Instagram's Start-Up Secrets

PALO ALTO, United States — Instagram rocketed from launch to $1 billion acquisition by Facebook in only 18 months. At the time, the company had just 13 employees, working from a small space in the South Park area of San Francisco, but had managed to acquire 30 million users (including many of fashion's die-hard social media holdouts) with a simple, focused and joyful app that let people quickly take, beautify and share square-shaped photos.

Today, Instagram has added video to its offering and grown a community of more than 150 million monthly active users spread across the globe."We think of our user base as a community of people contributing to the larger vision of capturing and sharing the world's moments," Instagram's co-founder and CEO, Kevin Systrom, told BoF. "Right now, we define photos and video as the basis for a moment, but that doesn't mean you can't add the location of the moment, the time of the moment, who you were with, who is in the photo — all these storytelling outlets, I think, are very important for Instagram. When I say moment, a synonym you could use is story. I mean we really are about storytelling through a visual medium."

Given the app's rapid-fire, visual nature, perhaps it's not entirely surprising that no other sector has embraced Instagram with more energy and enthusiasm than the highly visual, fast-paced fashion industry. In fact, it often seems like the entire fashion ecosystem is active on Instagram, from first-mover mega-brands like Burberry and pioneering imagemakers like Nick Knight to models-of-the-moment like Cara Delevingne and fast-scaling retailers like Nasty Gal, which has used the platform to develop a uniquely powerful connection with its loyal customer base of "bad ass girls."

“It does kind of surprise me, but at the same time it makes a lot of sense. If you look at a newsstand, something like two-thirds of the magazines relate to fashion or beauty. I think that Instagram as a visual platform just fits very naturally with how the fashion community communicates its work,” observed Systrom.

“When we find natural partners in fashion, we find that they produce great content, our users love watching it and viewing it — and it’s this natural cycle, this positive feedback loop: the more people love seeing content on the platform, the more they use it, the more they post and the more other brands want to be on it as well,” he added. “Our goal is to capture and share the world’s moments and if we can bring all these people together, starting with fashion, I think we will end up capturing and sharing far more moments than we would have otherwise.”

Tellingly, some emerging designers say getting their pieces on celebrity Instagram accounts is a more powerful driver of sales than being featured in the pages of established fashion magazines. So does Instagram have plans to experiment with e-commerce? “Um, definitely thoughts,” said Systrom. “But I think Instagram is such a general platform — I mean we have students, cooks and chefs, people who make crafts, photographers — that focusing on a specific retail product feels a little early in our lifecycle. That being said, we see the natural fit for it going forward and I think if there is a way to build products to allow companies to express their products to their consumers, then we are going to end up working on it. But right now there is so much opportunity in branded moments that that is what we are going to focus on.”

Michael Kors ran Instagram's first ad back in November 2013, earning the brand 218,000 'Likes' (a 370 percent increase over the average of the company's previous five posts) and over 33,000 new followers (16 times more than usual) within the first 18 hours, according to Instagram marketing analytics platform Nitrogram.

In recent years, the global fashion industry has seen an explosion of digital innovation. Large sums of venture capital have poured into young fashion-tech companies with business models ranging from social commerce to collaborative consumption. Valuations have been sky-high. But with the exception of early e-commerce pioneers like Net-a-Porter, Yoox and Asos, there have been very few big exits. What’s more, few fashion-tech companies have achieved the kind of exponential growth and stickiness that most consumer Internet start-ups aim for.

So how was Instagram able to achieve such astounding results in such a period of short time? And what lessons can fashion-tech start-ups learn from its phenomenal ascent?

“I am not sure if it is one single thing rather than the interplay of a lot of different variables,” said Systrom. “In my experience, the best apps in the world solve problems for people — and, often, they are problems that are uniquely solved by that application or that business.”

BoF spoke with Kevin Systrom to identify the secrets to the company’s remarkable success.

TAP INTO YOUR PASSIONS

“No-one wants to pull all-nighters on ideas that they don’t really care about. For me, photography has always been a passion of mine. I love the nature of visual communication and I believe that it’s the next generation of the way we are going to communicate, rather than just text or audio. I believe that Instagram could be at the forefront of it. If you look at my Flickr account — say in 2007 — there are photos on there that are square cropped, filtered, just the way that Instagram does, but I was doing it manually in Photoshop. What I did was take my passion and programmatise it and release it to the world with the correct set of ingredients around it.”

SOLVE A PROBLEM WITH LASER-LIKE FOCUS

“In my experience, the best apps in the world solve problems for people — and, often, they are problems that are uniquely solved by that application or that business. I think it is really important to stay clear with your users about what you are trying to solve. People don’t just want more features, people want strength in the features that solve their problems. When you hypothesise too much, or don’t go towards a solution that solves a user problem, then I think you get stuck. If you just listen to users, and listen carefully, and interpret it correctly you will build the right thing. What makes us successful? I think it is the user-centric, problem-centric focus of the product development.”

PIVOT QUICKLY & DECISIVELY

“What a lot of people don’t know is that we were working on a different idea before Instagram, a social network which let you check in and add photos. But it wasn’t quite clicking with people. It was fine, but it wasn’t quite clicking. Instagram really, really worked. It was about watching what users did and what they loved. Far too many companies stick to their initial idea. But in product development, you need to move quickly, while challenging your assumptions. We threw away stuff that didn’t really matter and we doubled down on stuff that people told us mattered. We followed the trail. And by following the trail and blazing new ones — that is how you end up succeeding.”

DELIVER A BEAUTIFUL & USABLE EXPERIENCE

“I think visual design matters a lot — it is necessary, but not sufficient. There are plenty of apps in the world that are really poorly designed that people love. There are websites that are this way as well. In fact, there are some websites that are kind of known for not being that beautiful and they work very well. I think design is far less about aesthetics and far more about usability and experience, and the best designers in the world can do both: deliver usability and make it beautiful. But I mean, I think for Instagram, being such a visual platform, it required us to put a lot of thought into how beautiful and usable the app was.”

TAKE OFF LEAN

“In the beginning, keeping it lean was pretty important for the stage of growth that we were at. We were a single platform; a small group of really talented engineers tackling big problems. But you only stay lean for so long. It’s kind of like being in an aeroplane. You stay low when you take off to gather speed, but you can only stay low for so long, because you are bound to hit something like a tree. You have to take off at some point. I think our goal was to stay low and gain enough speed, then really gain the momentum and gather enough users to take off and branch into different areas.”

PICK THE RIGHT PARTNER

“It was really about Mark [Zuckerberg]’s commitment to building out a social future: the idea that a company could create different ways for people to connect and make the world more open. Fundamentally, they were committed to the same mission we were committed to and I think that partnership just made us both stronger. There are a lot of companies where it wouldn’t have made sense. There are many acquisitions where media companies buy up social companies, for example, and it never really mixes well. But when a social company and a social company come together with different ways of approaching the same mission, that is when you end up getting the value of bringing two things together.”

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