UPDATED 12:21 EDT / JUNE 06 2012

The Evolution of Instagram’s Breakout Success

“We’re a bit disappointed here…We were aiming for $2 billion and they only gave us one…But, you know, sometimes s— happens.”  Although Instagram CEO Kevin Systrom kept a serious tone when offering this sarcastic response, he finally erupted in laughter.  It’s still unclear how Facebook will leverage it’s recent acquisitions and, despite it’s announcement of the Camera app, critics are unsure why Facebook paid $1 billion for a company with only one product, which it gives away for free.   What is certain, however, is that Instagram has been the breakout leader in artistic photo-sharing apps and mobile technology.  KISSmetrics details Instagram’s success by the numbers as of April 2012.

With over 1 billion Instagram photo uploads and more than 40 million users, Instagram’s user base grew 1600% in just one year.  Amidst the variety of free and paid apps offering similar functionality, Systrom believes Instagram’s democratic approach distinguishes it from the rest: “There’s this large network underneath where people can connect and follow inspiring photographers and friends around the world…[it] really democratizes attention: everyone from celebrities to a random guy in Japan taking pictures of his dog every day can get many thousands of followers. Taking images is the great equalizer.”

In less than a year, Instagram acquired 5 million users that uploaded 200 million photos.  For Flickr, it took almost 2 years to reach 100 million. Still, Instagram is not only a pioneer in the photo-sharing sphere, but the mobile tech, in general.  100,000 users joined Instagram only one week after it’s iPhone app launched.  For Foursquare, on the other hand, it took seven months to gain 60,000 users.  Near the end of Instagram’s first year run, it totaled 14 million users and was named the iPhone app of the year.

In 2011, Instagram had raised $7 million in a Series A funding round, by 2012 it raised $50 million in Venture Capital.  A few days later, Facebook made it’s billion-dollar purchase.  Putting the valuation in perspective, KISSmetrics notes that Kodak, the over a century old American brand, had a valuation of only $77 million in April 2012.

It’s no doubt that celebrity users like Justin Beiber, and companies like National Geographic, helped raise Instagram’s profile throughout the world.  Still, Systrom attributes the company’s success to age old-wisdom about customer satisfaction.  “Some people have maybe over-stated the value of getting celebrities and brands from the start. If you focus on producing a great experience for anyone, that’s how you get big.”


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