The big news today was that Facebook acquired Instagram for $1B in cash and stock. I don’t want to debate whether that was a good price but I am amazed that Instagram was able to get to over 30 million users with 13 employees, of which 3 are engineers. I see a few factors combining to make this an ideal model for the future tech startup.

  • Open source tools and the cloud have made starting easier than ever and a few motivated, talented people can build a marketable product over a weekend.
  • Social networks simplify distribution and allow a good product to stand out and succeed without heavy marketing.
  • People are comfortable with technology and can start using a product without any dedicated support.

They are converging to provide a massive increase in leverage. A small team is able to quickly and cheaply build a product that can spread organically to millions of users. The enterprise space will also be impacted as people start expecting their personal tools in their corporate environments. It’s definitely an exciting time to be building a tech startup.


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