It’s the dream of any startup: selling your company to Facebook for a cool $1 billion. But back in 2012, critics balked at the price tag. Why would Mark Zuckerberg spend that kind of money on a social network with only 30 million users?
Six years later, it’s obvious that Zuckerberg’s big gamble paid off. While Facebook usage is declining, Instagram is growing rapidly. By 2020, experts predict that Instagram will overtake Facebook.
From David to Goliath
What did Facebook see in the fledging startup? Instagram didn’t have better technology or even a better idea. The startup went viral by focusing on a few key features and doing those really well.
In the digital age, millennials were hankering for a slice of nostalgia they never really experienced — the square-shaped Polaroids that populated their parent’s family albums. Tapping into this need, Instagram developed a series of filters designed to make modern photos look like vintage snapshots. And thus, the hashtag #nofilter was born.
For modern companies like Instagram, success no longer comes from being bigger and focusing on the pieces, but by being faster and focusing on the big picture. This is the fundamental advantage of velocity. Big, fragmented companies aren’t beating small ones; fast, integrated companies are beating slow ones.
Goliath Loses Momentum
Launched from Mark Zuckerberg’s dorm room in 2004, five years later Facebook was transitioning from collegiate fad to global empire. How could it appeal to baby boomers and still maintain its youthful cool?
Facebook was trying to do it all. It wanted to be a social network for families, close friends and acquaintances. And a source for professional networking, news sharing and even selling old furniture. It was LinkedIn, Craigslist, USA Today and Myspace all wrapped into one.
With so many purposes and so many audiences, Facebook lost its quintessential cool, and lumbered under the weight of a vast array of stakeholders — in the boardroom and beyond.
While Facebook struggled to break free of its numerous growing pains, a nimble little app named Instagram focused on one thing and did it really well — sharing square photos with cool filters.
Instagram Takes Off
Despite its singular beginnings, Instagram has been able to branch out and even monetize its features like Stories and IGTV.
It’s become a hash-tagging kingdom — giving brands and influencers a way to connect with followers and share photos, videos and products.
Instagram feels like the next generation of Facebook. A mobile-first platform, Instagram was built for the way people use their phones. It feels less cluttered, more positive and more curated.
Improving on features lifted from rival Snapchat, Instagram’s success comes from staying true to what it is — a photo sharing service in an age where smartphones and selfies are omnipresent.
In order to grow at breakneck pace, Instagram analyzed and eliminated bottlenecks and maximized its opportunities for growth.
Instagram’s cofounders realized their primary hurdle to growth was sluggish decision making. To combat this lost velocity, they began holding meetings where they made a bunch of decisions at once.
And to accommodate the 80 percent of Instagramers who live outside the U.S., the company worked tirelessly to improve the efficiency of its Android app.
Millennials and Gen Zers are abandoning Facebook and flocking to Instagram. But with Facebook in the driver’s seat, and Instagram’s cofounders leaving this year, there’s no telling where the social media company will go next.
Future growth in the social sphere will undoubtedly be affected by Facebook’s dominance. Mark Zuckerberg either owns or has cloned the 8 social apps he cites as competition.
Still, as of August 2018, Instagram has 1 billion active users, compared to 800 million in September 2017 and 600 million in December 2016.
This year Instagram is expected to generate $5.5 billion in revenue, and the photo-sharing platform will account for 40 percent of Facebook’s ad revenue by 2020.
So, when it comes to success, Instagram proves that bigger isn’t always better. Whether you’re a startup or an established company, velocity is all about capitalizing on speed and direction.
It’s getting the right people involved at the right time. To learn how you can accomplish more by doing less, contact us and see what The Velocity Advantage can do for you.