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You are here: Home / Sales & Marketing / Instagram's Social Media Reinvention
Inside Instagram's Social Media Reinvention Process
Inside Instagram's Social Media Reinvention Process
By Kurt Wagner Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
PUBLISHED:
JANUARY
30
2017

Toward the tail end of 2015, Kevin Systrom, the CEO of Instagram, came to a realization: The photo-sharing app he founded five years earlier was straying too far from its roots.

Instagram was growing, yes, and finally generating some serious ad dollars - which Facebook had been waiting for since it bought the company for $1 billion back in 2012.

But its user base was also growing, and it wasn't all good growth: Instagram feeds that were once dominated by photos from friends and family members were becoming more impersonal.

Brands, celebrities and publishers had arrived en masse, and with them the pressure to capture and share that perfect photo - the one that made you and your weekend hiking adventure look as cool as humanly possible - had escalated. User feeds were riddled with what some saw as over-produced or inauthentic depictions of people's lives. The feed was becoming a digital game of keeping up with the Joneses.

"It became a place where people kept raising the bar on themselves in terms of the quality of what they had to achieve to post," explained Kevin Weil, Instagram's head of product who has been working to fix this problem since joining Instagram from Twitter in early 2016. "We didn't want that."

That pressure on users led to pressure internally at Instagram. Users started sharing less frequently, according to a June 2016 report from The Information. And Snapchat, the hot messaging app from LA that Facebook tried to buy but couldn't, was offering young people the kind of experience that Instagram was not: A low-pressure way to share photos and videos that don't stick around online.

In April of last year, a study from investment bank Piper Jaffray found that Snapchat had surpassed Instagram as the "most important" social network for teenagers, a title Instagram had held the previous two years. Another study by RBC found the same, that teens would choose Snapchat over Instagram as the one social network they'd choose if they were trapped on a desert island.

Instagram needed to evolve. Systrom did that by looking backward: He refocused the company around priorities he says Instagram held in its early days.

"Your connections with your friends and your family are the thing that make Instagram work," Systrom, 33, explained from Facebook's Menlo Park, Calif., headquarters late last month. "All the data supports that if you follow more friends and engage with your friends, your activity goes through the roof. If you just follow more celebrity content or more interest-based content, that doesn't move the needle at all."

"Your connections with your friends and your family are the thing that make Instagram work."

That realization led to a massive product push in 2016 designed to make Instagram more authentic, encouraging users to share with friends in places outside of the traditional feed.

The list of major updates since May include:

* Instagram Stories - Montages of photos and short videos that users can share with their followers. Stories expire after 24 hours.

* A feed ranking algorithm - A computer model that surfaces the posts Instagram thinks you'll like, not just the most recently published content.

* Live video broadcasting - The ability to stream live video directly to your followers, who in turn can send you messages while they watch. The video feeds disappear after they've ended.

* Ephemeral messages - A new messaging feature that erases the photos or videos you send friends after they've been opened.

Ask Systrom for the "aha" moment that prompted such a rampant product revival and he won't be able to name one. He won't comment on Instagram's sharing decline (though he doesn't deny it either), and says Snapchat "motivate[s] us in the sense that I think that they're really innovative."

Not exactly a rallying cry.

Instead, Systrom chalks up Instagram's busy year to a combination of changes, both structural and philosophical.

For starters, Instagram got much bigger.* The company's engineering team, which had long been run by co-founder Mike Krieger, hired a new leader in fall of 2015: Jim Everingham, a former Yahoo VP who oversaw engineering for Yahoo's homepage. Then Everingham went on a hiring spree, doubling his team's size last year to more than 200 people.

The product organization grew, too. The key hire was Weil, the former product boss and longtime exec at Twitter who oversaw the company's ad products through the IPO. Weil was known inside Twitter as a good operator; he left the company in early 2016 after a year and a half as Twitter's highest-ranking product executive.

Weil now has the same role at Instagram, where he's tasked with turning Systrom's visions into reality. The duo have known each other for a decade - Weil's wife Elizabeth went to Stanford with Systrom - and Weil says getting the chance to work with Systrom at Instagram was a huge draw.

"[Systrom is] absolutely one of the best product thinkers I've ever met," Weil said in December from the company's new office, a three-story complex a short bike ride from Facebook's main headquarters. "Probably the best I've ever worked with."

Even with that growth, Instagram is still small compared to its peers. It has just north of 450 employees despite a product with 600 million monthly users and 300 million daily users. Twitter, for comparison, has more than 3,500 employees for 317 million monthly users, and Snapchat has more than 1,500 employees for a daily user base half the size of Instagram's.

That's not a completely fair comparison: Instagram has the luxury of tapping into Facebook resources like data centers, content moderation teams and advertising technology - things that its competitors have to build and support on their own.

