Instagram's Rise: Secrets and Costs

Source: Dev.to

Book Details

• Title: The Inside Story and Price of Instagram’s Rise – And How It Changed Culture, Business, Technology, Media, and Each of Us
• Subtitle: And How It Changed Culture, Business, Technology, Media, and Each of Us
• Alternative title: (No Filter: The Inside Story of Instagram)
• Author: Sarah Frier
• Translator: Yu Weida
• Publisher: Facebook
• Publication Date: 2020‑11‑26
• Language: (unspecified)

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Preface

This is the second book I’ve read this year. I was drawn to it after hearing the introduction on the 87th episode of the “Star Rocket” podcast — the episode’s discussion was so compelling that, even after more than an hour of listening, I still felt the urge to buy the book and read it carefully.

The book chronicles the rise of Instagram, which Facebook acquired for $1 billion in 2012. Although the acquisition was initially presented as a move that would allow Instagram to continue operating independently, Facebook’s growing influence eventually led to significant interventions. As Facebook users migrated to Instagram, the platform’s culture shifted, culminating in the departure of founder Kevin Systrom from the company. The narrative offers a detailed look at how Facebook integrates acquisitions and the challenges that arise.

Reference Links

• Star Rocket Podcast – Episode 87 – “1 Billion Worlds: The ‘No Filter’ Entrepreneurial Story of Instagram”
• Instagram Wikipedia page

Content Summary and Thoughts

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Founded in 2010, Instagram rose in just a few years to become the second‑highest‑engagement social media platform in the world, trailing only Facebook. More than 1 billion people use Instagram each month, with 500 million daily active users and over 100 million photos and videos uploaded every day. In 2019 its advertising revenue hit $20 billion, dwarfing YouTube’s $5 billion.

Key questions

• How did the unconventional Silicon Valley duo—Kevin Systrom and Brazilian engineer Mike Krieger—build Instagram with “counter‑intuitive” decisions, spark explosive growth in just 18 months, and attract Facebook CEO Mark Zuckerberg to acquire it for $1 billion?
• What price has Instagram—and its users—paid for that legendary success?

Chapter List

1. Chapter 1 – Plan
2. Chapter 2 – Successful Chaos
3. Chapter 3 – A Surprise
4. Chapter 4 – A Summer Full of Uncertainty
5. Chapter 5 – Moving Fast, Breaking the Rules
6. Chapter 6 – Comprehensive Domination
7. Chapter 7 – New Celebrity Class
8. Chapter 8 – Pursuing the Value of Instagram
9. Chapter 9 – Snapchat Crisis
10. Chapter 10 – Self‑Inflicted Slaughter
11. Chapter 11 – Another Fake News
12. Chapter 12 – CEO
13. Epilogue – The Price of Acquisition

Overview

• Early focus: Simple photo‑sharing and filter tools.
• Growth lever: Easy sharing to Facebook and Twitter accelerated user adoption.
• Differentiation: Unlike Facebook’s broad social network, Instagram centered on photography, speed, and a user‑first experience.

Acquisition by Facebook (2012)

• Instagram remained operationally independent after the purchase.
• While Facebook’s core business relied on its own ad platform, Instagram proactively courted advertisers, offering exclusive suggestions and deals.
• This strategy attracted advertisers who were previously skeptical of Facebook, expanding Instagram’s ad inventory without making users feel they were “just another Facebook product.”

Strategic Impact

• New features helped Facebook neutralize competitors (e.g., Snapchat) and push its user base past 1 billion by 2019.
• Instagram’s revenue grew to ≈ 25 % of Facebook’s total revenue.
• Many younger users mocked “old‑fashioned” Facebook users, yet they were still part of the same ecosystem.

The Hidden Costs

• Instagram’s rapid rise cannibalized Facebook’s own user growth, prompting Facebook’s senior leadership (Growth‑Hacking team) to restrict traffic from Facebook to Instagram.
• The promised “independent development” never fully materialized, contributing to the founders’ departure in 2019.
• Roughly 20 % of the book examines the sacrifices and struggles behind the success story—the price of agreeing to the acquisition.

Thoughts

I think that everyone in start‑up companies hopes their business will eventually be acquired by a larger firm. However, few consider that many valuable services are deliberately kept small and are bought by competitors through defensive acquisitions.

For example, when Facebook acquired Instagram it didn’t shut the platform down or fully integrate it immediately. Instead, Facebook allowed Instagram to continue operating independently, which helped it grow to over a billion users. Because many people dislike Facebook, they migrated to Instagram—often without realizing it was now owned by Facebook. This is why many argue that Facebook’s acquisition of Instagram is the most worthwhile acquisition of the past decade.

The book also makes it clear that after an acquisition:

• Not everyone can instantly rise to the top or own millions of dollars in assets.
• Acquisitions often only absorb engineering talent into the parent company.
• Employees may receive cheap stock‑option opportunities, but they can’t always convert those into cash at a favorable price.
• Resource‑allocation conflicts frequently arise between the parent and the subsidiary, leading to the “功高震主” (over‑achieving and threatening the parent) problem.

Instagram’s story, as described in the book, illustrates how the acquired company can face intense scrutiny and intervention from its new owner. These real‑world insights are rarely presented so clearly elsewhere, making the book highly recommended for anyone working in the start‑up ecosystem.