more features and you have to turn a profit, so the product gets bloated and the p90 experience suffers.
I'm not sure he totally underindexes on experience. He was long Apple at a time it was very common to think that Android + OEMs would soon be "good enough" and thus price would be only factor and Apple would suffer. He recognized the importance of user experience and that "feeling of good will" more than most industry analysts.
> "It's not the technology that matters, it's the strategy". I don't think that's right. A big talking point that comes up over and over with Instagram was how well-built the app was.
Yet that wouldn't have mattered if they hadn't pivoted from a location based app to photo sharing. Technology/product matters to get your foot in the door, but it's strategy/execution what ultimately makes it or breaks it.
But strategy/execution are not orthogonal to technology/product. Strategy is about which buckets are important (product, tech, sales, marketing, etc), and execution is about filling those buckets with the right people. Technology/product may matter a lot or not at all at any point in the lifecycle depending on the strategy.
That was a product decision, not a business decision. They did what is preached by HN - they built something people wanted, then listened to them when their users told them they didn't care about the rest of it.
information dissemination with the internet is drastically better than when MacOS lost to Windows, or when Betamax lost to VHS. Nowhere is this more apparent than in cars, where manufacturers are held accountable by numbers, reviews, and even interior design decisions that might have been ignored 20 years ago when a magazine wouldn't spend the pages to complain in detail about why you shouldn't have highly reflective chrome trim on the dashboard.
I think good, differentiated products have a better chance now than ever, but the differentiation is where things fall flat. Barriers to entry are lower across the board, but having differentiation is the key to funding/pipeline, which is the key to scaling.
I generally agree with this, but it really depends on the consumer not being lazy. We all have the friend that scours the forums, but 10x more friends that just buy the highest rated item on Amazon.
I think some of these businessy folk see real-world examples of boring enterprise-y companies that most developers aren't passionate about as proof that it really is about sales. And I also think that's how you end up with completely tone deaf business-folk based startups like Juicero.
The incumbent/legacy/first mover advantage is the one thing in tech that allows you to overcome better competition. Yes, as a mature company with a large integrated software suite, sales are extremely important. This does not apply to early stage companies.
> "It's not the technology that matters,
> it's the strategy"
Gross. That's the kind of meaningless ass-covering thing consultants like to say. It's a great claim because nobody can falsify it: "See, you don't get it! The increased clock-speed was part of their over-all strategy!"
Can you think of any examples where great technology or product compensated for bad strategy? I can't. But I can think of MANY examples of where great strategy compensated for bad technology or product.
> I can think of MANY examples of where great
> strategy compensated for bad technology
Well, there's never a compelling argument that someone had a bad strategy once their product is a financial "success." They may have simply won a lottery, by the argument won't sound convincing.
Another thing that bothers me is: if you're making a shitty project, what is the point? You become what you do. If your project is bullshit, and you're spending all day strategizing, you'll wind up attracting idiots as customers, and scumbags as employees. Why bother... easier to go into banking or something.
> Facebook seemed like a "shitty" project
> before it was a multi-national conglomerate.
Facebook is a shitty project. What Zuckerberg gained in the short term he is paying for now: he will spend the next decade of his life dodging tomatoes as Facebook craters.
And honestly, that might be worth it for him. He'll also be extremely wealthy. My argument isn't so much that "it's not strategy that matters" instead of "it's not technology that matters" but rather that making pronouncements like that is bullshit.
Apple comes to mind. Using Ben's logic, Tim Cook's Apple is superior to Steve Job's Apple. The new Apple cares more about strategy and more MBAs work there. The new Apple has made more money. But at the end of the day, for a lot of people, it was more rewarding to work at SJ's Apple. And SJ's Apple still did plenty well financially.
> Everyone deserve a chance to earn a living. Your
> opinion of the worthiness of a project doesn't really
> factor much into peoples considerations.
No, but my opinion exists in the world, as do many other opinions: Ben's personal preferences do not suit everyone. What his maxim assumes is that the only metric for "success" is his. I think for many people, it is better to do work of which one is proud. Not all people, but enough that Ben's advice is BS. For people like me, it's like saying "making 2x more money from your business, and wind up 10x less satisfied with your work."
