In June 2014, two years after Facebook bought Instagram, I visited Instagram cofounders Kevin Systrom and Mike Krieger to see how things were going. They were exceedingly, outrageously happy. “When acquisitions are on the docket, I think entrepreneurs look to Instagram to say, ‘How’s it gone for them?’” Systrom told me at the time. “We’re just kind of a storybook example.”
In September 2012, when Systrom and Krieger had first brought the team to Menlo Park, the whole hasty acquisition seemed a little crazy. Back then, the billion dollars that Facebook had agreed to pay for Instagram seemed like an outrageous sum of money. Especially for a small photo-sharing application with just 30 million monthly users. Especially when the acquiring company had just gone public four months earlier, and was off to a rocky start. Why would Instagram, a promising startup, sell so early, people wondered. And would Facebook, either accidentally or on purpose, kill it?
“When acquisitions are on the docket, I think entrepreneurs look to Instagram to say, ‘How’s it gone for them?’”
But quickly life inside Facebook became an engine of growth for the company. Namely, advertising took off. In 2016, Instagram launched a “Stories” feature that worked exactly like Snapchat’s feature, and stunted its largest competitor’s growth. Instagram will generate close to $8 billion in ad revenue next year, according to eMarketer. Snapchat, by contrast, is predicted to bring in just $921 million. Earlier this year, Instagram announced that it had finally hit a billion users worldwide.
So no one should be surprised that, nearly eight years into Instagram’s existence, its founders are leaving.
It might seem odd that the two are setting out at what seems like the peak of Instagram’s meteoric rise. But Systrom, in particular, has always had a knack for timing. In college in 2005, he told me, he’d been offered a job at Facebook, and turned it down to finish school instead. For most, forgoing a slot on the Facebook rocketship might have been a career-ending error. But in hindsight, by passing the first time, he was able to prepare for his second interlude, one with far greater opportunity. He’d stayed in touch with Zuckerberg while he and Krieger were building the application that eventually became Instagram. “I mean, the Valley consists of like 50, 60 people, it feels like, right?” he told me. “It’s a very small world.” As the nascent app was taking off, he ran into Zuckerberg at a party at former Instagram board member Matt Cohler’s house.
In the weeks that followed they continued to talk, and that’s when the timing aligned. Instagram was already growing quickly, but Systrom and Krieger believed Instagram could be very big—a billion-person service, someday. To get them there, the pair knew of exactly one social technology company that had mastered the process of building a billion-person social network. You can guess which one.
Both Krieger and Systrom anticipated that, by selling to Facebook, they could offload the harder, less exciting parts of growing their company—things like recruiting enough engineers, onboarding and building infrastructure for a host of new users, and interfacing with lawyers—while doubling down on the parts they loved most: namely, building products. In September 2012, the acquisition closed and Instagram’s 15-member team reported for work in Menlo Park, taking up residence in a cavernous room with a large glass garage door.
At first, everyone was a little nervous. Facebook didn’t yet have a model for a buying a company that they would allow to run independently. “You take a company that has an identity and you move it into a different context,” Systrom said. “I think there was a lot of apprehension.” But right from the start, Systrom wasn’t concerned at all, he told me. “Mark and I were always very aligned. We just wanted to create really cool stuff together,” he said.
And they did. By June 2014, their service had grown 666 percent, to 200 million monthly users. They invited me to spend the afternoon flying drones above the Stanford campus and taking photos to post on Instagram. (#Dronestagram) While we hung out, the duo explained how they were trying out new features like videos and private messaging. They were just beginning to introduce advertisements, and Systrom still personally reviewed every ad that went up. Their personal reputations were on the rise, particularly among artists and celebrities who were taking interest in the platform. Thanks to what they perceived to be a savvy link-up with Facebook, the skies were cloudless as far as they could see. “I think getting acquired is interesting, but it’s kind of a footnote in history,” Systrom told me. “I mean you end up just like having different investors, effectively, if it’s run the way we are run, which is pretty autonomously.”
This was particularly notable because earlier that spring, Facebook had agreed to pay $19 billion for WhatsApp and, shortly after, $2 billion for Oculus. Those acquisitions had yet to close, and Facebook hoped that Instagram’s successful integration could prove to be the model for a strategy that would allow Facebook to build a portfolio of apps. Systrom, in particular, had high hopes for this plan. He explained to me that Facebook would help with the parts it was best at. “You know, like potentially someday with WhatsApp, there’s a set of services that Facebook has built that I think can scale a company that comes in.”
Six years later—a generation in social networking years—it should come as no surprise that the founders, finally, are moving on. For one, this is what happens at tech startups. As Noam Wasserman, founding director of Founder Central Initiative at the University of Southern California’s Marshall School of Business, wrote in The Founder’s Dilemma, 60 percent of founders have left their companies after four years. Sure, most of those founders didn’t create a fast-growing startup like Instagram, in the midst of a founder-friendly Web era, but make no mistake: Krieger and Systrom certainly didn’t leave early.
Six years later—a generation in social networking years—it should come as no surprise that the founders, finally, are moving on.
But Instagram’s founders have always been masters of timing. Instagram is a beloved social media property within a company that is under pressure from every direction. Yes, we might lump in Instagram’s founders’ departure with criticisms that WhatsApp cofounder Brian Acton leveled against Facebook this week in Forbes, voicing concerns that the company was overreaching. But WhatsApp and Instagram’s relationships with Facebook stem from radically different origins. While Acton disagreed from the get-go with Zuckerberg’s ideas for how WhatsApp should grow, Instagram’s founders were largely in sync with the social media giant. Only recently did Instagram’s founders share concerns that Facebook is throttling the photosharing app’s growth in service to its own app.
But regardless of whatever tension exists inside the closed doors of Menlo Park—and even if Systrom and Krieger retained the same cheery relationship with their acquirer they’d had in the partnership’s early days—they’d still be smart to leave.
Social media properties can often be like nightclubs. They’re cool while the cool people are there, and they disappear without leaving a trace. Right now, Instagram’s party is still going strong, and its founders are smart enough (and cool enough) to know you should never be the last people to leave a party. Their reputations are cemented: They’re iconic and very young founders who have a long future in front of them. Facebook paved them this golden path.
Social media properties can often be like nightclubs. They’re cool while the cool people are there, and they disappear without leaving a trace.
By leaving now they’ve assured themselves a promising future. If Instagram continues to grow and change and become something even more important—and enriching—than it is, Systrom and Krieger will always be able to take credit for its existence. If, on the other hand, Instagram experiences the inevitable decline that so many of its peers have faced (remember MySpace? Friendster? Flickr? Snapchat…) it won’t happen on their watch.
Timing, it turns out, is everything in startupland. And Instagram’s founders have proven themselves masters at it. Again.