​​No Filter The Inside Story of Instagram by Sarah Frier

 ​​No Filter The Inside Story of Instagram by Sarah Frier

[A very interesting true story of Instagram; the patience & the perseverance of Instagram's main founder’s high artistic standard is equally scintillating.

Main actors:

• Mark Zuckerberg - While Kevin Systrom studying at Standford, Systrom was pleased to be recruited by Zuckerberg, who he thought was hyperintelligent, and even asked Systrom to drop out of school to join Facebook. But Systrom rejected that idea.

• Kevin Systrom - When he’d first applied to Stanford, he’d thought he would major in structural engineering and art history. He imagined traveling the world, restoring old cathedrals or paintings. His passion for photography eventually led him to his world-famous creation, Instagram.

• Jack Dorsey - Systrom went for an internship at Odeo which made a marketplace for podcasts on the internet and there he met Dorsey. Its CEO Evan Williams was already tech-world famous for selling Blogger, a blogging website, to Google. Dorsey & Williams later became founders of Twitter. Though Dorsey had initial reservations about Systrom, they become close buddies. Dorsey was very instrumental in popularizing Instagram during the initial phase by tweeting to his million followers.

• Mike Krieger. Gregor Hochmuth was Systrom's buddy at Stanford and was Systrom's first choice for co-foundering his Burbn app. Since Hochmuth was happy with his job at Google, he suggested his Brazilian international student at Stanford,  Krieger to Systrom.  Krieger thus became the co-founder of Burbn and eventually co-founder of Instagram.

• Marc Andreessen - Co-founder of Netscape who funded Systrom's Burbn app initially.

• Cole Rise - a local designer who created around 20 filters for Instagram, including the logo. One of the main filters is named after him the 'Rise' filter.]

Kevin Systrom imagined traveling the world, restoring old cathedrals or paintings. He loved the science behind the art, and how a simple innovation—like architect Filippo Brunelleschi’s rediscovery of linear perspective during the Renaissance—could completely change the way people communicated. The paintings for most of Western history were flat and cartoonish, and then, starting in the 1400s, perspective gave them depth, making them photorealistic and emotive.

Born in December 1983, he was raised, along with his sister, Kate, in a two-story house with a long driveway on a tree-lined street in suburban Holliston, Massachusetts, about an hour west of Boston. His energetic mother, Diane, was vice president of marketing at nearby Monster.com, and later at Zipcar, and introduced her children to the internet back when the connection took over the phone line. His father, Doug, was a human resources executive at the conglomerate that owned Marshalls and HomeGoods discount stores. Systrom was an earnest, curious kid who loved going to the library and playing the futuristic, demon-riddled first-person shooter game Doom II on the computer. His introduction to computer programming was creating his own levels in the game.

Photography was one of his longest-running personal interests. Ahead of his trip to Florence, the epicenter of the Renaissance he’d learned so much about, he saved up to purchase, after intensive research, one of the highest-quality cameras he could afford, with the sharpest lens. He intended to use it in his photography class. His teacher in Florence, a man named Charlie, was unimpressed. he took the prized purchase away into his backroom and returned with a smaller device, called a Holga, that only took blurry, square black-and-white photographs. It was plastic, like a toy. Charlie told Systrom he wasn’t allowed to use his fancy camera for the next three months, because a higher-quality tool wouldn’t necessarily create better art. You have to learn to love imperfection, he instructed.

The idea—of a square photo transformed into art through editing—stuck in the back of Systrom’s mind. More important was the lesson that just because something is more technically complex doesn’t mean it’s better.

Systrom needed a startup internship as part of the Stanford Mayfield Fellows Program he’d been barely accepted into. Systrom read in the New York Times about a trend in online audio and saw mention of a company called Odeo, which made a marketplace for podcasts on the internet. That’s where he decided he wanted to intern.

Jack Dorsey, a new engineering hire at Odeo, was expecting to dislike the 22-year-old intern he had to sit next to all summer. He imagined that an exclusive entrepreneurship program and an elite East Coast boarding school were both sterile, formulaic places and that a person shaped by them might be devoid of creativity. To Dorsey’s surprise, he and Systrom became fast friends.

