How I Built This with Guy Raz - Instagram: Kevin Systrom & Mike Krieger (2017)

Episode Date: November 13, 2017

We're hard at work planning our upcoming live shows, so we bring you this favorite from the last year: Instagram. Kevin Systrom and Mike Krieger launched their photo-sharing app with a server that crashed every other hour. Despite a chaotic start, it became one of the most popular apps in the world. PLUS in our postscript "How You Built That," we check back with Dave Weiner of Priority Bicycles, a low-maintenance bicycle brand. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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on sale right now for that event. You can find them at nprpresents.org. And now here's one of our favorites from the archive. It's the story of Instagram. Enjoy. It was nothing more exhilarating than seeing all those people stream in and nothing more crushing than then seeing, you know, people posting on Twitter or on their blogs and saying like, oh, another startup that doesn't know how to scale. Like, oh, like so clowny. We were both, I mean, at that point, like, running on zero sleep for two days, just devastated. And I was like, this is it. We built this great thing, and we totally messed it up.

From NPR, it's How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built. On today's show, how a walk along the beach sparked an idea that turned all of us into good photographers and made Instagram one of the fastest growing apps of all time. Okay, it's 2009, and Kevin Sistram is just a few years out of Stanford and doing the Silicon Valley thing. He's working at a travel startup by day and teaching himself to code at night. And a friend from college, Mike Krieger, is also in the area pretty much doing the same thing. And after a few months of experimenting, Kevin builds an app.

He calls it Bourbon, and it's a check-in app where you can tell your friends you're at a coffee shop or a bar or wherever. And Kevin thinks this app has, you know, some potential. I mean, at that time, there were so many checking apps. There was Foursquare. There was Goala and there were a bunch of others trying to make it. And of course, following, you know, kind of the trend, I was like, there's something here about the devices in everyone's pockets being available to share new types of information.

And I was like, location is the type of information people are going to want to share. I think the insight Mike and I had along the way was that, actually there were more types of information. The fact that these devices had a camera, that would lead to our visual communication revolution where all of a sudden people weren't just communicating with text and voice, but they had the chance to communicate with an image. But initially our bet was on location, and I'm frankly just very happy that we discovered the image thing along the way.

So people were using this app? Yeah. And, you know, it was just compelling enough to get like a handful of beta users, But I would basically come home at night and just tinker with this idea. And, you know, along the way, I prototyped it enough that I was willing to give it to a handful of friends. And those friends gave it to a handful of friends. And before you knew it, we had, I don't know, maybe 80, 90 people using it. And only at that moment did I decide that, like, hey, maybe this thing could be a company if we actually tried.

Then, like, at what point did you say we should try to, like, raise some money for this? I went to a bar where a bunch of investors were getting together. And like I kind of mingled around the room and, you know, people were kind of showing their prototypes on their phones to different investors. And I showed it to this one investor, his name, Steve Anderson, who was one of our first investors. And he was like, this is pretty cool. Let's set up coffee. You know, we can meet up and you can tell me more about the app. And that was like the biggest accomplishment to date.

I was like, oh, my God, there's an investor who's willing to talk to us. Yeah. So I went and I had that coffee and I sat down. And as we were talking, actually, I had an alert that would alert on my phone every time someone signed up because I was really excited when we went from 80 users to 85 users to 90 users. And as I'm sitting there with him, like a bunch of people are signing up. And I wasn't entirely sure why, but he looked at me and was like, did you plan this, like that you would have a bunch of people sign up while you were demoing to me? And I said, no, I honestly don't know who these people are. And he looks at me and he was like, all right.

