Instagram Was Facebook's Biggest Threat

Kevin Systrom and Mike Krieger

Before today, the biggest threat to Facebook wasn’t Google or Twitter.

It’s was an out-of-nowhere startup that allows people to do what they like to do on Facebook easier and faster.

That’s Instagram, which Facebook acquired today for $1 billion.

What people like to do on Facebook is share and view photos of friends and family.

Facebook is popular because it is the easiest way to do that over a computer.

Where Facebook has a huge blindspot, however, is that it is not the easiest way to share photos of your friends and family over your phone.

It’s too slow. 

Startups backed by millions of dollars in venture capital have been attacking Facebook’s weakness in this area for years now.

The current leader of this insurgency was Instagram, which grew from 1 million users in January 2011 to 15 million in December 2011 to 30 million today.

What’s great about it is that it is very fast – especially compared to Facebook.

Mary Meeker chart on Mobile versus desktopClick here to expand the image.

With the Facebook iPhone app, there are 6 screens a user has to go through before a user can actually take a picture. With Instagram, there is one.

If not for today’s acquisition, this would have been a long term problem for Facebook. 

According to Mary Meeker, sometime in the middle of 2013, there will be more people on the Internet via their mobile devices than desktops.

If Facebook didn’t figure this problem out, it might have gone the way of Friendster. Friendster lost to Facebook because users found they could do what they wanted to do with much more speed and simplicity on Facebook than they could on Friendster.

Instagram Step 1: Tap on the Instagram app.

Instagram Step 2: Tap the camera icon in the middle bottom.

Instagram Step 3: Take a photo.

Instagram Step 4: Approve the photo and select a filter.

Instagram Step 5: Select where to upload the photo.

Instagram Step 6: It's up.

Facebook step 1: Tap the Facebook app icon.

Facebook step 2: Wait 5 or so seconds for the Facebook app to load.

Facebook step 3: Wait 30 seconds for your Facebook profile to load.

Facebook step 6: Take a photo.

Facebook step 10: Your photo is up!

NOW WATCH: Tech Insider videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.