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What Really Happened When Facebook Bought Instagram

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Re: What Really Happened When Facebook Bought Instagram

#41

Post by replicatorblog »

corford wrote: post #21
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?

Zuckerberg is a gentleman of Harvard! I say good day!

Re: What Really Happened When Facebook Bought Instagram

#42

Post by logicallee »

jacquesm wrote: post #35
logicallee wrote: post #33

Earlier quoted context omitted.

The portion you refer to is pocket change - it would not retain these employees outside Silicon Valley, where such caliber of employees are willing to give great weight to equity. Read http://www.dailymail.co.uk/news/article-2127882/Meet-OTHER-n... and it becomes clear that the 18 employees were recruited mostly with equity. Hiring the quality of talent that we're talking about, in will1000's market, just doesn't hap…

> The portion you refer to is pocket change. You're currently running a company with in excess of 18 talented engineers without a viable income stream? And your payroll is 'pocket change'? > Hiring the quality of talent that we're talking about, in will1000's market, just doesn't happen with the kind of equity (e.g. 10% pool) that instagram was using - outside of silicon valley that is. Of course it does. You make so…

I'm a bit confused, we might have misunderstood each other.

There's nothing to "back up" - I said that the most talented employees in the world, who can build a $1B company up in 18 months, will not do so outside Silicon Valley in exchange for a 10% employee equity pool, and a low base salary.

Outside Silicon Valley they would only do so for a very high base salary.

Re: What Really Happened When Facebook Bought Instagram

#43

Post by brazzy »

omegant wrote: post #37
brazzy wrote: post #25

Earlier quoted context omitted.

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.

I agree with that, but that´s true anywhere in the world. In Spain if your company fails you may be personally liable of the debt. Recently a bank removed 3000€ from my grandmother account because of a debt dated from 1993 of my deceased grandfather´s company. My grandmother is 97 years old, and the funniest part is that debt was settled long ago. Also if you fail nobody is going to trust in you any more, you are don…

My point was not so much about SV but about the "can do attitude" - when taken too far it will have you go deeper into debt and chasing pipe dreams rather than cut your losses. It can kill good companies too, if it leads you to ignore risks.

Re: What Really Happened When Facebook Bought Instagram

#44

Post by temphn »

jacquesm wrote: post #22
logicallee wrote: post #20

Earlier quoted context omitted.

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 whatsoe…

  Explain to me how talented coder 'x' (whoever, maybe 
  will1000) will be able to live without any compensation 
  whatsoever during 18 months.
Savings? Perhaps if Bitcoin rises and deflation becomes the norm, it will become more common to have 18 months of savings before quitting your job.

Re: What Really Happened When Facebook Bought Instagram

#45

Post by kybernetyk »

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.

Wake me up when VCs choose to fund companies that seek profit.

Re: What Really Happened When Facebook Bought Instagram

#46

Post by dasil003 »

logicallee wrote: post #34
dasil003 wrote: post #27

Earlier quoted context omitted.

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

The portion you refer to is pocket change. Read http://www.dailymail.co.uk/news/article-2127882/Meet-OTHER-n... . and it becomes clear that the 18 employees were recruited mostly with equity. Hiring the quality of talent that we're talking about, in will1000's market, just doesn't happen with the kind of equity (e.g. 10% pool) that instagram was using - outside of silicon valley that is.

There is no mention of salaries in that article. It seems like you are a little bit jealous and rampantly speculating about this whole scenario.

Obviously with the trajectory Instagram was on it was much easier to hire with equity. I don't know what you mean about the "level of talent" though. There are hundreds of small teams with the talent level of Instagram both in and out of the valley, but talent does not guarantee traction. What makes Instagram extraordinary is a confluence of factors, not just an amazing team.

Re: What Really Happened When Facebook Bought Instagram

#47

Post by kybernetyk »

logicallee wrote: post #34
dasil003 wrote: post #27

Earlier quoted context omitted.

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

The portion you refer to is pocket change. Read http://www.dailymail.co.uk/news/article-2127882/Meet-OTHER-n... . and it becomes clear that the 18 employees were recruited mostly with equity. Hiring the quality of talent that we're talking about, in will1000's market, just doesn't happen with the kind of equity (e.g. 10% pool) that instagram was using - outside of silicon valley that is.

It would be interesting to know how they pitched the jobs to their future employees? If someone came to me saying "Hey dude, work for free and you get 5% stake in a photo sharing app for the iPhone. It's cool app. We have filters!" I'd show him the door.

So there must have been some "we know people at $comp and they will buy us out"-talk to convince people to work for free.

Re: What Really Happened When Facebook Bought Instagram

#48

Post by dasil003 »

logicallee wrote: post #42
jacquesm wrote: post #35

Earlier quoted context omitted.

> The portion you refer to is pocket change. You're currently running a company with in excess of 18 talented engineers without a viable income stream? And your payroll is 'pocket change'? > Hiring the quality of talent that we're talking about, in will1000's market, just doesn't happen with the kind of equity (e.g. 10% pool) that instagram was using - outside of silicon valley that is. Of course it does. You make so…

I'm a bit confused, we might have misunderstood each other. There's nothing to "back up" - I said that the most talented employees in the world, who can build a $1B company up in 18 months, will not do so outside Silicon Valley in exchange for a 10% employee equity pool, and a low base salary. Outside Silicon Valley they would only do so for a very high base salary.

Are you a foreign national who can't move to the valley? Because you certainly have an extremely distorted view of reality. People are not being hired with pure equity with the ease you seem to think. Also, I might add as the co-founder of a growing startup with offices in both Palo Alto and London, salaries are higher and competition for employees stiffer in the valley.

Re: What Really Happened When Facebook Bought Instagram

#49

Post by logicallee »

will1000 wrote: post #36
logicallee wrote: post #20

Earlier quoted context omitted.

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…

That was part of my point that Instagram would be less likely to work out outside of SV. This article helps us on the outside looking in understand how many things you have to have going for you other than just talent and a good idea to achieve the level of success Instagram has.

All right, that's fair. But people hugely underestimate the difference that employees willing to consider equity as serious compensation makes. It's the difference between being able to afford to change the world and not being able to afford to do that.

That is one of the biggest things about the valley.

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