combination of Facebook stock and a dangled carrot of $300 million in cash. Though the numbers the two talked about were eye-watering to any normal human being, the real deal clincher was centred on the fact that Instagram would be able to operate independently within Facebook – something critically important to Systrom and his team. ‘I’m not sure what changed my mind, but he [Zuckerberg] presented an entire plan of action, and it went from a $500 million valuation from Sequoia to a $1 billion [one from Facebook]’ – Kevin Systrom Clearly, both the sheer amount of money and the natural fit with Facebook swayed Systrom. Aftermath On Monday, ‘s deal with Facebook was made public. Both Jack Dorsey and Twitter’s CEO Dick Costolo were left wondering why they hadn’t even been given the opportunity to put in a counter-offer. Systrom closed the funding deal with Sequoia before Instagram was acquired by Facebook. That gave the venture-capital firm an instant return on its investment. ‘I have to give Kevin a lot of credit for keeping his word,’ said Botha.19 Apparently the two had had only a handshake agreement – one that cost Systrom a personal fortune to honour. When Facebook did finally IPO, the final value of the deal was $736.5 million because of the initial drop in Facebook’s stock price, but, in the period since the IPO, Facebook’s stock price has bounced back to the IPO level and proceeded to rise even further, so Kevin Systrom did indeed make a fantastically good deal. Andreessen Horowitz, the firm who invested the first $250,000 in Burbn, made a return of $78 million when Facebook bought the app. That’s a rather healthy 31,000 per cent return.
Idea • You have a big idea and you’ve validated that millions, if not billions, of people will love it. Get out there and test your great idea for an app, put it on paper, and start getting feedback. That is the first step.
App • Figure out how your idea – your solution – translates into an app. Sketch on napkins, sketch ideas in Photoshop, do whatever you need to do to make your idea real and communicable to others. • As you flush out a great design, start prototyping it. Your goal is to get it into user’s hands quickly, so that you can get as much feedback as possible. Your goal is to get to drive towards delivering wow! • No matter what happens, you’ll need to have an app ready for real users’ hands. If your business model is simple (gaming, Software as a Service) expect to be operational, at least in a basic way. • If your model is more complicated (marketplace), then you have a solid proof of concept.
Team • You should not use the excuse of not having a cofounder to slow your progress, but finding a partner in crime who shares the vision and has complementary skills will make the journey more enjoyable. • Ear to make it work – and do everything you can to get them on board. Recruiting will be your number-one job throughout the life of your app. • Three key roles need owners: someone must lead the product vision; someone needs to build the technology; and someone needs to be
Use that to secure investment to build it out
Users • Your mum promised to use your app – so make sure she does. Persuade every friend and family member to download it, use it – and give brutal, honest feedback. • Figure out your target user group early, and find out how to target them and get the app in their hands. • Aim to get feedback from hundreds of real users, if not a thousand (if you’re a marketplace model a couple of hundred will be good going).