Hard to take you take this seriously with a comment like that. It's a technical marvel what they've accomplished and at the scale they've been able to take it. I'm not a fan myself, but I'm not going to crap on what they've pulled off because I don't like the service.
I don't even know what we are discussing at this point. As far as I can see, it would be a debate over various meanings of the word "shitty." If we brought it back to something tangible, I doubt we've even have any real disagreement. I don't like just bickering with people on the internet for its own sake. Cheers
You initially lead with a use case, but end up following how people actually use your product, or competitive products, and iterate on them in order to retain and attract users.
--------------
The broader point here though is that, at least with consumer software, you will not be able to compete with Google AND Facebook AND Snap AND Amazon in any category.
Maybe your product can beat Google+ at social networking, you won't beat Facebook and they'll either buy you or siphon your users. You might be able to build a better enterprise messaging system than LinkedIn but Microsoft will bleed you dry with a better enterprise sales team.
Even new categories that are subsets of broad categories eg. Social/Ephemeral Messages have no chance of surviving, as they are features to existing products that have BN of users.
So the best chance you have as a software startup to compete is to sell to the Cartel (Facebook, Google, Apple, Amazon, Microsoft), and hope that you're given enough lattitude to see the product that you're ruddering play out as long as possible.
>I will say that I think he dismisses Snapchat's founders too quickly. Yes, they've been struggling, but they are trying to build a business rather than just integrate with an existing conglomerate.
I am aware this is not the same as acquisition or total assimilation, but I think it speaks directly to your comments about how Snapchat is trying to create it's business side of things.
The Innovator's Dilemma would be my first choice. There's 30 more that would be worth reading after that, but that will change your view of the industry.
Instagram was huge even before Facebook took over. It has gone from strength to strength in the 6 years since but I'm pretty sure that would've been the case without Facebook's involvement (see also: Twitter and Snapchat).
You seem to be doing the founders and the team behind Instagram a huge disservice here by accusing them of not being willing to put in the work and riding on Facebook's coattails.
They definitely did a huge amount of work. But did they have a business model before they sold? I don't know, but the author states that they didn't.
I don't think it is a disservice to say that being acquired and integrated into a larger company means you don't have to focus as much on the business schlep. I think that is the truth.
Just as a thought experiment, do you think without FB the Instagram team would have copied and integrated their version of Snapchat stories to hold the (at the time) rapidly growing Snapchat threat to their business?
They traded their company for hundreds of millions of dollars. Good on them for turning a product into something that was so lucrative for FB and a real enjoyment for so many people the world over. I think it can't be understated how Instagram has become a pillar of so many brands and online businesses today.
But in reality their departure is really part of the business of software, the founders sell out, become exceedingly wealthy. After a few years the disillusionment with being part of a corporate machine (and not in control) sets in and they quit to spend time on their burning man floats. Its always been this way and theres nothing wrong with that.
I think many of us would do exactly the same given the option of struggling for a decade to profitability or a $10m+ exit with a comfortable VP level role.
I find it interesting that Instagram would want to include more adverts, as I find myself drawn to brands/interests without the help of annoying ads.
At the end of the day, as the article correctly points out:
> Letting Facebook build the business may have made Systrom and Krieger rich and freed them to focus on product, but it made Zuckerberg the true CEO
Instagram's decision to include advertisements is best understood from Zuckerberg/Facebook's view. Even if the local view is that IG adverts are negative, they are likely accretive from the perspective of the entire Facebook enterprise.
Seems like they didn't know when to leave. Once they sold it was no longer their baby and should have started working on an exit strategy. It becomes a contest of egos.
On the technical side, FB's methodology with acquisitions seemed the most rational. Rather than sucking the new company in they embedded PE's in there for the purpose of giving the tech teams a fast track to using FB resources.
I've always wondered about this. How much inventive is that? When the person thinks "if I work really hard and this, I'll increase my huge pool of money from an amount I can't easily spend given the rest of my life to an amount almost six times as much!", does that really resonate?
It's not like it's the same as $700 to $4,000, or even from $7,000,000 to $40,000,000. There are things you can buy to spend most of those amounts, but those are things it's not really worth buying multiple of (e.g. houses, super yachts), so at the point you have close to a billion dollars, what does another billion buy you, besides bragging rights?
