Emerging Technology

BEST OF THE WEB: The downfall of the photo app that Facebook didn’t buy

Patrick Stafford /

The tech market was hit with a surprise earlier this year when Facebook announced it would purchase Instagram for over $US1 billion. It was a bet on how important photography is to the social space.

But Instagram wasn’t the only photo app around. Hipstamatic, an app founded by Lucas Buick, was arguably doing extremely well, marketing itself as a $US1.99 app and a “Kodak for the digital era”.

Facebook didn’t want it. It was overlooked. And in a huge piece over at Fast Company, the company details exactly what went wrong to have Instagram overshadow it – and how the past year hasn’t been the best time for the company.

It’s become so bad people have called up Buick asking if the company is going bankrupt.

It’s easy to see things aren’t going well – staff have been laid off. And after speaking to “more than a dozen players involved”, the publication has uncovered a year of trouble, growing competition, and “a lack of product vision”.

It’s a sad tale for the app that was among the first to realise photos are the key to social – Facebook wouldn’t be Facebook without them. But as it describes, Hipstamatic tried to keep up with the social element of Instagram, and failed:

In the most regrettable ways, Hipstamatic was, in fact, becoming Kodak. Like the once venerable brand, which failed to keep pace with industry changes during the 1990s, Hipstamatic was struggling to adapt to the daily chaos and external pressures of the social app world.

It started to dabble with video, and a new feature called Hipstamatic Classic, which would have more mainstream functionality. But nothing was ever finalised – and there was plenty of internal fighting.

Buick held a meeting about a new social feature, where employees quickly pointed out the app was looking more and more like Instagram:

One former developer, who was also present in the meeting, recalls, “People raised concerns that it didn’t offer anything more than an Instagram feed of photos, and that we would basically be mimicking all the functionality that Instagram already had.”

The company is in trouble. The publication spoke to venture capitalists about the possibility of raising more money, and it doesn’t look good – especially considering how much Instagram was purchased for.

But Buick is optimistic and, more importantly, he recognises what went wrong:

“What we did was build a Ferrari and we didn’t know how to drive stick. So we had this awesome machine that wasn’t able to perform like it should. We built the wrong type of team to solve the wrong kind of problem.”

The making of one billion users

Facebook passed a billion users this month – no mean feat. Eight years after launching, the company has managed to escape competition by building scale and making sure the site runs smoothly while doing it.

And in a piece over at BusinessWeek, it’s examined just how it made that milestone – and the raft of problems it had in doing so.

“We have this ethos where we want to be a culture of builders, right? We don’t want to overly celebrate any particular milestone,” Zuckerberg tells the publication.

It’s a typical comment from the chief executive who regularly shuns the spotlight. Facebook is a dynamic company, always learning and changing.

Of course, that can be a big problem for them sometimes. The company’s IPO has been a problem, and that raises questions about how far it can grow. Not that Zuckerberg is too worried – he’s not in it for the cash.

“The performance has obviously been disappointing. I mean, we care about all the investors, and that’s really important,” Zuckerberg says. “I suppose there could be short-term things that we could do, but we’re not going to focus on those; we’re going to focus on the long-term stuff.”

But the crux of this piece is a look at what happens behind the scenes, with engineers working on code and making sure everything runs smoothly.

But that gets harder when the company has almost 4,000 employees.

“We have this stat that we throw out all the time,” says Zuckerberg. “There is on the order of 1,000 engineers and now on the order of a billion users, so each engineer is responsible for a million users.”

This is an extensive piece about how Zuckerberg is growing, changing and having to manage difficult new problems all at once.

As Zuckerberg admits, “We make more mistakes than other companies do.”

“You can’t have everything, so you just have to choose what your values are and where you want to be. For example, Microsoft has a huge focus on really rigorous, bug-free code. That’s cool. I think that’s the right decision for a lot of the markets they’re in. But for us, this is the right way to go.”

The continued fall of the BlackBerry

“I’m ashamed of it.”

That’s Rachel Crosby talking to The New York Times about her BlackBerry, the device professionals once had attached to them night and day. Now, it’s a different tune.

The company has fallen so far, so quickly, that professionals are now abandoning their once beloved BlackBerrys. But it’s not just that – they’re shunning them, embarrassed to even have them.

As this piece points out, one of Marissa Mayer’s first decisions at Yahoo! was to trade in BlackBerrys for iPhones and Android-based phones.

The cultural divide between BlackBerry loyalists and everyone else has only grown more extreme over the last year as companies that previously issued employees BlackBerrys — and only BlackBerrys — have started surrendering to employee demands for iPhones and Android-powered smartphones.

This week alone, Woolworths in Australia has traded in its BlackBerrys for the iPhone 5.

Research In Motion is trying to survive, but as long as people are embarrassed to have these devices, it won’t get far.

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Patrick Stafford

Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.

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