Later that year, Systrom built something called Burbn, after the Kentucky whiskey he enjoyed drinking. The mobile website was perfect for Systrom’s urban social life. It let people say where they were, or where they planned to go so their friends could show up. The more times a user went out, the more virtual prizes they got

In January 2010, determined to make his pitch and justify quitting Nextstop, Systrom headed to a party for a startup called Hunch at Madrone Art Bar in San Francisco’s Panhandle neighborhood.

Over cocktails, Systrom met two important VCs with checkbooks: Marc Andreessen, a co-founder of Netscape, who ran Andreessen Horowitz, one of the valley’s hottest venture capital firms, and Steve Anderson, who ran a much quieter early-stage investing shop called Baseline Ventures. Anderson liked the fact that Systrom, with pedigrees from Stanford and Google and a confident personality, didn’t have any investors yet for his mobile idea. Anderson liked to be the first to notice something. He borrowed Systrom’s phone to type an email to himself: Follow up. “The biggest risk for you is you’re the sole founder”, Anderson told Systrom. “I usually don’t invest in sole founders. He argued that without someone else at the top, nobody would tell Systrom when he was wrong, or push his ideas to be better”.

Mike Krieger was another Stanford student, two grades younger, whom Systrom knew from the Mayfield fellowship. Systrom had first met Krieger years earlier at a Mayfield networking event, where Krieger read Systrom’s Odeo name badge and quizzed him about what that company was like. Then Krieger disappeared for a while to complete a master’s degree in symbolic systems—the famous Stanford program for understanding the psychology of how humans interact with computers. He wrote his thesis about Wikipedia, which had somehow cultivated a community of volunteers to update and edit its online encyclopedia. 

After the investment from Anderson, Systrom told Krieger the idea was turning into a real company, with real financial responsibilities, and asked Krieger if he wanted to be an official cofounder. Count me interested, Krieger said. 

Krieger and Systrom started the exercise by making a list of the top three things people liked about Burbn. One was Plans, the feature where people could say where they were going so friends could join them. Another was photos. The third was a tool to win meaningless virtual prizes for your activity, which was mostly a gimmick to get people to log back in. Not everybody needed plans or prizes. Systrom circled photos. Photos, they decided, were ubiquitous, useful to everybody, not just young city dwellers.

Systrom and the girlfriend who would become his wife, Nicole Schuetz, whom he’d met at Stanford, went on a short vacation to a village in Baja California Sur, Mexico, called Todos Santos, with picturesque white sand beaches and cobblestone streets. During one of their ocean walks, she warned him that she probably wouldn’t be using his new app. None of her smartphone photos were ever good—not as good as their friend Hochmuth’s were, at least.

You know what he does to those photos, right? Systrom said.

He just takes good photos, she said.

"No, no, he puts them through filter apps", Systrom explained. 

"Well, you guys should probably have filters too", Schuetz said.

Systrom realized she was right. If people were going to filter their photos anyway, might as well have them do it right within the app,

While they were building it, they received an unsolicited email from Cole Rise—a local designer who had heard what they were working on and wanted to be a tester for it.

Systrom and Krieger asked Rise a lot of questions about his beta-testing experience, and he started to sense that the founders didn’t know their potential. This is going to be fucking huge, Rise explained. In the tech industry, leaders rarely had any experience in the industry they were disrupting. Amazon’s Jeff Bezos had never been in books and Tesla’s Elon Musk had never been in car manufacturing, but Instagram’s filters had clearly been made by a photographer. Earlybird was the best Rise had ever seen, he explained—far higher quality than anything on Hipstamatic.

After a few drinks, the founders asked Rise if he would like to create some filters of his own, as a contract job. Rise agreed, thinking it would save time to have an app that would automatically edit his pictures exactly how he wanted them to be edited. He’d built up a complicated system after spending years collecting textures from things he saw around him. He would overlay those textures on files in Adobe Photoshop, then add layers of color change and curves.

