This Week in Business History- Episode 17
“Many users clamored for new features, buttons and other upgrades to the Instagram experience. But they’d decline. Systrom and Krieger wanted to stay focused to their simple, core mission. And they saw tremendous value in saying NO to just about anything that deviated from that mission of sharing photographs and keeping the app very lean.”
-Scott Luton, Host, This Week in Business History
The ‘This Week in Business History’ Series on Supply Chain Now shares some of the most relevant business and global supply chain events from years past. It will shine a light on some of the most significant leaders, companies, innovations, and even lessons learned from our collective business history. This week focuses this birth and rise of Instagram and more.
Scott Luton (00:12):
Good morning, Scott Luton here with you on this edition of this week in business history. Welcome to today’s show on this program, which is part of the supply chain. Now family of programming. We take a look back at the upcoming week, and then we share some of the most relevant events and milestones from years past, of course, mostly business focused with a little dab global supply chain. And occasionally we might just throw in a good story outside of our primary realm. So I invite you to join me on this. Look back in history to identify some of the most significant leaders, companies, innovations, and perhaps lessons learned in our collective business journey. Now let’s dive in to this week in business history.
Scott Luton (01:13):
Good morning. And thanks for joining us. I’m your host Scott Luton. And today on this edition of this week in business history, we are focused on the week of October 5th. Hey, before we get started, thanks so much for listening to the show. In fact, I’d like to specifically thank one Gary Smith and dear friend of the show and a huge figure in the world of supply chain. Gary, thanks so much for listening all the best to you and the family in New York city. In today’s episode, we’re focused on the birth of one of the most popular social media platforms in the world. It’s the story of Instagram, and we’ll also hit on a few other big notable items from across the business world. Hey, it’s a big week. Thank you for joining us today on this week in business history, powered by our team here at supply chain now.
Scott Luton (01:58):
So did you know that Instagram has about 1 billion active users? 63% of them are a key demographic between the ages of 18 and 34. And according to Psalm, it’s almost evenly split the audience that is between male and females. The company has been a colossal success and an intriguing story, really since this launch, which took place 10 years ago on October 6th, 2010, but let’s start a little bit further back in 2009, Kevin Sandstrom was working at a company called next stop. A travel recommendation startup that would eventually be acquired by Facebook. Systrom was a 27 year old Stanford university graduate. He had spent time at Google as a corporate development associate, which was the, the department behind M and a activity at the tech behemoth room had also interned at a little company called Odo, which itself would give birth to Twitter sized term did not major in computer science at Stanford, but he did teach himself to code a huge connoisseur of fine whiskeys and bourbons.
Scott Luton (03:07):
Trump would use that passion and combine it with his growing technical expertise to create a web application prototype called bourbon B U R B in bourbon. We should pause the story for just a second and give a tip of the hat to Jasper Newton, Daniel, better known around the world as Jack Daniel. He founded Jack Daniel’s, Tennessee whiskey in Lynchburg, Tennessee, and he passed away this week in business history on October 9th, 1911. Okay. So back to Kevin Systrom and bourbon, the bourbon app was fairly limited. Users could check in post plans and photos, but it was clunky from a user experience. Hey, aren’t we all, sometimes at that time, which seems like a hundred years ago for square and the ability it gave users to share their location via check-ins was pretty hot. But on the bourbon app users, weren’t checking in as much as they were sharing photos, Kevin Systrom would attend a party for a startup called hunch, and it was a fateful moment for him.
Scott Luton (04:10):
While there he would meet a couple of venture capitalists size firm would show them his app bourbon and within weeks he’d have $500,000 in seed funding and would quit his job to focus on growing zap that investment, Kevin Systrom to hire exceptional talent where fate would intervene once more. One of the bigger fans of bourbon was a user named Mike Kroger. Kroger was born in South Paulo, Brazil and came to the States to attend Stanford. It was at Stanford where Systrom strum and Kreiger would meet through a fellowship program. Now get this. While at Stanford, Mike Kroger worked on a project for class named, send me some sunshine. It was focused on an app, allowed people from around the world to share photos of sunrises, sunsets, et cetera. You get the point it’s purpose was to get users, to share cheery pics with other users that might be in wintry climbs to perk them up a bit.
Scott Luton (05:11):
This experience was certainly come in handy. So one of Kevin [inaudible] first calls now that he had dollars to spend on talent was Mike Kroger and they decided to work together on growing the bourbon app. This dynamic duo was immediately fascinated with how bourbon users were heavily addicted to photo sharing. They then began to analyze the market studying just about every app in the photography space. One app that really stood out to Kevin Systrom and Mike Kreiger was one called hips. Dematic one. It was popular, two, it was focused on photo sharing, three hips. Dematic had really neat features. You could apply to your photos before you shared them like filters, but one clear gap out to Kevin and Mike hips to Dematic didn’t have a strong social media play. There was a lack of integration there instantly. They saw an opportunity in the market, so they rebuilt the bourbon app.
Scott Luton (06:08):
They focused on the photo sharing function with an enhanced social sharing and engagement factor. And they also renamed the bourbon app, choosing a portmanteau, combining the words instant and telegram. Thus Instagram was born and the rest by and large is history. The Instagram app launched on Wednesday, October 6th, 2010. And here’s a trivia question for your next virtual party. What was the first Instagram post? A picture of? Well, that would be South beach Harbor at pier 38 posted by Mike Kreiger, a whopping 25,000 users joined Instagram in the very first day, October six, 2010 by mid December, just two months later, Instagram would celebrate 1 million users size Trump and Kroger’s timing was serendipitous as Apple launched iPhone four in June, 2010, just a few months before Instagram launched this often model offered a highly upgraded camera that took marvelous pictures. And of course, all those often users just had to share their picks and needed a platform to do just that.