count me in. But he actually said one thing to me. He goes, before I do this, you have to find a co-founder that's willing to do this with you. And at that moment, I was like, all right, got to find someone awesome to kind of partner with and make this all happen. So Mike, how did you guys, like, I mean, how did this happen? Like, you came to Kevin. You were like, I like this thing. It's cool. I want to work with you. I mean, was there more formal than that? I think where it came from was we had a kind of shared kind of kind of kind of kind of shared kind of spirit of tinkering. So on the weekends, a lot of times I would be at coffee bar, which was this great coffee shop here in San Francisco, and I'd be working on iPhone apps just for fun. And Bourbon,

the check-in in itself I didn't find as compelling, but having a sort of visual status was really compelling. So I got excited enough that I think I'd, yeah, I came up with Kevin. I was like, look, if you ever do this for real, like, let's have a conversation. And I think that first meeting we had about it, actually, I was like, count me interested. Like, I'm excited enough. to do it and you know how like the the cliche of your life flashing before your eyes like my future flash before my eyes for talking to Kevin right then I just imagined myself working one-on-one with him on something that I was really excited about in San Francisco just trying to make something of it and I was like there was something in me that just stirred at that thought so just going back for a

second when you met that investor he just he was just like here's a bunch of money well he was like okay I'm willing to give you $50,000 to do this And that's more money than I had ever heard of in my entire life for a business getting at the time. But the second someone shows any interest in you in Silicon Valley, all of a sudden you have a bunch of other people that really want to invest. Because nobody wants to miss the bus, right? No one wants to miss the next Google, the next whatever. And that initial check went from $50,000 to $250,000. And then there was another investor in Andreessen Horwitz who came in and put $250,000 in.

So here are two guys with like basically a prototype. and a couple of computers, no office, who raised a half a million dollars, and we're looking at each other like, we think we can make this last. I mean, we were living on peanut butter and jelly sandwiches at the time. So how did you guys pivot? I mean, how did you turn bourbon into what became Instagram? What was the genesis of that? I think the best thing for any entrepreneur is failure.

And for us, it was the lack of momentum. I mentioned we got to we got to about a hundred users using this app. A hundred, not a hundred thousand, a hundred. No, no, no, no, a hundred. Like, you can fit them in a room. And Eric Reese is this guy in Silicon Valley likes to, you know, talk about the lean startup method.

And one of his, one of his lines is like, don't ask why people don't use your startup. Ask why the people who continue to use your startup keep using it. And when we looked at our user base, our whole hundred people, each of them, loved the photo aspect. So that's why we ended up focusing on photos.

But there were already a bunch of photo websites and even photo apps. So how are you able to come up with an idea that would make your thing different? So we were both kind of burned out. We had decided that Bourbon wasn't going to do anything. We had, you know, $495,000 left in the bank because $5,000 to buy a couple of computers, right? And we were like, all right, it's okay. If this idea doesn't work out, we can. really string this half a million dollars out for a long time. So we're going to come up with a new idea. So we started focusing on photos and we were both burned out. I was like, all right, Mike, I got to take a break. So my now wife and I, Nicole, went to Mexico. And we were working on this idea of photos. So Mike was like, all right, I'm going to prototype this thing while you're on break. You come back and then we'll like reconvened. So Mike started prototyping this app. And as I'm away. I'm walking down the beach with Nicole in Mexico. We were in this little surfing town called

Toto Santos. And I'm like, you know, Nicole, I think we're going to focus on photos. And she goes, oh, yeah, that sounds like a great idea. I love all the photo posts on Bourbon. But she goes, I don't think I'm going to post that much. And I go, well, why not? And she goes, well, my photos aren't that good. And I said, well, they're great. And she goes, well, they're not as good as your friend Greg. And I was like, well, Greg uses a bunch of filter apps to like make them look nice. And she goes, oh, you should probably add filters. And I was like, ah, that's it. Like, we just need to be able to make people feel like their photos are worthy of sharing.

And I remember going back right from the beach, I sat in the room with a little dial-up connection that the little Hacienda had. And I literally just, like, researched how to make the first filter, which ended up being called X-Pro 2. And if you scroll all the way back on my account to the very first photo, there's Nicole's foot and a little stray dog in Mexico. And that's because that day I made X-Pro 2 and I went out to a taco stand for lunch to test it. And I took that picture and posted it on the prototype that Mike had given me. So that was kind of the intersection of the ideas of photos and filters. And it all came through

consumer insights. It was just like, what problem are we solving? Share something that people love and make sure that they feel great sharing it. So how long did it take from the time you decided to move away from Bourbon and then launch Instagram. It was only eight weeks from the time we basically sketched it out to when we put it into the Apple store. We pressed launch on October 10th of 2010. And it was like about midnight and people just started streaming in. It was crazy. It was like...

