Large, square photos of a towering redwood forest, a yacht at sunset and a carefully crafted cup of coffee adorn the walls of Kevin Systrom’s office. At one time, these beautifully shot pictures might have hung in an art gallery. Now they are everyday Instagram, plucked from filtered feeds found in an app on a smartphone.
In the scrappy, ever-expanding Facebook campus where Instagram is based in Silicon Valley, and where everyone has just moved desks and few have changed out of their gym clothes, the pristine office of its co-founder and chief executive is a corner that is forever fashionable. Systrom strides in to find me waiting at his white oval marble table. Wearing a khaki mac, pale blue striped shirt and black sneakers with patent toes, he is more carefully dressed than his boss Mark Zuckerberg, who was responsible for turning the hoodie into a geek icon. Yet, however stylish his outfit, he still lacks the gloss of the last photo he posted on Instagram.
In it, 31-year-old Systrom shows off his tuxedo in the mirror of a hotel room, with girlfriend Nicole posing in an off-the-shoulder silver dress behind him. The couple is pictured heading to the Council of Fashion Designers of America Awards, where he picked up a gong given to Instagram from one of the most famous Instagrammers of all (with 37.1 million followers): Kim Kardashian West.
“I think I’m just going to wear tuxedos for the rest of my life,” Systrom says cheekily, after I ask the question he doesn’t want to answer: how long will he stay at the helm of Instagram as it further integrates with owner Facebook?
Bending over my iPhone on the table, which is recording every word, he says: “Dear Financial Times readers, that was a joke.”
Winning the CFDA’s Media Award is the latest sign of Instagram’s growing influence in creative industries from fashion to food and travel to music. This influence has necessitated a lot of tuxedo-wearing from its leader. “In the last month, I think I’ve had to go to three events in a tuxedo, so much so that I think my cleaner is like, ‘Usually people get their tuxedo cleaned once a year, you are like blowing through this one,’” he laughs.
Instagram boasts 300 million monthly active users, of which 200 million log on every day. The average user spends 21 minutes daily on the app uploading images, flicking through photos and commenting. It is one of a new generation of photo-focused social media apps, alongside Snapchat — whose messages disappear after 10 seconds — and online scrapboard Pinterest.
To Systrom, the app is not just a portfolio of pretty photos. He describes it as the “visual pulse of the world”, a “history of the world” and a “visual walkie talkie” to communicate with friends.
The app is spawning an entire Insta-economy, becoming a source of income for thousands and changing how everyone, from celebrities to small businesses, communicates.
While many large US technology companies such as Uber and Amazon push into the rest of the world vowing to “disrupt” other industries, brashly confident in their own superiority and (in Uber’s words) “hustle”, Instagram is reaching outside of Silicon Valley to make friends. “We go out of our way to make friends with others, not because it is strategic but because we enjoy it,” he says. “I get a lot of energy from getting out and being present.”
Systrom’s Instagram feed shows him posing with designer Karl Lagerfeld, snapping a hasty selfie with chef Jamie Oliver and a view looking down on the Oscars audience. When we meet, he is excited that Hillary Clinton has just joined, posting a picture of her red, white and blue pantsuits.
“It is cool to see that the fashion world has really taken to Instagram but, again, it is one of the many examples of many communities: whether you are a chef, a skateboarder, a surfer, a skier,” he says. This week, Instagram announced a new way to discover these communities on the app, curating collections such as “extreme sports” and “towering rocks” and making it easier to find people to follow. “There are funny examples — nail art communities, for example,” Systrom says. He does not follow nail art on Instagram personally, he adds, examining his unremarkable man nails.
Amount Facebook paid for Instagram
Instagram’s business is only just beginning to reveal itself. Bought by Facebook in 2012 for $1bn, when it had just 13 employees, it escaped the frenzy of fundraising rounds which have brought copious press attention to rivals including Twitter and Snapchat. Nor has it had to rush to take advertising. Now, five years after it was founded and three years after it was acquired, it is ready to go full throttle into generating revenue. Its relationships with other industries, where people are passionate about photographing and filtering images of meals, outfits and scenery, should help grow advertising sales.
