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  • Michael N.

Mark Zuckerberg's social media rule

In 2008 Mark Elliott Zuckerberg became the youngest self-made billionaire. Had he ever dreamed of what his company would become? Had he ever thought that he would own the top four most downloaded apps in the last decade? Did he ever think that the small app he developed as a college student would change the world? Did he think he would go to a social media war with Snapchat? Would he have believed you if you told him his company would reach a net worth of half a trillion dollars? Did he ever have thought that his net worth would be 129 billion U.S. dollars at the age of 37? What are his plans for the future?


In February 2004, Mark and his Harvard roommates released an application called Facebook which was coded in C++. In that year Facebook made what is now a small 400,000 dollars. It started out as a student directory for Harvard students, but those who liked the app shared it with their friends and more and more people joined Facebook. It is now the most downloaded app of the decade.



WhatsApp

It was 2009; the iPhone had recently been released; mobile apps were growing, and Facebook too was doing well. Brian Acton applied for a job at Facebook but was turned down. A couple of months later he and his friend Jan Koum had an idea. That idea was WhatsApp where you could post your status. Very soon after launch they added private messaging and their app started gaining popularity. At the time texting was expensive and WhatsApp offered all of that for free. There was, however, a catch; the owners were losing money through big data costs and to get back their money, they needed either advertising, in-app purchases or to sell their data. They both hated ads and even left their jobs at Yahoo for that reason. They didn’t want any in-app purchases because they wanted their app to be free and easy to use. Also, both founders were privacy activists and hated the idea of selling their user data. So, for a short time, they managed to live off investors' funding and a rising stock price. Their employees needed to work on the cheapest Ikea tables to save money. Eventually they did have to introduce the one-dollar fee, where you paid one dollar a year, but if you didn’t pay you could still use the app. In effect more of a small donation. But this only paid off their debt and got them little to no profit at all. The app benefited from more and more users because that attracted more investors who put in more millions, even though they were barely making any money at all.


This wasn’t however going to work for long, since the old investors would want to start seeing some return after all they invested. There was one other way. In 2014 Facebook bought WhatsApp for 19 billion dollars, they had offered to buy Snapchat for three billion, they had bought Instagram for a billion, those apps were making much more money than WhatsApp was. With all of that money you could build thirteen Burj Khalifa's, but Mark Zuckerberg had put in all that money for an app that was losing money, rather than making money. Everybody thought Mark Zuckerberg was out of his mind, he was a money maker not a money loser. Also, Zuckerberg also owned Facebook Messenger which actually has 0.1 billion more downloads and is the second most downloaded app in the decade. Zuckerberg even said it was worth more than 19 billion dollars and here is why: Zuckerberg used the data which the two founders wanted to protect to personalize ads on Facebook thus making more money. Zuckerberg even faced court action for stealing user data.



Instagram

In 2009 Mark Zuckerberg offered a job to a man named Kevin Systrom to make a photo sharing feature on Facebook, which he declined. Instead, he went to Italy to study photography. When he arrived back in the U.S., he received a job from Jack Dorsey, the founder of Odeo, now known as Twitter, however, he also declined that. But that didn’t matter, he soon started learning how to build mobile apps and made his own website called Burbn.com, named after one of his favorite drinks. The website lets you share your location and send pictures of where you are. He managed to gain half a million dollars in funding from investors who weren’t interested in the app specifically but invested broadly, looking to find the next successful idea. He also hired his friend Mike Krieger, so everything was set, but burbn.com wasn’t popular at all. It only had a hundred users and was hardly growing at all. He asked the users what they liked about the app. Most of them said it was photo sharing, so Kevin and Mike deleted all the other features and focused on that.


They then produced Instagram, a combination of Instant and Telegram. Soon, filters were added to the app and even though there were other photo apps and other photo filters, Instagram had it all in one. So, after six weeks of putting the app together they released it on the sixth of October 2010. Yet no one knew it was going to blow up so much. Within 24 hours in had 25,000 users and within a month a million. The app crashed very often, usually when celebrities like Justin Bieber joined, and thousands of fans downloaded the app to follow him. By the time Instagram had two million users they only had four employees working in one room including the two founders. The servers kept on crashing, and they had no way of stopping abuse on the platform. It was also getting increasingly difficult to become famous without being a celebrity because the Instagram employees would hand pick posts to recommend because they didn’t have an algorithm.


In 2012, Twitter’s CEO Jack Dorsey offered to buy Instagram for half a billion dollars. So Instagram’s CEO Kevin Systrom called Mark Zuckerberg who out bid Twitter by double their original bid, offering one billion. To everyone’s surprise Kevin agreed, was still the CEO and kept running Instagram but under Mark Zuckerberg’s power.


This led to some issues, most notably the independence of the platform. Instagram ended up making 24 billion dollars a year in 2019 and 30% of Facebook’s total revenue. Also, Instagram had more and more people using filters to look better, making others who saw these photos feel depressed. The problem became so severe that Instagram had to delete the “like” count. But by 2018 the founder had had enough. Mark and Kevin were leading their own civil war within the company. The first argument happened in 2016 when Mark told Kevin to add more notifications to Instagram, but Kevin said this would only annoy the users. Also, Mark wanted to put Facebook ads on Instagram, but Kevin disagreed saying it would damage the user experience, but Mark didn’t care. Kevin was the CEO and Mark was the boss commanding him around.


Because of Instagram’s growth, Mark was scared they would overtake Facebook. Despite owning both platforms, he had a preference for the one he built. As a former Instagram employee quoted “Facebook is like the bigger sister who wants to dress you up for the party but doesn’t want you to be prettier than she is.” Originally, Facebook had been trying to promote Instagram to their users. Following this disagreement and Marks fears of being overthrown, he stopped bringing Facebook users over to Instagram and made Instagram users come over to Facebook. Due to this sudden change of heart, Kevin was forced to leave in 2018.


Credits: Cover image - Financial Times - https://www.ft.com/content/96c131ba-2524-11e9-8ce6-5db4543da632

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