What Happened After Instagram’s Acquisition

A Story about Growth Mentality and Originality.

Pictures of Mark Zuckerberg, Kevin Systrom and Mike Krieger (left to right) | Source: Fast Company

Introduction

Instagram, started with an idea of photo sharing application. Their focus was actually more towards the product, i.e. camera filters and users interactions rather than developing a social network. They have faced various challenges including investment shortage, lack of technical experts in the media field and developing a profitable business model. Jack Dorsey, the founder of Twitter was an angel investor to Instagram and had offered Kevin to buyout instagram. Kevin rejected Jack because he was longing for the autonomy and there is not any apparent synergies that could drastically benefit both companies.

Mark saw Kevin’s rejection to Twitter and began to approach in a more sympathetic way to pitch Kevin with an ideology saying Kevin is able to do what he’s doing currently, Facebook will not interfere in addition you can have my capital and human resources if you needed them. So the buyout was successful and at the time Instagram had only 30 million subscribers with zero dollar revenue.

Source: Techwyse.com

Post-Buyout

The difference between Kevin’s Instagram and Mark’s Instagram is Kevin treats instagram as a product whereas Mark treats instagram as a business.

Before Facebook’s intervention at Instagram, Instagram was simple and engaging. There were not a lot of advertisements and business profiles, where all the contents are from people that you followed. There were not a lot of notifications of mutual friends and page suggestions, pretty people treat instagram as a place to see what are your friends up to rather than building a network. There were not a lot of social influencers (KOL) or paid promotion contents, where the platform was intended to be entertaining, not in a commercial settings.

Disconnection

  1. Users are not longer able to see if the user has posted through Instagram from a Facebook post from the others
  2. A heavy amount of business profiles were incentivized and instagram ads penetrated user’s profile more often than before
  3. Facebook also inserted its brand into Instagram in order to cope with its fairly negative reputation towards public sentiment

Value Proposition Changes

Every user markets themselves like a brand and every brand markets themselves like a person.

Source: DKODING

Until Tiktok Kicks-in

Tiktok’s value proposition is much different than any other social media because its focus on customer experience in addition to its network has shortly made Tiktok the second most popular application with 800 million active user worldwide. Also it is also fair to say Tiktok users typically spend more time in Tiktok than on Facebook.

Source: Influencer Marketing Hub

The current Tiktok is like Instagram in the very beginning but instead of displaying photos, Tiktok utilize video-sharing application. With elements like Youtube (Copyrighted Music Rule), Facebook (Content Sorting Algorithm), Tiktok is so technologically driven and have a competitive advantage over Facebook and Instagram. However, the primary purpose of Tiktok is for entertaining purpose instead of communication, therefore it is not quite ideal to compare Tiktok with Facebook in a apple-to-apple scale.

Growth Mentality

Facebook is a great example of exaggerated growth mentality because of Mark’s growth mentality, he is less receptive to ideas that could potentially reposition in Facebook in a better way but cost Facebook some profitability margins. Moving forward, Zuckerberg will only continue to expand their core competency and get to innovate by acquiring startups. The brand loses value and provides more opportunities for new entrants to compete.

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