Three weeks ago, FastCompany broke the news of a new partnership between photo app darlings Hipstamatic and Instagram, which essentially meant that Hipstamatic was the first service that could post to Instagram. The suggestion implicit in the article was that Hipstamatic and Instagram, winners of Apple's iPhone app of the year award in 2010 and 2011 respectively, should work closer, perhaps even merge.
In the short time that has passed since then, Instagram - with heavy VC backing yet not a cent of revenue - has been acquired by Facebook for $1 billion, while Hipstamatic - entirely bootstrapped and profitable since the second week of its existence - is left on the sidelines (for now).
So how is it that Instagram has won, while Hipstamatic makes money?
So while Hipstamatic has about 4 million users, who have paid for the app and many of whom have paid for further lenses, films and flashes, Instagram has around 30 million users, who haven't spent a single penny on it. Instagram allows you to share and see your friends' pictures easily with the app; and Hipstamatic forces you to choose the (far more sophisticated) camera filters prior to taking the picture. The ease-of-use of Instagram and the social connectivity built into it are worth far more than the sophistication of the Hipstamatic app and the clever business model.
Once again, success depends on being free, simple and connected.