Facebook acquisition of Instagram for $1 billion dollars | Kevin Systrom and Lex Fridman

TL;DR

Instagram, with its 13 employees, was sold to Facebook for $1 billion in 2012, leading to a mix of emotions and lessons for the founders.

Transcript

i have to ask about april 2012 when uh instagram along with its massive employee base of 13 people was sold to facebook for one billion dollars what was the process like on a business level engineering level human level what was that process of selling to facebook like what did it feel like so i want to provide some context which is i worked in cor... Read More

Key Insights

• 😤 Corporate development teams play a crucial role in acquiring companies and expanding a company's portfolio.
• 🖤 Valuing a company like Instagram was challenging due to the lack of a market for such startups at the time.
• 😃 Success doesn't automatically lead to happiness or fulfillment; it's essential to find joy in the journey and choose challenges that align with one's interests.
• 😫 Selling a company for a billion dollars with just 13 employees was an exceptional feat and set a benchmark for future unicorn valuations.
• ❓ The process of selling and the aftermath can be emotionally challenging, with a mix of excitement, disbelief, and the pressure of maintaining success.
• 👶 Learning and growth should continue even after achieving significant milestones, as there is always more to accomplish and new challenges to overcome.
• 🧑‍🏭 Enjoying life involves embracing the fact that everything can be hard, and it's essential to choose challenges that align with one's passions.

Questions & Answers

Q: What was the process of selling Instagram to Facebook like?

Selling Instagram to Facebook was a combination of negotiations, valuations, and gut instincts. The founders initially set a lower valuation but eventually closed the deal at $1 billion after negotiations with Sequoia and Greylock.

Q: Why did the founders feel a mix of emotions after the sale?

Despite the financial success, the founders felt a sense of emptiness and questioned their happiness. The "we have arrived syndrome" kicked in, and they realized that success didn't automatically guarantee satisfaction or fulfillment.

Q: Why did the founders decide to sell Instagram?

Selling Instagram to Facebook seemed like a great opportunity for growth and scaling. The founders believed Facebook's resources and expertise would help them achieve their vision and de-risk their lives financially.

Q: How did the founders deal with the pressure of being "on top"?

Being on top was challenging because the expectations were high, and there was constant pressure to innovate and compete with rivals like Snapchat. The founders learned that there is always more to learn and accomplish, and the journey never ends.

Summary & Key Takeaways

• Instagram, a small startup with 13 employees, went through the process of selling to Facebook for $1 billion in 2012.

• The founders initially set a valuation of $500 million but eventually closed the deal at $1 billion after negotiations.

• The experience was a mix of excitement, disbelief, and the realization that success comes with new challenges.