Sarah Phillips was one of the first to use Instagram for her business, grabbing the handles @food and @baking. The trim 61-year-old learnt about the app from her daughter, who has the handle @newyorkcity. (The same handle cannot be used by another Instagrammer.) She immediately knew it would be a hit. “People say a picture is worth a thousand words but I think it is worth billions,” she says. “It is technology plus art merged together, hence its popularity.”
Phillips is an early adopter, starting the subscription-based craftybaking.com in 2000, where she posts recipes and pictures of food that she raves are full of “colour, nourishment, fun and joy”. Instagram has helped build her business, striking deals worth thousands of dollars to promote food brands such as Kraft, Unilever and Starbucks in her feed, and helping her network with the other food industry Instagrammers.
She is one of thousands who say Instagram has changed their business. Elsewhere in food, chefs are paying more attention to plating meals and cafés say foods such as avocado on toast have soared in popularity because of their looks, not their taste.
In fashion, models often gather at the end of a catwalk show, posing so Instagrammers can snap them. A model’s follower count is considered when she auditions for work and draws up contracts.
Singer Rihanna is preparing to launch an album with a teaser on Instagram, Mario Götze put his first photo with the World Cup trophy on Instagram and Katie Meyler, a non-profit founder honoured by Time magazine’s Person of the Year 2014, used the app to promote her work fighting Ebola in Liberia.
Kristina Webb, a 19-year old New Zealander, has built a full-time job on Instagram. Her colourful, Disney-like pictures appeal to Instagram’s huge teenage base — and she can now afford to employ her sister, a former accountant.
“It is sort of my perfect job because at the end of the day, Instagram is what I used to do in my spare time when I got home from school or home from my part-time jobs,” she says. She sells her work on posters and phone cases, has a book deal with HarperCollins and is planning a 20-city book tour in the US this year.
Last time she came to the US, she posted asking if any of her followers (1.7 million on her business account, 600,000 on her personal one) wanted to meet up in a mall in Santa Monica. The next day, she found 300 fans waiting for her, screaming and brandishing signs, and an angry manager confused about the fuss. “It was the most surreal moment for me. On Instagram it is a number, but getting to see them in real life was the overwhelming part. Knowing I had impacted their lives,” she says.
Loic Gouzer, 34, a specialist at Christie’s, realised the power of Instagram when a flyer he designed to promote an edgy modern art sale, “If I Live I’ll See You Tuesday”, in New York was rejected by “some suit somewhere in management”. He published the image on Instagram as he felt there were “no laws” and he could develop his own voice and relationship with his followers. It has helped attract collectors to his shows and artists clamour to be featured in his feed.
“The time from when a painting is shown in a gallery to the moment it gets some kind of credibility used to take two, three, five, 10 years,” he says. “Now you don’t even finish the work and someone in a studio somewhere is taking a photo and two minutes later a guy is seeing it and buying it.”
Monthly active users
But there are signs the dynamics of the Insta-economy may already be changing. Sarah Phillips is organising a meeting of fellow food Instagrammers to try to create some standards for brands who she says often “want something for nothing”.
“Why should I advertise for a big food company for nothing? I think there’s going to be a shake-up in how to monetise on Instagram,” she says, adding that some now approach her offering as little as $100 per photo or even just free products. “It is not that I like turning away money. It is outrageous. And if I start taking these jobs it will drive the whole business down,” she says.
Systrom may be in his early thirties but he speaks like he is feeling his age. Pointing to his office door, he refers to the employees as the “young folks out there”. Outside, fresh-faced men and women sit and stand at rows of desks, peering over laptops. The open-plan office has the perks expected in tech (free snacks galore) — but a fun “gravity” room, arranged so that photos can be taken to make it look as if a person is flying, has been removed to make room for more staff.
Average daily use
He describes how different his own teenagehood — spent playing the game “Snake” on his Nokia — was to that of the flocks of teens on Instagram. When asked what has changed in Silicon Valley since he started there in 2006, he focuses on age. “There are a lot more companies with a lot younger people,” he says. “It is just like 23-year-olds are starting companies and they are scaling really quickly.”
Systrom started Instagram with co-founder Mike Krieger, who leads the technical side, at the grand old age of 26. Instagram was one of a few real overnight sensations, with 25,000 downloads on its first day. When it was bought by Facebook a year and a half later, it had 27 million active users.
