The link to the full story is here
From just two guys at rented desks to a $715 million sale to Facebook, a second wind on Android and a mess of privacy scares, Instagram today announced 100 million people use it every month to share the way they see the world. The startup hedged its bets by being acquired just as it expanded beyond iOS, but despite what it could have sold for now, there’s no disputing Instagram’s success.
In a heartfelt blog post that smooths over the rough patches, co-founder and CEO Kevin Systrom explains the journey to building an app that’s created “a world more connected and understood through photographs.”
The untold story is that Instagram made a tough decision right after its April 3rd launch on Android. Before that it had 30 million installs on iOS. Whether it would succeed outside of the design-focused iPhone was a gamble. It could have flopped, attrition could have set in, and it was still small enough to be vulnerable to competitors. So despite racking up 1 million new users in the first 12 hours, there was a lot to lose. $1 billion (at the time) in cash and stock from Facebook for a company with just 13 employees was too good to pass up, so it sold.
If Systrom had foreseen what would happen next, he may have held out longer. The Android app maintained its sprint, and the iPhone version continued to pick up steam. Even without much help from Facebook, and in fact despite Facebook’s own competitor Camera, the Instagram juggernaut could not be stopped.
At over three times as many users now as when it sold, and seemingly beyond quick disruption, would Instagram have sold for $2 billion or even $3 billion today? Would anyone have been willing to pay that? Remember this was when fervor was frothy for the coming Facebook IPO. Social companies still saw going public as a lucrative option.
But Systrom chose to become a made-man (and make made-men out of many of his employees), rather than roll the dice. He chose greater impact by aligning with the world’s premier social network over total control. He still runs Instagram somewhat independently from Facebook, so he may be getting to have his cake and eat it too.