This is Kristen O'Brien, Managing Editor at NFX, and this is the founder list. Audible versions of essays from technology's most important leaders selected by the founder community. The following is a reenactment of a private email conversation between Facebook CEO, Mark Currier, and Instagram CEO, Kevin Systrom, about Facebook's acquisition of Instagram between the dates of March 19th April 9 2012. Please Pete, some names will be bleeped out for the sake of privacy.
The first voice you hear will be reenacting the voice of Mark Zuckerberg. The second will be reenacting Kevin's system, read by NFX. I'm glad we got a chance to talk yesterday. I appreciate the open style you have for working through these issues. It makes me wanna work with you even more. I was thinking about our conversation some more and wanted to share a few more thoughts.
On the thread about Instagram joining Facebook, I'm really excited about what we can do to grow Instagram as an independent brand and product while also having you take on a major leadership role within Facebook, that spans all of our photo products, including mobile photos, desktop photos, private photo sharing, and photo searching and browsing.
This would be a role where we'd be working closely together and you'd have a lot of space to shape the way that a vast majority of the world's photos are shared and accessed. We have about 300,000,000 photos added daily with tens of billions already in the system. We have almost 100,000,000 mobile photos a day as well, and it's growing really quickly. And that's without us releasing and promoting our mobile photos product yet.
We also have a lot of infrastructure built up around storing and serving photos, querying them, etcetera, which we can do some amazing things with. Overall, I'm really excited about what you'd be able to do with this and what we could do together.
One thought that I had on this is that it might be worth you spending time with to get a sense for the impact you could have and the value of using all of the infrastructure that we've built up rather than having to build everything from scratch at a startup. This would probably be a useful perspective for you to have.
On the threat of integrating OG deeply, whether or not Instagram joins Facebook, you expressed some doubt about whether it would be good for Instagram to send so many photos to Facebook. I think this would be quite good for everyone, users, Instagram, and Facebook, and want to share one mental model I use for thinking about this. I often think about Wikipedia as the best example of a crowdsourced corpus of content.
One interesting thing about it is that they allow anyone to download their whole encyclopedia and copy it to uses their own. This might seem like a bad business strategy for the same reasons you're concerned, but in fact, it's really helpful for them and doesn't hurt them at all. The reasons why it helps them are obvious they get more distribution, authors want to contribute more since they know their work will be in many places, etcetera.
The reasons why it doesn't hurt them are more interesting. I think the best way to look at this is that the value of Wikipedia isn't really that it's an encyclopedia. It's that it's a community and engine that continually produces the best encyclopedias. Because of this, they know that even if people use their data that they have all the leverage since they're the engine that produces the core data set. I actually think you guys are in a similar position with us.
By pushing a lot of data into o g, you get distribution, but you remain the engine that produces Instagram photos, which will become more powerful over time. From this perspective, you may wonder why Facebook is happy with the arrangement, and the answer is that we're playing a meta game rather than being the engine that produces photos or any kind of content, our goal is to be the engine or platform that helps produce other engines or apps that produce content.
That's the only way we'll ever scale to helping people share every kind of thing they want. In short, I'm really excited about the acquisition, and I think it would set up Instagram and you personally to have the biggest impact possible. If we do that or even if we don't, I still think having a deep OG integration is very good for both companies and all of our users. Let me know when you wanna talk some more. If you have any feedback on my offer, I'd love to hear it.
Looking forward to continuing the conversation. Hey, Mark. I've been thinking a lot since we talked last and I wanted to share how my thinking has evolved. Getting to chat about our paths and how they cross has been eye opening, I think, for us in many ways. First, it's humbling to know that you guys look at what we're doing in the mobile space think it's as innovative and strong as we like it to be. I've always been a fan of what you're doing.
And in many ways, I've shared similar passions for the problems that you've wanted to solve along the way as well. There's a mutual respect that I think will help us get a bunch of things done together around OG going forward. 2nd, I've never had to stand back and look at our company at foot level and ask what it might look like as a part of something larger. For this reason alone, I wanted to meet with you to understand what Instagram would mean to you and to Facebook.