Chris Sacca, an early Instagram investor, says Systrom did not pitch hard when talking to investors. “Kevin always knew that Instagram would be huge. He never tried to convince any of us,” he says. Beforehand, Systrom had a typical career for a wannabe entrepreneur: studying management science and engineering at Stanford, working at Google and the start-up Odeo, which turned into Twitter. But it was his life before tech that prepared him to create a new way of posting photos online.
Systrom grew up in Massachusetts, with a mother who worked in marketing, a father in human resources and a sister. He studied computer science at an independent high school near Boston, skied and worked at a local radio station.
Studying in Florence during college, he took a photography class in which a teacher pushed him to try a plastic camera and add chemicals to the developing solutions to achieve interesting effects. “That changed my life. I mean, you know, the discovery of square-format, filtered photos. I mean, that’s it, right?” he says, gesturing at the plus-sized Instagram photos on the wall.
Skipping over years, he describes how he did the same with Photoshop, “without all the hard work of a dark room”, then made it an easy “tap on an iPhone” by programming the algorithm of a filter.
He never considered becoming a photographer because he was “never that good at it”. “I just like to try to take good photos on Instagram and people are like, ‘Why don’t you take photos every single day?’ Because I’m not that good, I’m trying my best.”
Instead, Systrom thrived where art meets technology. He bets if you “zoom back to high school”, where he was president of the photography club, and asked peers what kind of start-up he would found, they would predict it would be about art, photography and connecting people.
But it wasn’t just the square format and flattering filters that helped Instagram beat many other photo apps. It was also the “asymmetric follow model”, where people can follow others without them following — or friending — them back, he says. “Not many people were doing that with photos. Photos were seen as the most private type of content and Instagram really flipped that on its head and said photos can be really public.”
Critics worry that this public face displayed on Instagram is creating a narcissistic generation who use the app to depict a vision of a life they may not actually live. The selfie has become the ultimate symbol of self-promotion. Systrom’s feed shows he, too, is fond of a selfie. “I’m like my own selfie stick,” Systrom jokes, unfurling his arms. “I’m 6ft 5in, can you see me?” But he rejects the idea his app is simply lifestyle porn, where, for example, people are so concerned with presenting every meal to their friends, they leave the food to go cold.
“I’ve never woken up and thought, man, we live in a narcissistic generation,” he says. “I think it is creating a record of the world, a history of the world, people’s emotions, people’s expressions and I think that is beautiful. I don’t think that is narcissistic.”
Systrom likes how teens’ Instagram feeds show them growing up. One young man, who was 13 when he met him at an early gathering of Instagrammers, is now 18 and using the app to promote his music. Self-portraits existed before the smartphone, he says, but it “took a really long time”.
“I think, like, this is not an Instagram thing, this is a societal thing. People wear certain clothes to give off a certain image, people drive certain cars, live in certain homes, work in certain jobs or titles. It is a human thing. I think you’re just seeing humanity play out on a massive scale through images on Instagram,” he says.
Instagram has humanity, now it needs money. Systrom must now get a slice of the proceeds already being made on the platform, by creating adverts that will be embraced by Instagram lovers.
Usually careful with his words — except when joking — Systrom surprises when he casually slips in the boldest claim of the interview: Instagram is probably monetising more quickly than any other social network, “period”.
It is bold because the start-up has been only dabbling in advertising since it showed its first advert — of a gold Michael Kors watch on a table set for high tea — 18 months ago. Few Instagram users regularly see ads and it only allowed users to click through to a company’s website in March this year.
“Initially, we took it pretty slowly because we wanted to make sure everyone understood we were going to monetise,” Systrom says. Now Instagrammers are comfortable with ads on the platform, so “our intent is certainly to go very quickly right now”.
He attributes this ability to accelerate now to Instagram’s owner, Facebook, the first to master social media advertising. Facebook is an “engine for serving ads” that can power Instagram, he says.
Facebook’s algorithms can use detailed targeting to help marketers reach their audience. A retailer can choose, for example, to show adverts to women aged 25 to 35, who like tennis and share attributes with other customers.
Systrom is also learning an important lesson from the parent company: advertisers do not want to be forced to learn their craft from scratch for every new platform. Facebook flailed in its first ventures on to Madison Avenue, when it tried to reinvent ads without understanding advertisers’ desire to measure and compare different media. It changed tack and is now one of the more popular digital media companies.
