So it has to be today’s breaking story. Instsgram, an app was bought over by Facebook yesterday for a billion dollars ( that is $1,000,000,000 if you’re having a tough time visualising it. For all the Indians here, that’s a cool 5,000 crores. Now thats a lot of money at stake, and as is usual with when the billion dollar number is dropped, a lot is written about the this thing. But that’s not what this post is about. Let’s talk about what this kind of deal might imply, since as a society, presumably, we put our money, where our worth is. And in studying our worth, or what we consider worthy, we can assess where we’re heading.
1. Instagram is an app. Like Angry Birds ( another multibillion dollar asset). If our fathers grew up in a time when building big industries was the path to success, and us 20 year olds aspired to optimize a whole bunch of stuff done in the past, behold, for there is a spate of 14 year old coders looking to build the apps of tomorrow. Apps are so much cooler, lighter and colourful no. But it masks some serious economic value.
2. This company is less than 2 years old. At the risk of repeating myself, it’s 1 billion dollars of value in 2 years. I wonder what people like Ratan Tata and the Adtitya Birla think of value generation at such a clip, in the light of the fact their families took entire generations to achieve such value. Am sure they question the ‘real’ value of something like this, and you never know they might have a point too.
3. Instagram has 9 employees ( for the record, some reports say 12, but there is no official count known). We’re living in a time where some ninja-coders can lead to people loading close to 400 millions pictures at about 60 pix/sec at times. Our other old school industries that get valued around a billion dollars ( Flipkart for instance – cross between tech and retail, valued at $750 mil; employees about 4000 people) Think about how few people can engage how many. That is something that was impossible even about 10 years back. All in all, that while I feel the guys at Instagram got really lucky. A billion dollars for a revenue less app screams to the old school commo sense in me to be skeptical. But what is for sure is that it’s happened, and the best we can do is understand the world (virtual or otherwise) we’re heading into.