“The first slowdown that we had was maybe a year into being at Facebook,” Systrom testifies. The FTC is making the point that Instagram’s rise was unique and validated before the social media giant acquired it. After winning “App of the Year” from Apple, Systrom recalls that new registrations “skyrocketed.”
At launch, Systrom says the app’s growth was “exponential, unstoppable,” with 25,000 users registering in the first day. It was growing so quickly in the early days that, in his eyes, it didn’t even matter exactly how many active users were on the platform; he just had to keep up with the demand, he testifies.
We’re going all the way back to 2009, when Systrom and co-founder Mike Krieger were working on a location check-in app called Burbn, which they later pivoted into the photo-sharing app Instagram. Systrom says Instagram’s October 2010 launch occurred as the Apple App Store was making it easier for developers to get started, and advances in smartphone cameras, particularly with the iPhone 4, had significantly improved photo quality.
The FTC just called the former Instagram CEO as their next witness to kick off the sixth day of trial. He’s likely to be testifying all day about his experience selling to Meta and then working there for six years.
The court has wrapped for the day after it was briefly closed to play some sealed testimony from one of the video depositions. Instagram co-founder and former CEO Kevin Systrom is expected to testify for most, if not all, of the day tomorrow.
Amin Zoufonoun, a former Meta corporate development executive, testifies in a video deposition about “spirited debates” over whether mobile messaging could threaten Facebook’s flagship app, though he doesn’t specifically recall colleagues seeing it as a threat. He remembers colleagues wondering, for example, if messaging apps could “use that as a Trojan horse wedge to get into the social networking space.”
Botha says that, if he had suggested a $1 billion valuation for Instagram at the time, he probably wouldn’t have gotten support from his partners. It wasn’t clear it’d be worth that much, he says.
Botha recalls expressing to Instagram’s founders that if they wanted to get their “payday” from Meta, that’s their prerogative. But, he recalls saying, “if your ambition is to build an independent company, then you should partner with people like us.”
Botha says he was “giddy” to get the chance to invest in the app in 2012. He recalls it was less than a year old and already had millions of daily users. Sequoia didn’t get to invest as much as it wanted because so many other investors wanted a piece of the startup. He compares it to how he felt investing in YouTube: “This felt like one of these companies.”
We’re watching pre-recorded video testimony from Sequoia’s Roelof Botha, who spoke with attorneys in this case in January 2023 about his firm’s investment in Instagram in 2012, just before Meta acquired it. Botha describes the app’s rapid growth and resonance with users at the time, stating that Sequoia likely would have been able to help Instagram obtain the resources it needed to scale had Meta not intervened.