“I think one thing that most technology companies will learn over time with advertising is the way to be really successful in the advertising business is not to try to be too unique,” he says.
That Systrom praises Facebook for speeding along Instagram’s advertising business is a vindication of the original logic for the acquisition. Instagram was the first child in what Facebook now dubs its “family of apps”. The deal has formed the model for subsequent acquisitions such as last year’s purchase of messaging app WhatsApp.
In this model, the acquired start-up’s founders are given significant independence but offered a list of what Facebook can help them with: from hiring, to server space, to advertising. Rich Wong at Accel Partners, an early funder of Facebook, says the company had “guts” to buy Instagram. “People thought it was crazy at the time but that was prescient, in retrospect, addressing mobile users plus the younger demographic,” he says.
But Instagram’s success has also led to questions about whether they sold too early and for too little. At $1bn, it was much cheaper than the $22bn Zuckerberg spent on WhatsApp just two years later. Then, $1bn was a lot of money; now, there are about 80 so-called “unicorns”, start-ups that have been valued at more than $1bn, and the largest boast valuations of $11bn (Pinterest), $15bn (Snapchat) and $40bn (Uber).
John Lilly at Greylock Capital, which closed a deal to invest in Instagram just days before the acquisition, says Instagram could have become a “big, durable company”. But he adds: “My guess is it wouldn’t be all that different if it had stayed independent. It had significant scale before the acquisition. I think Kevin having collaborators in Zuckerberg and Mike Schroepfer [Facebook’s chief technology officer] and Sheryl [Sandberg] has been transformative to him.”
Systrom seems most on edge when I ask about his relationship with Zuckerberg. Throughout, he has been spinning the rotating leather chair next to him, first with his foot, then pulling it nearer and turning it from side to side with his hand. The spinning gets more fidgety when the topic turns to Zuckerberg.
“I see him every week, not always talking about Instagram stuff. I’m on the management team at Facebook so I also help with managing in general,” he says. “We have dinners, not every week, that would be a lie . . . ”
When pressed on where they have dinner — Facebook canteen, home or fancy Silicon Valley restaurant — he shrugs: “It totally depends.”
“But yeah, we have a close relationship and I think one that is fairly productive. So it’s good,” he concludes.
I try lightening the mood with an attempt at a joke about Zuckerberg’s lack of dress sense. Systrom demurs but smiles, “I don’t know. I mean, everyone has their own thing. He reads like a book a week, I wish I did that.”
He clearly dislikes being compared to his boss. “I guess my point is everyone has their thing but it makes sense that I love aesthetics, I love the craft, I love the product based on those communities that have really taken to Instagram,” he says. “I think to try to compare us is hard because we are just two very different people but that is what makes Instagram and Facebook together so cool.”
Facebook also helps insulate Instagram from fears about a technology bubble bursting. Valuations are soaring and even prominent venture capitalists and entrepreneurs are publicly questioning whether some start-ups could be overvalued.
Systrom doesn’t worry about a tech bubble because “our single investor is Facebook” and their business is “healthy” (generating a plump $4.7bn of adjusted earnings last year). But he realises the cycle affects everyone here — he just doesn’t know where we are in it.
“There are issues with technology right now. Technology companies, everyone is growing really, really quickly but I think that will work itself out in the long run. I’m not concerned about the long-term prospects of technology,” he says. The future for social media will include more video, wearables and virtual reality, he predicts. Instagram already offers video and Facebook is challenging YouTube’s dominance but: “I don’t think anyone has figured out video.”
And his own future? Many wonder if Systrom will stay in the job. Even when Instagram develops a solid business, Systrom will still be a leader of a corner of Facebook’s empire, not a public company chief executive. Maybe he’ll be tempted to start out on his own again.
In reality, he sees more than just tuxedo-wearing in his future. Refusing to name a timeline, he says he is revelling in the opportunities to launch new Instagram apps, such as Layout, to arrange photos, and Hyperlapse, which speeds up videos to a comic pace.
“Building a business is something I really believe in. I didn’t start it because I felt it was a good idea for an app, I started it with Mike because we felt we could build an amazing business around, like, connecting people through images,” he says. “It is just awesome, right?”
Hannah Kuchler is the FT’s San Francisco correspondent
Photographs: Annie Tritt
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