[...] it would have been very hard for them to get to the scale [...]
Without revenue you can say it would have been very hard for them to, you know, exist as a company for some period of time.
Without revenue you can say it would have been very hard for them to, you know, exist as a company for some period of time.
Same thing as being a programmer. MySQL isn't the correct DB for everyone, so it helps to know when it's appropriate and when it's not.
(And regardless, eventually you will need to make money)
If you manage to be sneaky with an exit strategy, you never need to make money as you bail with a ton of cash before that becomes neccessary.
And when things like Instagram come around, the amount of people making businesses purely with the motive of sneaky exit strategies starts to completely overshadow the amount of businesses created that are genuinely valuable.
Then things can get very messy.
But putting off revenue != built to flip. Having a ton of usage and figuring out how to make money is easy. Getting a ton of usage is hard. They are focusing on the hard problem first, and the easier problem second.
Here's evidence I have: Steve Anderson, one of Instagram's earliest investors and a board member, is also on our board. Just because they're not trying to make money on year 1 doesn't mean they weren't ever planning on making money.
In addition, if they wanted to build a large independent business why would the sell out so early?
What evidence do you have to the contrary?
Also, I never alleged that Instagram specifically was built to flip (although I can see little to suggest that it wasn't, although that is not the same thing), I merely pointed out that phenomena such as Instagram encourages a lot of people to enter the market with that as their motive, often enough to drown out other businesses. And that kind of behaviour was a major factor in the death of the last web boom.
Furthermore, the namedropping of someone you share a corporate interest with is generally an admission of probable bias and using it as an argument in favour of your position isn't particularly convincing.
That sounds more like faith based economics than anything else, of couse some of them must be doing this.
And offering a service for free at point of use can often be much easier than turning it into revenue later, especially if you have millions in the bank from investment already. There are plenty of stale corporate corpses littering that particular road, but with founders that did quite nicely out of it.