Season 4, Episode 3: Instagram Revisited (with Emily White)

0:00 I can't believe that Instawalk tours were a thing. Like Facebook employees were led around campus to use Instagram and take pictures of things after the acquisition to learn how to use it. Yeah. Welcome to season four, episode three of Acquired, the podcast about technology, acquisitions, and IPOs. I'm Ben Gilbert, I'm David Rosenthal. And we are your hosts.

0:35 On our second episode ever, way back in twenty fiftin. We covered Facebook's acquisition of Instagram. And in fact It's The canonical example of an A plus that we use on our show. So today we'll dive into the integration itself, how Facebook spent a billion dollars

0:52 to take something from zero revenue to an app responsible for almost a quarter of all of their revenue today. And we are super. We are super lucky to be joined by the one and only Emily White, who played an important role in making this all happen. So who is Emily? So Emily today is a venture investor and the president of Antos Capital in Los Angeles, but previously in her career was a longtime executive at Google where she joined very early pre-IPO. Uh she worked with Cheryl Sandberg for 10 years, and she then continued to work for Cheryl by moving to Facebook in 2010. And then the topic of today's episode joined Instagram post acquisition as their first business executive.

1:35 She was tasked with building out the business model, which spoiler, she did a pretty good job, and then became COO of Snap before transitioning full time over to what David wrote in the notes as the dark side of investing, and now sits on the boards of Lululemon, Graco, Honey, Hyperloop One, and the X Prize. Welcome, Emily, and thank you so much for joining us. Thank you for having me. Yeah, you bet. So Emily, I think there's a good chance that you are the only person in the world who has worked at Google, Facebook, Instagram, and Snap. Do you know if that's true? I think it I think that's true. At least I when I left Snap that was true. Well.

2:11 I can't think of anyone else who's done all of those. I brought a couple of folks from Facebook with me, but yeah. I know. It's a pretty exclusive Venn diagram, right? If I'm good at one thing, it's it's seeing around corners. Yeah, but We'll definitely get into that in the show. I think it's it's been pretty uh pretty apparent from your journey.

2:29 So listeners, you know that a few months ago we started our limited partner program for folks that want to go deeper on technology, startups, and other VC topics with us. So for LPs, uh we will have an additional segment with Emily after this episode where we'll cover what Emily and Anthos are looking for in their investments. what it was like to work with Cheryl Sandberg and her experience serving on public company boards. And if you would like to become a prestigious Acquired Limited partner, you can do so by clicking the link in the show notes or going to Kimberlight.fm slash acquired. All right listeners. Now is a great time to talk about a new partner of ours here on Acquired, Lagora. The agentic operating system that is redefining how the world's best legal teams work.

3:14 Yep. It's sort of obvious that AI is gonna completely change the legal industry. I bet most of you listening have dropped a contract into some sort of AI chatbot out there. Ligora took that insight and asked the question, what if you really built something with that power from the ground up for the legal industry? So the founders did exactly what great founders do. operate with obsessive customer focus. They embedded inside a massive law firm. For months.

3:41 They sat with the lawyers just watching how the work really gets done. And that's how you get features that customers love, like tabular review where you Drop in a folder of hundreds of contracts and it pulls every key term into a grid a lawyer can actually work with. Legor's Bet here is interesting, since it lets each lawyer handle more complexity, any given person can increase the quality of their work and do higher value work. And this means that the pie can grow even as each individual task takes less time. And they recently launched Lagora Agent, offering greater intelligence and performance. The agent lets lawyers set an objective. Then it can handle the planning and the execution and delivery of the final product. Legal teams get to maintain full control and transparency since they're still involved where judgment is required. And Lagora works where you already work. You can use it within Microsoft Word while redlining or drafting. The early Ligora numbers essentially

4:37 speak for themselves. When they have a head to head pilot with their top competitor, they win seventy percent of the time. Lagora now has over a hundred thousand lawyers on the platform from twelve hundred legal teams in fifty countries. And crazily, they went from one million

4:57 Eighteen months. truly insane numbers. And that is the real test. Plenty of things demo well, but the question is whether a busy associate actually reaches for it during crunch time, or whether a partner trusts it before going into a conversation with a major client. If your legal team wants to check it out, whether you're a law firm or you're in-house at a company, you can learn more at Lagora.com/slash acquired.

5:19 And just tell'em that Ben and David sent you. Alright, David, it is time to do what you do best. Take us in, set the scene, what was happening in the world and uh how did this deal go down? Well it's so funny, you know, of course we re listen to um Episode two of Acquired in preparation for today. Which is a little rough. It's a little rough. And we realized there was one glaring thing missing from it. Which was no history and facts. Today we're gonna do a a brief history and facts and and then we're gonna get to um The meat of of today's episode, which is talking with Emily about building the business model at Instagram. But to start quickly and make up for the lack of this in episode two.

5:59 Um, we're gonna go back to a very specific time and very specific place in history. Which is Friday, April Sixth. Two thousand twelve. At Mark Zuckerberg's house. In Menlo Park. Actually it's in Palo Alto, California.

6:13 I remember driving by it many times. Facebook is one month away from its IPO roadshow. Uh it's legendary IPO. process is about to kick off. They're planning to raise$10 billion in one of the largest IPOs ever. Hoping for about a hundred billion dollar valuation.

6:30 Um the company is a buzz, everyone is working like crazy and it's actually it is Friday April sixth. It is good Friday. Easter is on Sunday. But I suspect Emily can correct us to tell us if this is true or not. Everybody's probably ready to work through the weekend anyway, because I imagine this is a pretty intense time at the company, right? Yeah, I would say so. Um despite the holiday. Something changes that day though, uh which is Mark gets a piece of news that would indeed change the course of history and change the course of his weekend. He found out that Instagram The hot new mobile photo sharing app.

7:07 Which had been on his radar screen for a few months, um on the company's radar screen. And had just launched on Android the previous week, adding a million users uh in uh I don't know if it was the day or the week. Um pretty quickly. It's still mind blowing to me that this all sort of happened right around the same time. The the acquisition, the funding round. So Mark and and Facebook find out that Instagram has an acquisition offer on the table from Twitter. I knew this, but I'd completely forgotten this.

7:36 I think many people forget about this. Yeah, I I actually it was funny, I was I was reading through your notes and I was listening to uh episode two this morning and just thinking about like Oh my God, that almost happened. Yeah. What a different world we would live in today is. Absolutely. So obviously I was at Facebook at the time, so I didn't have insight into this, but hearing about it after the fact I don't know, I think good things happen often really quickly and um it all came together for them so fast and in unexpected way. Yeah. So Instagram, the company, had literally that week closed their series B, raised fifty million dollars from Sequoia.

8:11 And uh acquisition offer on the table from Twitter for five hundred and twenty five million. Now this must have been a particularly um Salient piece of news for for Mark Zuckerberg and Facebook, because a few years earlier, also another thing that is is public knowledge, but most people don't know. Mark had offered to buy Twitter for just about five hundred million um a few years earlier, and now here

8:35 is his former acquisition target that is about to buy His current, you know, potential future competitor. And he's determined that history is not going to repeat itself here. So he does the only thing he can think, which is he calls Kevin Sistram, CEO of of Instagram, invites him down to his house in Palo Alto. And makes him uh an offer uh

9:00 One would say that he can't refuse. A billion. Dollars. Three hundred million in cash and seven hundred million in Facebook stock. Which um

9:09 You know as as we all know and the Facebook stock. Yeah, covered in the Facebook IPO episode. Um looked like a bad deal about, you know, six months later, but ended up being a great deal and worth a lot more than a billion in the long run, in many ways, because of Instagram. So Kevin receives this offer at at Mark's house. He had driven down uh Instagram's office was in South Park in San Francisco, which also had been the birthplace of Twitter, famously. Uh Jack Dorsey came up with uh as legend has it, uh, the idea for Twitter in South Park in San Francisco. Um Today it is Sand Hill Road North. All the VC firms uh that used to be in Menlo Park now have their offices. And South Park in San Francisco.