In many ways, we're aligned. We both believe in the power of mobile quickly as people adopt new products like Instagram, etcetera, Pete both at our core engineering driven in culture and vision. We both have a passion for social products and realize that by building what we're building, we can and have the responsibility to positively influence culture and the world at large. I also realized that Instagram is a foreign citizen in the world of Facebook.
We produce more photos week over week that have found a home inside Facebook. At the same time, We have a very independent and disparate browsing and friend experience within our own network. Most of the photos on Instagram are not social photos, but instead 10 towards photos of the world around us. Our graphs are significantly different as well.
For 1, we have an asymmetric visual interest graph, one which I'm sure differs from most people's Facebook graphs, Also, we're primarily mobile and experience. We have no webinar DNA as of Pete. And for this reason, we focused on mobile photos rather than photos in general. Regardless, I think there's a world where Instagram with Facebook just makes a lot of sense, though the particular balance at this time makes Mike and I feel that we'd like to stay independent for the time being.
Really, it just comes down to wanting complete independence to pave our own path. This in particular means not limiting the scope of Instagram to just photo but to explore other mediums as well, which support the original version of Bourbon being to improve the way we communicate and share in the real world. There's utility and optionality that make both Mike and I really excited to build a long term viable business from where we are today long into the future.
To be clear, you've been nothing but helpful. When asked if it made sense for you to think about acquiring a company, there wasn't any fuss around it. It was a straight forward yes, no decision that you made with confidence, and for that, I'm thankful. I'm not coming back at you asking to change the offer because I don't think that's what drives us.
Of course, there's a limit to that logic, but honestly, I'm not sure at the point we discussed those limits that we're doing this for the right reason. Either way, I think we should start a more open discussion because even if it's not now, it could make sense in the future. Of course, this may mean the economics are less favorable given a large raise, but it's worth it to me to explore what we're actually building here.
Is it a next generation photos app, or is it a next generation communication app? I don't mean to get overly philosophical, but the limits of our ambitions have really yet to be tested. And I want to see that through at least for now. The desire to have an effect at the scale of Facebook is real and tangible and one that is actually quite hard to balance in our minds. That being said, I think you should meet Mike, my co founder, and we should spend more time with our leadership going forward.
I hope this clarifies my current position, and if anything, helps you understand the depth of our ambition to create something really meaningful in the world. On the OG stuff, you're right. I do think there's a valid question in thinking through whether or not sending all our photos to face make sense. I actually don't think we'd ever go out of our way to discourage or make it difficult for anyone to share from Instagram to Facebook. We just wanna make sure it's up to the user.
Right now, users are voting that 15% of all photos on Instagram end up on Facebook. Whether or not that's because it's a different audience or a different type of content, I'm really not sure. All I can go on is data, and I think we're given a pretty good experience so far in the form of full photos in the timeline with absolutely no restrictions. We win when users are happy and users seem to be really happy with that option of selectively sending over content.
We rarely, if ever, Pete complaints that the shared to a service toggle not being sticky is a problem, so it makes me feel that we shouldn't go out of our way to make that the default without a really clear thesis on why it's better for everyone. I think your comparison to Wikipedia has its merits, but in some ways isn't as applicable.
Wikipedia doesn't care that their content is distributed and copied elsewhere because they realize that the freshest and most up to date content will always be on Wikipedia. Since they have the economies of scale, there's no incentive for people to go anywhere than Wikipedia to make edits, etcetera. With Facebook, we have a different situation. You guys actually have all the economies of scale around photos, That is you guys have all the systems to make a photo's experience really awesome.
In many ways, once we send our original content over to Facebook, it starts getting likes, comments, etcetera, and takes a life of its own. It's as if a Wikipedia article gets copied somewhere else and starts evolving on another site with larger scale Trust me, I realized the comparison is a bit tenuous, but I hope it shows where I'm coming from and why I think the Wikipedia comparison is hard for me to grok exactly.
