551 days. $1 billion. $400 million to Kevin, $100 million to Mike, $200 million to investors, and a cool $100 million to be split among the other 11 employees. Not a bad day for Instagram and its employees!
However, what struck me today was the timing of the announcement. Facebook is in the so-called “quiet period” before its IPO. Yet, by acquiring Instagram, Facebook is clearly making a material acquisition that required an announcement and will necessitate a refiling of its S-1 with the folks at the SEC. While there is no reason to think that Facebook has violated SEC rules, it did bring about a whole mess of paperwork and hype. So, why now?
Most of the news media is reporting that Facebook had something to fear from Instagram’s growing popularity, particularly on mobile platforms. Yet, that seems silly. Even though Instagram has 30 million users and likely would have hit 100 million eventually, I don’t think Facebook is clamoring to reach these people most, if not all, of whom use Facebook. Was it competition? If so, why Instagram and not Path? Is Instagram really a threat to Facebook?
I don’t see it. So, for now, congratulations to Kevin, Mike, and the rest of the Instagram team. In under two years, you’ve built a $1 billion company, while generating zero revenue. And, in less than two weeks, you went from raising $60 million in VC funding at a $500 million valuation to selling at $1 billion. Not bad!
Finally, one last interesting biological/historical note. Lost in most of the reporting has been personal information on the Instagram founders. Kevin Systrom was Stanford ‘06, a member of Sigma Nu, and in addition to previously working at Google had also worked at Odeo. Sound familiar? Can’t place it? Odeo was the podcast start-up that also employed the talented Twitter trio - Evan Williams, Biz Stone, and Jack Dorsey. Clearly something was in the water!
So, if anyone else knows an Odeo alum trying to start the next Billion Dollar company, let me know and be sure to invest so that you too may become Insta-rich!