Like how fast were people joining it? The first 24 hours, we had 25,000 people sign up around the world, which sounded big to us at the time. Yeah, that's incredible. Were you expecting that? No, I mean, a couple of things that showed how naive we were at the time. Number one, midnight in San Francisco, it's 9 a.m. somewhere. And we didn't quite realize how global our business could be. So it turns out everyone who was signing up at the beginning actually lived overseas. So when we looked into the database and we were like, who are these people?

They all had, you know, email addresses from Germany and Hong Kong and various places around the world. And before you knew it, we actually had overloaded our system, and it was a very small, naive system. It was a single computer in a co-location space somewhere in L.A. Everything was on one computer? Yeah, it was nothing more exhilarating than seeing all those people stream in, and nothing more crushing than then seeing people posting on Twitter or on their blogs and saying, like, oh, another startup that doesn't know how to scale. Like, oh, like so clowny.

We were both, I mean, at that point, like, running on zero sleep for two days, just devastated. And I was like, this is it. We built this great thing and we totally messed it up. And to be clear, there's no reason we should have succeeded. Like, I mean, the server was just like it was down every other hour. And like, people just kind of forgave us. And they would come back and they would share their photos. And at the time, mobile networks weren't that great either.

So people would actually blame their connection and not us, which was great. But those initial weeks, I mean, it was just like trial by fire. And we had to learn everything on the job. And we had so many chances to fail. We just kept at it and kept working and pulled a bunch of all-nighters. And the amount we learned in that first year was crazy. It was like five years of college, all in one. And, yeah, it was pretty exciting and tiring.

How did people even find out about Instagram? Like, how did they know that they should download this app? So we had this intuition that if you're going to throw a party, which is kind of what an app launch really is, as people are streaming to the door, you want them to sort of know how they should act and who else is there. So one of the things we did was we have, you have a hundred sort of invites that you can have before you launch your app to the Apple store where you can invite people to try it out.

And we're like, how are we going to use these hundred people? And we used them a combination of some journalists that we'd gotten to know over, you know, the last couple of years in San Francisco in the Valley. We also went on the site called dribble.com, which is sort of like a place where designers go and show off their best work. And we figured photographers might not instantly take to Instagram because, like, they want, like super high resolution or they have other constraints. But designers love photography, but it's not their main sort of job.

So we picked basically the 10 top designers on Dribble, and we emailed them, and some ignored us, which is fine. And some wrote back and said, sure, I'll try your app. And it was great because coming in day one, people who would explore things, we had a popular page at the time that showed the most popular photos across the whole community, would be like, wow, you can take that on a phone. Like we take this for granted a little bit now. cameras have improved every year.

But I think part of what we showed to people back in 2010 was that there was something really amazing you could do with just the phone in your pocket. When we come back, how President Obama, Snoop Dog, and about 500 million other people started to use Instagram, and what happened after Facebook bought it for a billion dollars? I'm Guy Raz. You're listening to How I Built This from NPR. It's How I Built This from NPR.

I'm Guy Raz. So it's about a year after Instagram's launch, and it's grown to 10 million users at this point. And Mike Krieger and Kevin Sisterum are expanding their staff very, very quickly. And at this point, did you guys have like investors banging on your door? Yeah, we actually had investors showing up in our office. We'd be like trying to keep the servers up. And someone would like tap on our shoulder and they'd be like, hi, I'm so-and-so from so-and-so investment partners. And I'd like to take you out for lunch.

And we're like, we're trying to keep the side up, please. But we met, you know, a bunch of people along the way. And the ones we did make time for were the ones who were most respectful of that time and knew what we were going through and could help. So very shortly after you launched this thing, it's like it's valued at like more than $20 million or something, right? Yeah. Yeah. It was I think our first round was like, I don't remember. It was like we took $8 million of financing on like a $20 million.

