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Here’s why the Instagram cofounders’ resignation is dangerous

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Mark Zuckerberg
The departures of
Instagrams’ cofounders come at an auspicious time for parent
company Facebook and its CEO, Mark Zuckerberg.

Photo by Chip Somodevilla/Getty
Images


  • Instagram cofounders Kevin Systrom and Mike Krieger announced
    on Monday they are leaving the company.
  • Their departure poses big risks for the service they created
    and for Facebook, its corporate parent.
  • Their resignations come as Facebook has becoming increasingly
    reliant on the revenue and user growth Instagram provides.
  • It also follows a series of scandals at Facebook that have
    exposed the shortcomings of Mark Zuckerberg as a leader and
    CEO. 

It’s usually not huge news when the founders of a startup leave
after their company is acquired.

But the
departure of Kevin Systrom and Mike Krieger from Instagram
is
a big deal — and not just because it was so unexpected. Their
resignations are a huge blow to parent company Facebook.

Their move puts the future of Instagram up in the air even as it
has become increasingly important to Facebook’s overall business.
And their departure — which follows that of other other top
executives — comes as it’s become increasingly clear that
Facebook CEO Mark Zuckerberg could use more, not fewer, strong
voices to check his impulses and guide the company.

Perhaps not so coincidentally, the early indications are that
Systrom and Krieger are leaving Instagram
precisely over a difference of opinion with Zuckerberg
about
the future of Instagram.

Up until recently, Systrom was largely able to run Instagram on
his own, according to multiple reports. Although Instagram tapped
into Facebook’s engineering resources and infrastructure, its
founders were largely able to stick to their own vision when
running the service, and to shrug off product suggestions from
their corporate parent.

But Facebook had recently begun to alter the nature of its
relationship with the photo-sharing service. Zuckerberg has been
personally taking a more active interest in Instagram’s direction
of late,
according to the Wall Street Journal
. A management shakeup
earlier this year appeared to decrease Systrom’s power over the
service and access to the CEO, the Journal reported. Meanwhile,
Facebook has dramatically cut back on promoting Instagram inside
its main social networking app, according to the Journal.

Systrom and Krieger were upset about the loss of the site’s
autonomy and their ability to steer its direction, according to
multiple reports.

Instagram was doing great under Systrom and Krieger’s leadership

At least from the outside, the two have done a terrific job with
the service. In the six years since Facebook acquired Instagram,
it’s grown from 30 million to a billion active users. When it
became part of Facebook, Instagram was basically generating no
revenue. This year, it’s expected to pull in $8 billion
advertising sales, according to eMarketer.


Kevin Systrom
Under cofounder Kevin Systrom’s leadership, Instagram
grew from 30 million users at the time it was acquired by
Facebook to 1 billion now.

Getty

As it’s grown, Instagram
has become an increasingly key part
of Facebook’s overall
business. This year, the photo service’s revenue will account for
an estimated 17% of its corporate parent’s ad sales, up from 9%
last year.

Instagram’s fast sales and user growth have come as the revenue
growth from Facebook’s core app has started to slow. They also
come as the number of Facebook users in developed countries has
started to stagnate and the amount of time those users spend on
the service has started to fall.

Indeed, Instagram has started to look like Facebook’s bright hope
for the future. Young consumers increasingly signing up for and
spending time with it instead of with Facebook’s main social
network. And while the reputation of Facebook’s main service has
been sullied by a succession of scandals, including the Cambridge
Analytica fiasco, Instagram has largely maintained its positive
image.

But Facebook is risking that success with Systrom and Krieger
leaving. Consumers bought into their vision, which was a site
that was distinct from Facebook. If Facebook muddies that vision
by remaking the service so it’s more like, or more integrated
into the company’s core social network, users may go elsewhere.

It’s clear that Zuckerberg needs outside voices on his team

But that’s not the only danger Facebook faces from the departure
of the Instagram founders. Perhaps the bigger risk is to the
company’s management and leadership.

Thanks to a stock structure that gives him outsized voting power
in any corporate matter, Zuckerberg appears to rule Facebook

unchecked by the company’s board
. That makes the role of the
top managers around him even more important, giving them a key
role in help shape shape and influence the company’s direction.

It’s
clear that Zuckerberg could use some help
. The company has
been stumbling through a series of crises for much of the last
two years, from the Russian-linked propaganda campaign during the
2016 election to the persecuting of Myanmar’s Rohingya people to
the massive compromise of customer data to Cambridge Analytica.
To a large degree, those problems have been of the company’s own
making, stemming from a culture that promoted growth above just
about all else, no matter whether it was privacy or social harm.


Jan Koum
WhatsApp cofounder Jan
Koum, who left Facebook earlier this year, was reportedly upset
with with the company’s efforts to commercialize the chat
app.

Reuters

But at a time when Zuckerberg could use some voices in the upper
levels of management who might offer a different vision for how
to grow and run a social network, he’s been losing just the kinds
of executives who could provide that kind of insight.

Jan Koum and Brian Acton, the cofounders of WhatsApp,
who promoted privacy within the chat app and criticized
Facebook’s efforts to commercialize it
, left within the past
year. Alex Stamos, Facebook’s security chief
who warned that the US is unprepared from a security standpoint
for this year’s election
, left last month. And now Systrom
and Krieger are gone.

The remaining cadre around Zuckerberg is mostly comprised of
managers who have been at the company and working on its core
social network for years, many since its early days. They’re
precisely not the sort of people who might be able to offer
Zuckerberg an outside perspective that’s not heavily steeped in
how the company has always done things.

If Instagram falters in the wake of Systrom and Krieger’s
departure, that will be a bad thing for its users, for Facebook,
and for Facebook’s shareholders. But if their resignation helps
lead to a CEO and company that are even more insulated from
outside perspectives and contrary visions, that will be bad for
the rest of us too, given how much power the company has and how
much social harm it can and has caused.

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