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What Really Happened When Facebook Bought Instagram

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Re: What Really Happened When Facebook Bought Instagram

#21

Post by corford »

digitalengineer wrote: post #4

A good read, for sure. As someone outside of the US, it makes me wonder if Instagram's succes would have been possible if it was a non-US company, or even a startup outside of California?

Reading between the lines, it seems the major contributing factors to their success were the connections they had to other ex-Stanford alumni (Zuckerberg himself being one of them), the internship at Twitter and the stint at Google. A more interesting question (at least for me) is: Would Instagram's success have been possible (or that fast) if the founders had not gone to Stanford?

Re: What Really Happened When Facebook Bought Instagram

#22

Post by jacquesm »

logicallee wrote: post #20
will1000 wrote: post #19

Earlier quoted context omitted.

As someone in the US and in California, but !in the bay area and !in rapport with the likes of Marc Andreessen, Jack Dorsey and Mark Zuckerberg, I too wonder if Instagram-like success would be possible for a startup that is not in that position. And if it isn't possible, perhaps the rest of us should think twice about aspiring to that specific type of success.

It's kind of your fault. That's a provocative statement, here's the justification: Instagram had "only" 18 employees. Wherever you are, will1000, hiring 18 employees of the caliber who built Instagram for 18 months would cost you $2M. Instagram was able to pay for them with equity, instesad of starting with $2M in the bank. The direct reason that this doesn't work outside silicon valley is that outside silicon valley…

> The direct reason that this doesn't work outside silicon valley is that outside silicon valley you, will1000, will not work for me for equity and no salary. That is only possible in Silicon Valley.

Right, because only in Silicon Valley will people work for equity and no salary. They live off the air.

Explain to me how talented coder 'x' (whoever, maybe will1000) will be able to live without any compensation whatsoever during 18 months.

Even in SV that's an exception, not a rule, and even in SV people need to eat. So the more commonly employed scenario is that there is a bit of funding which is made to stretch as far as it will go by compensating key employees with equity rather than salary for some portion of their total package.

0 salary and just equity is an exception.

Re: What Really Happened When Facebook Bought Instagram

#23

Post by jacquesm »

soup10 wrote: post #17

Well connected individuals flipping over-valued companies to large corporations who have more capital than they know what to do with. Wake me up when VCs choose to fund companies that seek something other than validation and profit.

I'm perfectly ok with VCs choosing to fund companies that seek profits.

Re: What Really Happened When Facebook Bought Instagram

#24

Post by mailshanx »

pathy wrote: post #12
EGreg wrote: post #7

I think this story also shows how super-important connections can be. This guy was well connected in the valley. The question is, how can someone who moves there from, say, New York, actually make those connections?

My guess would be that it is harder, especially to get connections like Zuckerberg, if nothing else because he, and others like him, are now quite hard to reach. That said, getting to know the up-and-coming Valley entrepreneurs should be doable. It is not as easy as getting to know them while you are in college but go to conventions, go to coffee shops, bars. If that is not your thing, start conversations on HN, Twit…

But doesn't a huge part of the problem stem from geography? Like you, i'm finishing up my Masters in Singapore - that is pretty much on the opposite side of the globe as SV. Surely i can't afford to go flying around to SV conferences as a student. I'll be speaking at a few conferences in Europe this summer, but still, i feel that if you are not located at least in the USA, you are missing out on a huge piece of startup action...

Re: What Really Happened When Facebook Bought Instagram

#25

Post by brazzy »

smackay wrote: post #18
omegant wrote: post #11

Earlier quoted context omitted.

It also counts that you are in a habitat where having beers with Zuck or being one of the first employees of google or twitter( or just name one..) is easy. If you need a 500000$ seed investment? No problem, I will talk to Andressen and it'll be done in a week.. Of course it's not always like this but SV is the place where this may happen. The biggest difference I notice with other places beyond the easier access to…

The can-do attitude is something to be envied but the dynamism and opportunities available in the Valley and generally in the USA make a big difference. If your big idea doesn't pan out then the (almost) worst case scenario is that you simply go and work for somebody else. I don't think other country's economies are nearly as developed in that respect. In many cases developers are hired on the basis of cost and anyth…

Don't forget the other side of the coin: that "can do attitude" and that environment can also, if you buy into it too far and don't get lucky, have you broke and homeless.

It's partially a gamble, and magazines write articles only about the winners.

Re: What Really Happened When Facebook Bought Instagram

#26

Post by brazzy »

jacquesm wrote: post #23
soup10 wrote: post #17

Well connected individuals flipping over-valued companies to large corporations who have more capital than they know what to do with. Wake me up when VCs choose to fund companies that seek something other than validation and profit.

I'm perfectly ok with VCs choosing to fund companies that seek profits.

So when do you think tehy'll start doing that again?

Re: What Really Happened When Facebook Bought Instagram

#27

Post by dasil003 »

logicallee wrote: post #20
will1000 wrote: post #19

Earlier quoted context omitted.

As someone in the US and in California, but !in the bay area and !in rapport with the likes of Marc Andreessen, Jack Dorsey and Mark Zuckerberg, I too wonder if Instagram-like success would be possible for a startup that is not in that position. And if it isn't possible, perhaps the rest of us should think twice about aspiring to that specific type of success.

It's kind of your fault. That's a provocative statement, here's the justification: Instagram had "only" 18 employees. Wherever you are, will1000, hiring 18 employees of the caliber who built Instagram for 18 months would cost you $2M. Instagram was able to pay for them with equity, instesad of starting with $2M in the bank. The direct reason that this doesn't work outside silicon valley is that outside silicon valley…

Whoah! Instagram didn't pay salaries to any of their 18 employees?

Re: What Really Happened When Facebook Bought Instagram

#28

Post by jacquesm »

brazzy wrote: post #26
jacquesm wrote: post #23

Earlier quoted context omitted.

I'm perfectly ok with VCs choosing to fund companies that seek profits.

So when do you think tehy'll start doing that again?

There seems to be this terrible misunderstanding that 'VC' is a uniform unit the multiple of which is VCs.

In fact, every VC is different, every VC has their own ideas of what companies are good to fund and which they'd rather pass on.

So, right now there are VCs that will not fund companies that do not have a clear idea of how they're going to become profitable.

Re: What Really Happened When Facebook Bought Instagram

#29

Post by gbog »

saddino wrote: post #2

What I really enjoy about Kara Swisher's article is how her writing style and her framing of the story reflects the whirlwind reality that found Systrom and Krieger in an 18 month exit. There are no superhuman heroics involved here nor supersecret backroom deals. This is really just a simple story of good luck and timing, a spot on pivot and execution, and honestly brokered business relationships. You can't duplicate…

> writing style

I beg to differ, I yawned on the first page, on the second page, and got somewhere else. Information density is very low. It looks like this journalist, as many other, is paid by the line, and adds too much water in the soup.

Re: What Really Happened When Facebook Bought Instagram

#30

Post by gbog »

sharkfood wrote: post #8

Sounds great.... The dream we all long for; Silicon Valley dream. Though does anyone tell the stories where the little guy is invited out there by big influentials only to be baited into giving away their secret algorithm and then being stomped on? Beware innovators/entrepreneurs sharks abound, especially for the little guy. They'll sell you on your dreams only to get what they want from you then kick you and your dr…

> Silicon Valley dream

That's interesting, because most of the technical focus is on scalability, and this "Silicon Valley dream" is so very much not scalable.

The "American dream" had more scalability potential, don't you think so?

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