Last night, the tech-twitter was lit-up by the shocking news that Instagram co-founders Kevin Systrom and Mike Krieger have put in their papers and are leaving the company that bought them for a billion dollars — Facebook. They aren’t the first founders to sell their company to Facebook and then eventually leave the company. Whatsapp and Oculus founders too left the company after spending considerable time under the aegis of Mark Zuckerberg. Mike and Kevin, too are leaving under a shroud of disagreement with Zuckerberg, if media reports are to be believed.
.@instagram helped me find my path when it came to photography and for that I will always remain grateful to @mikeyk Kevin Systrom & their team. I hope life gives them peace and happiness. Have fun and do something magical again!
— OM (@om) September 25, 2018
This shouldn’t come as a surprise to anyone. It is common knowledge among those of us in the know that Zuckerberg has become more and more hands-on with Instagram, which has become increasingly crucial to Facebook and its growth prospects. Zuckerberg’s growth objectives and desire to appease the gods of growth are almost universally at odds with other people including the founders whose companies he bought for handsome premiums and enriching them in the process. $20 billion for Whatsapp. $2 billion for Oculus. $715 million for Instagram. Everyone got paid in those acquisitions — and now it is time for Facebook to call in their chips.
Facebook, has become a bit of pariah in the minds of the people and has been looking for a good news story. It needs an untarnished brand like Instagram. And as Sarah Frier pointed in her piece today on Bloomberg, Facebook mentions Instagram way more often on its earnings calls these days.
Frier adds, “In the most recent call, Zuckerberg explained that Instagram grew twice as fast being part of Facebook as it could have on its own, a statement that many Instagram insiders felt was unnecessary and unprovable.” Some analysts estimate that Instagram will bring in about $20 billion in revenues for Facebook in 2020. With founders gone, I bet that number balloons.
Instagram was tiny and had only 10 million members at the time of its acquisition. Yes, it was growing fast. Yes, it was a deal of a century for Facebook. But also let’s face it — by turning down Facebook, they would have faced the same future as is being faced by Snap. Anyway, we won’t know, will we?
Founders (Mike and Kevin) have a parental attachment to their product and how they perceive the product should evolve — but in the end, as we have learned time and time again, at Facebook, there is one king. And there will always be one king,
September 25, 2018, San Francisco
From the archives, my posts about Instagram and Facebook.
April 2010: Instagram and me, love at first sight
April 2012: Here is why Facebook bought Instagram.
June 2013: What makes Instagram such a steal for Facebook.
July 2018: Companies, like people, don’t change.