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Instagram founders say losing autonomy at Facebook meant “winning” – TechCrunch

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Rather than be sore about losing independence within Facebook, Instagram co-founder Kevin Systrom told me it was an inevitable sign of his app’s triumph. Today at South By South West, Systrom and fellow co-founder Mike Krieger sat down for their first on-stage talk together since leaving Facebook in September. They discussed their super hero origin stories, authenticity on social media, looming regulation for big tech, and how they’re exploring what they’ll do next.

Krieger grew up hitting “view source” on websites while Systrom hacked on AOL booter programs that would kick people off instant messenger, teaching both how code could impact real people. As Instagram grew popular, Krieger described the “incredi-bad” feeling of fighting server fires and trying to keep the widely loved app online even if that meant programming in the middle of a sushi restaurant or camping retreat. He once even revived Instagram while drunk in the middle of the night, and woke up with no memory of the feat, confused about who’d fixed the problem. The former Instagram CTO implored founders not to fall into the “recruiting death spiral” where you’re too busy to recruit which makes you busier which makes you too busy to recruit…

But thankfully, the founders were also willing to dig into some tougher topics than their scrappy startup days.

Kevin Systrom and Mike Krieger (from left) drive to Palo Alto to raise their Series A, circa January 2011

Independence vs Importance.

“In some ways, there being less autonomy is a function of Instagram winning. If Instagram had just been this niche photo app for photographers, we probably would be working on that app for 20 year. Instead what happened was it got better and better and better, and it improved, and it got to a size where it was meaningfully important to this company” Systrom explained. “If this thing gets to that scale that we want it to get to which is why we’re doing this deal, the autonomy will eventually not be there as much because it’s so important. So in some ways it’s just an unavoidable thing if you’re successful. So you can choose, do you want to be unsuccessful and small and have all the autonomy in the world, or no?”

AUSTIN, TX – MARCH 11: Mike Krieger speaks onstage at Interactive Keynote: Instagram Founders Kevin Systrom & Mike Krieger with Josh Constine during the 2019 SXSW Conference and Festivals at Austin Convention Center on March 11, 2019 in Austin, Texas. (Photo by Chris Saucedo/Getty Images for SXSW)

Krieger followed up that “I think if you study . . . all the current companies, the ones that succeed internally eventually have become so important to the acquiring company that it’s almost irresponsible to not be thinking about what are the right models for integration. The advice I generally give is, ‘are you okay with that if you succeed?’ And if you’re not then you shouldn’t do the deal.” If the loss of autonomy can’t be avoided, they suggest selling to a rocket ship that will invest in and care for your baby rather than shift priorities.

Asked if seeing his net worth ever feels surreal, Systrom said  money doesn’t make you happy and “I don’t really wake up in the morning and look at my bank account.” I noted that’s the convenient privilege of having a big one.

The pair threw cold water on the idea that being forced to earn more money drove them out of the company. “I remember having this series of conversations with Mark and other folks at Facebook and they’re like ‘You guys just joined, do not worry about monetization, we’ll figure this out down the road.’ And it actually came a lot more from us saying “1. It’s important for us to be contributing to the overall Fb Inc . . . and 2. Each person who joins before you have ads is a person you’re going to have to introduce ads to.” Systrom added that “to be clear, we were the ones pushing monetization, not the other way around, because we believed Instagram has to make money somehow. It costs a lot to run . . . We pushed hard on it so that we would be a successful unit within Facebook and I think we got to that point, which is really good.”

But from 2015 to 2016, Instagram’s remaining independence fueled a reinvention of its app with non-square photos, the shift to the algorithm, and the launch of Stories. On having to challenge the fundamental assumptions of a business, “You’ve got maybe a couple years of relevance when you build a product. If you don’t reinvent it every quarter or every year, then you fall out of relevance and you go away.”

