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What Really Happened When Facebook Bought Instagram

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Re: What Really Happened When Facebook Bought Instagram

#121

Post by jacquesm »

logicallee wrote: post #98
jacquesm wrote: post #81

Earlier quoted context omitted.

Some questions for you: Do you run your own company? Do you have employees? Co-founders? Have you ever received funding from a VC? Have you ever solicited funding? Were you accepted? Rejected?

all of the above (yes to all seven question marks) except for number four receiving funding (from a vc), as in check clears, no that hasn't happened yet. going through this process now - and I can tell you, if I fucked up with one VC I would fuck up with them all. everyone talks. On the flip side, when you're hot everyone wants you, you don't have enough equity to sell to everyone!

Check out the story behind Cisco before you give up.

And on another note, ask a VC if they reject you why they reject you, there really is a huge difference in the spectrum of available parties to work with, from assholes to fantastic people to work with and everything in between, make sure you partner with a group that feels right rather than just looking at the terms sheet. That's where the action is of course but sometimes it is better not to have a deal than to have a deal with the wrong party.

Re: What Really Happened When Facebook Bought Instagram

#122

Post by jacquesm »

jeremymcanally wrote: post #101
logicallee wrote: post #67

Earlier quoted context omitted.

I see. Let's say I see a big incumbent who's UNIQUE selling point is 'we have everyone's private photos. people have to come to us if they want to see their friend's photos.' I start threatening them. They pay and buy us. I get rich. The incumbent gets to keep everyone's photos. At what point in the above do we not have a business model? Oh, you mean it can't possibly WORK! Except that it just did. Well, I'm sorry, b…

What you've just stated is, essentially, the business equivalent of the lottery. You could almost replace any reference to business terms in your post with "lottery" and have the same amount of truth applied. The whole point of a "model" is that it's repeatable and definable. "Getting acquired because they fear us" isn't a business model.

> "Getting acquired because they fear us" isn't a business model.

No, but it is one of the best reasons to be acquired, far far above 'they acquired the team for the talent, and shut down the project' and 'they acquired us to get our customers (aka buying growth)'.

Re: What Really Happened When Facebook Bought Instagram

#123

Post by ttrreeww »

jakejake wrote: post #110
joonix wrote: post #94

Earlier quoted context omitted.

In addition there aren't many lessons to be gleaned from the story. It might be entertaining to read but in the end it's as if you just wasted 20 minutes playing Solitaire.

I would say if there is a lesson at all - that it's helpful to be on friendly terms with several of the Silicon Valley elite before you start your company. Not taking away from Instagram being a great app, but it was catapulted towards success due to the founders personal connections.

It's not what you know, but who you know.

Re: What Really Happened When Facebook Bought Instagram

#124

Post by brown9-2 »

Skibb wrote: post #38

Ugh this is linkbait and upvote-bait if I ever saw one. The whole tone of the article is so contrived and fake-mysterious that it's kind of digusting. Basically the whole thing can be tracked down to a rich privileged white kid doing what rich privileged kids do. NOTHING worth reading about here. And the shitty app could maybe start about thinking of getting some cash flow.

I'm not sure how an article in a print magazine reproduced online for free can be "link bait".

I think the wording you are looking for is "I did not find this interesting or worthy of my time", which is fine, but I wish people would let other members of the community decide if they think a link is vote-worthy or not rather than arguing the merits of an upvote in the comments.

Re: What Really Happened When Facebook Bought Instagram

#125

Post by joezydeco »

gbog wrote: post #29
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.

We also have to collectively agree to stop using the term "money shot" except when producing or filming a pornographic movie.

Re: What Really Happened When Facebook Bought Instagram

#126

Post by zmitri »

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?

I'm from NYC and just went to SF for a week. Have to say that most people and knowledge are way more accessible there because there are just so many more startups and so much more talent. Guys like Zuck are hard to reach sure, but within a week we were able to get meetings with a couple well known folks and they actually had interesting things to say. In NYC there are only a handful of large "start-ups".

Re: What Really Happened When Facebook Bought Instagram

#127

Post by nwzpaperman »

SandB0x wrote: post #120
nwzpaperman wrote: post #117

Earlier quoted context omitted.

Nature and capitalism share a structural characteristic: both require equilibrium or over-production to self-sustain. Any sustained deficit and the organism or economic entity suffers catastrophic failure. It is absolutely possible to undermine the business model of a company like Facebook by winning a marginal piece of their business away from them. Economists are so fervently engaged in trying to eliminate cash-flo…

I have tried to understand what you have written. Help me out here. > Nature and capitalism share a structural characteristic: both require equilibrium or over-production to self-sustain. Any sustained deficit and the organism or economic entity suffers catastrophic failure. What does this actually mean in the context of this discussion? What does this have to do with anything? > It is absolutely possible to undermin…

"What does this have to do with anything?"

It means building a site like instagram, with zero revenue, can be very profitable if it competes with a revenue-generating site like Facebook. It is also repeatable.

Re: Lottery Ticket

Survivorship bias is not the same thing as playing the lottery even if the statistical probability of success launching a start-up or winning the lottery was identical. Instagram successfully built the technology, acquired the user base and sold to someone who found them valuable.

I don't think luck has anything to do with building a company. Bad luck is how losers explain their losses rather than learning from the loss.

Re: Non-linear consequence

You borrow $1,000 and service is $10/mo. The basic loan covenants would define a default if you can't pay all $10 in any single month according to schedule. That means $9.99 service of the debt gives the creditor legal capability to seize the entire collateral--business.

Fixed operating expenses can be viewed like debt service in that the economic entity breaksdown when all expenses can't be covered.

If the profit margin goes to zero, a company is still running, but extremely vulnerable to random economic volatility.

Re: What Really Happened When Facebook Bought Instagram

#128

Post by ritchiea »

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?

Ha.

I would say a better question is, how does someone who grows up poor do this? And/or someone with parents who do not give them access to excellent schooling. And/or currently feels excluded from the industry despite being talented.

Re: What Really Happened When Facebook Bought Instagram

#130

Post by physcab »

mailshanx wrote: post #24
pathy wrote: post #12

Earlier quoted context omitted.

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 start…

I live in San Francisco. Its an awesome city and I love living here, but it is by no means a prerequisite to starting a successful business. People have problems everywhere that need solving.
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