billion look like in this new era? Fourteen twentysomethingsâthe entirety of Instagramâs head countâbanging away on keyboards in the companyâs small office in San Franciscoâs SoMa neighborhood. How fast does it take to get to $1 billion? In this case, twenty-two months, from idea to exit. And what kind of financial metrics equate to $1 billion? For Instagram, there were none. No revenue, no expressed way to get any. These kind of facts led many to conclude that Facebookâs $1 billion purchase, in 2012, was a sure sign of a bubble. In reality, it was one of the great deals of the Internet ageâby 2014, the company was likely worth $10 billion. Instagramâand its 200 million active users, who share 60 million photos a dayâoffered a seamless path onto mobile phones.
When Steven Bertoni sat down with founder Kevin Systrom, now thirty, for his first-ever in-depth profile, Instagram was in limbo. The deal was done, yet the check hadnât arrived and Facebook corporate minders were nowhere to be found. Systrom was in limbo, too. He knew he was about to be incredibly wealthy, but he was still living on a bootstrap budget. Perhaps outside the money, little has changed since: Systrom remains at the helm of the companyâwhich operates independently from Facebookâs Menlo Park campusâhis lean team of coders trying to scale, hopeful that the app can become the eyes of the world.
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K evin Systrom was working behind a hissing espresso machine at Palo Altoâs Caffé del Doge in the spring of 2006 when Facebook founder Mark Zuckerberg approached the counter with a puzzled look on his face. The previous summer Zuckerberg had taken Systrom to dinner at Zao Noodle Bar on University Avenue and asked him to ditch his senior year at Stanford to develop a photo service for his nascent social network, The Facebook. Systrom turned down the offer. Now Facebook, sans the âThe,â was worth $500 millionâen route to a valuation more than 300 times greaterâand making headlines. Systrom was making cappuccinos.
âI had been like, âNo, I donât want to work at this thing,â and here I am working at a cafe,ââ Systrom, then twenty-eight, told me over our $4.50 cups of artisanal coffee in the warehouse-like room of Sightglass Coffee in San Franciscoâs SoMa district. By opting to stay at Stanford he had turned down what surely would have amounted to tens of millions in Facebook options. âWorking at a startup to make a lot of money was never a thing, and thatâs why I decided to just finish up school. That was way more important for me,â shrugged Systrom. âIâm sure in retrospect it would have been a nice deal, but itâs funny where you end up.â
In Systromâs case, the place you end up is exactly the place you turned downâFacebook. But thanks to his Stanford detour, instead of eight figures, Systrom, by doing it his own wayâdeveloping the white-hot photo network Instagram, which Zuckerberg agreed to buy in 2012ânow stood atop a $1 billion score. The purchase price, which made Systromâs stake of 40 percent or so worth $400 million, is all the more shocking given that his startup had zero revenues and no revenue model. Instagram, just twenty-two months old, still had all of fourteen employees.
But what Systrom also hadâand which Facebook, at the time reeling after a choppy public debut, desperately neededâwas buzz, and a mobile platform that had prompted more than eighty-five million users to share four billion photos, with six new members joining every second.
âThis is the first thing Iâve seen that feels like itâs truly native to mobile,â said Matt Cohler, the former VP of product management at Facebook and current general partner with Instagram investor Benchmark Capital. âTo have scaled the product, the network of users, and the infrastructure behind
When Steven Bertoni sat down with founder Kevin Systrom, now thirty, for his first-ever in-depth profile, Instagram was in limbo. The deal was done, yet the check hadnât arrived and Facebook corporate minders were nowhere to be found. Systrom was in limbo, too. He knew he was about to be incredibly wealthy, but he was still living on a bootstrap budget. Perhaps outside the money, little has changed since: Systrom remains at the helm of the companyâwhich operates independently from Facebookâs Menlo Park campusâhis lean team of coders trying to scale, hopeful that the app can become the eyes of the world.
Â
K evin Systrom was working behind a hissing espresso machine at Palo Altoâs Caffé del Doge in the spring of 2006 when Facebook founder Mark Zuckerberg approached the counter with a puzzled look on his face. The previous summer Zuckerberg had taken Systrom to dinner at Zao Noodle Bar on University Avenue and asked him to ditch his senior year at Stanford to develop a photo service for his nascent social network, The Facebook. Systrom turned down the offer. Now Facebook, sans the âThe,â was worth $500 millionâen route to a valuation more than 300 times greaterâand making headlines. Systrom was making cappuccinos.
âI had been like, âNo, I donât want to work at this thing,â and here I am working at a cafe,ââ Systrom, then twenty-eight, told me over our $4.50 cups of artisanal coffee in the warehouse-like room of Sightglass Coffee in San Franciscoâs SoMa district. By opting to stay at Stanford he had turned down what surely would have amounted to tens of millions in Facebook options. âWorking at a startup to make a lot of money was never a thing, and thatâs why I decided to just finish up school. That was way more important for me,â shrugged Systrom. âIâm sure in retrospect it would have been a nice deal, but itâs funny where you end up.â
In Systromâs case, the place you end up is exactly the place you turned downâFacebook. But thanks to his Stanford detour, instead of eight figures, Systrom, by doing it his own wayâdeveloping the white-hot photo network Instagram, which Zuckerberg agreed to buy in 2012ânow stood atop a $1 billion score. The purchase price, which made Systromâs stake of 40 percent or so worth $400 million, is all the more shocking given that his startup had zero revenues and no revenue model. Instagram, just twenty-two months old, still had all of fourteen employees.
But what Systrom also hadâand which Facebook, at the time reeling after a choppy public debut, desperately neededâwas buzz, and a mobile platform that had prompted more than eighty-five million users to share four billion photos, with six new members joining every second.
âThis is the first thing Iâve seen that feels like itâs truly native to mobile,â said Matt Cohler, the former VP of product management at Facebook and current general partner with Instagram investor Benchmark Capital. âTo have scaled the product, the network of users, and the infrastructure behind
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