Innovator’s dilemma, e.g. in order to compete with Twitpic we would have had to be willing to sacrafice our own login system in favour of Twitter’s (insecure) one. The Yahoo! Paranoids would have shut us down in a heart beat (See also: http://laughingmeme.org/2009/07/…)
Additionally we fell into the trap of thinking like an incumbent, we spent 6 months off and on talking to Twitter about preferred product placement rather then just shipping the integration we had built.
We also spent *years* debating whether or not to build iPhone apps/iPhone optimised sites or bet on a HTML5/multi-device strategy. And work like the award winning iPhone optimised Flickr mobile site was viewed ambivalently even within the team as it happened largely as a skunk works and was very much hard coded around iPhone’s limitations.
Lastly, Marco Boerries was the without a doubt one of the most viciously political, and disliked Yahoo! execs and he reigned for 4 years over the Yahoo “Connected Life” team which had universal control over all native mobile experiences within Yahoo. Several Flickr internal attempts to build and ship native mobile experiences (going back to 2006) were squashed relentlessly. The Flickr iPhone app that eventually shipped was built by CL.
That said it’s easy to look at the successful products and wonder how **anyone** could have missed something so obvious, but the debate about what the future of mobile photography and photo sharing looked like was a fairly active one. Perhaps less remembered the innovated Radar.net social/mobile photo app/site was very visibly struggling to gain traction throughout this whole time period, and many less interesting attempts never made it to the gate.
Prototypes like Flickr for Busy People (http://flickrforbusypeople.appsp…) and the semi-integrated Photos Nearby (http://www.flickr.com/nearby) both built by Aaron Straup Cope, as well as the afore mentioned iPhone optimised http://m.flickr.com were partially byproducts of those long running internal debates about how to do mobile.
It would actually be incredibly straightforward to build something like an Instagram on top of Flickr using the API, especially if you could convince Flickr to release an API to “Beehive” the friend finder tool, which among other things, benefits from Y! backdoor deal with Facebook.
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