Neither Rise nor the founders thought there was a downside to the fact that filters when used en masse, would give Instagrammers permission to present their reality as more interesting and beautiful than it actually was. That was exactly what would help make the product popular. Instagram posts would be art, and art was a form of commentary on life. The app would give people the gift of expression, but also escapism.

Systrom and Krieger wanted to come up with a name that was easy to pronounce—and spell, after Burbn. They also wanted it to portray a sense of speed in communication. They’d borrowed Gmail’s trick, and would start uploading photos while users were still deciding which filter to apply. A lot of the good photo-related startup names were taken, so they came up with Instagram, a combo of instant and telegram.

The founders picked their first users carefully, courting people who would be good photographers—especially designers who had high Twitter follower counts. Those first users would help set the right artistic tone, creating good content for everyone else to look at, in what was essentially the first-ever Instagram influencer campaign, years before that would become a concept.  Dorsey became their best salesman.

Once Dorsey was addicted to Instagram, the product seemed so obvious and useful that he wished Twitter had managed to build it first. He asked Systrom if he would be open to Twitter acquiring his company. Systrom sounded enthusiastic.

Williams was CEO and was still trying to establish himself as Twitter’s leader. Dorsey’s strategy was not welcome. After that, Dorsey had another motivation to promote Instagram—to prove Williams wrong. Everything he posted on Instagram would immediately cross-post to Twitter, reaching his 1.6 million followers there. He told the world it was his favorite new iPhone app, and they listened.

Articles would later reflect on Instagram’s origin, crediting the app with perfect timing. It was born in Silicon Valley, in the midst of a mobile revolution, in which millions of new smartphone consumers didn’t understand what to do with a camera in their pockets. That much is true. But Systrom and Krieger also made a lot of counterintuitive choices to set Instagram apart.

Instagram’s early popularity was less about the technology and more about the psychology—about how it made people feel. The filters made reality look like art. And then, in cataloging that art, people would start to think about their lives differently, and themselves differently, and their place in society differently.

If Facebook was about friendships, and Twitter was about opinions, Instagram was about experiences—and anyone could be interested in anyone else’s visual experiences, anywhere in the world. 

With so much to get done, the founders divided and conquered based on what they were good at. Systrom was the public-facing guy, navigating the relationships with investors and the press, and working on the look and feel of the product. Krieger was behind the scenes, learning on the fly how to solve the complex engineering problems that supported Instagram’s growth. Krieger, who owned much less of Instagram than Systrom did, embraced the hierarchy. He didn’t want Systrom’s job, and Systrom didn’t want his. That’s why it worked.

The first big celebrity to sign up was the rapper Snoop Dogg. He posted a filtered Instagram picture—of himself wearing a suit and holding a can of Colt 45—and simultaneously sent it to his 2.5 million followers on Twitter.

Siegler wrote for TechCrunch at the time: Step one: obtain a ton of users. Step two: get brands to leverage your service. Step three: get celebrities to use your service and promote it. Step four: mainstream. In his estimation, Snoop put Instagram on step three, just a few months after its launch.

By the summer of 2011, Twitter had about 100 million monthly users, and Facebook had more than 800 million. Instagram was a much smaller player—with 6 million sign-ups—but had reached that milestone about twice as fast by building off the existing networks.

Nowhere was the effect more apparent than with celebrities. Justin Bieber had more than 11 million followers on Twitter. So when the 17-year-old pop star joined Instagram and tweeted out his first filtered photo, a high-contrast take on traffic in Los Angeles, Krieger’s alarm sounded. The servers were stressed as Bieber gained 50 followers a minute. Justin Bieber Joins Instagram, World Explodes, Time magazine reported. Almost every time the singer posted, throngs of tween girls would overload the servers again, often taking them down.

Bieber’s following was enough to change the nature of the Instagram community. All of the sudden, Instagram was emoji heaven, Rise later recalled. As younger users joined, they invented a new etiquette on Instagram, which involved trading likes for likes and follows for follows. 

Instagram kept getting more valuable, finding its footing and a path to the mainstream. Despite Costolo’s doubts, celebrities continued to sign onto Instagram, including Kim Kardashian, Taylor Swift, and Rihanna. In January 2012, Instagram added one of Twitter’s most valuable users: President Barack Obama. Obama’s account launched the day of the Iowa caucus for that year’s presidential campaign.