I imagine there's some impetus to stick around because you want to see what you built succeed, but at some point I imagine you realize it's not really yours anymore, so why not leave and do what you want, instead of what other people want you to do? I mean, you literally have "fuck you" money.
"PERSPECTIVE. The wealthiest person I have spent time with makes about $400mm/year. i couldn't get my mind around that until I did this: OK--let's compare it with someone who makes $40,000/year. It is 10,000x more. Now let's look at prices the way he might. A new Lambo--$235,000 becaome $23.50. First class ticket internationally? $10,000 becomes $1. A full time executive level helper? $8,000/month becomes $0.80/month. A $10mm piece of art you love? $1000. Expensive, so you have to plan a bit. A suite at the best hotel in NYC $10,000/night is $1/night. A $50million home in the Hamptons? $5,000. There is literally nothing you can't buy except."
> what does another billion buy you, besides bragging rights?
The only real way to look at wealth is through the lens of power and influence. In day-to-day life, is $250 million that much different than $1 billion? Probably not. But when it comes to power and influence, $1 billion (or more) is an incredibly better place to be.
Once you get into this kind of wealth, you can attack global problems. The Bill & Melinda Gates Foundation is probably the crown jewel, publicly, of the kind of power this sort of multi-billion USD wealth can accomplish. We will see in the next few decades what the Chan-Zuckerberg Initiative can do for education, or what the Bezos Day One Fund can do for homelessness and poverty. Of course having huge endowments doesn't necessarily mean you will be successful in your mission, and plenty of these sorts of foundations are just set up to preserve wealth and establish political bastions of influence.
Imagine also the effect that comments from other prominent billionaires have on politics in general, or the economy. Warren Buffet can swing intraday trading to the tune of billions of dollars just by commenting on individual stocks or sectors. Mere millionaires don't have this kind of influence.
So sure... you make anywhere north of, what, $100 million? and you can retire comfortably. Maybe a couple hundred million more and you can have a trust that might stay solvent for a couple generations. But a billion dollars? Two billion dollars? You can now build your own rocket and send yourself to space, build towers and monuments, influence entire nations... With a billion dollars you have exclusive access to the only worldly things that are so luxurious that they cannot even be expressed in monetary value. The differences are staggering at that scale.
> We will see in the next few decades what the Chan-Zuckerberg Initiative can do for education, or what the Bezos Day One Fund can do for homelessness and poverty.
Note that while I don't doubt that Zuckerberg will give away a big part of his wealth, Chan-Zuckerberg Initiative is an LLC and not a 501(c)(3) like a 'proper' foundation should be.
Another thing to note is that it has been investing in startups, and not really giving away money, although the startups themselves seem to be for good purposes. So it might be a way for that money to make more, while putting it in noble causes?
Or it just was made that way because he would still retain control over the shares even though he 'gave' it to the initiative.
Reddit's unfriendly block-everything popup reminder for National Voter Registration Day got me wondering, does anyone know how effective these types of popups are?
The less-obtrusive popups that allow you to still see whatever you came to the site for seem better IMO, but I'm curious if they're less effective.
First, money at at level isn't earned to spend -- you're right about this. It's more a way of signaling status. Someone getting paid $30 million is less important than someone getting paid $40 million at the same company. This comes up a lot in athletics, too. It establishes your location in the pecking order, which is important in any hierarchical organization. You have to know who's boss.
Second, I think money can be a basis for talent competition. If one company offers $5mil/year and another offers $10mil, you'll probably take the $10 over the $5. Not that it will actually make a difference in your life, but just because it's 2x as much. Perhaps not everyone would make that choice and I think at those levels of wealth, it becomes quite a personal, idiosyncratic decision. But it does get hard to turn down.
Just some thoughts from a guy who isn't that rich.
Is that supposed to be the majority of people that make that much money though? I think that's a small minority of people that are billionaires or close to it. When talking about incentives, I don't think most of those are really a huge draw.
And for the philanthropic ones, are you really going to say, "well, I better not stop now, because a few hundred million might not be enough..."?