9:49 But Kevin had driven down. He calls his co founder Mike Krieger, who's back up in the office. And says, Hey, um I need you to meet me down here. Can you take the Cal train? So South Park is right next to the Cal Train station in San Francisco. Can you take the Cal train down to Palo Alto? Let's meet here and uh and we'll drive back up to the city. I've got some news we gotta discuss. So he had left Zuck's house at this point. It wasn't like I'm gonna hang here at Zuck's house for an hour. Apparently, yeah, he was sitting on the bench at the Caltrain station in Palo Alto, uh you know, contemplating his life and future. And um Mike shows up on the train, they drive back up to San Francisco, and by the end of the drive, as legend has it, they've decided To take the offer.

10:27 So that sets in motion a chain of events w what really sets in motion a chain of legal firms uh that work like mad throughout the weekend, uh throughout the holiday and on Monday April ninth. The world changes. Bombshell announcement. And and I said this on on episode two. I'll say it again. I remember the exact moment when I heard this news because um this was I mean now it seems quaint almost a billion dollar acquisition, but like this didn't happen back then. This was the first you know the term unicorn didn't exist. Um this was a huge moment. Did this coin it? What created the freeze unicorn? No, actually I think that was Aileen from How Adventures who had done a

11:05 piece for what was it, TechCrunch or something? It was Tech Crunch. It was next summer. And she had come up with the term. Yeah. Um but but but at this moment in time, um You know, this was a huge valuation for a photo sharing app with no business model, no revenue, uh just bleeding money and server costs. You know, and people really thought, you know, and this was heading right into the IPO Roadshow, people thought, you know, this is an example of a crazy young founder out of his mind with too much control of his company. Like, how could you make such a rash decision in a weekend? Um

11:36 Turns out that the haters were wrong. Today, you know, w we basically all know what happened since then. In last year, in twenty eighteen. Uh Facebook does not disclose uh Instagram revenue broken out separately. However, analysts estimate that the Instagram itself did about eight to nine billion dollars in revenue.

11:56 It is predicted to grow by another almost fifty percent this year to fourteen billion dollars, and that would be almost a quarter of all of Facebook's. Revenue. So I think they've been pretty good ROI on that uh on that acquisition. Um but that's what we're here to talk about with Emily, which is How did you know this company, which was famously thirteen people, no business model, no revenue, um, this product when uh um when Facebook bought it? Uh, how did you and the team build what would become Fourteen billion dollars of revenue today.

12:26 Yeah. So I remember that Monday too. Did you know about it over the weekend? No, no, no one knew about it. I don't I'm not even sure the board knew about it. It moved really quickly and I think um internally we had a moment of Wow, this is incredibly cool that our founder has the ability to spot things like this and move so quickly to put them together because you have to be incredibly aggressive in a situation like this, and you also have to have the ability to He has a incr obviously an incredible sense of of what works and what's new. And Instagram had been sort of On the radar, but in a really small way. And so the I mean, I think it was I want to say it was like thirteen or sixteen people at the time. It was tiny. It was something that some people at Facebook, some of the Facebook employee population used, but not a ton. But Mark got it immediately and acted really aggressive to make it happen. And uh of course the challenge is once these things are announced internally, you've got to sit and twiddle your thumb for months as they're undergoing review. So the reality is that we actually didn't even really incorporate Instagram into our day to day until

13:37 I wanna say it was Much, much, much later that year. And did People at the company in that time after you had announced the acquisition, but before you could start doing any integration work, did people start using it? Did people believe how did people start to believe that, you know, Instagram was was uh, you know, something that, you know, they should really believe in as a Facebook m community. I don't think it was on the radar in that way at all. I think it was wow, that was really cool that we just did this. Now back to work. So to be honest, I think everyone just put their heads back down and kept working, right? We had a just a ton of thing answers that we didn't have and there was in some ways sort of no use in even preparing for it'cause we didn't know what's going to look like it was gonna take a while anyway. So

14:18 So you were running mobile partnerships at Facebook at the time, right? Like had Instagram been on your radar screen? Like You know, I I had heard about it, but honestly I wasn't even using it at the time Um, and I left what was it, in late August to have a baby and Instagram had still not sort of come on not closed at that point. But I came back handful of months later, and they had just arrived. It was really the first acquisition that Facebook had done, not just for the people, which are typically called acqua hires, right? But an acquisition for the people and the company, the underlying product And While Mark knew that, I'm not sure that many other people really knew this.

14:59 And because of our lack of experience in this world, they had sort of moved those thirteen or sixteen people into a corner of one of the buildings. I think they had thrown some engineers over the wall. Um but I got in the U.S. They moved the team to Menlo Park, which of course they weren't totally excited about. Did did they like negotiate for hey we need to be separate in some capacity or do do you remember like How did it work kinda going back and forth on well, we need to be separate and be our own team versus we want to be, you know, a part of the Facebook family in some way? Yeah, I have to tell you, uh my sense of the things And and the I wasn't on the inside when I was in maternity leave listening to the level of conversation. My sense is that no one really knew. We knew that they had to come down and they would they would be leveraging what Facebook built, but beyond that it was pretty unclear. So so I got involved when I had come back from maternity leave. And um I think it was Dan Rose who has just left the company said, Listen, you know, we've acquired Instagram, they're sitting over in this corner and they're having some challenges on the business side. You should go spend some time with Kevin and see, you know, there's there's maybe some opportunity to help him.

16:08 What had just happened I think before d like maybe the week before was that Facebook lawyers had gotten a hold of the terms of service that Instagram had and rewritten it. I was gonna ask about this. And um they rewrote it with a very Facebook frame of mind which was we want the ability to use this user generated content in future ad you know future ad content and of course They did that with revolted. Exactly. I mean, that was such a Facebook way to approach the situation. And Instagram users were not having it. And they they really did revolt in a pretty beautiful way. Um and made their made themselves known. And I think for us and for me being very arms distance at the time, it was a realization that like this is actually a very different company with a different Men user mentality and

16:56 This we really need to understand it and Understanding it does not mean taking the Facebook playbook and throwing it at them, under understanding it means getting inside there, understanding the spirit of the company, what makes it so special. And it was sort of through that process that I went I underwent and I think the team underwent at the same time. We really understood what Instagram's voice w was and the importance of maintaining a separate identity. And

17:22 We have to ask be f before then. back on the Facebook side, you know, when all this went down Mobile and Facebook were like uh I mean you must have had a really interesting vantage point running mobile partnerships, but these were the HTML five days, right? Like mobile was um Not native to Facebook, let's put it that way. I mean this must have been uh culture clash. Yeah. I had gone over to work on the mobile efforts in two thousand eleven. And I think we had one IOS engineer at the time. One IOS engineer in all of Facebook. It was bad. Um four years after the iPhone had come back.

17:59 Um. The web had done so well. And I think everyone saw it coming, but when you have a company that's I mean, the even that size of Facebook that I'm with thousands and thousands of people, there's a DNA change that has to go on. Even to make a platform change that now seems so simple and so obvious, you know, it really meant that You know, Mark had to start every product conversation, product review with show me mobile first, right? I don't wanna see your web anymore. I don't wanna see desktop. I wanna see mobile. So changes like that are things that we really had to had to do every day in every opportunity to make sure that Mobile became part of everyone's job, not just not just a sort of small select team.

