Why Instagram won

Your community is more important for your long-term success than your actual product.

Don’t believe me?

When the iPhone was released, a few people rushed to create apps and benefit from first-mover advantages.

With little to choose from, people were more likely to use your app, right?

So they built beautifully complicated apps, all in the hopes of making the perfect product.

But there was something that most of them weren’t taking into account…

Even though there weren’t that many apps, one of them started to break out.

It was launched in 2009 by two young entrepreneurs with a passion for photography.

The app promised to take almost any photo and apply filters to make them more beautiful and shareable on social media.

It quickly gained millions of installs, was featured in The New York Times, and made it to the Top 10 Apps in many countries.

Think you know what it was?

Think again… the name of the app was — drumroll, please — Hipstamatic!

Not what you expected?

Hipstamatic was so successful and popular that it inspired another pair of entrepreneurs — Kevin Systrom and Mike Krieger — to create a similar app...

... the app you were originally thinking of — Instagram!

So why did Instagram become one of the world’s most popular apps…

… while Hipstamatic sounds like a medical condition your grandma has?

Instagram did one key thing differently, which later propelled its growth.

They took Hipstamatic’s features and added a community section to it.

While Hipstamatic was only a photo editor…

Instagram was a community — a network, where you could share photos and get feedback.

Chris Dixon, a popular entrepreneur and investor, has a famous essay — Come for the tool, stay for the network.

He explains that a popular way to build communities and benefit from the network effect is to attract users with single-player tools and get them to participate in a network.

While the tool helps get critical mass, the network creates long-term value for users and a competitive advantage for the company.

While Hipstamatic had millions of users and amazing initial traction, it failed to engage them in a community.

And hence, it lost its market share to Instagram, which was built with a community in mind from Day 1.

But couldn’t Hipstamatic have just built a community later?

They could.

Building a product then transforming it into a network might not always work, as people rarely want to change the behaviors they are mostly used to.

But not building one will probably be worse in the long run…

And when it DOES work — the benefits are beyond impressive:

  • You benefit from the network effect and product-led growth
  • You don’t need to spend much on marketing
  • AND your product grows exponentially!

But, as with Instagram, the chances that this will happen are much higher when you build the product with a community in mind from Day 1.

And this doesn’t just apply to software products, hardware products will benefit too!

So, whatever product idea you have, pause for a while, and think about your community.

Are you paying enough attention to your users?

Can it become a strong network that gives you strong defensibility against your competition?

Learn more about how to develop networks by reading the Cold Start Problem by Andrew Chen.