Instagram’s Business Model

Marco Arment has the best take on what Instagram did, that I have read. But after reading his take I couldn’t help but wonder if this was the plan all along, to sell to a another company for big money, and if that plan is “ethical”, or whatever you want to call it.

That is: if Instagram’s plan was to get huge and sell to another company, then the plan is essentially a greedy plan. Because the plan must be to grow as fast as possible at all costs, doesn’t matter if people like the service so long as they use it (the way I think most people feel about Facebook).

However, if the plan was to create a great service and figure out the money part later, then the plan was a stupid — but noble. They were creating something out of passion, but naively assumed making money off of a free product later on would be easy — it’s not.

Of course there could have been a great plan to make money in place all along, allowing them to create a great free service that they were passionate about, but we may never know that.

I don’t think the first option, being acquired, could have been the business model. The service was/is just too good not to have a passionate group behind it. You can feel that in the app.

So the only leaves the last two options.

Originally posted for members on: April 15, 2012
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