Instagram’s Co-Founders Step Down From Company; How it Rose into a Cultural Powerhouse

Instagram’s Co-Founders Step Down From Company; How it Rose into a Cultural Powerhouse

September 9, 2018

On September 24th Instagram’s co-founders, Mike Krieger (left) and Kevin Systrom (right), resigned from the photo app. Having presided over the company that boomed with help from technological advances and societal changes, their exits add to the challenges facing Facebook, which owns the app.

To truly understand the impact on business the leaving of their founders will have, you have to take turn the clock back to 2011 and look at how Instagram grew into a cultural powerhouse.

When Justin Bieber posted on Instagram for the first time in July of 2011, he did not enthrall his army of fans with a shirtless selfie or a meticulously planned photo shoot.

He just wanted to complain about Los Angeles traffic.

Out of focus. Mundane scenery. Not particularly artful. No matter. These were the early days of Instagram, before smartphones included cameras that could produce higher quality images than the point-and-shoots of yore.

Most celebrities now, some with tens of millions of followers, put far more care into what goes on the platform. Instagram has become central to their public images. The same goes for teenagers who just want to look cool, as well as everyone in between.

Before resigning on September 24th, Systrom and Krieger, presided over a company that grew into a cultural powerhouse. Along the way, they got help from technological advances and societal changes that demanded an app like Instagram.

The beginnings

Instagram was founded in 2010, but initially focused on location check-ins as an app called Burbn. Krieger and Systrom noticed early Burbn users were heavily using the app’s photo features, so they retooled it around sharing photos and changed the name.

It was, in many ways, the perfect time to release a photo-sharing app. Flickr, which had once dominated web-based photo sharing, was on the decline. Apple unveiled its iPhone 4, which had a five-megapixel camera, then considered a major leap. Anyone with less of a camera could apply Instagram’s easy-to-use filters to obscure any graininess.

Within hours of Instagram’s release, thousands of people had downloaded it. It passed one million users about two months later. In 2012, it had 40 million users. Now more than one billion people use it, and analysts expect continued growth.

Eighteen months after Instagram arrived, Facebook bought it for an eye-popping $1 billion.

A simple, staged stream of positivity

Instagram’s concept was simpler than those of competing social networks. It offered a stream of photos — and later videos — that were more often than not pleasant or artful. There were no heavy news stories or invitations to download new apps mucking up feeds.

As cameras improved in smartphones, so did users’ desire to share their photos. Instagram has weathered a challenge from its upstart rival Snapchat, partly by mimicking Snapchat’s popular Stories feature, which displays photos for 24 hours before they disappear.

Critics say Instagram offers a carefully staged version of everyone’s best life — which, in turn, can inspire nagging feelings of envy, or exhaustion at keeping up a facade, or a crushing need for approval, or a thirst for realness.

On the other hand … doesn’t this brunch look great? Isn’t this dog perfect?

For all the behaviors it inspires, the app has remained a primary way to keep in touch with friends, and maybe kill a minute or two in the line at the grocery store. It even works as a dating app.

Celebrities claim their own voices

While the growth was driven by everyday users, much of the app’s cultural clout comes from its utility to celebrities, who also have quite an interest in putting their best foot forward.

At first, the servers struggled to keep up when Mr. Bieber would post a photo. Now, instead of learning about stars through the probing questions of reporters, fans follow celebrities’ Instagram accounts to get a look at their personal lives — however highly scripted.

Met Gala attendees offer an inside look. N.B.A. stars have put their workouts on Instagram, giving eager fans off-season sustenance. The pope offers multilingual spiritual guidance.

A-listers like Beyoncé and Kylie Jenner announce pregnancies and births on the platform instead of magazine covers. Stars ensnared in scandal will post text or video statements and apologies before news sites can update their articles.

As much as it props up established celebrities, Instagram has also given legs to new ones. It has turned everyday users into paid “influencers” hawking brands, as long as they have enough followers. A high-profile Instagram account can rapidly be leveraged into professional opportunities.

But even those who have profited deeply from the platform say they need occasional respite. Selena Gomez, who at 143 million followers holds Instagram’s largest audience, said on Monday that she was taking a break from social media.

“As much as I am grateful for the voice that social media gives each of us, I am equally grateful to be able to step back and live my life present to the moment I have been given,” the pop star wrote alongside a blurry selfie.

The Challenge Moving Forward

Systrom, Instagram’s chief executive, and Krieger, the chief technical officer, notified Instagram’s leadership team and Facebook on Monday, September 24th, of their decision to leave, according to those with direct knowledge of the matter, who spoke on condition of anonymity to the New York Times because they were not authorized to discuss the matter publicly.

