→ Forget the filters, it’s about the vision.
Facebook just acquired Instagram for one billion dollar in cash and stock shortly before the big Facebook IPO expected in the next months. Another app start-up that Facebook bought not long ago was Gowalla which is one of the two check-in pioneers but the clear number two since foursquare took off all over the world. It was a talent-acquisition, yet in my opinion extremely skilled people like Tim Van Damme decided not to go to Facebook after the deal. In this case Instagram is the obvious number one with 30million (mostly iPhone) users and no serious competitor in its space which supports Zuck’s statement that the focus is on Instagram as a product, not only on the talent behind it but more about that in a second. Fun fact: Tim Van Damme, extremely talented designer at Gowalla left and joined the small team at Instagram instead of joining Facebook. Seems like there is no escape from Facebook for him.
The announcement today is huge because it symbolizes a shift from purely technological acquisitions to product vision acquisitions for very serious money. Considering that flickr was bought by Yahoo! for under $40million years ago, $1billion is just a small hint of what Pinterest must be worth today. But not just because of the code or the visual design or the product’s own number of users:
When Google bought Milk, the app incubator that Digg’s founder Kevin Rose founded, it wasn’t about the technology and engineering talent behind their first app Oink. It was all about the product guys around Kevin Rose and designer Daniel Burka and to get them on board of Google to work on consumer products. Milk’s actual developers weren’t hired by Google which is no surprise since apps like Oink or Instagram are quite trivial applications, nothing a team at Google or facebook couldn’t replicate in zero time.
Conclusion: Consumer technology is trivial, it’s not rocket science. Same when it comes to visual design I would argue. What’s valuable is product vision and the ability to make something that the average consumer wants to use or even gets addicted to. Facebook and Google are hunting for people that proved they can make consumers addicted to a product. Best case this product solves a problem that didn’t exist in its users’ minds before and makes a shit load of money on top of it. This ability can easily be worth $1billion, just think of AdSense or the concept of virtual currency. It’s not a bubble, guys like Kevin Systrom (co-founder of Instagram) have talents that go beyond a technical skill like visual design or software development, what matters are product ideas. One idea like AdSense is worth more than $1billion.
Exciting times!