20 pre, so like roughly a $30 million valuation or something. And I mean, again, at that stage in life, it's like, wow, I've never heard of a company that's worth this much. I mean, this is crazy. I didn't really think much of it. I just wanted to get back to work. And I think Mike felt the same way. We were just like so focused on building what we were building. It just like, it kept growing. And the question was, again, Mike and I every single day were thinking how, what scale can this get to. And I think it really started to hit us when we would be out and see people using it in the real world. It was kind of surreal over time. I mean, I mean, sort of like from the outside, the story just seems like just a clear, linear, like jumping from success to success. Like,

it was super easy. You put it up there and then you raise all this money and then the valuations just in the stratosphere. But were there moments in the beginning even after that initial 24-hour period and beyond, where you thought this could fail, this could easily just fail. I mean, all the time. Like three weeks in, Kevin turned to me and he said, Mike, I don't know how big this is going to be, but I think we're onto something. And I was like, oh, we'll see. And every morning I would wake up expecting that that was the morning that growth would

stall, and that was it. And if I knew what I know now about metrics and how to measure that whether people are coming back over a one day, seven day, 30 day period, I would actually have been, I think, a lot calmer because I think it would have shown. as it shows now, that people who join Instagram tend to stick around and become more active. And that's really exciting. But at the time, I didn't know that. I was like, ah, they're signing up.

Are they going to come back tomorrow? Like, is it all going to change? And that was sort of an internal worry. And then externally, you know, as we launched and grew, it became a very competitive space. And we would see, you know, companies get announced that had tens of millions of dollars in investments even before launching. And we're like, man, like, these guys have so much money. They're going to come in and, you know, attack us. and it's going to be really hard.

And that's the other lesson learned, which is, you know, your valuation and the amount you raise, it can be helpful in building your product, but it does absolutely nothing. People, end users don't care at all how much money you've raised. They care if you're providing some kind of value in the product. And, again, lesson learned over time that, you know, you have to earn it every day for people. I'm curious to sort of get your take on why it continued to grow. I mean, there are a lot of cool apps that you and I both. know of that launched five, six years ago that were amazing, that people used, that no one

uses anymore, that that are just gone. And there are lots of people who work really hard, who are really creative, really smart, have amazing ideas, and put out a really cool product. So why do you think Instagram survived and thrived? I think there was this opportunity that we spoke of back in the day that people had cameras in their pockets with them for the first time ever. And digital, photography was clearly going to be a thing. But the second a camera got added to the phone, it meant you had it with you at all times. And that doesn't mean that you're going to take photos on it. Obviously, the quality has to be high enough. But we started the company right

at the moment where like the quality of those cameras just kind of met up with point and shoots. And because of that, everyone started taking photos on their phone. But they had no place to put them. Or if they did, it was hard. I mean, they would look at Facebook and they'd be like, well, you know, like I have to upload them like on the desktop or on Twitter. Like it doesn't really show in the timeline. So they had this problem. Like there's no place to easily share all these photos that I'm taking all the time. And we just happened to be the right tool for that job at the right moment.

And we created, I believe the thing that kept it growing was we created an open network. We sat down very early on in the product design process and asked ourselves, okay, do we want to be a place where you send a friend to request? and you have to accept it in order to see those photos, or do we want to be open, where anyone can follow anyone? And I'm so glad we ended up choosing the open model, because now you can follow someone from Japan. You can follow, you know, a chef from New York City. You can follow your favorite celebrity, or you can follow your friends.

And that, like, hadn't really been done before in photos. If you look at every photo service before then, it was basically a closed-only, friends-only network, and we were the first ones to really open that up. You know, there was a moment in my other radio show, the TED Radio Hour, where I think we all realized how big the show became when Pink, the pop singer tweeted about the show. We were like, holy, she listened to the show. Did you guys have a moment where you were like, Jesus, like, they're using this thing that we built in like our basement? I think for me, the biggest one was the White House or Obama.

I think it was Obama joined first, and I think it was part of the campaign that he was. running and I remember like the President of the United States like knows what Instagram is and knows how to use it and I remember you know every I you know every time somebody's using our app and I either see or hear about I'm like I hope it doesn't crash I hope it works perfectly and I hope they like don't have any questions that keep them from using it so that was I think a big inflection moment and I think the other one was I noticed that the New York Times when they would cover us had stopped saying Instagram comma the photo sharing app and then

it was just Instagram I'm like oh we are we have reach the point where they can assume that most of their readers know what we are. I am old enough to remember when NPR would say Google the search engine. And for me, so I feel embarrassed because you had a really good example about like the president using. For me, it was like our first celebrity of Snoop Dog. Do you remember Snoop Dogg signing up? And we were like, is this actually Snoop Dog? And then I got an email that was like Snoop Dogg's people want to meet you guys.

