Behind Instagram´s Success
How to build a photo app company and sell it for $1 Billion dollars 551 days later
By: Claudia Repsold
What are the odds of launching an app, get 25,000 uploads in the first day, 100,000 in the first week, 1 million users in 60 days and sell it for $1 billion dollars 551 days later? As Bernard Shaw once advised: “People who say it cannot be done should not interrupt those who are doing it”. mike krieger the co-founder of instagram
What may it seems like a far-fetched Hollywood´s screenplay to you, is the everyday life of the Brazilian entrepreneur Mike Krieger and his American partner Kevin Systrom, the founders of the Instagram.
Founded just four years ago, Instagram have 150 million users, posting 55 million photos every day that produce an engagement of 1.2 billion likes daily. Its community boast 15 times more engagement than Facebook, its parent company. Instagram is also growing in much faster pace, it gained 23% in active users while Facebook showed 3% growth.
Getting at the White House
Last month, once again President Barack Obama mentioned Instagram at State of Union address, asking the astronaut Scott Kelly to Instagram from space.
Mike Krieger´s successful tale is as impressive as is inspiring; President Obama had already mentioned him at last year State of Union address while the First Lady Michelle Obama invited him to sit at her guest box.
They all posted that special moment at the White House to their Instagram accounts. Mike Krieger has been called the soul of Instagram. He is a different kind of geek, who managed to mix a solid background in computer-human interaction with an unusual sense of multiculturalism. He was born in Brazil but lived abroad with his father, an executive of a multinational transferred to the United States, Portugal and Argentina.
Krieger had been “tech material” since the age of four when he got his first computer. At six, he played with Windows´s codes to enhance the desktop games. In his teen, he was already teaching computer skills to the maintenance personnel in an after-school program at his high school in Brazil. At 18, Krieger, moved from São Paulo to California to study Computer Science at Stanford University. He got his major in symbolic systems–a Stanford mash-up of technology and psychology that counts LinkedIn´s Reid Hoffman and Yahoo´s Marissa Mayer as alumni.
Krieger also graduated from Stanford´s Mayfield Technology Ventures Program, which gave him the first glimpse of the entrepreneurial process of building simple solutions to viable products. When Krieger worked for Meebo, he met Kevin Systrom who was working for Google, but on weekends struggled to get some traction for his side-project, a photo service for web called Burbn.
Krieger, the human-computer interaction specialist, was a Burbn user, who believes behavior speaks louder than algorithms. Systrom invited Krieger for a breakfast and convinced him to quit his job at Meebo to found a new tech company.
After analyzing the user behavior, Systrom & Krieger adapted the Web service to an app for smartphones. They cut the unused features and simplified to a social network for sharing photos. Systrom, who always liked pictures, came up with the idea of introducing the filters. Then, the Instagram as we know it, was born; a portmanteau of “instant camera” and “telegram”. They gave the new app to their friends to test–many of them tech influencers like Twitter´s Dorsey–who began posting photos using filters to social networks. Buzz began to build.
At midnight on Oct. 6, 2010, they launched Instagram on the Apple app store. The users flowed in while Systrom and Krieger rush to keep the servers stable. By 6 a.m. media sites like Bits Blog and TechCrunch published stories about the debut. The servers melted. Systrom & Krieger worked a straight 24 hours to keep the app running while 25,000 iPhone users downloaded the free service. The rest is dot.com history.
Facebook acquired Instagram in April 2012 for approximately $ 1 billion in cash and stocks. It was estimated that Kevin Systrom, who was 28 years old at that time, pocket $ 400 million in cash and Facebook shares from his 40% stake on Instagram. While the Brazilian Mike Krieger, who was just 26 when the deal was closed, earned around $ 100 million for his 10% stake and a place at Forbes magazine as one of the most influential entrepreneurs in Brazil.
Now, two and half years later, Citigroup estimates that the Instagram worth $35 billion. Zuckerberg, Systrom and Krieger are forecasting that by the end of 2015, Instagram will have 420 million monthly active users.
Krieger, like any other innovator, is more driven by the thrill of creating than to amass wealth. Last year, Instagram released Hyperlapse; a cool app that captures high-quality time-lapse videos with a built-in stabilizer that creates a cinematic look.
Mike Krieger has not even turned 30 and his tale of entrepreneurship is already motivating many startups around the world. He is the kind of guy who “give back”, one of his goal is to inspire other Brazilians entrepreneurs expand their startups. Mike Krieger lives according to Alan Kay doctrine: “The best way to predict the future is to invent it.”
Claudia Repsold is the Editor-in-Chief of Brazil & USA Biz. She is a Brazilian international award-winning journalist with twenty years of experience in editing, research, coordination, production and reporting news on Brazil and U.S.