Wednesday 11 April 2012

How Instagram beat Hipstamatic to the $1 billion prize

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?

Hipstamatic is fundamentally a camera app, which post-processes images taken with the iPhone camera, using selections prior to taking the picture. It mimics to a degree the pre-digital photographic experience, which did not (easily) allow for the manipulation of images after they'd been captured. In simple terms, you choose a film and a lens then take your picture. If you don't like the effect, you reselect a combination and retake the picture. You can share your pictures on various services like Facebook, Flickr and, now, Instagram. The app was born of a desire to recreate the cheap and unexpected effects of the original Hipstamatic, a plastic molded camera that had a very short life, and was in turn born of a love of the Kodak Instamatic

Instagram, meanwhile, is a social network. You take a picture and share it with your friends directly within Instagram, and cross-post to Facebook, Twitter and a number of other services. Yes, you can alter the image after taking it by selecting from a number of effects. However, that is not the main aim of the app. The name - Instagram - tells you all you need to know about the intended purpose: you use a simple image to tell the story of your occasion, instantly.

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.