At the same time, I think your point around being the meta engine makes total sense. I agree that Facebook should be really happy when engines like us come along and plug in. I guess it wouldn't feel nearly as strongly if independently you weren't building a mobile photos app that makes people choose which engine to use. Listen. This is all based on me not knowing what the overlap in what you're doing and what we're doing is.
Rather, it's based on the speculation that there's a future where all our content flows away from Instagram over time, Instagram becomes less of the place for people to share and interact with content from the real world because the scale and tools exist elsewhere, Facebook, I actually think that if done well, complete integration around likes and maybe even comments could be really cool.
I think having my preferences expressed to my Facebook friends could be really valuable to me as a user, but also to Instagram for distribution. I don't wanna seem as though I'm against the idea of Open Graph at all, I think it could totally set us up for incredible distribution.
It's just very hard to balance sending over all our digital content that lives inside a very separate photos experience, which creates a fractured experience of 2 comments streams, 2 like streams, and 2 feeds for Instagram and Facebook separately. I hope you take this as open and on feedback for how a developer in the ecosystem is trying to balance the decisions of sharing not sharing with the hope that it sets off a discourse where we are both happy about the integration going forward.
Either way, I think I've had some of the most interesting conversations I've had in a long time with you over the past few weeks. It's made me think about our company in a different and also Beller push me to form a stronger opinion about what we are and what we aren't. Regardless, it's been super valuable, and I hope we can continue that going forward. I'm happy to chat about this more in person. Just let me know. And thanks again for all your support and everything we're trying to do.
Beller, Kevin. A few thoughts on both pieces. On acquisition, everything you're saying seems reasonable, but it's a pretty unfulfilling conclusion for me since it doesn't feel like you've explored it fully. The process began with you asking if we do this at 500,000,000, but then you didn't wanna end up doing it at that valuation. I'm curious to know at what valuation you would do this and then I can just let you know whether we do that.
I get that you're not primarily doing this for money, but there's usually some continuum here. And given the time we've put into this so far, do think it would be worth it to be honest about where that is. Related, you reference flexibility and things you'd like to do independently that you couldn't do at Facebook. I'm curious what you think you couldn't do at Facebook given that what I offered for you was to keep building out Instagram as a separate product and brand.
I actually think you'll be able to do all the same things with Instagram at Facebook, plus you'll have more distribution firepower behind you. So there will be a bigger chance anything you do takes off. So I'm curious to hear what your concerns are here. A final sub point on this is if you choose to stay independent, it's really important to me that this doesn't become a public story how you guys turned us down to go do something independently. That just isn't a positive story.
I know it won't leak from my team, so I'd ask that you make sure it doesn't leak from yours either. On Open Graph, there's a lot of nuance here that you haven't captured in your note. I'm not suggesting that you make your current settings sticky. What I've specifically suggested is making it so there's toggle where all of your social activity, photos, likes, comments, and follows, get synced to your timeline in the background.
In this mode, these items wouldn't show up on the news feed as you post them, but you'd still have them as a collection on your timeline. This addresses a major pain point for people, which is that they don't want to spam their friends. I would implement this that when a user connects to Facebook, this is turned on and they can turn it off at any time. In addition to this, I'd also keep the current option you have to broadcast any individual photo to your friends on Facebook.
If you did this, I think you create a lot of value for your users, Instagram, and Facebook. People may not be asking for a sticky toggle, but that's not what this is. If you listen to your user feedback on why people share more or less on different networks, a lot of it is because they don't wanna spam their friends' followers on different networks.
But they want to share these photos and are comfortable doing it in a photo specific setting like Instagram using Open Graph the way I'm suggesting allows that. It's not simply a matter of people voting that they want to share 15% of their photos, the actual dynamics around how this works are very important. And many people follow all of their friends. So this clearly isn't a privacy issue. It's an issue of how the photos are shared.
