Why are Instagram Founders Leaving the $100 Billion Company

instagram founders systrom and krieger

Instagram founders Kevin Systrom and Mike Krieger are leaving the company they started to explore their “curiosity and creativity.” What are they leaving behind? A transformed social media landscape and many, many questions.

“Mike and I are grateful for the last eight years at Instagram and six years with the Facebook team. We’ve grown from 13 people to over a thousand with offices around the world, all while building products used and loved by a community of over one billion. We’re now ready for our next chapter.

We’re planning on taking some time off to explore our curiosity and creativity again. Building new things requires that we step back, understand what inspires us and match that with what the world needs; that’s what we plan to do.

We remain excited for the future of Instagram and Facebook in the coming years as we transition from leaders to two users in a billion. We look forward to watching what these innovative and extraordinary companies do next.”

 

Instagram founders expressed differences with Zuck
Instagram founders expressed differences with Zuck

Since the two founders announced their departure, there’s been tons of speculation about why they are leaving. The loudest rumor? Systrom and Krieger are moving on because of differences in opinion with parent company Facebook.

  • Remember, Facebook bought Instagram back in 2012 for just $1 billion. Insta is now worth more than $100 billion, per Bloomberg estimates. Is a 100x return good?

Fast forward six years…

…And Facebook user growth is stagnating. FB shares dropped the most in a single day ever in July after execs said declines in revenue growth would continue through year-end. Through that, though, Instagram has flourished (with 1 billion monthly active users).

According to Recode, it maybe not so surprising that the Instagram Founders are leaving. “Over the past year, both Systrom and Krieger have grown increasingly frustrated and agitated with Zuckerberg and Facebook’s increased influence over the app, according to multiple sources. One characterized it as “bizarre meddling” that hurt morale within the unit.

Specifically, there were worries that Facebook’s moves were hurting the app’s growth — perhaps even intentionally — through some of the company’s product updates and marketing changes, these sources said.

That included a throttling back of Instagram’s promotion inside the Facebook app, apparently ordered by Zuckerberg, that dropped weekly referrals significantly by hundreds of thousands of users.

Systrom was also frustrated with a recent Facebook change to how posts are shared between the two apps. Previously, photos shared to Facebook via Instagram included a label identifying the photo as an Instagram photo, presumably to encourage people to visit or download Instagram. That label was recently removed, which made it appear as though people were posting those photos directly to Facebook and not to Facebook via Instagram.”

The big question now is that…without Systrom and Krieger’s hands-on approach to running the Instagram, could Facebook mess up the magic that makes Instagram…Instagram?

 

 

 

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