And I was like, oh my gosh, I don't even know. what does it mean people? Like Snoop Dogg has people. And I remember Justin Bieber signing up and the world going kind of bonkers for that as well. And by world, I mean teenage girls. And they basically started using the app incessantly. And it kind of took off with like a bunch of really young people as well.

Yeah. You obviously everybody knows that eventually you sold Instagram to Facebook for a billion dollars. I mean, it's just incredible that two years after you create this. thing that happens. You couldn't have planned for that. You couldn't have, that couldn't even have been an ambition. Yeah. I mean, the first day that we went home after pulling that all nighter to launch Instagram,

there was a guy sitting on the Muni here in San Francisco, which is the subway system, and he was using Instagram. And I was like, oh, my God, like, we did it. Like, someone in the world is using this thing out in the wild. That feeling and that moment is the currency that you might. maximize when you're an entrepreneur. It's like seeing someone using your product and loving it is like way more rewarding than any amount of money in the world.

You guys now are within the Facebook family, right? I mean, you're an independent company, but you are part of Facebook. How does that change the way you operate? Obviously, you're a lot bigger. Yeah. Initially, that was actually pretty awesome because we had all these problems scaling our services and like the Facebook infrastructure team would come over and been like, oh yeah, we've seen that before. Here, this is what you do. So it made our lives

actually a lot better. And we were able to hire some of the best people in the world and share talent. I like to call ourselves the older brother or the older sibling where we were the first company that Facebook acquired and sort of kept running. And then since then you've seen Oculus and WhatsApp. And I think there were a lot of things that we figured out early on in terms of the relationship, the office space, hiring. And I think we all from both sides of the table approached it from a spirit of, hey, how can we make Instagram better through these integrations, rather than how can you make Instagram more like Facebook, you know, or try to adapt it to be exactly the same?

There was this, like, this controversy that happened, um, with Instagram where you change a terms of service and people are under the impression that their photos were, we're going to, like, be your property. And a lot of people, like, left Instagram at that moment, um, presumably that, I mean, that's, that was a, a little. learning lesson for you for you guys huge lesson um number one people read the docs that you know you put out and you should care about them as a founder so your terms of service basically what happened we had these terms of service that we had i think effectively copied from some other site

way back in the day and just find and replace their name with instagram because we were a startup and we didn't know what we were doing um but we eventually got to a place where when we joined facebook Facebook was like, hey, you actually need a real one that, like, fits with the way you guys work and we're going to make all these changes. And we went through it. And I was like, okay, great, this makes sense. And I didn't really read it all that carefully. And one of the sections, reading it again today, if I look at it can be interpreted that we were going to take user photos and somehow use them in advertising. That was definitely not our intention. And like no one in the company had even thought of that idea. It just, if you read the sentence that way, you could see that maybe it would. worry people. So immediately, you know, we had this big protest and people were, you know, leaving the service. I mean, we have a graph of account deletions at that time and it was skyrocketing. And Mike and I sat down and were like, what do we do? And, and we felt helpless. I mean, it was like all over, it was that first day all over again. It's like we've screwed this up. How do we make make sure people know? And I went back in my head. I was like, why don't we just apologize and

say we're wrong? And I posted this blog post on our blog. You can probably still find it online. And I was like, we're sorry. Like, we didn't mean this. That's absolutely not what we're trying to do. And we tweeted about it. And actually, the graph of deletions at that moment drops to zero. And sometimes you just have to say sorry. Sometimes you just have to say you were wrong and reassert what you're actually trying to do. And that interaction with the community still sticks in my mind is something that we try to do every single day, which is be really transparent with people, put our community first because, like, at the end of the day, without them, we're a photo sharing app. How much of what happened to you guys, to Instagram and, and this