When Van Damme and Hochmuth got to the office the next morning, it was clear that everyone else had gotten the same message. The employees whispered their theories to one another. Maybe there had been a major hack. Maybe something had gone wrong with the recent venture capital fundraising, and Instagram was actually out of money and would have to shut down.

Every employee got a call on Sunday night to be in the office at 8 am in the office and there was a surprise waiting for them.

“​​So over the weekend, we had some conversations about a potential acquisition”, Systrom said. “I talked to Mark Zuckerberg”, he continued. Still normal.  “We said yes to Facebook. We’re getting bought—for $1 billion”. Not normal. Not believable. Employees let out gasps and guttural sounds. Some of them laughed, unsure how to control their surprise, while others failed to hold back tears.

The public statements from Systrom and Zuckerberg attempted to reassure them. It’s important to be clear that Instagram’s product is not going away, Systrom said on the Instagram blog. We’re committed to building and growing Instagram independently, Zuckerberg’s Facebook post said. 

On the same Sunday, Michael Schroepfer, Facebook’s head of engineering, was in Zuckerberg’s kitchen with Zoufonoun while Systrom paced outside in the yard, on the phone with his board.

Usually, when Facebook acquired a company, they found ways to absorb the technology, rebrand the product, and fill some gap in what their own company was capable of. If Instagram was going to be its own product, it broke Facebook’s normal acquisition process, and it wasn’t clear how it would work. How do we integrate something like this? Schroepfer asked.

“Schrep, we are buying magic. We’re paying for magic. We’re not paying $1 billion for thirteen people. The worst thing we could do is to impose Facebook on them prematurely”. After hours of discussion and sleepless nights, Zoufonoun who was Facebook's deal man was fully converted into an Instagram believer. “It’s blossoming, and you just need to nurture that plant. You don’t need to trim it or shape the plant at that point”.

Zuckerberg agreed. He fired off an email to the Facebook board, letting them know what was happening. It was the first they were hearing of the massive deal, which was all but completed. Because Zuckerberg held the majority voting power in the company, the board’s role was merely to put a rubber stamp on his decisions.

The same Sunday night, Systrom’s board conversations faced more resistance. Anderson, in particular, was confused and opposed as he could arrange better financing deals.

Systrom gave four reasons. First, he reiterated Zuckerberg’s argument: that Facebook’s stock value was likely to go up, so the value of the acquisition would grow over time. Second, he’d take a large competitor out of the picture. If Facebook took measures to copy Instagram or target the app directly, that would make it a lot more difficult to grow. Third, Instagram would benefit from Facebook’s entire operations infrastructure, not just data centers but also people who already knew how to do all the things Instagram would need to learn in the future. Fourth, and most importantly, he and Krieger would have independence.

Zuckerberg understood that the hardest part of creating a business would be creating a new habit for users and a group they all wanted to spend time with. Instagram was easier to buy than to build because once a network takes off, there are few reasons to join a smaller one. It becomes part of the infrastructure of society.

Systrom said. It was about creativity, design, and experiences

Ultimately the team came up with three Instagram values. 

• The biggest was community first, meaning all their decisions should be centered around preserving a good feeling when using Instagram, not necessarily a more fast-growing business. Too many notifications would violate that principle.

• Then there was simplicity matters, meaning that before any new products could roll out, engineers had to think about whether they were solving a specific user problem, and whether making a change was even necessary, or might overcomplicate the app.

• There was also inspire creativity, which meant Instagram was going to try to frame the app as an artistic outlet, training its own users and highlighting the best of them through an editorial strategy, focusing on content that was genuine and meaningful. 

Data collection using Onavo.

Facebook in 2013 acquired a tool called Onavo. The acquisition generated little buzz, as it wasn’t a flashy consumer product. It was a wonky-sounding thing called a virtual private network, or VPN, which was made by Israeli engineers to allow people to be able to browse the Internet free from government spying on their activity, and from having to go through firewalls. Once Facebook purchased the VPN company, they could look at all the traffic flowing through the service and extrapolate data from it. They knew not only the names of the apps people were playing with, but also how long they spent using them, and the names of the app screens they spent time on—and so, for example, could know if Snapchat Stories was taking off versus some other Snapchat feature. It helped them see which competitors were on the rise before the press did.

