Instagram’s Co-Founders have resigned; Is Instagram in trouble?

Instagram founders Kevin Systrom and Mike Krieger’s decision to leave the app has caused both advertising executives and loyal fans alike to worry. Will Instagram turn into another clone of their parent company, Facebook Inc.? Or will it manage to keep the unique persona that has become extremely popular with younger audiences in the past year?

Facebook bought Instagram for $1 billion back in 2012 when the app had only 31 million users. Now with more than 1 billion users, it is unknown how much money Instagram makes a year, but it is estimated at around $6 billion this year alone.  What kept Instagram so unique from its parent company was that for the most part, it was allowed to run itself independently. Now that the founders have left, the questions have started to crop up on the future of Instagram.

“It’s probably a bigger challenge (for Facebook) than most people realize,” said Omar Akhtar, an analyst at the technology research firm Altimeter. “Instagram is the only platform that is growing. And a lot of people didn’t necessarily make the connection between Instagram and Facebook.”

Any sign of instability could also spell trouble for advertisers, who have spent more money on Instagram than Facebook in an attempt to capture their vast user market.

“I don’t think Zuckerberg is dumb,” Akhtar said. “He knows that a large part of Instagram’s popularity is that it’s separate from Facebook.”

Therefore, it would be smart of Facebook and Zuckerberg to continue to keep Instagram – for the most part – running autonomously and to not force integration with Facebook.

While the reasons for Systrom and Krieger’s departure have remained unknown at this time, it does seem like their decision is a repeat of WhatsApp’s co-founder and CEO Jan Koum, who resigned in April of this year. WhatsApp was bought by Facebook for $19 billion four years ago. Koum previously stated that if Facebook pushed to increase profits at the cost of losing WhatsApp’s core elements, he would take a stand. It seemed like this is what lead to his eventual departure.

Another sign of possible trouble and integration with Facebook is when Zuckerberg sent Facebook executive Adam Mosseri to run Instagram’s product operation earlier this year. It is unlikely that the Instagram founders liked this intrusion, and now that Systrom and Krieger are gone, it is possible that Mosseri will be the one to lead Instagram. We can only speculate at this time if it means that Instagram will lose its core value and become more like Facebook in the future.

Akhtar believes the personal change will continue for a while. “Kevin Systrom loyalists are probably going to leave.”

“If the founders left because they were worried about the future path of Instagram and what Facebook is going to do, that would be concerning,” said Mike Parker, global president at Hearst-owned digital ad firm iCrossing.

However, some advertising executives don’t have the same concerns.

“The platform is at a scale now where founders are most important if they are capable executives and still passionate to run the ship. Kevin is uber-talented and I’ve been blown away by his execution, but for Madison Avenue this is a nonevent,” said Gary Vaynerchuk, founder and CEO of digital agency VaynerMedia. “Facebook is loaded with talented executives.”

Now, Facebook is facing one of their biggest challenges: how to keep the growth of Instagram going strong while keeping it unique and separate from Facebook.

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Lindsey Conger
Associate News Writer: Lindsey is a writer originally from Chicago but can now be found somewhere in Europe. She is driven by a passion to explore every corner of the world, spread her marketing and business knowledge, and to be able to speak Spanish fluently. Follow her on Instagram at @lindseyaconger

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Associate News Writer: Lindsey is a writer originally from Chicago but can now be found somewhere in Europe. She is driven by a passion to explore every corner of the world, spread her marketing and business knowledge, and to be able to speak Spanish fluently. Follow her on Instagram at @lindseyaconger

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