18:41 I mean, it makes sense, like Facebook was built at that point to, you know, the hottest company on the planet. In a prior generation. It's totally understandable why like the company and everyone focused on that product, you know, other than Mark at that vantage point would be thinking like, What is this mobile? you know, we're the big gorilla here. Yeah. I'm curious, Emily, a lot of times in acquisition like this, the

19:05 there's value destruction that happens because the team at the big company that is doing something most similar to the startup they acquired is allergic to it, even though, you know, upper management believes that the acquiring the startup was the right idea. And so they like do everything they can to kill it. Was there any clash with the photos team uh who sort of looked at Instagram and thought it was competitive or thought it was, you know, the wrong strategy or anything like that. You know, oddly no. I never I never witnessed or heard anything like that. I did, and I think I told you guys this as we were prepping. As I was getting to know Kevin and sort of falling more and more in love with the product and his brain and and his vision for it. And he and I had started talking about me coming over and joining him. I talked to some friends at Facebook and I got reactions like, Why would you do that? That's like joining Facebook Photos. Or I was told several times

19:57 that I shouldn't take the job because it was too small for me. That actually resulted in me, I think I I think I told Kevin twice. Or three times no. I just was like, no, I you know, I think I need to s continue to focus on mobile. I'm being told that it's the place that I need to spend my energy. And I remember driving home one evening Oprah had just come actually to Facebook and talked to our our our um employee base and she had ended the conversation with an a of course amazing piece of advice that really sat with me that night, especially on the drive home. She said, Listen to your whispers because if you don't listen to your whispers, they become screams. And um I was like, what am I doing? These all I want to do is go work on Instagram. And we're about to piss away not only a billion dollars and an amazing team, but really the opportunity to disrupt ourselves. And

20:48 It's a really big struggle. I mean in disruptive companies to maintain that DNA when you're large and have the ability to say, you know what? There's gonna be another generation that is going to sort of Take over what we've built and we want to create the playground to have that that disruptor be in our in our home with us is pretty mature. And uh I'm not sure again everyone got it. Um and so

21:15 Uh for me it was a pretty big aha moment and the and what drove me back in the next day to Or the next week I should say. You called Kevin at that point. I probably went across the wall to see him and Um You know I so this was a Friday night. I think on on Monday I went into the exec student told me it was this the job was too small and I said, You're you're wrong. Actually, you're wrong and here's why I think you're wrong and they said Fan I think you're right. Like this is the right move and go for it. I bet there's a lot of listeners out there who have at some point while working at a big company had this realization of Oh, we need to disrupt ourselves and I think I know how. And in most cases

21:49 there's no way to act on it. And and certainly they're not gonna get executive support. But it is amazing here with the billion dollar bet, you having these whispers and and realizing, you know, this this is You know, this is something that not only should we kinda bet the company on, but I'm gonna bet a lot of my career and reputation on. But you had Mark Zuckerberg supporting the idea that the company should do that. So you're able to actually go and and get that done. Yeah. This is a huge issue for companies. I mean, I being at Google for ten years, I saw this all the time, right? If you can put a dollar into one business, your main product, and get five dollars out. When you're developing a new product, you're putting a dollar and you're getting seventy cents out, or you're putting a dollar and you're getting a hundred and twenty cents out, right? And I'm not just talking about dollars, I'm talking about engineers, I'm talking about, right, headcount and the whole ecosystem that goes along with building a business. And so time and time and time again

22:43 When you look at this from a high level, you say, Why the hell are we investing in this other business? Because our core one is doing so well. So it's it m makes it incredibly hard. So the bar is so unreal realistically high for new businesses. So it really does take often a dramatic acquisition, frankly. A lot of times, right? Google is a good example of this. They grow through acquisitions because it's too hard to get the early traction that you need to prove that this is a place you should continue to spend your resources. Yeah. Yeah. So that's a good thing. Speaking of uh of building the business, David, you wanna take us into uh dollars in and dollars out, yeah. How I mean at this point there's no business model, there's no revenue model, there are no ads in Instagram. Brands are in on Instagram, but it's all organic. Right. Um, it's all brand managers at companies posting, you know, posts on on their own.

23:34 How did you even start with Kevin to think about what to do here. I mean because we're sitting here in twenty nineteen, it seems obvious that But It wasn't obvious at the time. Like uh even Facebook's first advertising model, you know, famously was just display ads on the side of the webpage, and that was terrible. It was years until they figured out the newsfeed.

23:57 Um, you know, how did you guys start to approach the problem? Yeah. Well, the first question is, do you have to make money? Right. And that's the question that we debated with ourselves and with a bunch of people at the company is like, do you really need to make money? Um, I like making money. I've been in that business for a long time, I know it. Kevin and I sort of came to the place where I think we knew that we wanted to make money'cause If you make money, you can write your rules. You can write your own rules, right? It's easier to tra it's e easier to make the case for headcount. It's easier to have a voice within the company. And of course, we were at at this point now a very small company and a very large company. Um, or at least a medium sized company that had a lot more people than we did. And

24:38 It was shortly after I arrived in a handful of months that we hit the hundred million user mark. So at that point Um, we were sitting on top of a company that had the infrastructure. um and talent help us monetize relatively quickly compared to how do we had to had to do this on our own. We had the user base that we needed in order to actually make a viable business. And we knew that we wanted sort of power and control and the ability to write our own future moving forward. And so it really made sense that we were gonna start with advertising. We also knew that The model that was gonna work on Amazon on Amazon on Instagram. Um Amazon also has advertising.

25:22 It gave us opportunity to do something pretty different in the ad space, namely around um using mobile to actually complete a purchase. And the people were coming to Instagram with a different perspective, products were showing up in a different way. And it it seemed to us Even at that time that giving users the ability to buy through Instagram ads could be a really killer ad format down the road. But that mobile infrastructure, I mean, it's funny talk about payment just didn't exist then, right? Mobile websites were good enough. Did Stripe even exist at this point? Apple Pay certainly didn't. Yeah. Yeah, no. So um we knew that we needed to give the industry some time to mature. And so actually starting with the ad formats that we did made a lot of sense as a very first step and a journey. And we knew that we were heading down that path. And that the beginning was just that it was the beginning. So You know, sometimes, I mean I would say at Google with AdWords actually we got relatively lucky that early on we sort of landed on the ad format that ended up being like the ad format that's still there today.

26:27 Maybe the best ad format of all time. Pretty good ad format. It's done well. I mean, this was fun, right? This was really fun. We had we had visual, we launched video another maybe six months after that. Um, so it was a very rich ecosystem for really the next generation of ad formats. um in marketplaces. So So Instagram as a product was known for being Spartan and beautiful and focus on the content.

26:56 Ads on Facebook at the time were not that. Right. How did you go about making sure that you didn't ruin something beautiful on Instagram by starting to introduce the Facebook's business model to it? Yeah. So we made that the number one priority, actually. Um, we knew And we knew, by the way, just looking at what happened with the terms of service, that pissing off our user base was not the way to go. Um, and that we had something pretty precious and we were gonna treat it that way. And we are in the advantageous position, as I mentioned earlier, of not having to make money. Um meaning we didn't have to pay the bills. So we could take our time and move slowly and be really thoughtful. Which is Facebook's mantra.

