Please Don’t Try to Build the Next Instagram

by / ⠀Startup Advice / April 15, 2012

2 years of work…  $1 billion payout…

In an instant, this became the dream of thousands of young, enthusiastic entrepreneurs.  Instagram was founded in 2010.  They built a relatively simple photo sharing application, gained traction, raised capital, continued to grow, found a buyer (Facebook) at just the right time, and cashed out big time.  Sounds easy right?

There are now thousands of young entrepreneurs saying, “all it takes is one big hit, let’s create the next Instagram!”

There are a few reasons that I am begging you NOT to try to create the next Instagram.

1.  Gaining Traction is Not Easy Nor is it Guaranteed – Instagram was able to gain traction early, and in this fast paced world of consumer technology, a graph demonstrating hockey stick growth is everything.  The problem is, gaining the kind of traction that Instagram was able to do is not easy, and it isn’t done simply through hard work.  You can’t gain traction through a Techcrunch article.  You can’t gain traction simply by raising capital.  In order to attain hockey stick growth everything has to come together just right, like it did for Instagram.  I believe that Instagram’s traction/exponential growth in the photo sharing market is what ultimately allowed the company to attract investors and attract a buyer.

For further reading:  I love this post by Brendan Baker from AngelList about how to communicate traction to investors.

2.  What if There is No Buyer – Another reason why I believe you should not try to replicate the Instagram model is simple.  What if there is no one willing to buy your company?  If Instagram was not purchased by Facebook or another company, I don’t think they would have been in business in 5 years.  At the time of acquisition, Instagram had no business model.  They didn’t generate a single dollar in revenue.  This is clearly an unsustainable model.  In the case of Instagram it all worked out, but there are countless other companies who have started to grow, had no business model, no buyer, and couldn’t raise another round of investment, so they were forced to shut their doors.  This is an incredibly risky way to start a business, and I wouldn’t recommend it unless you can afford to lose everything.

3.  Timing is Everything–  Finally, I don’t think you can set out to duplicate the success of Instagram, because you can’t duplicate their timing.  At any minute, 2008 can happen again.  At any minute, the market can collapse and angel investment and VC dollars can dry up completely.  At any minute, the market can change and potential buyers like Facebook, Google, and Microsoft can halt all acquisition activity for months.  Unless you are willing to risk everything, then make sure that your business can withstand a market downturn that could delay your plans for months or even years.Bottom line: 99.9% of businesses can’t do what Instagram did. I urge you to focus your efforts on a business model that works.  I am not suggesting that you simply play it safe.  I think entrepreneurs should continue to take risk; however, a business model that is reliant on incredible traction, VC investment, and perfect timing is more risk than most of you should take.

See also  Never Use the Words “I Can’t”

Now with that in mind, go out and change the world!

About the Author:  Adam Hoeksema is the Founder of ExecutivePlan.  ExecutivePlan helps entrepreneurs write business plan executive summaries in order to raise capital.  You can access our free executive summary template here.

About The Author

Matt Wilson

Matt Wilson is Co-Founder of Under30Experiences, a travel company for young people ages 21-35. He is the original Co-founder of Under30CEO (Acquired 2016). Matt is the Host of the Live Different Podcast and has 50+ Five Star iTunes Ratings on Health, Fitness, Business and Travel. He brings a unique, uncensored approach to his interviews and writing. His work is published on, Forbes, Inc. Magazine, Huffington Post, Reuters, and many others. Matt hosts yoga and fitness retreats in his free time and buys all his food from an organic farm in the jungle of Costa Rica where he lives. He is a shareholder of the Green Bay Packers.


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