There are plenty of things that huge amounts of money can be spent on, but I think in most cases those aren't things most people are specifically interested in. At least not enough to ultimately sway their opinion about leaving early.
I like Jimmy Kimmel's proposal to tax the richest person in America at 90%(something along those lines). This way everyone at the uppermost top gives away more money in the process of avoiding the number 1 spot.
Space exploration, artificial intelligence, architecture, art - there are enough bottomless pits on which you can spend endless amounts of money. Money is not only about consumption but also about creation. If you are into creativity then you have to stay around until you have made enough money for your goals.
Much more of the incentive is the desire to make Instagram a cool, popular, successful thing. Even though they sold the company to Facebook, it still felt like their creation the vast majority of the time. They were proud of what they had built and they wanted to make it a really popular thing that people liked to use.
There are plenty of billion-dollar acquisitions that don't work out at all. Instagram grew far bigger than it had been when they were acquired, in both financial impact and impact on the world.
I'm sure. Everyone has to do the 4yr slog, but founders usually write in a parachute clause.
I hope they stuck around to make sure their original team was taken care of, but it's naive to think they'd have C-level control at the parent company after acquisition.
Very hard to second guess such a well written article.
Are there instances where the thesis that “folks who outsource the business side to the acquirer” stay? Salesforce seems good at keeping acquirees but enterprise is different. The acquired companies come with their own revenue and field sales.
> Are there instances where the thesis that “folks who outsource the business side to the acquirer” stay?
Hsieh? I mean, I don't know too much about the inner workings of Zappos but I find it hard to believe that the FB->IG relationship is significantly different from the Amazon->Zappos one.
Then again maybe he's just the exception that proves the rule.
I find it hard to believe that the FB->IG relationship is significantly different from the Amazon->Zappos one
Why? Zappos was minting money and sustainable in their own right well before the acquisition. IG had no datapoints showing they could sustainably make revenue when they were acquired.
Hmm, I guess fundamentally I find it hard to believe that a large corporation would acquire a smaller one just to let them run completely independently - it just seems counter-intuitive unless the acquirer is a holding company, basically.
It definitely also doesn't seem like Amazon's jam. Twitch seemed to have a pretty large upward trajectory (and path to profitability) right around the time they were acquired, and Amazon's still clearly guiding at least some of those major decisions.
> Hmm, I guess fundamentally I find it hard to believe that a large corporation would acquire a smaller one just to let them run completely independently - it just seems counter-intuitive unless the acquirer is a holding company, basically.
I don't find it hard to believe - it is a perfectly valid defensive move to contain a potential competitor. What if an independent Zappos decided to start selling everything, not just shoes? Also, it might provide an internal 'skunkworks' where Amazon finds lessons applicable to the larger organization without killing the golden-egg-laying goose. It's quite a reasonable way of self-disrupting.
You are right that letting the acquired company "do whatever they want" wouldn't be Amazon's jam.
But the Zappos case was different. They didn't NEED to sell, so they put in the selling agreement that they get to keep a bunch of autonomy.
Basically Zappos loves being a part of Amazon for shipping and logistics benefits.
But Zappos core strategy/identity is based on being an uncommonly fun place to work and being great to its employees. They wanted to make sure when they sold that the never had to deal with employees "the Amazon" way.
It's kind of different for enterprise. The acquisition cycle is often to expose a good product to a more deeply entrenched sales system. Acquired companies have proven they have a product that enterprise companies are willing to buy (and go to some pain to do so), but they don't have the ability to sell anything anywhere that someone like Salesforce, IBM, or Atlassian can do.
If you read more closely, the author is not arguing this. He doesn't touch what the Instagram guys should have done, just what they did, and what they did was give up control of their product.
That has an advantage, which is you can plug into Facebook's monetization model and instantly start making money, but it also has a disadvantage, which is no longer being in total control.
Zuckerberg wanted power, not money, that's the difference. Only a fool turns down a billion dollars. That's live the rest of your life doing whatever the hell you want money. Holding out for more billions won't change that.
Very few people turn that down, and even fewer are capable of running $100B companies. But those who are in the second camp are also probably in the first camp, because being an effective CEO requires the irrational confidence of first believing you are an effective CEO with limited evidence.