That last launch was inspired by wanting to offer prismatic identity where people could share non-highlights that wouldn’t haunt them. But also, Systrom admits that “Honestly a big reason why was that for a long time, people’s profiles were filled with Snapchat links and it was clear that people were trying to bridge the two products. So by bringing the two products [Feed and Stories] into one place, we gave consumers what they wanted.” Though when I asked anyone in the crowd who was still mad about the algorithm to hiss, SXSW turned into a snake pit.

Regulating Big Tech

With Systrom and Krieger gone, Facebook is moving forward with plans to more tightly integrate Instagram with Facebook and WhatsApp. That includes unifying their messaging system, which some say is designed to make Facebook’s apps harder to break up with anti-trust regulation. What does Systrom think of the integration? “The more people that are available to talk with, the more useful the platform becomes. And I buy that thesis . . . Whether or not they will in fact want to talk to people on different platforms, I can’t tell the future, so I don’t know” Systrom said.

AUSTIN, TX – MARCH 11: Josh Constine, Mike Krieger and Kevin Systrom speak onstage at Interactive Keynote: Instagram Founders Kevin Systrom & Mike Krieger with Josh Constine during the 2019 SXSW Conference and Festivals at Austin Convention Center on March 11, 2019 in Austin, Texas. (Photo by Chris Saucedo/Getty Images for SXSW)

Krieger recommended Facebook try to prove users want that cross-app messaging before embarking on a giant engineering challenge of merging their backends. When I asked if Systrom ever had a burning desire to Instagram Direct message a WhatsApp user, he admitted “Personally, no.” But in a show of respect and solid media training, he told his former employer “Bravo for making a big bet and going for it.”

Then it was time for the hardest hitting question: their thoughts on Presidential candidate Senator Elizabeth Warren’s proposal to regulate big tech and roll back Facebook’s acquisition of Instagram. “Do we get our job back?” Systrom joked, trying to diffuse the tension. Krieger urged more consideration of downstream externalities, and specificity on what problem a break up fixes. He wants differentiation between regulating Facebook’s acquisitions, Amazon white-labeling and selling products, and Apple’s right to run the only iOS App Store.

Acquisition vs Competition

“We live in a time where I think the anger against big tech has increased ten-fold — whether that’s because the property prices in your neighborhood have gone up, whether it’s because you don’t like Russian meddling in elections — there are a long list of reasons people are angry at tech right now and some of them I think are well-founded” Systrom confirmed. “That doesn’t mean that the answer is to break all the companies up. Breaking companies up is a very specific prescription for a very specific problem. If you want to fix economic issues there are ways of doing that. If you want to fix Russian meddling there are ways of doing that. Breaking up a company doesn’t fix those problems. That doesn’t mean that companies shouldn’t be broken up if they get too big and they’re monopolies and they cause problems, but being big in and of itself is not a crime.”

attends Interactive Keynote: Instagram Founders Kevin Systrom & Mike Krieger with Josh Constine during the 2019 SXSW Conference and Festivals at Austin Convention Center on March 11, 2019 in Austin, Texas

Systrom then took a jab at Warren’s tech literacy, saying “part of what’s surprised me is that generally the policy is all tech should be broken up, and that feels to me again not nuanced enough and it shows me that the understanding of the problem isn’t there. I think it’s going to take a more nuanced proposal, but my fear is that something like a proposal to break up all tech is playing on everyone’s current feeling of anti-tech rather than doing what I think politicians should do which is address real problems and give real solutions.”

The two founders then gave some pretty spurious logic for why Instagram’s acquisition helped consumers. “As someone who ran the company for how many years inside of Facebook? Six? There was a lot of competition internally even and I think better ideas came out because of it. We grew both companies not just one company. It’s really hard question. What consumer was damaged because it grew to the size that it did? I think that’s a strong argument that in fact the acquisition worked out for consumers.” That ignores the fact that if Instagram and Facebook were rivals, they’d have to compete on privacy and treating their users well. Even if they inspired each other to build more engaging products, that doesn’t address where harm to consumers has been done.

