An Open Letter To Those Not Employed At Instagram

Actually, Facebook was first. They've been calling themselves the biggest & best photo sharing app for quite some time now; long before Instagram existed. By this Author's logic, Instagram shouldn't have bothered.

Being first is good, but being great is better. That was the motivation behind the Mac OS, the iPhone, the iPad, etc, right? None of those things were the first in their categories.

Corporate inertia, difficulties finding key decision makers, the start-up stigma (no big company wants to be reliant on a start-up that might not be around in a year's time.)

These roadblocks make it difficult for enterprise-focused start-ups to diagnose lack of traction. Is it product? Distribution? Market?

These issues aren't as pronounced in consumer internet start-ups. The end-user is your target (not some manager who will never use/understand the product), and fortunately around here, users are willing to try most anything. Think of how many apps you have downloaded that you don't use anymore.

Start-ups are inherently hard, and each market has its own set of challenges.

I'm genuinely surprised to see it writ here about a photo-sharing app.

And from the author's viewpoint (Instagram is just "a few filters [...] a few sharing options") Instagram wasn't first either; Hipstamatic was doing the same thing way before them, with a different business model.

I will start from the middleman market. Middlemen are all about information asymmetry. i.e. someone knows something that others don't. The knowledge freedom that the Internet provides largely destroyed the asymmetry (knowledge gap). It is no secret that now you don't need a middleman to "brand" your music/film/video game. Instead, the leverage of social network (Twitter, Facebook, reddit etc.) enable one to market himself directly or at lower cost. That's why currently music/movie industry is under attack from two sides, both the production and the consumption. They can control neither. And this is the death of middleman market.

The same analogy can apply to enterprise market. Traditionally, it requires a long cycle to negotiating and shipping product to selected few big corps. At that case, the leverage is "information asymmetry" as well. That's why you cannot find a price quote on IBM's supercomputers, or any enterprise software/hardware. But, it is transforming too. The ubiquitous openness and flatness provided by the Internet making such man-made "information asymmetry" useless. And traditionally "consumer-facing hardware/software can penetrate enterprise market as well. That's why RIM is losing in enterprise market to Apple, and that's why Intuit is taking over accounting software market.

P.S. I am considering product for small businesses as consumer-facing product as well since it serves sufficient many customers comparing to traditionally-defined "enterprise market".

Perhaps a more direct message from this article could have been: "Just because you target consumers doesn't mean you can avoid solving an important problem". Consumer products fail for the same reason enterprise ones do: their products are not important to anyone.

It's kind of like American Idol or X Factor; yeah there is a small chance of making it big, but most realise that the competition is tough and monetising startups can be very hard. Not like that is anything to worry about when being bought out, so it seems...

But great companies exist despite "intellectual property" (another loose term), not because of it, especially in the realm of software - i.e. it simply is not the driving concern for creating either a great enterprise or startup! Think about it...

The author also seems to have completely ignored disruptive technologies and applications of them, i.e. it is not about being first for the sake of it - look at Xerox etc.

I don't think instagram is completely invulnerable to the market. As a user of it, I'd happily adopt a different service that did the exact same thing better, and I don't think I'm alone. So in that sense, this article misses the mark. But I'd rather read this article than one that tells people they can do it too. It's a once-and-a-lifetime valuation. The service itself may be reproduceable but the results far from it, and in that vein the article speaks the truth. Your time is better spent elsewhere.

Before, I'll say first to execute well wins. But I thought DailyBooth did well.

Maybe they did not take mobile as very important?

Or did the VCs who own Instagram also own Facebook and so just moved some numbers from one cell in a spreadsheet to another - netting themselves huge amounts of publicity before the Facebook IPO (and probably a tax break somewhere)

first in what? first in photo sharing or first in image processing?

first in what?

Also: Articles like this is why TC stinks.