It's a little tautological, but the fact that they took it means they probably wouldn't have succeeded.
Ben Thomson is one of the best folks writing about the business of tech. Such lucid writing and even someone who's fairly early on in their careers will be able to understand what's going on.
Usually his essays are information dense, but this was a bit of a let down. It would have been a fine tweet though.
And the constant amazement at the IG founders' extraordinariness is very tiring. (They are obvioulsy not dumb, but they mainly got lucky, as it's not like there were no other apps with photo taking and filters trying to make it big in/on the Apple App Store at the time.)
Giving a single person full control of a company is great when they're on the right track. These have to be warning shots to employees and investors though.
> Facebook had agreed to let it run independently as part of the acquisition deal.
Sounds nice on paper.
> It is about finding and developing a business model that lets you determine your own destiny.
But when you sold the business to Facebook, you ultimately agreed to forfeit your ability determine your own destiny to obtain the ability to use their vast resources.
What a silly article with a preposterous attempt to define “CEO.” IG would have had access to unlimited funding if they wanted. I’m sure they were under a lot of pressure from FB to sell when they did, but it was a clear blunder. And one of Zuck’s best moves as CEO. The train had already left the station at that point and IG could have been sold for $20 billion a year or two later.
> Controlling one’s own destiny, though, takes more than product or popularity. It takes money, which is to say it takes building a company, working business model and all.
This article does a great job illustrating how it is easy to have IDEAS, but its hard to develop them to a point where they are bold enough to work yet feasible enough to where they're worth working on. Instagram never would have done stories if they were concerned about how a large group of users would think that they are:
> entirely stolen from snapchat
> a total sellout
but look what a bold idea and strong leadership brought to instagram!
Instagram is very successful. But, I think people shouldn't lose sight of the fact that it's turned a substantial fraction of our teenage and 20-something population essentially into zombies. I believe it is a significant social negative.
Hysteria. Do you know any teenagers? I have a teenage daughter. She's not on instagram, but most of her friends are. They have rich, full lives, are engaged at school, spend tons of time together in person, play sports, decorate each other's lockers on birthdays, etc.
Is instagram a net negative? Maybe. Are they zombies? No.
I realize the plural of "anecdote" is not "data," but more than once I've watched 20-something women spend hours on end swiping through Instagram and commenting on photos. One particular time I sat on a train in Europe for 4 hours while a woman did that the entire time. Wall to wall. I respect the fact that you have countervailing experiences, but I do think you're underestimating the negative impact here.
Meh, just a decade ago those same women would have been flipping through Vogue and Cosmo. Media has always been a net negative for female body issues and relationships. At least with Instagram for the first time, they can chose to follow more enlightening things. Also seems far more empowering to allow comments on photos.
Great article, this is how I feel about Instagram personally:
- Great app who turned a camera phone into a powerful camera for those who couldn't afford one of those expensive Canon/other brands of good cameras.
- Democratizing photography made phone vendors spend more time build better camera, we're at a point where cameras on certain phones are as a good as stand-alone cameras for photography.
- Filters have been around forever but with filters in instagram a whole generation became addicted to what they're able to do - turn a simple picture in a more interesting picture. To the point where people had to start create the #nofilter hashtag. Snapchat took the filters to the next level or rather the next iteration and also made itself a name because of them.
- Instagram also has it's darkness too: some people say you can get depressed if you browse instagram too much, seeing all those happy pictures of delicious food, beautiful looking humans, cars, paradise-like places, etc.
It sounds crazy right? :shrugemojigoeshere:
Short aside: Friends of friends who used to work in the same building with the founders of Instagram told me that on the night of their launch they stayed up till the early morning hours to fix their server issues because their initial instagram app was such a success! Honestly, you can't get more real than that - almost like a movie!
Thanks instagram co-founders for your creativity throughout the years: Although copying most of Snapchat's features wasn't a great move, it was a business decision that worked really well for your userbase..I can smell that being a very Facebook thing to do. I remember Snapchat turning down $3B acquisition offer, I guess that move really showed how much FB wanted Snapchat's features.
