3 reasons why Instagram is worth $1b

The Instagram digest:

1. Simple business model: photo sharing from the iPhone
2. With a twist: organize photos across users by tags (like Twitter)
3. Perfect user experience: easy to use, fully integrated, no bugs
4. Use off-the-shelve technology: Amazon cloud, Ubunto, Postgres, and other open source
5. Hire the right effective team
6. Nurture the network effect
7. Move fast, spent lots of money, and do not worry about a revenue or profit model

The last item is a lot like in the old dot-com days. Building size by moving fast, spending lots of money, without having a viable revenue or profit model still appears to work well in the “craze” areas like social. This is a bit against the general business 3.0 trend of companies moving slower with solid business models.

Why did Zuckerberg spent $1b for less than 10 developers and generic software and a business model which is neither new nor unique nor easy to protect? Well, this is a very good question. Here are some guesses:

1. People are tired of Facebook. Facebook is mainly photo sharing. Mark was scared that his fad is ending and people shift to the next shiny thing.
2. Nice PR ahead of the IPO. $1b does not hurt them much and for sure gets them attention.
3. Wants to move lightspeed on better mobile integration.

Here is a good summary on Instagram's technology.

Comments

[Tablet PC]

so noce

[flat]

nice