About WhatsApp takeover

After the failure with Snapchat for $3bn, Zuckerberg asked Systrom to help acquire the app he wanted to pursue next: WhatsApp, the messaging app that had 450 million monthly users all over the world. According to Onavo data, the app thrived especially in countries where Facebook wasn’t as dominant.

Systrom dutifully helped Zuckerberg sell the vision. The money was perhaps even more convincing to Koum than Systrom was. When the deal was announced, everyone at Instagram was shocked all over again. The price was a stunning $19 billion. Plus, Koum got a seat on Facebook’s board, and WhatsApp got to stay in its own offices in a nearby town called Mountain View, with about fifty employees who were all now tremendously wealthy.

About Trump Clinton issue with FB

In the internal paper, the employee explained that Trump had outspent Clinton between June and November, paying Facebook $44 million compared to her $28 million. And, with Facebook’s guidance, his campaign had operated like a tech company, rapidly testing ads using Facebook’s software until they found the perfect messaging for various audiences.

Trump’s campaign had a total of 5.9 million different versions of his ads, compared to Clinton’s 66,000, in a way that better leveraged Facebook’s ability to optimize for outcomes, the employee said. Most of Trump’s ads asked people to perform an action, like donating or signing up for a list, making it easier for a computer to measure success or failure. Those ads also helped him collect email addresses. Emails were crucial because Facebook had a tool called Lookalike Audience. When Trump or any advertiser presented a set of emails, Facebook’s software could find more people who thought similarly to the members of the set, based on their behavior and interests.

Clinton’s ads, on the other hand, weren’t about getting email addresses. They tended to promote her brand and philosophy. Her return on investment would be harder for Facebook’s system to measure and improve through software. Her campaign also barely used the Lookalike tool.

Personal conflicts

Mark Zuckerberg's mentality is all about speed and monetization and Systrom is slow to make changes and believes in artistic aspirations. He was reluctant to enable Ads on Instagram but was forced to do so by Zuckerberg. Even then, Systrom was very selective on Ad content as he wants Ad to look like an artistic expression than an Ad. 

When Snapchat’s popularity was going up, he was forced to incorporate disappearing stories on Instagram, which was a huge success; mimicking Snapchat’s core feature. 

Facebook pushed to put advertising in WhatsApp Status, their version of Stories. But in order to place those ads in front of the right people, WhatsApp would have to know more about the users of the chat app, which would mean chipping away at the encryption. The founders, Brian Acton and Jan Koum, stubbornly resisted the idea, which violated their motto—No ads, no games, no gimmicks—and which they thought would break users’ trust. Acton decided to leave Facebook: his decision cost him $850 million in stock options.

When Instagram’s user base reached 1 billion, faster than facebook’s same milestone, Zuckerberg was getting upset. He felt Instagram reached the milestone because of Facebook’s network effect, but at the same time, Facebook did not grow much with Instagram. He felt Instagram is making Facebook irreverent and being a creator of Facebook, he felt offended; He wanted to stop the cannibalization of Instagram. ​​Facebook's growth team was asked to look into cannibalization, with help from about 15 data scientists at both Facebook and Instagram.

When Schultz completed his research on whether Instagram would cannibalize Facebook, the leaders read the data very differently. Zuckerberg thought the research showed that it was likely Instagram would threaten Facebook’s continued dominance—and that the cannibalization would start in the next six months. Looking at the chart years into the future, if Instagram kept growing and kept stealing users’ time away from Facebook, Facebook’s growth could go to zero or, even worse, it could lose users. Because Facebook’s average revenue per user was so much higher, any minutes spent on Instagram instead of Facebook would be bad for the company’s profitability, he argued.

The rift between them got worsened when Zuckerberg appointed a CEO for Instagram and eventually both founders of Instagram left Facebook.