Krieger suggested that the acquisition actually spurred competition by making Instagram a role modeI. “There was a gold rush of companies being like ‘I’m going to be the Instagram of X . . . the Instagram of Audio, the Instagram of video, the Instagram of dog photos.’ You saw people start new companies and try to build them out in order to try to achieve what we’ve gotten to.” Yet no startup besides Snapchat, which had already launched, has actually grown to rival Instagram. And seeing Instagram hold its own against the Facebook empire would have likely inspired many more startups — some of which can’t find funding since investors doubt their odds against a combined Facebook and Instagram

As for what’s next for the college buddies, “we’re giving ourselves the time to get curious about things again” Krieger says. They’re still exploring so there was no big reveal about their follow-up venture. But Systrom says they built Instagram by finding the mega-trend of cameras on phones and asking what they’d want to use, “and the question is, what’s the next wave?”

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Paris-based VC firm Partech unveils Chapter54 accelerator to help European startups cross into Africa – TechCrunch

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Partech Shaker, the innovation division of the Paris-based VC firm Partech, has launched an accelerator program christened Chapter54 to help European startups launch in African markets.

The accelerator will take in 10 technology startups annually over the next four years for the Chapter54 program, which will last up to eight months. Application for the inaugural cohort will open next month, and successful startups will begin the acceleration journey in April.

Chapter54 will be funded to a tune of $5.7 million (EUR 5 million) by the KfW Development Bank on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ).

“Investors from all sectors are welcome – but they must have business experience, be registered in a European country and active in two European countries, and have a solid financial foundation and regular income,” said KfW.

Vincent Previ, the managing director of Chapter54 told TechCrunch that startups will be taken through several preparation stages including mentorship programs with founders running successful enterprises across the continent, and with c-suite tech or startup executives.

“We have a very good knowledge of the European tech ecosystem because we are one of the most prominent investors in European tech. We are now a major investor in African tech, and we have the capacity to run innovative projects through Partech Shaker… From KfW’s view, we were a good player to run this acceleration program,” said Previ.

Chapter54 will match mentors with startups based on their business models, conduct webinars with different speakers and review startups’ operation roadmaps “to check if what they have designed is consistent with the reality on the ground.”

Previ said that during these sessions, they will “check that the participating companies have the right level of knowledge of what it means to run a tech business in Africa, and have what it takes to hire tech people.”

“We are going to have a session where we will compare the gig economies in Europe and Africa, and another where we will help them do a B2C market sizing in Africa (which is not similar to Europe).”

“If you want to enter Africa, you have to do it properly, and as per legal requirements. You have to tweak the way you work. We are going to help them to reinvent the way they operate their businesses (to enter African markets).”

Chapter54 is targeting startups in growth stage with some sizable traction in the countries they operate in across Europe.

Partech has 15 investments in nine different countries across Africa including Wave; a U.S. and Senegal-based mobile money service provider, Tugende, a Ugandan mobility-tech company, and Trade Depot, a Nigeria and U.S.- based company that connects consumer goods brands to retailers.

Africa’s growing young and tech-savvy population, deepening internet penetration, developing digital infrastructure, and fast uptake of modern technologies by its people has made the continent the next growth frontier. KfW said it is supporting Chapter54 to promote growth and create jobs.

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Ahead of a February event, Samsung teases Galaxy S/Note merger – TechCrunch

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Last summer, Samsung announced that – for the first time in a decade – it wouldn’t be releasing a new Note. The future of the well-loved phablet was a big, open question, as the hardware giant acknowledged a shift in focus to foldables, a form factor it felt was finally ready for a truly mainstream push.

Further muddying the waters is the Galaxy S line – Samsung’s primary flagship, which has steadily been blurring the line separating itself from the Note. “Instead of unveiling a new Galaxy Note this time around,” the company’s president wrote at the time, “we will further broaden beloved Note features to more Samsung Galaxy devices.”