27:40 Right, exactly. It was an amazing luxury that we had and most companies don't have it. And so We spent a lot of time looking at um what content was going up, how users felt about it, what brands were already sort of natively acting on the platform and how users are were reacting to them and decided that We were going to place ads in the feed, which was also, as you can imagine, sort of a controversial moment because it's m prime real estate. But it's also when you're in an ad business, you need distribution. And that's where distribution was gonna happen. But we were gonna do so in a way with brands that were already really elegantly playing on the platform and had good user um interactions. And we were also gonna do it in a very

28:27 sort of one off way, meaning every single piece of content that came in was approved by us and Kevin and that and Kevin. And that went on for a long time. So we were like hand curating this stuff and paying it really close attention. Wow. Yeah, the first brands were well, Michael Kors, I think was the first Add on Instagram and then um You had Levi's W Hotels, Macy's, Lexus, PayPal. General Electric was in there too. Oh, interesting. And uh and Ben and Jerry's. I mean that's perfect. I'm actually curious on on on PayPal, if you remember, like How that's not an obvious like You know, I have to tell you I don't remember the PayPal one, like really specifically. I wish I could speak to it. Um I can't remember exactly what it was, but it might have been for mobile payments. And anyway. Um we again we went we went back and we said who is really using this. So I mean it's it's um

29:21 Looking back at it, it seems like the most amazing opportunity for a marketer to participate in something this early, but remember what the time was. I mean it was like, okay, we don't want to be the first advertisers because what if they hate it? What if there's backlash, right? Um, I remember actually having a challenge with GE'cause they had gotten some they had such a beautiful Instagram presence, but when they started advertising they the you the users didn't love it. It was in part'cause we were it was one of the first ads and it was like, Wait a second, now you're talking about it. This is the place where I go and dump their experiences. There are comments on ads, right? Right, and there are comments on advanced. And we were basic basically treating them like organic cont content that with a sponsored tag, right? So um and more distribution. So there there really is some headwind. You have to find marketers who are willing to go down this d go down the road with you and take some risk. And believe in what you're doing well enough to sort of

30:13 get over some bumps. And so we really looked at who was doing really well on Instagram already and who were the teams that were leaning into this and would be good partners for us along the road. Along the way. It's interesting thinking about uh also in retrospect, I mean, the business model of Okay, we just bought the fastest growing sort of inventory pool available. we have all these advertisers that are trying to m push more and more ads to uh more and more slots or available inventory. It makes so much sense to just enable that dashboard to also push to this new sort of slot pool that is Instagram. So tempting, huh? Not gonna do it. And I mean that's effectively what it is today. There's zero I mean, it we at PSL all the time, we're buying ads and like you click another box. In fact, for acquired, we've done some ads, you check another box and like boom, the same thing goes on on Instagram and Facebook, and there's no real way of of sort of quality controlling one or the other.

31:07 How did you think about like what features of the ad dashboard and in what way to actually let people who are using the ad dashboard tool put ads into Facebook beyond like I'm sorry into Instagram beyond actually hand curating every single one. So it's a tricky question for this'cause I left in

31:32 the beginning or the very end of twenty fourteen. So the actual dashboard integration happened after I left. That wasn't until uh self serve at all didn't exist till twenty fifteen. It took a while. That's a great point. Yeah, it took a while. So we were really in the like hand curating um hand posting, hand reporting phase. And I I think the other point that's worth making here is It's sort of what was happening internally and culturally at Facebook and Instagram at that time. So as I mentioned, it was the first time we had acquired a company for the c for both the talent and the underlying technology. And

32:11 The Facebook community didn't really the group of people who work there didn't really understand what that meant. Specifically, let me just give you some examples. Um, you know, besides the lawyer going and and sort of you know, changing the terms of service. Um Teams generally just wanted to do exactly what they were doing for Facebook. The recruiting team wanted to do what they were doing for Facebook. The policy team wanted to apply Facebook's policies, right? Everything was just like, okay, let's just integrate them right now. And so Really, the f my first week or two on the job, Kevin and I had like locked ourselves in a room and we mapped out Instagram's mission, vision, and values. Specifically because we knew that it was important that this thing was It was big already, but it was going to be much bigger. Um, that it was really important that we maintained our own identity and control over how the product moved forward. And that we were also um making it really clear from the employees Perspective like what is Instagram and what is Facebook, and how do you play in these two different worlds, right? We wanted people's help, but we couldn't let them smother it.

33:17 That was the beginning of realizing what Instagram was inside of Facebook instead of Instagram becoming Facebook. Now, of course, as you read the news, There is actually real uh momentum, it looks like inside of Facebook to make Facebook and Instagram and WhatsApp all sort of one thing. Yeah. But I think for the beginning. Yeah, but um Instagram became Facebook Mobile Photos app, right? Right. Yeah. No, it could have happened. Yeah. In fact, one of the first things I did is um

33:47 Facebook had maybe six or twelve months before bought an app that uh was a data compression app. So users all over the world were downloading this app on their phone and it was lowering their phone bill effectively. And in exchange it was giving information about what those what users were doing on their mobile phones, right? So I actually we had access to this. I could go see okay of all the Facebook employees, how many are actually using Instagram? And it turned out that the same percentage of Uh and I can't remember the exact percentages now, but basically the same percent of the United States that was using uh Instagram was the same percent that Facebook of Facebook employees that were actually using Instagram. The point here is it was very low. It was like in the, you know, low teens or something like that. And this was after they'd hit the hundred million user mark. Uh this was just before that. Yeah. So Instagram was had been acquired. It had been the team had moved down, but still people were so focused on Facebook, right? I mean, as you do. Right.

34:49 And uh and so really, you know, between the mission, vision, values, and then really like an on campus marketing campaign where we started doing insta walk tours around the campus and stuff got up and started talking at all hands meetings and thinking about our product launch separately and going to the board meeting and sort of just talking about what Instagram was and what made it special and how it was different. And really the ad strategy in part rolled out out of that, right? How do we create a product experience that feels really authentic to this platform and through that also make a stance about our ability and and and requirement in some ways to build something that's unique for this platform and not just slap Facebook ads onto the user experience, which I think at that point would have been really rough. Yeah, it's like philosophically, how do you make sure that the people who are gonna be designing those experience for that platform actually use that platform? Yeah, yeah. All right, listeners, now is a great time to tell you about a longtime friend of the show, Vanta.

35:49 AI has scrambled the whole security picture. It used to be that you proved that you were secure once a year on audit or a static PDF, then everyone would nod and you're done. But in an AI first world, that doesn't hold up anymore. Yep, your risk surface changes every week now. A vendor turns on an AI feature or someone writes in a new model without telling IT.

36:11 And your posture is different than it was last week, let alone at your last audit. Banta's own research found that around seventy percent of companies have this quote unquote shadow AI running with no security review at all. Right. And that's where Vanta comes in. They're the leading agentic trust platform, meaning they've built the thing that closes the gap.

36:31 And the way that they close that gap is Vanta Agent. Think of it as a GRSC engineer, that's governance, risk, and compliance, except that it's software and it doesn't sleep. It finds the issues, drafts the fixes, and cuts the time that you'd spend on vendor assessments in half. In half. Which is exactly why more than sixteen thousand companies today run on Vanta. Companies like Ramp, Cursor, and Snowflake.

36:55 All stay audit ready and catch the risks that crop up between audits across every vendor. Every AI tool. The whole environment. And that's the real value. Trust has to be continuous now, which is why Vanta automates your security, your compliance, and the work to earn and prove trust. We're huge fans of Vanta over here, and literally hundreds of acquired listeners have become Vanta customers at their companies over the years.

37:19 So you can get$1,000 off Vanta at vanta.com slash acquired. That's V-A-N-T-A.com slash acquired for a thousand dollars off. And just tell'em. That Ben and David sent you. What are the components of building an ad business? Um You know, that obviously you did it at Instagram, but it but you saw it at Google, you saw it Facebook, you know, one of the only people, if not the only person in the world who's done this four times. Like what are the what are the pillars of of this business? Yeah. Well, it also is it's changed so much in that period of time, right? I mean

37:50 when um when Google started, I remember it actually really did not care about making money. If you guys remember those days hire smart people, have the fastest search results and nothing else. Exactly pretty much. So so I joined Google at the very beginning of two thousand one when AdWords was you know, like five hundred advertising advertising beta was all, you know, based on what was it, CPM ranked on the right side. And had the luxury of growing at a time when nothing like it existed. I mean, you had overture at the time that was doing some interesting stuff on the algorithm side, but Google For the first time really married this incredible web presence, right? I mean, they just had traffic coming out of their ears with um a very intent based user. um experience, right? People are telling you what they're looking for. And so the opportunity to serve up content

