$1 billion twist
“You don’t need to have an amazing idea or innovation to succeed. You just need to improve or “twist” something that already exists…in a big market.”
One can debate whether Instagram was an amazing idea of innovation, but you can’t argue with the results. In less than two years after Instagram’s inception, Facebook acquired the social photo sharing platform in 2012, for approximately US$1 billion in cash and stock.
When Instagram was first made publicly available in October 2010, it distinguished itself from other platforms with its focus. While many other methods existed at the time to share photos, Instagram was only for iPhones, and only accepted square photos. It’s navigation and interface were extremely limited, but easy to use.
That simplicity was its strength. Before the end of 2010, Instagram had a million users.
in 2015, Instagram took advantage of the improvements in phone displays and connectivity to allow larger photos and portrait and landscape aspect ratios.
Since its minimalist beginnings, Instagram has introduced apps for Android and Windows phones, now permits views from web browsers, and added several new features intended to keep its user community growing and engaged, including:
- threaded comments
- private direct messaging
- image carousels
- bookmarking and collections
Instagram’s parent company Facebook doesn’t take competition lightly. Its strategy is like Microsoft of old – “embrace and extend”, which is a nice way of saying copying your competitor’s feature sets before they come to dominate the marketplace.
Snapchat was particularly vulnerable to this strategy.
“Instagram’s Snapchat-like feature lets you create sequences of photos and videos that expire after a day.”
Stories proved to be a very popular with Instagram reporting in 2017 that it had 250 million daily users. Because of the ephemeral nature of the content, there was little reason for Snapchat users not to move to the more popular and comprehensive Instagram platform.
Many also viewed Instagram’s expansion into video as a direct assault on the existing video-sharing platform Vine. Instagram offered longer video than Vine and promoted celebrity accounts with its explore tab, drawing them and their sponsors’ money.
Instagram’s strategy has been to start with a focused product that is easy to understand and adopt; ramp up the feature set in response to user demand; adapt features from competitors’ products.
What’s fascinating is that Instagram’s strategy is so different now than it was in its beginning.
As a startup, it only needed one killer feature to penetrate the marketplace. Now as a dominant player, it needs to add the killer features of its competitors to sustain its position.