whole story, how much of it was luck? I'd say 50%. Actually, I have this thesis that the world runs on luck. The question is what you do with it. Everyone gets lucky for some amount in their life. And the question is, are you alert enough to know you're being lucky, or are you're, you're becoming lucky. Are you talented enough to take that advantage and run with it? And do you have enough grit? Do you have enough like resilience to stay with it when it gets hard? Because everyone gets lucky in minimal ways every week. I mean, you find a dollar on the ground or, you know, you get a break at work to work on a cool project or you meet someone really interesting. The difference between people I think who succeed in the long run and the people who don't is frankly that optimism that

like you got lucky and now it's yours to make awesome. And that first day, I think we got lucky by having the right ideas, the right time, in the right place. And we were lucky to have met each other. I mean, there were a lot of co-founding pairs in tech who have not worked out. And Mike and I are like great friends. At least I think so, right, Mike? And the question is, can you take that luck and capitalize on it? Instagram co-founders Kevin Sistram and Mike Krieger. By the way, after the sale of Instagram to Facebook for a billion dollars, those two became very, very rich. But today, Instagram, according to Forbes, is worth more than $50 billion, which makes Instagram bigger in dollar terms than places like Alaska, Maine, Rhode Island, Latvia, Senegal. And please do stick around because in just a moment we're going to hear from you about the things you're building.

Hey, thanks for sticking around because it's time now for how you built that. And today, we're updating a story we first ran in January featuring Dave Weiner from New York City. When you tell people that you're leaving your successful software career to start a bike company, you get two types of reactions. You get, wow, that's amazing, let me hear more. And then you get the, oh, okay, go to luck. But about three years ago, Dave was willing to take that leap because he loves bicycles. basically grew up fixing them, building them. But a lot of times when he wanted to go out for a ride with friends, he'd run into this.

They'd always say, my bike has flat tires and needs a tune-up. And then, of course, me as the ex-mechanic, I'd either have to go over early and tune up their bike or we wouldn't go for a ride. So Dave decided to design the kind of bike where that type of thing would not happen. We really reinvented the bicycle going through every little... nut, bolt, piece, component on the bike with the focus of low maintenance. And so in a basement workshop in Manhattan, Dave designed his first bike, made of aluminum and stainless steel with internal gears and disc brakes. But he says what really set his bike apart is that instead of a greasy chain,

it's got a belt drive made from carbon fiber that feels more like rubber. So there's no grease, there's nothing to rust, there's no way to stay. suck in your pants and leave you on the side of the road, and it lasts three times longer than a traditional chain. Now, you might think a bike like this would cost like thousands of dollars, but Dave figured out a way to do it for a lot cheaper, more like $400. And his concept was so popular that he raised half a million bucks on Kickstarter and then found two factories in Asia to make the bikes. But about two years ago, when it was time to deliver the first thousand bikes, he got into a jam.

We had our bikes produced and they were on the water on their way over from Taiwan when customs took our containers and held them for an undetermined amount of time while they inspected them. And even worse, this was in December. And we started to get emails

from our customers saying, you're going to ruin Christmas. I bought this for my spouse, for my son, for my daughter, for Christmas. It needs to be under the tree. And all this almost upended the whole company. But about a week before Christmas, customs finally let the bikes through. I was lucky we made it on the very last day we could have. That's Dave Weiner of Priority Bicycles.

When we first spoke to him in January, Dave was working on opening his first retail location in New York City, and right now he has a showroom. It's downtown in Tribeca. And things are going really well. Priority Bicycles now has partnerships with more than 200 hotels, resorts, and college campuses around the world, and they're launching a line of accessories, including some bike bags that just came out this week. And in August, Wired Magazine called his bicycles the ideal city bike. If you want to find out more about Dave's Priority Bicycles, head to our Facebook page. And of course, if you want to tell us your story, go to build.npr.org. We love hearing what you're up to. Our show was produced this week by Ramtin Arablui, who also composed the music.

Thanks also to Neva Grant, Sanazmeshkampur, Claire Breen, and Jeff Rogers. Our intern is Diana Mustak. If you want to find out more or hear previous episodes, you can go to how I built this.npr.org. Please also subscribe to our podcast at Apple Podcasts or however you get your podcasts. You can write us. That's H-I-B-T-NPR.org. And at Twitter, it's at How I Build This. I'm Guy Raz, and you've been listening to How I Build This from NPR.