38:42 And they they really took advantage of that opportunity by saying, This is not just brand marketers who can do this, this is anyone. And um they didn't get that initially. They actually built AdWords originally, as I mentioned, as a CPM product. So everyone who's showed up at the top right had to pay ten dollars. Everyone underneath them had to pay eight doll ten no, it was it twelve, ten and eight cent per thousand views. And that Wait, so no auction? There's no auction early on. There's no auction. And I would say like a year, year and a half in the auction came about. So we added um We added in the component of actual click through rate. So how well were these things performing? And then we added an auction in. So it allowed um businesses with wide variety of margins to come and participate all of a sudden. Cause when you have a set CPM, you're crowding out ninety percent. You're only letting, you know, a very specific set of advertisers bid. And so we didn't have anyone bidding for

39:40 you know, sheet paper music or Persian rugs, right? We had a ton bidding for like Mizotheme Ethelioma ads or whatever. So It really was, you know, sort of a stroke of genius and luck at the same time that those things came together. By the time fashion forward to Instagram. The technology to do this obviously had w sort of already existed, um, which was wonderful, but We had also moved as a

40:05 A marketplace to be so much more focused on effectiveness. Right. I mean, Adwards started that, right? You could put a dollar in and you knew what you're gonna get out, but really ten, twelve years later, that had taken over the world. And so they move to Target. Yeah, Facebook dropping you know, conversion pixels or or telling advertisers, hey, you should be putting these conversion pixels at the end of the pot of gold on your website so we know when these people are actually buying the stuff, you can tell us how much it was for, we can help you tune that. Exactly. So it's like really serious performance marketing. And of course um that existed. That was the expectation in the marketplace, but we were coming out at Instagram with a brand new platform and we didn't know how it was gonna work. And we knew photos. And they had to be pretty photos. And they had to be Um they had to speak to our user base in a pretty unique way. And so when you're doing something like that, you don't want to make promises. We knew that we were not building a product that was going to, at least in the short term, compete with

40:58 Add with Facebook ad dollars, right? We weren't going to be that performance marketing vehicle. In fact, initially, we talked about it with marketers more as a brand play. Because there weren't calls calls to action. It was it was beautiful content telling a story. Well yeah, could you could you tap on the ads the first time they're that there weren't even links in Instagram at all? Nope, there were no links. There were no links. So they re really had to fit into that Again, with the picture of longer term, we wanted links, we wanted the ability to interact, we wanted the ability to purchase and drive purchase. purchases, right? Because it's this beautiful ecosystem for discovery. But again, the infrastructure didn't exist then. The the mobile infrastructure didn't exist then. So what we did was um we very systematically went through all of the pieces of Facebook that we could either lean on or build our our own. And we decided systematically, okay, we're gonna lean on Facebook for this, we're gonna build our own this, right? Um that I should say. So

41:57 We had the Facebook data. Right. We knew who our users were. And that was a huge gift because when you're going out with a new ad product, to be able to say, actually you can target exactly who you want to target was a big was a big win. But we also in the in the sort of the face of This is gonna be uh feel a little bit more like brand advertising early on. This was not a world this was not about micro targeting. This was about getting your audience in pretty broad swaths. Targeting tends to be really important in direct response advertising and less important in brand advertising because you're going for the bigger, broader base. I guess, yeah. Did you need all that targeting capability for those initial We needed basic targeting because our user base was a hundred million users. And you need really big budgets to target all hundred million users. And by the way, it's not gonna be relevant for them. So you have to think about them. You can't be buying a Super Bowl ad every day. No. And nor would that necessarily play particularly well with what we were starting to do. Again, remember the beginning was about

42:52 Little disruption. Platform consistent visual storytelling experience. And um it was also our chance. It was our sandbox. It was our chance to play and and sort of try different things. So So did you need I'm jumping ahead here, but did you need A new

43:09 Sell these ads and interface with these brands. I mean, that's not the core capability of what the Facebook ad sales team was doing at this time, right? Yeah. So um we decided to do a a take a hybrid approach. We um leaned on the sales teams really heavily because they had all these relationships that we didn't have to go recreate, but we actually started a little ad sales team within our group and we sort of repurposed people who are doing more business development work and th and the such too. go and have those conversations. So it when we showed up, this was not a Facebook marketing ad sales meeting. This was an Instagram interesting uh meeting.'Cause you're probably meeting with different people within the advertisers, right? Like

43:49 Do these big brands have different versus brand brand versus performance people? Um You know, probably in some cases, but ultimately when you're doing something that's experimental and cutting edge, you're typically running up to the people at the top anyway. And we tended to work with brands that were doing this in house and weren't out like outsourcing it to agencies. So it was just easier for us. It was lower friction for us. We didn't have to go through ten layers of approval. So again We were able we were s in such a great position we could go to the advertisers we wanted to go to. It's like the greatest startup of all time where you both get to do things that don't scale and have a playground to do it manually, but can pick up the phone and have any CEO say, Sure, we'll commit X million dollars to that. Exactly. Yeah. And of course, when I did this again at Snapchat, uh now Snap, um, we didn't have anyone to lean on. We had to build it all of ourselves. We have to build the technology ourselves. Now by that point, which was, you know, twenty thirteen, twenty I guess it was twenty fourteen, twenty fifteen, um We could have gone to a Google or you know, one of the other engines and said, Can you just

44:50 Send us your ads and here are the qualifications that they have to meet. And and Snap you did a partnership with Viacom, right? For that was Uh okay. No, that's it's a little conflating issues, but I'll I can explain that. But no, we actually decided um instead of going to a partner and just having them turn on their ad feed to us that Advertising was gonna be an important part of our DNA and our business moving forward. And when it's an important part, you don't wanna outsource it. You wanna own it. And so we actually went ahead and built the infrastructure in house to serve the ads, to measure the ads. This is at Snap.

45:23 This was at Snap, yeah. So we launched the yeah, Snapchat. Now Snap. Um we we built that infrastructure in house. Um we went and got all the advertisers by ourselves. We did all the measurements. I mean, again, if it's important, you've got to have it in in your purview and your control, you want to measure it, you want to know it, you want to understand it. We did down the road when we launched Discover. Which is the platform, right, where we pull in third party content in sort of bite size snippet formats that you can sort of read really easily. We had ads, embedded within that. And so our partners who were actually producing the content to a format that they had agreed on with us. We're doing a bunch of the ad sales for that content.

46:04 But not for the core Snapchat content. Some of it was repurposed, but it was T V commercials. That was why hence the Vatican Partnership. Yeah. Um Cool. Yeah.

46:17 I think that about takes us to the end of the road on on the history and facts of uh of the Instagram. You know. The end, uh, as we said in the beginning, as we always do, is um You know, eight to nine billion dollars. Well, uh a brief timeline. It was Twenty fifteen, as we mentioned, when self serve ads launched. Um

46:37 Twenty sixteen stories launched. There were no stories on Instagram before twenty sixteen. But you can take Snapchat. Yeah, right, yeah, right. Speaking of Snapchat. Uh famously and and it wasn't until twenty seventeen that Adson stories launched. I mean, that was two years ago. Well and there's still I mean this is still this we've talked about this on previous episodes, but Stories is not as good of a medium for advertising as the feed is. And so uh Facebook and

47:04 you know, everyone else with stories is going to have a reckoning as more and more attention shifts to stories with their, you know, their advertising performance. And I think uh that shows up in Facebook's numbers a little bit and they've cited it a little bit as as uh, you know, reasons that Um there might be a deceleration, but it's it's kind of obvious in the user experience. When you're going through stories, you're just not grabbed in the same way that you're grabbed. It's so If you take a step back and think about what we're talking about here. I'm saying that when you are flicking vertically through something, adds are somehow more appealing of a format as when you are horizontally tapping through something, and yet it is a

47:41 dramatically different user experience where in a story you're like ah not not now, not now. I'm I'm in the now. I'm in the story. But when you're scrolling, you you're used to study something for longer and it being something that you're willing to let interrupt your brain for a little bit. Exactly. So it's really about trying to infuse ads In a story versus in a feed. That's the real difference. We actually at Snapchat when we launched um the live stories, we took a pretty different approach with advertising too, because of that, actually. And we decided to make it much more of a brand play. Um, because brands were typically they were already part of that social experience. Like if you're gonna go to a concert or something, or you're gonna go to an event, there's usually brands around you anyway that are associated with that. And so our first step was let's pull them in and make them part of this.

