Despite being publicly traded, Facebook is wholly under Zuckerberg’s personal control and perhaps he simply doesn’t care (in fact, good for him for not caring). Then from the Facebook viewpoint, they bought Instagram right before an IPO that made Mark Zuckerberg a lot of money and since the IPO the stock is down 30 percent while the broad market has soared. Competing against cheap, fast startups is hard for any entrenched incumbent, but it’s downright impossible when the startup is able to operate with total disregard for revenue. But how could it have worked for Yahoo? It’s like a funhouse mirror version of the innovator’s dilemma. They were a small startup, so the “burn some VC money growing a free service as fast as possible and then sell it to make the revenue issue someone else’s problem” would have worked for them. But looking back, it’s clear that Hipstamic made a mistake. Hipstamic the company is still out there, pivoting to new products and it’s a good team and I wish them well. This was a successful product in its day, but it ultimately proved less popular than a similar product that you could use for free (surprise!). That’s why they didn’t do it.īefore Instagram really took off, some of my friends who were more into photography were using Hipstamic a cool paid app that had social features and photo filters that were used to create award-winning pictures. Taking its existing photo service, Flickr, and adding to it a wildly popular but revenue-free mobile app would not have accomplished anything for the company.
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