Editor’s note: This analysis was written by Vivek Wadhwa, a former tech entrepreneur in the Triangle turned academic and author, and Alex Salkever. The two co-wrote “The Driver in the Driverless Car.”
SAN FRANCISCO – The departure of Instagram’s founders marks a pivotal and potentially perilous moment for Facebook.
It has long been rumored that Kevin Systrom, who maintained an iron grip as chief product officer of the Facebook subsidiary, aggressively defended his fast-growing and youthful fanbase from desires to include more ads on the platform.
The departure of Systrom and Mike Krieger, the other co-founder, follows on the heels of the founders of WhatsApp, who also left Facebook with concerns that the company was not behaving in a manner that put the interests of its users first.
Whenever a visionary founder leaves a company, it is a moment of great risk. For Facebook investors, the risk is even greater because Instagram has become the growth engine of the company, as the legacy Facebook product has stagnated and lost users in key markets.
Instagram is Facebook’s future, and CEO Mark Zuckerberg’s biggest test.
Here are three things Facebook investors should watch closely for — and fear:
1. Changes to features that allow for more aggressive marketing customers
Instagram users hate ads that are not relevant to them. Systrom did a masterful job of ensuring his customers get exceptionally relevant content the majority of the time. Facebook has often erred on the side of clickbaity content and ads that are dubious in value and more like run-of-house remnants that pick up pennies off the floor.
Allowing those types of adds onto Instagram will signal to its finicky users that Facebook wants pennies off the floor more than it wants to maintain an intimate user experience.
2. Additional executive departures from Instagram
An obvious sign that cultural change is uncomfortable is executive departures. Systrom built a loyal team that bought into his world view. This removes the few checks and balances that remained against Facebook CEO Mark Zuckerberg’s obsessions with gathering data and monetizing it.
Should a revolving door start to spin at Instagram near the top, it’s a likely sign that changes by the new regime do not sit well with the early crew that made Instagram the rock star it is.
3. Surging negative dialogue on the platform
Part of what has made Instagram so awesome is that it lacks all the toxic discourse of Facebook and Twitter. That’s by design. The community has low tolerance for negativity and they are often turned off by the constant mudslinging and barrage of negativity on other social media.
However, angry, unhappy people always follow the users because they want a loud voice. The current feature set on Instagram makes it difficult but not impossible to create the types of negative content we saw take over Facebook and Twitter and gain real purchase. Should we see signs that Instagram is becoming a less happy place, that’s a real flashing red light for investors.
Instagram is the future of Facebook. How the company handles its crown jewel after the departure of its founding team will be a litmus test for its long-term ability to stay relevant and grow quickly. Surely Zuckerberg knows all this, and in the upcoming months we’ll see how he plays his new hand.
(C) Vivek Wadhwa