Sep 23 - 3min readThe Rise of InstagramBy Launchbase

This morning in a blog post Instagram, the photo sharing app announced that it has hit 400 million users. The news comes just nine months after announcing that it had hit its 300 millionth users. 100 million users in nine months is not bad going at all for an application that grew big largely on the idea of adding filters to photographs. What’s interesting is that Instagram’s user base is truly worldwide with only a quarter of users coming from within the United States. Instagram can truly call itself a Social Media giant (Twitter has around 300m users for instance.)


Considering the recent user spike trend its influence is only going to get greater.


We take a look at the rise of Instagram and wonder how soon it will be before the next 400 million users.


The $1bn gamble pays off


In April 2012 Facebook and CEO Mark Zuckerberg startled the industry by announcing a $1bn takeover of Instagram, then a two year old start up with barely 40 million users. Of course this was later massively eclipsed by Facebook’s $19bn takeover of Whatsapp but at the time users were bemused, analysts were confused and the industry as a whole was left wondering what would happen next for Instagram and its now parent company, Facebook.


Less than 4 years and 400 million users later that $1bn looks like a snip with Instagram’s growing as an important social influencer which means it has grown ever important for businesses and as an advertising revenue platform.


An important fact to mention however is that despite the growing and varied user base Instagram is still cool with the app largely unchanged from its early days which has been a great part of its success. Sticking to its roots and offering users accessibility and usability and, of course, the chance to simply take a good photo, add a fun filter and share it with friends.


As Forbes said when Facebook first bought Instagram “By buying Instagram, Facebook bought itself 30 million hipsters, and all of their wonderful hipster cool.”


That coolness still sits with Instagram and is actively used by a young demographic while Facebook itself now has an older audience.


Where next?


It must be said that Facebook is still the de facto king of social networking and is likely to be for quite some time considering its reach, user base and its standing in the industry. Instagram’s growth is something to be recognised however and Facebook would be concerned if they didn’t already own it.


On Instagram’s 400m users blog announcement the company was predictably understated in its ambitions saying that it aimed to “experience the world through images and connect with others through shared passions.” Users are a bonus, user experience is sacred. That seems like a pretty good mantra for other start up app companies to follow.


There is value in Instagram for sure; and there are already ads though they appear less dominating than Facebook’s own advertising offering. The data of Instagram is practically priceless with foodies taking photos of food, skateboarders taking photos of their hobbies and so on – companies can use that data to their real advantage however Instagram seems to have gone about advertising differently to its peers. In a statement when they first started allowing advertisers on to its platforms Instagram said “We’re starting slow with advertising to make sure we take time to get the experience right for our ad partners and the Instagram community.” This is again a case of the company sticking to its roots and not making a dash for the money which, quite frankly, it didn’t need to with the $1bn Facebook purchase behind it.


It must be stressed that before Facebook the company was not making money although had been in talks to secure additional investment. It remains to be seen what would have happened to Instagram had Facebook not bought it when it did, but likely we would have still seen a steady growth and a much larger purchase price from one of the big tech companies.


Its value is, and always was there, its growth has just been accelerated.


The next 400 million?


You wonder if the growth will continue at this level or will it plateau and stagnate like other services before it? You kind of think that it won’t as even with new apps like Snapchat etc. Instagram has shown its strength in its simplicity and usability. So at this rate it is safe to say that it won’t be long.


Congratulations then to Instagram and look forward to the filtered future.


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