That’s meant a fairly steady increase in the S series’ screen sizes over the years, culminating with the addition of S-Pen functionality for the S21 Ultra last January. In August, the company also brought its proprietary stylus to the Galaxy Fold line leaving some wondering whether the Note was quietly being phased out.

Coming fresh off CES and staring down the face of MWC, we find ourselves entering Unpacked territory – the time of year when the company announces the latest additions to the S series. Roh is back with another somewhat vaguely worded post that celebrates the life of the Note’s life, pointing out how its 5.3-inch display caused a minor stir back in 2011. It seems quaint now, though it’s worth pointing out for those who weren’t at the IFA unveiling, that big screens meant much larger and thicker devices than they do now.

The post strongly suggests a proper merging of the two flagships to make more room for its foldables.

“With every fresh evolution of Samsung Galaxy devices, we have introduced features that redefine the entire mobile category,” the executive writes. “And we’re about to rewrite the rules of industry once again. At Unpacked in February 2022, we’ll introduce you to the most noteworthy S series [emphasis added by TC] device we’ve ever created. The next generation of Galaxy S is here, bringing together the greatest experiences of our Samsung Galaxy into one ultimate device.”

“Noteworthy” could mean a lot of things in this context. The most obvious seems to be an S22 Ultra becoming the S22 Note. Does that mean a proper stylus slot? Could we be seeing further S Pen integration across the lines? I’d say most likely not to that one, if only because the carefully worded post uses the singular “noteworthy device.” There are still some big questions in the lead up to the event – which may or may not be answered early, given the frequency of leaks surrounding these devices. Also on-tap for the line are improved night/low-light photos and a more sustainable design, which has become a priority for the company in recent years.

Samsung is once again betting that consumer excitement and brand loyalty will be enough to get users on-board, sight unseen as it gets set to open reservations for the new smartphone and an unnamed Galaxy tablet tomorrow.

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a16z, Avenir and Google back South African mobile games publisher Carry1st in $20M round – TechCrunch

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Carry1st, a South African publisher of social games and interactive content across Africa, has raised a $20 million Series A extension led by Andreessen Horowitz (a16z). This is a16z’s first investment in an Africa-headquartered company (the firm has previously invested in Branch and Zipline, companies with some of its operations in Africa but headquartered in the U.S).

Carry1st also received investments from Avenir and Google; it’s the latter’s second check from its Africa Investment Fund.

A couple of prominent individual investors, including Nas and the founders of Chipper Cash, Sky Mavis and Yield Guild Games, took part.

The round — which is an extension of the Series A Carry1st raised last May from Riot Games, Konvoy Ventures, Raine Ventures and TTV Capital — also saw the same investors double down on their investments in the company. 

Andreessen Horowitz general partners David Haber and Jonathan Lai will join Carry1st’s board as observers. 

Cordel Robbin-Coker, Lucy Hoffman and Tinotenda Mundangepfupfu founded Carry1st in 2018. The South Africa-based company, which currently has a team of 37 people across 18 countries, wants to use this additional capital to scale interactive content across Africa.

The company started as a game studio where it conceptualized, developed (from system designs to artwork and engineering), and launched mobile games. Over time, it switched to a hybrid model, adopting a publishing role and handling distribution, marketing and operations.

Carry1st co-founder and chief executive Robbin-Coker told TechCrunch that Carry1st has mainly focused on its publishing arm since it went hybrid.

The three-year-old company has signed publishing deals for seven games from six studios globally, including Tilting Point, publisher of Nickelodeon’s SpongeBob: Krusty Cook-Off, which Carry1st recently launched in Africa. Others include CrazyLabs and Sweden’s Raketspel, a studio with over 120 million downloads across its portfolio.

Carry1st said it provides a full-stack publishing solution, handling user acquisition, live operations, community management and monetization for its partners.

“We have a full-suite service that starts with distribution and partnerships. We help them create bespoke marketing materials from short-form advertising videos to statics, and we customize their content to resonate with individuals in different countries,” said Robbin-Coker.