Simply saying that people want to share only 15% of their photos is overly simplistic. I think you know that, so making this argument just makes me think that you don't want to do this for some other reason. The whole point of Open Graph is to create a social dynamic where it is socially acceptable sync all of your social activity in another app with your timeline without spamming your friends. So this is the core problem we're trying to solve.
This creates better timelines our users with lots of distribution and brand awareness for you. You can use Open Graph to sync individual photos like you're experimenting with now, but fundamentally, there's nothing special about using Open graph over our traditional APIs for this. So over time, we wouldn't really consider this a deep open graph implementation.
At some point soon, you'll need to figure out how you actually want to work with This can be an acquisition through a close relationship with Open Graph, through an James length of the relationship using our traditional APIs, or perhaps not at all. I'm willing to put effort into whichever approach you'd like to take, but you should be clear and honest with me about what you'd like to do so I don't waste time working on things you're not interested in.
Of course, at the same time, we're developing our own photo strategy, so how we engage now will also determine how much were partners versus competitors down the line. And I'd like to make sure we decide that thoughtfully as well. Overall, though, I'm still very optimistic about what you're doing and would love to find a way to work together.
My preference is to work together extremely deeply since I think there are a lot of things we can do together can't currently be exposed through our current Open Graph implementation that we need to work on closely together, either as one company or 2. Hey, Mark. Thanks for the thoughts. I would never leak this and I think it'd be really bad for a bunch of reasons for us so I'm on the same page. I messaged that to and Mike, so we're on the same page.
I realize it's unfulfilling, and I agree we haven't explored it fully. We have a board meeting today. Going to spend a significant amount of time discussing our relationship with Facebook. I want to be respectful of your time as I know you have many things to deal with, So let us come to you with a clear thesis. I try my best to explain where my head's at, but I take your points and I'm going to work on it.
I have a feeling we should probably discuss this in person as the sincerity for how I'd like to work with you probably gets lost in a message. Would you be okay with that? Apparently, it Pete to the Wall Street Journal that we in Twitter were talking to you about an acquisition. I didn't tell anyone on my side that you were talking to Twitter, so this must have come from your end. Hey. Honestly, it didn't come from me or anyone inside my circle.
You know, and it's absolutely not in my interest for this to be out. If you're down, I'd like to chat live, can be phone or in person. I have some thoughts after our board meeting that I can share. Let me know. Sure. I'm around later this afternoon and evening if you wanna talk. Okay. 7:30 phone. WSA Spencer just reached out to me via email, by the way. My plan would be to chat with him and Stonewall on anything around financing and our discussions.
If you guys have talked to him and I should have context, let me know. Not responding may be more of a signal than not. Let's talk at 7:30. We can cover this other stuff then too. Following up from last night, On acquisition, I'll wait to hear more from you here. Given the leaks and that I put the last offer on the table, it doesn't make sense for me to put another offer on the table before you provide more guidance on what you'd accept.
If you're not comfortable doing this, then we can just discuss this down the Flint. But it seems like the right next step now and one you should be able to do is for you to give me a clear guidance on what you'd accept. On partnership and Open Graph, the ball is also in your court here.
Although you've said that you want Instagram users to be able to share and sync whatever they want on Facebook and elsewhere, it seems like you have a real strategic discomfort around the idea of moving the percent of photos sync to Facebook from 15% up to 40 to 50%. Obviously, if you don't actually want your users to be able to do this, then we won't produce something good together. So I'm just gonna wait for you to answer this question before engaging further.
I'm obviously happy to help out and support you guys in any way I can. On these two issues, let me know when you wanna talk about more. For more audio essays from the people who've Beller companies like Instacart, Facebook, Trello, HubSpot, and Dropbox, visit the founder Flint. Atnfx.com, or subscribe to the nfx podcast at podcast.nfx.com, or wherever you get your podcasts.