Smartphone photo-sharing application Instagram has been an impressive success story, reaching more than 10 million registered users in less than a year (with a little help from Justin Bieber). Today, CEO Kevin Systrom talked about how the startup might turn all of those users into a business.
Systrom was interviewed on-stage at the Mobilize conference in San Francisco, where he said Instagram is more focused on growth than revenue. Thanks to venture funding from Benchmark Capital, Instagram doesn't need to make money right away, and with so many competing apps, the company wants to "really lock up the space," so that everyone thinks of Instagram as "the place you go to take photos in mobile." The six-person team has devoted its recent efforts to launching Instagram 2.0, and its next big priorities are building versions for Android devices and the Web. (Instagram is currently iPhone-only.)
At the same time, the team is trying to "move the company in a way where we can make money," Systrom said. He outlined two possible revenue sources. First, Instagram could start charging for premium features. He didn't give specific examples, but he said there are certain things the company hasn't built because it would take too much time or cost too much money, and that's what Instagram might charge for. In addition, Systrom noted that Instagram is one of the few places where people actually subscribe to a form of advertising—namely, the photo-sharing accounts run by various brands such as Burberry and Red Bull. So that could become the basis of an Instagram advertising program.
More broadly, Systrom said he has been describing Instagram as an "entertainment platform," because it's a place where you can have a short, entertaining experience browsing content from both larger media companies like NBC and from your friends. That doesn't mean Instagram will be "running programming that we produce," Systrom said, but it is thinking about how to expand that aspect of the app.
Systrom also looked back at what made Instagram so successful in the first place. For one thing, Instagram launched right after the release of the iPhone 4, which included a much-improved screen and camera. The company also went against the grain by making it easy to push photos from the app into social networks like Facebook and Twitter, rather than locking the photos in Instagram. It also helped, Systrom said, that the company made it super-fast to upload images—or rather, Instagram manages to "hide the slowness" by beginning the uplaod process as soon as photos are taken and by using a relatively small photo size.
"When you're in a coffee shop with your friend, the last thing you want to do is spend five minutes trying to upload a high-res photo," he said.