Facebook buys Instagram for $1 billion: A lesson for Africa Startups

Mark Zuckerberg and Kevin Systrom

Mark Zuckerberg and Kevin Systrom

The recent acquisition of Instagram-a popular photo sharing application, by Facebook for a whooping sum of $1 billion in cash and stocks is something I find very interesting considering what critics have always said about Facebook and even Instagram  as startups.The businesses are similar and are focused at making users have a unique experience with their product

For Facebook this is their biggest acquisition so far and with the much talked about IPO, Facebook will be valued at about $100 billion or so. The truth is as the users of Facebook grow, its value grows too, simple!

It gets my attention  more knowing that Instagram is just two years old, the most downloaded application on iphone and with a user base of 30 million, ahhh !what other statistics do you need to know that this product is a viable one. Before their deal with Facebook, read what Instagram said about how they intend to make money:

we believe that the core of our product will always be free. There will be opportunities to consumers to buy extra add-ons like special filters etc. However, we plan to experiment with different models as we grow and learn what special value we can provide to the community to make their collective experience more engaging, exciting and useful”

Am just thinking what lessons can Africa Startups/App developers learn from this, it’s easy for us to get the education of the west, learn their pop and rap culture and even learn to speak like them but it becomes difficult to learn  from them how to start, grow and sale a Startup.

Like Sramana Mitra, an experienced Silicon Valley Business consultant and the Founder of One Million by One Million, will say that great Startups or businesses are not built on power points they are built on great products.

I have learnt that the core and viability of a Startup is the value of the product, what value does your product bring, how many eyeballs (users) are on it, for online Startups, eyeballs bring the money. With eyeballs you can always figure out how to make money like Instagram has just done and prove pundits wrong always!

So African Startups don’t figure out how to monetize in your early years, figure out how to attract millions of people to start using and feeling your product, and offering it for free will help you get there faster in growing the user base and soon the money will come. This model works all the time on the Internet where eyeball is king!

Kenneth Omeruo
Omeruo Ndukaku Kenneth is an Innovation Management expert,the CEO of Emerging Media,a new media company.He is a member of ISPIM - International Society for Professional Innovation Management and the US-Africa chamber of Commerce.He is the Founder of TechTrends Nigeria Blog,Nigeria Innovation Summit and the African Innovation Academy.Kenneth is a highly sought-after Internet Marketing Consultant who has through his seminars, articles, training and consulting, helped many organizations, Individuals, Businesses maximize the Internet for business purposes.Kenneth has also being featured as a guest on the TV show TODAY ON STV Nigeria and on Bloomberg Africa TV.He is the author of the best –selling Internet Book: How To Create Unlimited Internet Wealth. He is a syndicated columnist with the following Newspapers in Nigeria: Daily Independent, Financial Standard, PUNCH, BusinessDay, and Sun.Kenneth organises the EduNet Conference for Universities in Nigeria. Kenneth is a member of Institute of Software Practitioners of Nigeria( ISPON ) Roundtable For Capacity Development in Nigeria,member pre-selection committee for Nigeria at the UN World Summit Awards,a Panelist for Youth Enterprise With Innovation in Nigeria(YouWIN)-a Federal government initiative created by the ministry of finance,supported by ministries of Communications Technology,Youth Development,Worldbank and DFID. A 2013 Judge at the Google Cloud Developers Challenge for Sub Saharan Africa.He has been a contributing editor of Nigeria Communications Week,Africa Telecom and IT Business Magazine,ICT Today magazine,M2 magazine.Kenneth has been invited to the Commonwealth Telecommunications Organisation Forum, Oracle Open World Conference USA, Oracle Cloud World Dubai, and GITEX Dubai. He now lives in New York with his family and presently working on an Open Innovation project for Nigeria. You can contact Kenneth through email: (kenneth (at)techtrendsng.com) Facebook:www.facebook.com/Kenneth.omeruo On Twitter:www.twitter.com/kennethomeruo Skpe:Kenneth.Omeruo

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