48:32 online experience too, not just the in stadium experience or the in you know Right. predicted Instagram to do fourteen billion in revenue this year in twenty nineteen. when I believe it was shortly before we did our first episode, episode two, on Instagram, Citigroup had just done a research report on Facebook and estimated the value of Instagram within Facebook at thirty five billion at that point in time, which was a crazy number, right? I mean, we'll get to grading in a minute here, but you know, by Any measure a a a business that big growing at forty, fifty percent a year.

49:09 uh with a very high margin, you know, ad revenue business, probably gonna get at least a ten X revenue multiple, um, which is very high, but like warranted, you look at like squares trading at a ten X revenue multiple with worse margins. So you're saying the enterprise value of Facebook or I'm sorry of Instagram is somewhere around one hundred and fifty billion dollars. That's what I'm saying. At least, right? You know And Facebook's market cap is I believe about four hundred billion today. Didn't look right uh exactly but two X from the last time we we dove into this story at the end of twenty fifteen. So There you have it. For the moment we're gonna pause our history of facts on Instagram. Something tells me we'll revisit this again in the future. Um I'm I'm pulling forward a tech theme here, but it is interesting to take a step back and just let it dawn on you that

49:52 You know, Friendster and MySpace it never I mean, imagine if MySpace had bought Facebook. And they said, Okay, look, it's it's it's not about the MySpace, the platform succeeding, it's MySpace, the company succeeding. And Facebook did that when they bought Instagram. And so Facebook is becoming less relevant. Instagram became way more relevant. It was the thing the kids were on. Everyone's parents got on Facebook. Snap started to steal some of that back. And then Instagram, you know, Facebook, Instagram sort of wisely realized

50:22 We're gonna leverage what we still have, and that's the network, and we're just gonna copy feature for feature in a way that blends really well into our product. And they managed to sort of like steal a lot of that back. And and Instagram remained sort of uh or avoided that sort of low-end disruption. And the thing that I'm wondering now is sort of like Parents come to Instagram and have has Instagram become uncool, and is there something else that Facebook's gonna need to go by here shortly when the existing social networks are are sort of parents now. Yeah, as as as the parent in the room. Parents are on in on Instagram.

51:02 First of all, I think we're seeing that the there's longevity to these things. I mean, Facebook has been around in and of itself for a while. Right. And it still is, even though it doesn't always feel like it's as much of our day to day as it used to be, it's still incredibly successful. I think. Yeah. Um, while adding on some really nice bells and whistles that keeps it current and has really helped as you mentioned, capture sort of some of the wondering eyes off. So I don't know, I w I would still I would Bet money on Instagram continuing to do well. Although we'll see what happens when, you know, as Facebook is thinking about bringing all these products together, you know, that's a very delicate situation that

51:45 They can't really afford to mess up. So Yep. Yeah, and it's it sh it actually we shouldn't call the history and facts done without uh mentioning that uh the founders are no longer at Facebook um and and left in uh Um at the end of twenty eighteen. Yeah. And in sort of disagreements about the the future direction of the product. So um

52:06 I'm I'm not saying it's been a long time. Yeah, yeah, yeah. I come down way in the camp. Can I just say it was ridiculous reading those news articles that were all like, the founders are leaving? This is this is crazy and it signals all these bad it's like I can't believe how long they were there. I mean it really speaks to like the it's it speaks to how right the acquisition actually went if they stayed this long and then what happens. Yeah. Yeah. No, you're right. And I think that these things become institutionalized too. I mean I I I think that people and culture are everything to a business, and by the time that You know, um Kevin and Mike left like

52:40 They had built an organization of people that they had handpicked and they had decided what the culture was going to be and that existed within Facebook. Now can they keep it going? We'll see. But it's you know, it's so much larger than just the two of them now. Yeah. That's great point. Well, actually this is a really good uh segue to revisiting acquisition category here. I believe I called this a technology acquisition uh in episode two. Um I think we were trying to disagree more and and Yes, uh Emily, we should we should

53:09 Talk here about like and and for folks who are new to the show, every time we we bucket into a category of people, technology, Product. business line, asset, or other. And we've come up with like several different others over the years. But basically um the the main distinction to to draw there is between technology, product, and business line. A business line is when you're buying something that's revenue generating and you're gonna sort of leave it alone and it's gonna uh it's gonna increase in value and you're gonna YouTube or Yeah. Yeah. Yeah. Uh a product is something that I would argue like Instagram, for example, where it was not its own business line, but you were buying something that was sort of a a fully baked thing that people were gonna use, that was its own full value chain, nothing. Yeah, this is definitely product. Yeah. That was definitely product. It was the early days, yes. For sure, product acquisition. Yeah. Yeah. We should and and yeah, that was probably because we were trying to disagree more at that point in the show.

54:03 Uh I don't think there's many there's no arguments about that. Um what would have happened otherwise A lot of times we talk about like what would have happened if this didn't get bought. And I we whacked philosophically about that before. Anybody who wants to should go listen to episode two. The thing I'm curious about and I want to pick pick Emily's brain on is what if Twitter had successfully bought Instagram? What do you think the most likely outcome is of of that? If that had happened. Oh my gosh, that's a really hard one. I will tell you that um with you know sort of knowing that the Twitter history Uh when Kevin and I went to present to the board, I don't know, maybe

54:39 four or six months after I had joined, I said to the board, We just bought the next Twitter. It's gonna be bigger than Twitter. Because it was so much smaller at the time, but I was trying to get across the point, which I wasn't sure they knew that this was a really big deal and had tremendous amount of traction and the board was skeptical that you were Overselling. Maybe. Maybe. I think that listen, I think had We'll start with like had Facebook not acquired Instagram, I don't know where Facebook would be today, honestly. Um I think that Mark showed a level of ingenuity in identifying and moving quickly on the Instagram acquisition and maybe he would have done it on the next one, I don't know, and been successful with that. I'm pretty sure that Instagram would have been very successful. It just would have taken longer. Right. I mean, we leveraged a lot of what was at Facebook to make it grow this quickly, right? The expertise, the technology, the people, um the go to market, it's sort of all built in, which was wonderful. we intentionally maintained the product experience and that has continued to do very, very well, despite, you know, and in addition to it being part of Facebook.

55:41 had Twitter bought it, I don't know. The the management challenges there have g have gone on for a really long time and You know, you'd like to think that Instagram would have been able to carve out their own niche within Twitter and been able to avoid getting caught up in sort of the drama there, but who knows? But yeah,'cause that was This was um pre Jack Dorsey coming back. Yes, yeah. And uh Um there was still there.

56:07 Would have been a a hard entry point I think for any business into uh into into Twitter as a company. Let's say for for Dick Coslo Present to try and close him for five hundred million. Yeah. I mean that's that could have been a nice uh a nice pickup. Yeah. Yeah. But these this we're living in a world, I mean, at that point with thirteen or sixteen employees, no revenue, user attraction, it's all sort of funny. Yeah. It doesn't even matter, honestly. I mean, at that level, if you if you save or have to spend an extra five hundred million and it would sound so bizarre, but the the possibility is so tremendous that it really doesn't matter. Yeah. It's funny, it's reminding me of um

56:44 This will be for another episode someday, but uh I remember when I was at G S P in in business school uh Biz Stone came to one of my classes and told the story of when Mark Zuckerberg tried to buy them for five hundred million and I'm probably butchering the story, but The legend has it that uh it was Bizenev and uh they met with Mark Then they got back in the car and they were driving back up to San Francisco deciding whether to take it and and Ev said something like Oh, if we're worth, you know, five hundred million, we're worth five billion or something. I think it was if we're worth a billion, we're worth ten billion or something like that. And like it sounds so silly, but you're right. Like when you're talking about things at this scale and these opportunities, like

57:20 Instagram, five hundred million, a billion, ten billion, whatever. It's a steal at any price. It is crazy, yeah, that uh Twitter offered five hundred million for Instagram and then Facebook bought WhatsApp for forty times that. Yeah, well that goes to the point of like I think there's just maturing viewpoints on what these things are worth. But you have to remember that Ev had sold his last company, Blogger, to Google. Yep, right. So he had been down this road, he knew what integrations look like. Yep.