Back to Instagram - were the co-founders good businessman? I don't know, instagram pre-acquisition was very cool and ad-free. Now it's ad-ridden and almost an annoyance.
Every 3rd post/video/story has ads on it. Blocking those ads is a pain (I still haven't found a universal workaround since ad-blocking doesn't work as well). Another reason why I don't use FB's app.
You can smell the FB influence on Instagram far 10 miles, I would also feel sad to see my own creation being taken over by a bunch of product managers who come from the company who acquired my app because they need to "ad-ify all the things".
Finally, I think instagram is the only app I use on the daily, every single day (more than Uber/Lyft, more than Spotify and as much as Twitter but not as much as Chrome) ! Hope they can find something cool they're passionate about and build the "next" Instagram, even if it's not a camera-app!
I started using Instagram to publish to Facebook back in the days mainly because Facebook's mobile upload functionality was buggy and often failed to upload.
Doing a misjudgment here but the fact is "Companies like facebook don't need founders, they will eventually make the product that people might use in everyday life, they will do it anyhow; by either copying that product or to buy it. Remember that the 'poke your friend' feature is only unique from facebook everything else is someone else's things"
this evil face of facebook will hurt more and more companies day after day and in a result a chain reaction that will affect the life of general people.
No offence, but Sheryl heads up sales and ops (the head of Sales, David Fischer, reports to her), and will go visit big clients to sell them on FB ads/new products (of which IG was a good case).
I'm aware that Mark (he doesn't like zuck anymore, apparently) thinks that, but he focuses on product much much much much more than monetisation (there's an apocryphal story that suggests he said that ads weren't part of his vision for FB to an internal sales conference in about 2009-10).
Finally, I would credit the engineers in Ads a whole lot more than Mr Weil (to my recollection, all of the stuff that ended up making IG money was in place before he joined).
I would summarize it rather: a good product can yield a large network but only when combined with a good monetization/business plan can it be a successful business.
Your tl;dr isn't _wrong_, per se. But the article is really well written, and I feel like there's more depth to it than what you've said.
Plus, your statement comes off as kind of cynical and snarky ("no shit, guys" is the tone, even though you probably didn't mean it that way). The piece itself makes some pretty interesting, non-obvious points I think.
In the short-term, Zuckerberg maybe the CEO, but if he keeps prioritizing ads over product (which he has done with FB prod/privacy), then the long-term maybe dicey.
Just as content is king, so product will always be king. The ads will follow whoever has the best product, and hence user attention.
Ad money is what lets him crush or acquire competitors. The thing that isn't discussed is how commodotized social media software is. Sharing photos and comments and likes is the core of these businesses and it's extremely easy to replicate over and over from a tech perspective. The hard part is acquiring users, scaling and monetizing and FB has won that game. That's how they can take anyone else's product or idea and best them at it so quickly.
For those who covet money titles are more important than to those who covet building great products for users. As a product leader offloading your money challenges into the hands of VC funding is a surefire way to turn vision into greed and slowly destroy one's creative product vision.
Or, it could be the only way to get a great product out of your basement and into the hands of millions of users. It's a tough balancing act but TANSTAAFL.
"Still, as good as the Instagram Stories product was, it is difficult to overstate the built-in advantage that came from Instagram’s larger network, and impossible to overstate the importance of having a shared advertising backend with Facebook. To put it another way, Instagram’s two biggest advantages relative to Snapchat, or any other competitors that may arise, didn’t have much to do with product — Systrom’s speciality — at all."
But the first advantage he mentions -- the size of the network -- is a direct result of the product. The point of a good product is to get people to use it which is what grows the network.
You have to be willing to put in the long hours (err, years) and the schlepping to do all the business-y stuff:
* distribution
* monetization
* back end systems for admin users
* sales channels
etc, etc
Or, you can cash out and assimilate, err integrate, with a larger company that has done that hard work and lose control of your destiny. That's OK, most of us don't have full control of our destiny, and building product can be more fun. It's just a choice you should make with your eyes wide open.
I will say that I think he dismisses Snapchat's founders too quickly. Yes, they've been struggling, but they are trying to build a business rather than just integrate with an existing conglomerate.
It will be very interesting to see if Systrom et al can build another product, and if so, if they will try to build a business as well.