But Instagram is still taking advantage of its nimble staff.

"You can turn the ship much more quickly with smaller teams," Weil explained. "When we decide to do something, the time difference between us making the decision and doing it is very small. And that's different if you have a multi-thousand person organization."

Weil says that Instagram Stories, the company's most significant product launch of the year and a direct copy of a Snapchat feature with the same name, was the first big product he worked on after joining Systrom at Instagram. Concept to launch took just four months. (Of course, it's also faster to launch a product that's nearly identical to one already on the market.)

Stories lets users share with their friends a montage of photos and videos that expire after 24 hours. The feature has been a hit with Instagram's users: 150 million people use Stories every day. That's as many people as Snapchat's entire user base.

One reason people likely use Stories is that you can't really miss them. Instagram added the new feature at the very top of the home screen, so it's the first thing you see whenever you open the app. (In Snapchat, the app opens directly to the camera, prompting you to share something, but not necessarily something to Stories.)

"There's no more bold move you could have made," Weil said about the new product's location. "And [it happened] without the kind of existential debate, because the founder and the CEO says this is the problem we need to solve."

Stories, for example, was never tested outside of Facebook's walls. In other words, it was a feature Instagram's top brass wanted, regardless of whether or not its user base was on board.

Systrom cites Stories, Instagram's ranked feed and even its decision to abandon square-only photos back in August 2015 as examples of "false constraints" that were holding Instagram back.

"[There was] a change in philosophy internally of not being too precious about what got us here," Systrom explained. "I learned a lesson from watching other companies who held onto things too long. If you look at the history of companies that have succeeded and the ones that have failed, there's a pretty clear pattern that the ones that have succeeded typically morph every couple of years into something new. And that change is fairly uncomfortable."

"[There was] a change in philosophy internally of not being too precious about what got us here."

Stories, in particular, was a change targeting the pressure around sharing that Instagram executives had noticed in late 2015. Stories disappear after 24 hours, meaning the bar for what qualifies as "post-worthy" is usually much lower on Stories than what you'll find in your feed. It's a lot of the same stuff - food shots, sunsets, selfies - just less manicured.

Instagram doesn't deny that it borrowed the idea for Stories. Weil says the feature was "built on a format that Snapchat invented. It's because they were solving the same problem. It's a format, [and] we believe that format will be universal."

Admitting to borrowing an idea is one thing, but neither Weil nor Systrom will admit that Snapchat's rise in popularity is pushing Instagram to move faster. (Multiple former Facebook employees say that Snapchat is indeed a driving force - and Instagram's spate of very similar product launches seems to confirm the same.)

"They motivate us in the sense that I think that they're really innovative. I think that they execute really well," Systrom said. "I think we run different companies and I think we have different goals in mind, but we share a lot of the same aspirations."

Casual sharing is certainly one of those aspirations. Instagram also launched disappearing private messages, another Snapchat innovation. And when you create a live video broadcast on Instagram, the video disappears as soon as the broadcast ends. It doesn't stick around as part of your profile.

These kinds of changes seem to be working for Instagram. The company added its last 100 million users in just six months, the fastest growth rate in company history. The sharing problem from 2015 seems to be fixed, too.

"In the last couple months, with ranked feed and Stories, people are sharing more now than ever on a per-person basis, and more people are sharing [in] total," Systrom said, without providing actual numbers. "We have more people sharing every single day than ever before."

That's good news for Facebook, which seems to be betting on Instagram to not only fend off Snapchat but boost Facebook's sales.

Instagram's ad revenue has become more crucial to Facebook, which is starting to run out of places in its News Feed to put advertisements. Instagram, though, is still just ramping up a business that analysts think could be huge.

Research firm eMarketer estimates that nearly three quarters of U.S. companies over 100 employees will use Instagram for marketing in 2017, more than the number that will do the same on Twitter. Credit Suisse, meanwhile, estimated back in April that Instagram would bring in more than $3 billion in revenue in 2016, though other analyst firms offered more conservative estimates. (Facebook doesn't yet break out Instagram's financials.)

That growth will no doubt be challenged by Snapchat parent company, Snap, which is gearing up for an IPO this year. Snapchat had the original Stories product and has emerged as Instagram's largest (and really only) major threat.

Instagram just recently started selling the same type of full screen, vertical video ads that Snapchat has popularized, and the two apps will be fighting to win marketer budgets.

And, of course, fighting for your selfies and messages, too.

"Our mission is to strengthen relationships through shared experiences," Systrom said. "And we're going to be best at that in the world."

© 2017 Re/Code under contract with NewsEdge/Acquire Media. All rights reserved.
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