57:47 Um, he knew he'd made money at that point and founders' mindsets change when they have something in their pocket. Yeah. That's another thing that's changed since those days. I mean it used to be um I I feel like Instagram also ushered in um the age of Secondary is being okay for founders, right? Because If you haven't made any money and you have a billion dollar

58:08 deal on the table. Right. Um really hard to say no to. But if you're able to take some money off the table along the way and like buy a house, you know, um it's easier to keep going and build the hundred. San Francisco where you need a billion dollar acquisition to buy a house. Basically. Crazy. All right listeners. Now is a great time to thank our longtime friend of the show, ServiceNow. If you are running a large enterprise, AI agents are likely spread across every team, and deploying them is uh no longer the hard part. Yeah. The hard part is knowing what permissions they have, what employees are using them for, or what decisions AI is making.

58:45 AI security for an enterprise at scale is not a small concern. Like the risks Are real. Exactly. And the challenge with AI is governing it, securing it, measuring it, and making sure that it actually delivers value. That is why Service Now built the AI control tower. Yep, AI control tower gives enterprises a single place to see, manage, govern, and optimize AI across the entire business. And it works with Any AI, not just theirs.

59:12 Every device on your network, every permission across every system. Every AI agent visible and secure in one place. And ServiceNow can do this because they've spent more than 20 years building the operational backbone of the enterprise, the workflows, governance, approval, security controls, and institutional knowledge that power how work actually gets done across IT, HR, customer service, finance, and security. ServiceNow already runs more than a hundred billion workflows annually and trillions of transactions for more than eighty five percent of the Fortune five hundred. So when companies need a place to govern AI at enterprise scale, they're building on a platform at the center of how their business already operates. And in a future, that isn't going to be one AI, it's going to be thousands of AI agents working across every function of the company. But the question is.

1:00:00 Who's managing them all? So if you're trying to turn AI ambition into real business outcomes and make it work safely, securely at scale, go check out service now.com slash acquired and tell them that Ben and David sent you. One other question in here for Emily. Knowing Facebook as intimately as you did at that point, do you think without buying Instagram, that Facebook would have been able to succeed on mobile for the blue app, for their own product, and and how Crazy was the ship already turning into native, native, native mobile is super important by the time the Instagram acquisition happened.

1:00:34 At that point they had realized it. Do you remember when Facebook came out with Facebook phone? Oh yes. Yes. I mean there was a lot of effort there were a lot of effort underway at that company uh you know, at that point, um to make sure that it was a mobile first company. And I would say it took about a year, year and a half to really make that DNA change, but by the time Instagram was brought in, it was humming. It was Fun, I have to say. Um for me personally, because I had only worked on at companies that had made the that transition, right? I'd never worked at a sort of mobile native I mean, we would remember like

1:01:07 sort of getting in these conversations about like how m how d do do we continue to invest in in s Instagram web version and like why did it exist? And how much functionality do we want to put in there and when did people use it and do it even need it? And so the world has changed a lot. Yeah. Although I will say Jenny my wife uses um Instagram web quite a bit. Uh

1:01:30 And and we have web listeners have acquired. I heard they're adding uh DMs to Instagram web. Like big flash news. Yeah, this is Twenty nineteen and this is what we're excited about. Yeah. But the but the main use case was really the ability to reference it in press, right? They needed the ability to pull web images and web embedded. So that was sort of the one of the initial key drivers. But Yeah. I mean we w it was really a second class citizen for a very it sounds like it still is, yeah. Yeah. Um Well, tech themes I I feel like per usual, we've covered a lot of them. Well one I wanna throw out there that I think

1:02:04 I hadn't thought about before this in um You know, talking to you, Emily. It it seems to me, and feel free to disagree, but it seems to me like even though Instagram had Certainly lots of advantages within Facebook. And as you say, um, you know, got to Where it would have gotten anyway, but faster.

1:02:20 It's kind of amazing how much it still was a startup journey, right? Like you were having to do, you know, Instagram walks to to evangelize Instagram within Facebook. Like um It's still a fight for resources. It's not like an acquisition happens in a business on this scale and like Everything's done. The hard work's over. You know it's still like building the company. Um it felt so much like a startup. And at the same time we were part of a public company, which

1:02:45 Then emphasized, at least to me, that we needed to double down on who we were and really make sure that we knew it. And that we were defining it for the community. Um because Otherwise, it's just way too easy to get bowled over by like the massive organization that you're a part of, right? And so um, you know, our ability we still had to recruit entrepreneurial

1:03:08 People and engineers, right? We didn't want people who were sort of nine to five you. We wanted like passionate people who loved this business. And we needed to we needed to make sure that people understood that we were different in our own way while still being part of it. Did you guys or maybe even you specifically given your history, did you look at YouTube within Google as like an example of this? I mean separate campuses, separate cultures, separate everything. Obviously shared on a lot of fronts, but really enabled those businesses to grow separately. Yeah, I think Google did a really nice job with the YouTube acquisition in that They resourced it, they informed it. But they let it fly on its own for a very long time. And and I you don't know if you remember, but like before Google pot YouTube, they had launched Google TV and it had not worked. Oh yeah. It had not worked. And so they kinda knew that they didn't know what they were doing.

1:03:57 But that YouTube have figured it out. And so that was a very smart move. And I think they've done a nice job with many of the other nest is another one, right? Where they're just sort of keeping it separate. Um in the case of Facebook and Instagram, there's so much underlying overlap, right? I mean the the sort of back end infrastructure. I mean, even you think about like the content policing, like that takes Top teams and teams of people all over the world. Um and so it was effectively employ like tens of thousands of people. Today. Yes, absolutely. No, it's it's amazing um how much manual work still goes into into that. And so being being able to sort of plug into that and quickly, again, because the team was so small and so immature, but we had this user base that was large, the size of a much more mature company, and we had to deliver to those standards. So it was

1:04:44 incredibly uh it was an amazing resource for us to be within Facebook where we had all of those people and had those systems. Where we did decide though, we decided like we're gonna have our own policies of what we're gonna allow and what we're not gonna allow. Um and that this is more of an artistic platform and one of expression in a way that Facebook isn't Um, so what does that mean for the review process that we have? So again, we went systematically one by one and decided where where we were gonna integrate and where were we gonna have our own sort of perspective. Right. Wow, fascinating.

1:05:15 It's funny, the one I've been thinking about Is You were talking about At the time of acquisition or just thereafter. you and the Instagram team were kicking around ideas about Instagram as a transaction platform. And wouldn't it be great if in this really seamless experience you could buy stuff right from this beautiful browsable photography.