Scott Luton (07:18):
And so Instagram would blow up from there. Perhaps the biggest challenge to the team was not attracting users, but rather keeping it servers online and upgraded enough to handle the enormous traffic. In fact, as CTO, Mike Crocker would carry his laptop any and everywhere he went, he had to be on lookout for app downtime and Kreiger would regularly have to interrupt a dinner or a bar conversation to bring Instagram back online for as dedicated and passionate users. As Greg white would say, hashtag startup life, Instagram analytics would go crazy along with millions of teenagers across the globe. When Justin Bieber joined the platform it’s been reported that you can look back at all the apps history of data and pinpoint that precise moment in time due to the massive following that would accompany the beep stir his agents demanded that Instagram compensate the phenom, but they’d decline and Bieber would just keep right on sharing his picks.
Scott Luton (08:17):
The app would attract a ton of attention, especially from investors. It’s been reported that Jack Dorsey and Twitter made an offer of $500 million to buy the company from SaaS from in Kroger, but they declined less than two years after launch Instagram would have more than 25 million users, many users clamored for new features, buttons, and other upgrades to the Instagram experience, but they’d declined size Sherman Kreiger wanted to stay focused to their simple core mission and they saw tremendous value in saying no to just about anything that deviated from that mission of sharing photographs and keeping the app very lean Mark Zuckerberg, having seen his millions of Facebook users constantly focus their posts on sharing photos where he’d come call him. In fact, Zuckerberg would personally negotiate with Kevin Systrom and Mike Krieger to purchase Instagram. And in April, 2012, they had a deal for $1 billion in cash and stock Facebook acquired Instagram.
Scott Luton (09:23):
But a key caveat was that the newly acquired company would maintain independent management. So get this Instagram has since been valued at more than a hundred X that purchase price by a variety of experts. So probably not a bad ROI for the Facebook team, but back to that independent management idea, well, it worked for about six and a half years, but it eventually didn’t work any longer. It’s been reported that not only did Kevin Systrom and Mike Kreiger have design and functionality disagreements with Mark Zuckerberg, but they also grew frustrated with Zuckerberg’s huge desire to keep Facebook users own Facebook. And some of the decisions that came out of that desire thus in September, 2018, the founders of Instagram left the company, but Instagram and Facebook journey forward. In fact, according to Omni core, Instagram is the sixth most popular social network. Worldwide, more than 50 billion photos have been uploaded.
Scott Luton (10:26):
Thus far pizza is the most Instagrammed food globally followed by sushi. What an incredible story with its Genesis this week in business history, just some 10 years ago, a few other items to note on this week in business history for the week of October 5th on October 11th, 1844, Henry J Haans was born in Birmingham, Pennsylvania. His first business focused on horseradish would eventually fail, but his second entrepreneurial venture would be a home run. Henry would use his focus and passion for tomato ketchup along with other condiments to form the company known around the world today as the H J Heinz company based in Pittsburgh, PA on October 9th, 1873, Charles Rudolph Walgreen was born in Knoxville, Illinois as fate would have it. Walgreen would lose a part of his finger in a factory accident. The doctor who treated Walgreen would encourage him to get out of the dangerous manufacturing industry and jump into the pharmacy profession.
Scott Luton (11:31):
Walgreen would go own to found his own pharmacy store in Chicago in 1901, which would eventually blossom into the second largest pharmacy chain in the U S second, only to CVS health today on October 11th, 1935, Danny Evans was born in Smithville, Tennessee. This army veteran would serve in Korea, attend Auburn university and go on to co-found the Cracker barrel old country store with the first location being opened in Lebanon, Tennessee, the chain of course would take off, but 1991 Evans would issue a directive to all company restaurants, to fire employees, quote, whose sexual preferences failed to demonstrate normal heterosexual values and quote eventually largely due to this move. And others Evans will be forced out as CEO in 2001. And on October 8th, 1993, Tony Morrison would become the first African American woman to win the Nobel prize for literature Morrison was born in Lorain, Ohio. She graduated from Howard university and she could write like the Dickens, her talented works would bring a variety of awards to include the Pulitzer prize.
Scott Luton (12:45):
In 1993, Morrison will be recognized with the Nobel prize for literature. The citation would read quote in novels, characterized by visionary force and poetic import gives life to essential aspect of American reality in quote, Toni Morrison’s exceptional works include song of Solomon beloved, and God helped the child amongst many, many more. God bless our nation storytellers. Indeed, GUI that wraps up this edition of this week in business history. Those were some of the stories that stood out to us, but what do you think, what stands out to you? Tell us she just note to email@example.com or Hey, find us on LinkedIn, Twitter, Facebook, or Instagram, and share your comments there. Hey, we’re here to listen. Thanks so much for listening to our podcast. I hope you’ve enjoyed our latest edition of this week in business history. Be sure to check out a wide variety of industry thought firstname.lastname@example.org friendly reminder.
Scott Luton (13:46):
You can now find this week in business history, wherever you get your podcasts from and be sure to tell us what you think we’d love to get your review. A be sure to check out the entire family of supply chain. Now programming tequila, sunrise with Greg white supply chain is boring with Chris Barnes tech talk digital supply chain podcast with Corinne, bursa, logistics and beyond with Jaman veteran voices. Lot more. I searched for them wherever you get your podcasts on behalf of the entire team here at this week in business history and supply chain. Now this is Scott Luton wishing all of our listeners, nothing at best. Thank you so much. We’re grateful for your support and Hey, do good give forward and be the change that’s needed. And on that note, we’ll see next time here on this week in business history. Thanks for budding
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