Instagram for $1 Billion…What’s Next?!

When I read that Facebook was buying Instagram for $1 billion, I had a bit of a different reaction than everyone else.  You heard a lot of complaints about Facebook continuing to take over other apps (first Gowalla and now Instagram!?)  You heard a lot of, “Are you serious!? ONE BILLION DOLLARS?”  You heard a lot of people just going crazy over two of their favorite pieces of technology coming together.

So what do I think?

I think this is awesome.  I love pictures.  Instagram brings me together with my friends from all over the country, takes away all of the noise from status updates and simply gives a picture.  I’m a visual person so it is perfect for me.  I, of course, love Facebook, but Facebook does not understand mobile apps and photography like they need to.  Sure they invented tagging pictures and created a more interactive experience for photography.  But Instagram can teach Facebook about what it takes for a good mobile experience and what mobile users are looking for.  Facebook has always struggled with their app, and Instagram has always been applauded by their app.  And after all, everything is headed toward mobile now so this will be important for Facebook’s business.

But what really made headlines was the fact that Instagram had 13 employees, has not been around as long as many of the other successful start-ups (Facebook, Twitter, etc.) but has still found so much success.  How many times have you seen a new product or app and thought “Why didn’t I think of that?  That was so obvious!”  Photo sharing is not a new invention.  People have been sharing photos since the beginning of time.  But Instagram took it to the next step to make it a packaged experience.

This past weekend I was furniture shopping, and there was a couch with a chaise that could be replaced with a smaller cushion so it became a regular sized couch (aka 2-3 cushions straight across).  What an obvious but awesome invention!  And how many times have you looked at the Draw Something! app and thought, “Of course!  If Words With Friends, Chess With Friends, etc. have been so popular, of course ‘Pictionary With Friends’ would be popular!”  It is all about thinking about what people NEED or WANT and thinking of a way to solve that problem or meet that desire.

My junior year at Boston University, I took a series of four classes infamously known as Core.  You were put on a team with 7 other people and had to invent a product that doesn’t exist.  Then over the semester, you had to create a business plan that was as detailed as figuring out where your office building and production facilities would be and how much it would cost to produce the product.  There were marketing, finance, operations, and information systems sections that went into excruciating detail about your plan and future profitability.  We had to think of multiple products before ultimately deciding on the TripShield.  But the way we thought about it was by thinking of what problem people had — what they were unsatisfied with — and how we could fix it.  We thought about wires lying around college dorms and in dangerous places for young children.  We then thought of a way to fix it with the TripShield.

Not every company will have success like Instagram. They are really the black sheep of our time (see TechCrunch article). But every so often a company with an awesome ideas gets likely and, well, gets $1 billion dollars.

What do you think made them stand out more than other companies who have these awesome, unique ideas?