1:05:36 And that was Five, six years ago now. And we're just starting to hear whispers now that that's starting to get productized and it just reminds me so much of when you have a startup idea or you're, you know, hearing someone's startup idea and they're talking about this thing that they think they they eventually will be able to do. And it's it's

1:05:57 It actually doesn't sound that hard. A lot of times these things are like, Well, why don't you just do that feature? But there's just this morass of stuff that underlies it that has to, you know, be built foundationally before that's even possible. You know, it's just a testament to um the near term work and that thing that you want to achieve eventually fitting under the same mission and vision so that you can put the mission and vision on the wall, use that as a uh a knife for decision making. Does it fit in that or does it not? And without having to build that thing today, still be able to march toward the goal of building that thing eventually. And these things, you know, whether you have billions of dollars at your disposal within a big company or, you know, you're a scrappy startup, just takes a ton of time to be able to realize these things. And you have to remember this is all happening at a time where it was like

1:06:43 Do we even need to monetize? And we decided we needed to monetize, but we also needed to grow the product. Right. So we hadn't launched video, right? I mean, there's a lot, we hadn't launched direct messaging, we hadn't launched stories. And so of course, you know, the demise of many a business comes when there's lack of focus and you want to do everything. And One of the nice things about being small is that it really forces you to prioritize. And even though we were in within a larger company, we still felt like a startup. We still felt like a small team and we knew we could not do everything at once. And so you start to think about horizons and when does it make sense to do something? When does it make sense from a tech technological perspective, when is our community gonna be ready for it? How do you balance um monetization, non monetization together to create a story so you're continuing to drive uh user value? Um, they all go into the recipe um and decision making process. Yeah.

1:07:39 I have one more theme that uh I didn't think until just now too. Um You know, saying this it it strikes me too that there also was like a really perhaps Equally

1:07:49 um viable history where Facebook acquires Instagram. And You and Kevin and Mike decide monetization's not that important. Right. And then the world looks very different today, right? Like so it just reminds me that like the end of the day, this is really all about the people, right? Like I assume if if the three of you had been like

1:08:08 Mm. Okay. Like the company probably would have been okay with that, right? Like it came down to you guys saying like No. We are gonna monetize, we are gonna build a business here, right? Oh my gosh. I mean the the history is littered with these small decisions that seem so small at the moment. Just as a as a parallel example when I

1:08:24 First joined the Facebook Mobile Team I went and looked at all the contracts we had with carriers. Now we were not monetizing mobile at all. But in the contracts we had written in that they would get like Roughly I think on average like five percent of the mobile revenue. I am not kidding. Wow. And I read these and I was like

1:08:43 Okay, so we need to change that to zero. Uh, before we launch ads. Let's go do it. And we did. But you know, such a minor thing that you could have sort of you could very well have justified it. By the way, it wasn't easy. These uh these m the mobile operators were not happy that we did this, but we also knew we ha I mean, it was really like we could choose to give some of it back, but we didn't want to be contractually obligated to be in a Rev share with anyone because we hadn't done it before. There was no real need to do it. Um, and so

1:09:12 It does go to show too, like i the whoever negotiated those originally was probably thinking like You know, we really need to have Facebook on mobile. No, it's never gonna be a huge revenue driver for us. Don't care, I'll put it in. Exactly. I know, right? Hindsight's twenty twenty. Yeah. And on WAP phones, they were right. They were right. WAP. Oh well. Alright, well, greeting. This is gonna be short. Still an A plus. Still an A plus. Uh

1:09:36 Somehow there's not an A plus plus, so we're we're just gonna Emily, do you have any different opinion? No. Home run. Home run in every regard. But this is like a

1:09:49 This is like a game like a season ending home run. Like you hit this one and Carvelts. Yeah. Um So it's funny, we were talking about podcasting before uh before the show and we're talking about uh about Joe Rogan, uh who I believe has the most popular podcast, and yet I I had never really other than the Elon Musk uh blunt smoking episode, had never really uh Tuned in.

1:10:14 And Uh, it's a really good episode, by the way. It's a g it's actually it's a phenomenal episode and it's a great interview with the guy. I need to listen to the Jack Dorsey interview as well. The episode I just listened to is Sam Harris guesting on Joe Rogan, and uh um you know Sam uh super thoughtful moral philosopher, I think, but also he's and and and and he's he's he's lots of things. Uh YouTube personality Thoughtful person of the internet and author. And uh their dialogue on they both on their shows interviewed Jack Dorsey. They both are sort of kicking around uh direct monetization for and and flipping the business model, like we talked about in the last episode of podcasting. They're both super thoughtful, but serve very different audiences. And it's just fascinating, and I think they're they're great friends, and it's fascinating to hear them relate to each other, um, where they're these sort of mega influencers in wildly different worlds. And I think it's a uh it's a fascinating lesson for for anyone who's uh a fan of podcasts, uh a fan of uh of trying to understand the world of media a little bit, but then also in a new media in an influencer sense, but then also trying to understand, you know, they do like twenty minutes on what it's like to prepare for and interview Jac Jack Dorsey. And that's sort of a fascinating sort of dive into their uh their different psyche. So I highly recommend that episode. Oh, I gotta add it to my list. That's awesome.

1:11:29 I guess. The new Instagram. Um My car about is uh Uh a really, really fun book, which I'm not quite done reading yet, but uh Uh can't wait to finish uh Boomtown.

1:11:43 by Sam Anderson, history of Oklahoma, uh of Oklahoma City specifically. Man, I did not know anything about the history of Oklahoma City. So he he was a journalist was assigned to write about the Thunder and the the basketball team and Stealing the thunder from Seattle, but realized that there's a much bigger story about the history of Oklahoma City, which sounds like why would you write a book about that? But It's crazy. It uh uh is very worth re I can't even describe it other than like I cannot believe that even in the late eighteen hundreds, like basically what happened was you read about this in elementary school in history, like

1:12:16 The U S government Oklahoma was a unassigned territory, former native lands, and they decided that one day at noon on april twenty second, I think like eighteen eighty nine. They were just going to Anybody who wanted land could come in and claim one hundred and sixty acres of land.

1:12:33 That's it. There was no so like at noon on that day was, you know, the the boom and Oklahoma happened overnight. And Oklahoma City happened overnight. So people like lined up. They were the Sooners. That's why they're the Sooners. They cheated and Came across the border earlier. And like who's gonna tell'em no. It was chaos. Uh and uh In many ways, Oklahoma and Oklahoma City have been the same ever since. So really, really fun. Uh kinda hard to believe this happened in America, but um

1:13:01 It's like domain names, but in real life. Yeah. Uh Awesome. Well Listeners, that is that is all we've got today. Uh Emily Where can our listeners find you on the internet, if uh if that is something that that you'd be interested in uh in sharing. Oh, so ironically, I'm not sure I can really be found. I feel like my life in the um my life in social media uh is

1:13:29 It's so much on like the operations and making it happen, and so less on the sharing side. I don't tweet, I read. Um, I I look at Instagram, I actually don't even post that much, and same with Facebook. So I'm much more of a consumer. Um, but that has to do with so much of my like preference for being sort of a quiet private person. So All right. Well awesome. Well look for me at the halls of the airport. All right listeners.

1:13:56 Now is a great time to talk about one of our favorite companies, StatSig. Yes, there is a reason why the best product teams rely on StatSig, whether they are iterating on their core product features or shipping AI powered experiences at scale. Yeah. In the crazy speed of today's AI world. Shipping fast is just table stakes now. It's basically trivial to build and deploy your app constantly.

1:14:22 The real advantage is how quickly you learn what changes actually created value for customers and how fast you can use that signal to guide what you ship next. This is where StatsIG comes in. It brings experimentation, feature flags, and product analytics into one unified system so teams can ship safely, test rigorously, and directly link what they changed. to how users actually behaved. So if you want to make learning your competitive advantage, whether you're building new AI experiences or just evolving your existing core product, go to statsig.com slash acquired to get started. Well, listeners, um if you do want to hear uh a little bit of a a deeper dive into uh some of the things that Emily thinks today with uh in investing at Anthos and um a lot of the other things that she had talked about throughout her career uh at Google, then Tune in and uh we will be uh continuing the discussion in the limited partner show. So you can click the link in the show notes to go to uh Kimberlight.fm slash acquired, or if you are already a member, just hit the back button on your podcast client and uh and go to the uh the LP show feed.

1:15:26 So we will see you next time. See you next time.

What you see above is a preview of the first minutes. One unlock costs 10 credits and covers this episode forever: full segment and word-level timestamps on this page, plus .txt, .srt, .vtt and word-level JSON downloads, as many times as you like.