“And then we operate the game and we also monetize. So we’ve built out our monetization engine to allow users to be able to pay for content that they want more easily across Africa.”

It also enhances monetization in the region through its embedded payments solutions, where customers can pay via a range of local payment options, including bank transfers, crypto and mobile money.

L-R: Tinotenda Mundangepfupfu, Lucy Hoffman and Cordel Robbin-Coker

Shortly after closing its Series A round, Carry1st launched its online marketplace for virtual goods. On this marketplace, called Carry1st Shop, users of a Carry1st game can purchase virtual goods such as airtime, mobile data, entertainment vouchers, grocery store vouchers and gaming currency.

Games revenue has increased 90% month-on-month since the second half of last year, the company said. It’s not unexpected considering the astonishing growth of games in terms of quantity and revenue (gaming apps accounted for nearly 70% of all App Store revenue last year) on both Apple and Google stores since the pandemic.

The company’s online marketplace is noticing even faster growth, said Robbin-Coker, especially among users in South Africa and Nigeria.

Carry1st will use this funding to expand its content portfolio, grow its product and engineering teams, and obtain “tens of millions” of new users on the back of this revenue growth in its games and marketplace products.

In a statement, the company said it intends to acquire more users by expanding into game co-development with studios. It is also eyeing the possibility of developing infrastructure to support play-to-earn gaming in Africa, thus venturing into web3.

Cryptocurrency tokens such as SLP, AXS and MANA are used in play-to-earn games. They can be withdrawn to a crypto wallet and traded for another cryptocurrency like bitcoin or ultimately sold for fiat cash to be used in the real world. Carry1st wants to create on- and off-ramps (platforms that convert fiat into crypto and back) and accept crypto at point-of-sale in its marketplace.

“When we think about Carry1st, we want to be the leading consumer internet company in the region. And we think that the best kind of wedge would be able to do that is a combination of gaming and micropayments and online commerce,” the CEO said.

“These industries are being pretty significantly disrupted or augmented with web3 and crypto. And as more gaming content starts to integrate with NFTs and cryptocurrencies, we think there’s a really big opportunity to partner with those studios the same way we partner with free-to-play studios.”

Africa is the next major growth market for gaming globally. The rapid tech adoption from its 1.1 billion millennials and GenZs is a significant driver for this. Carry1st released a report last year with Newzoo showing that the number of games in sub-Saharan Africa will increase by 275% in the next decade. Gaming revenues are projected to see a 728% increase in the same period.

These stats present a much bigger addressable market than what Carry1st envisioned when it launched four years ago. And with the company’s converging at the intersection of gaming, fintech and web3, there is a broader set of opportunities (which we can see in other emerging markets) to go after in Africa. It’s one factor that piqued a16z’s interest in the company.

“We are delighted to be making our first investment in an Africa-headquartered company in Carry1st, a next-generation mobile games and fintech platform,” Haber said in a statement. “We see immense opportunity for the company to mirror outstanding successes we’ve seen in markets like India, China, and Southeast Asia. We couldn’t be more thrilled to partner with founders Cordel, Lucy, Tino, and the Carry1st team on their mission to build the Garena of Africa.”

Carry1st was seemingly intentional about the investors it brought into this round, especially as it looks to move deep in gaming, web3 and fintech across Africa.

As one of the largest crypto-centric funds, at over $3 billion, a16z brings unmatched expertise in gaming and web3. Google, via its products and phones, will help Carry1st deepen penetration and engagement in Africa. At the same time, Avenir continues to make a big push in African fintech following its big-sized check in Flutterwave.

As for the individual investors, Nas has been fairly prolific with his crypto investments, and Axie Infinity founders own the world’s biggest web3 gaming company.

“It’s a heavyweight group. We’re excited, and we think that their combination will be beneficial for us. Hopefully, it’s a sign that we’re on the right track and this helps drive strategic partnerships for us in the future,” said Robbin-Coker.

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