The History of Instagram

The story of Instagram inadvertently started when its soon-to-be co-founders met while studying at Stanford University. Interestingly, Systrom and Krieger barely knew each other at the time and wouldn’t become close friends until years later.

Before attending Stanford, Systrom had already worked in a company called Odeo. This would later develop into what is now known as Twitter. He had also shared a desk with Jack Dorsey — the current CEO and co-founder of Twitter.

Even though neither founder studied coding or computer science at Stanford, they both experimented with coding independently as a hobby. 

After university, Systrom worked in a tech startup. In his free time (i.e., during nights and weekends), he learned how to code. As a young child in Brazil, Krieger followed a similar path. He would often “experiment with HTML coding” and see what type of projects he could make. 

The two reunited in a small cafe called “Just For You Cafe.” Even though specific details haven’t been provided — particularly in relation to how the topic of Burbn came up — what we do know is that the two hit it off relatively quickly. 

In an interview, Krieger has stated how he was “instantly interested” and told Systrom that if he was ever serious about going through with his idea, he would want to “have a conversation” about it to discuss the logistics.

If you are wondering what Burbn is, you are not alone. Similar to the founder(s) of Facebook and Amazon, Systrom and Krieger had to persevere through a few failed business projects before eventually developing the “unicorn” success story that is Instagram. 

Similar to current social platforms, Burbn allowed its users to “check-in” their location, post pictures, and make other social interactions. 

In March 2010, Systrom “mingled” in a bar full of venture capitalists in order to convince them to invest in his idea. The first notable figure that agreed to invest in Burbn was Steve Anderson, who allocated $50,000 towards the idea. This led to a domino effect among other investors, as they wanted to ensure that they would not miss out on a potentially profitable business opportunity. 

This meant that the capital generated multiplied to $250,000, and then — with the assistance of the venture capital firm Andreessen Horowitz —increased to $500,000, all within the first two weeks. 

Despite generating a sufficient amount of capital, Burbn proved to be a massive failure. This was because it was deemed to be too complicated and too similar to several other already established apps. 

Burbn’s failure can serve as a testament to the fact that if your business idea does not address a certain market demand, it is not going to work regardless of how much money you invest in it. 

Burbn peaked at around 100 users, and, unfortunately, both Systrom and Krieger realized that it was not going anywhere. This was a critical point in the history of Instagram. The founders had approximately $495,000 left and two options.

They could:

1. Pivot towards a different idea that may work
2. Keep pushing Burbn

They decided to first identify what was wrong with Burbn. To do this, they went straight to Burbns’ users. Instead of asking why more people were not joining Burbn, the entrepreneurs chose to ask why the people that use Burbn actually stay on the platform. This allowed them to identify which parts of Burbn were unnecessary and could be voided and which parts should be enunciated more directly.

Most of the Burbn users at the time noted that they weren’t really interested in the check-in feature but enjoyed being able to communicate through images with their friends. Consequently, Burbn was changed to only include: 

• Uploading photos
• Liking
• Commenting

The name was also changed to “Instagram,” a testament to the fact that users would use it to send a type of “instant telegram” through photographs.

Following the changes made to Burbn, Instagram launched on October 6, 2010, and saw virtually instant success. According to Systrom, the changes made only took eight weeks to be implemented, but they were supported with over a year’s worth of work. 

Instagram quickly hit user milestones, amassing:

• Over 100,000 users in its first week
• Over 1 million users in its first two months
• Over 30 million users in its first 18 months

The two entrepreneurs credited their exceptionally fast success to the managerial approach that they developed. This aimed to remedy existing problems rather than finding problems for already made business solutions. 

According to Systrom, this mentality is what set them apart from the countless similar apps that existed at the time: “There were a lot of checking apps, there were a lot of planners and meet up things and group chat things, but there was no solution for posting great photos to, like, lots of friends at once.”

Another great approach that the founders adopted that allowed Instagram to thrive was requesting feedback from their friends and family. For example, Systrom reportedly asked his wife whether she was excited about the new app he was developing. Even though she was, she replied that she didn’t think she was going to be using it because her photos “weren’t that good.”

Even though this initially confused Systrom, that conversation allowed him to identify a need to implement filters into Instagram, which he did independently later that night — making X-Pro II.

He then went to a nearby taco stand where he took a picture of his dog in order to test his newly made filter. This picture can still be found on Instagram today.

To some extent, this allowed Instagram to provide users with low-level mobile cameras with a way of taking and uploading high-quality photos. This set it aside from both Twitter and Facebook at the time.

In March 2011, Twitter CEO Jack Dorsey announced that he was very interested in Instagram. Dorsey offered $500 million in stock, but Systrom and Krieger declined in order to keep Instagram an independent company. 

Just one year later, Instagram had amassed over 27 million users. It was also finally made available for Android users (April), which introduced an extra 1 million users in less than 24 hours. 

This meant that Instagram was valued at $500 million — less than 18 months after its launch. 

The platform had also begun to attract several notable celebrity names, including:

• Snoop Dogg
• Justin Bieber
• Barack Obama 
• Mark Zuckerberg 

Mark Zuckerberg is perhaps the most important figure, as he had reportedly identified a similar trend in Instagram to what had happened in Facebook and wanted to become involved with the platform’s future. 

Later that year, Facebook acquired Instagram for $1 billion. Besides the huge monetary benefit at the time, both Systrom and Krieger were happy to sell Instagram to Facebook because they believed it could allow Instagram to reach “even higher potentials even more quickly.” 

Retrospectively, this was likely the case, with Instagram’s net worth estimated at around $102 billion as of 2021.

Instagram has not changed much since the Facebook acquisition, although it has become a more all-inclusive platform. For example, it has introduced:

• Instagram Stories
• Instagram Live and Reels
• Instagram Messaging
• The ability to upload more than one photo or video in each post
• The ability to upload larger files 

The Instagram logo has also been changed three times. Initially, it was designed by Systrom in 2010 as a polaroid camera with a rainbow stripe. This was meant to symbolize Instagram’s purpose (i.e., communication through photography).

The two co-founders agreed to change this in the same year, however, and decided to hire a professional logo designer called Cole Rise. 

The new logo was inspired by the Bell & Howell camera of the 1950s and was well-received. It did receive a few modifications until it was controversially changed in 2016, but these were very mild:

• “Insta” instead of “Inst” on the camera logo
• Slightly larger rainbow stripe
• Slightly larger lens on camera logo

Instagram’s update in 2016 adopted a much more “minimalist” approach and has not changed since.

Even though most users viscerally disliked the introduction of the new logo at the time, it turned out to be a very profitable business move as it generated huge publicity for the company. 

If you had developed Burbn and had around $495,000 available, what would you do?

The history of Instagram is a perfect example of why you should never stick to a business idea that is not working, and why it is extremely important that you are able to assess:

• What works in your business
• What doesn’t work in your business
• What consumers want to see

This will allow you to extrapolate what changes you should implement in order to become profitable.