tl;dr: building great products not only requires a clear vision, but a strong strategy. Instagram has been able to achieve its mission to “… capture and share the world’s moments” in part by leveraging second mover advantage over certain competitors’ features and building an all-in-one social experience.
Let’s compare against competing social platforms and analyze Instagram's impact:
Putting this chart into numbers, this is what we see (not all companies publicize the same metric - some in the form of MAUs, others in DAUs, or user count):
As illustrated in the timeline, there were two major events that resulted in user engagement shifts:
Instagram now has all the cards in their house - a. original picture sharing / filtering, b. social video posting, c. stories (integrated to Facebook), d. a gargantuan and growing social graph. Vine only had b., and Snap only has c. (intertwined with it's existing photo ephemerality concept). Instagram doesn't really have much in terms of product differentiation at that point, but when it comes to social media it’s to one’s advantage to capture an all-in-one experience.
But along with being a second mover to certain features, its definitely important to credit Instagram’s growth strategy to other key factors as well:
Instagram has proven that what matters isn’t just a vision, but strategy. Kevin Systrom had many times admitted he's deliberately mimicking features across incumbents as a strategy to maintain a foothold in this space. Regardless, it's working in their favor because Snap and Vine never thought to do the same – social media so happens to be an industry that has always allowed this cannibalism to happen.
This cautionary tale of a second-mover advantage as a strategy is applicable everywhere; Facebook focused on MySpace’s flaw of a lack of a connected network by building a social graph, and Google over-indexed on Yahoo / AskJeeves.com’s problems around targeted relevancy by optimizing on users’ intent. We are seeing this in China, with hundreds of companies spawning not out of originality, but by copying Silicon Valley tech (Weibo to Twitter, Didi to Uber, Xiaomi to Apple, Baidu to Google, Renren to Facebook). Box was founded first before Dropbox – but Dropbox was the first to intertwine a consumer strategy with a SaaS model, which ultimately enabled self-serve, consumer-driven upsells (e.g. word-of-mouth) and ostensibly no need for a sales team. Finally, Uber was initially built as a service only for the wealthy, providing UberBlacks “like a baller”, so they campaigned. However, Lyft was first to enter the lower end market (including with Lyft Line), with options as low as $5-8 for a ride – Uber shortly copied that and beat them to market share, because they were able to iterate and grow faster (today, they have a ~70% U.S. category share). All these former companies had visionary ambitions, but failed to have a compelling strategy to protect themselves.
All that said, I believe it’s possible to not have to be a second mover and succeed long-term; Apple was the first to release a truly personal desktop computer, but shortly after was overrun by a cheaper version by Microsoft. But only after Steve Jobs took the helm and turned things around with the visionary iPod, iPhone and subsequently iMac / Macbook (focusing on a strategy around ubiquity and design simplicity), did Apple finally become the most valuable company in the world. I personally think Snapchat has the chance to turnaround because they are one of the most innovative social companies out there (lately, they’ve admitted mistakes, and will re-focus their efforts abroad as well as on social influencers. They’ve also launched a promising Spectacles v2). However, if they are to succeed as first movers, they’ll need to not only have an innovative vision but great execution against a strategy that will thwart copycatters moving forward.
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There are many ways to design a strategy (we can go deeper into that in a separate blog post). Too many times we’ve seen unique and original companies lose traction due to a failure to protect their IPs and original ideas. After all, as YouTuber Casey Neistat puts it: "Ideas are cheap. Who cares about ideas? It's all about execution." If first mover companies are cognizant of this threat, then perhaps they can strategize to survive its competition. Otherwise, they’ll be swallowed by the second movers.
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This post was also inspired by a talk from a Director of Product at Dropbox –AJ Frank– who recently shared about his past experience at Uber, Verst (acq by DBX), Vine (Twitter), & Google and learnings that came from all of them, i.e. the need for a clear vision and strategy.
I'm Daniel, and I'm an Investor @ Obvious.com. Previously, I was a Product Manager @ Dropbox and Uber, & studied CS at Stanford. I also write on Medium.
Ping me daniel@ obviousventures.com, or follow @dcliem – let's chat.