Systrom and Krieger did not give a reason for stepping down, according to the people, but said they planned to take time off after leaving Instagram. Systrom, 34, and Krieger, 32, have known each other since 2010, when they met and transformed a software project built by Systrom into what eventually became Instagram, which now has more than one billion users.

In a statement late Monday, Systrom said he and Krieger were “ready for our next chapter,” and hinted that they would create something new.

“We’re planning on taking some time off to explore our curiosity and creativity again,” Systrom said. “Building new things requires that we step back, understand what inspires us and match that with what the world needs; that’s what we plan to do.”

Mark Zuckerberg, Facebook’s chief executive, praised the Instagram founders in a statement and said that he wished them “all the best and I’m looking forward to seeing what they build next.”

The departures raise questions about Instagram’s future at a time when Facebook faces its most sustained set of crises in its 14-year history. For much of the past two years, critics have railed against Facebook for being careless with user data and for not preventing foreign interference across its network of more than two billion people. The issues have started taking a toll on Facebook’s business, with the company saying in July that growth in digital advertising sales and in the number of its users had slowed down.

Against those problems, Instagram has been one of the jewels of Facebook. The social network acquired Instagram in 2012 for $1 billion, when the photo-sharing site was used by around 30 million people. Since then, Instagram’s reach has ballooned and it has widely been seen as one of Facebook’s most successful acquisitions.

Facebook has lost other founders of businesses it has acquired. In April, Jan Koum, a Facebook board member and a founder of WhatsApp, the messaging app that the social network purchased in 2014, said he was leaving. Koum had grown increasingly concerned about Facebook’s position on user data in recent years, people with knowledge of the situation said at the time.

In Silicon Valley, reaction to the Instagram founders’ resignation was swift.

“Wow,” tweeted John Lilly, a venture capitalist at Greylock, calling the exits “a real moment.” He added, “What an impact they’ve had on all of us.”

Instagram was founded in 2010 and at first was a location check-in app called Burbn. Krieger, an enthusiastic user of Burbn, met Systrom at a Stanford University fellowship program and they decided to work together. Eventually, Burbn was retooled and renamed Instagram.

Instagram became popular in Silicon Valley almost immediately. The app heavily emphasized the use of a smartphone camera as iPhones were being widely adopted, turning everyday people into amateur photographers. Systrom and Krieger popularized photo filters and camera lenses, spurring a wave of copycat apps for the iPhone and Android-based smartphones.

The duo worked out of a small office in the South Park neighborhood of San Francisco. Instagram spent a lot of money in its early years just trying to keep its app online as its servers struggled under the constant stream of new user sign-ups.

Instagram eventually caught the eye of Zuckerberg, who realized how powerful Instagram’s nascent photo-sharing network would become, and saw the wealth of photo-sharing activity across his own social network. Zuckerberg handled the negotiations with Systrom and Krieger largely on his own.

Facebook purchased Instagram for $1 billion in cash and stock (though the final cost was closer to $715 million because the stock on which part of the deal was based declined in value). It was Facebook’s biggest acquisition to date, and came a month before the social network’s initial public offering.

“For years, we’ve focused on building the best experience for sharing photos with your friends and family,” Zuckerberg wrote in a blog post about the deal. “Now, we’ll be able to work even more closely with the Instagram team to also offer the best experiences for sharing beautiful mobile photos with people based on your interests.”

The deal immediately turned Systrom and Krieger into millionaires many times over. Instagram has since been valued at 100 times that $1 billion acquisition price by Bloomberg Intelligence; on paper that’s a sizable return on investment.

Facebook went on to purchase Parse, a service that provided tools for mobile developers, and Oculus, a virtual reality hardware start-up, branching into new areas beyond the original social network. Zuckerberg also spent $19 billion to buy WhatsApp.

But Instagram remained Zuckerberg’s main success story. As Facebook saw a threat in young people departing the network for Snapchat, a rival photo-sharing network, Instagram was quick to shift and recreate one of Snapchat’s key features of online stories. Since then, Instagram has surged further in popularity, while Snapchat’s growth has been inconsistent.

The departures of Systrom and Krieger create uncertainty around the app. It is unclear who will lead the company on the founders’ departures, and if that person can continue Instagram’s longstanding success streak. Marne Levine, who was previously Instagram’s chief operating officer, left her role at Instagram earlier this month to return to Facebook and lead partnerships.

Sources: The New York Times