There are two stories here. First, it’s remarkable that Instagram has surpassed 14 million users with only an iPhone app so far — not even a useful web interface.
It’s also interesting that the Instagram CEO believes that an Android version will “nearly double” the user count. Given Android’s significantly higher market share, why wouldn’t it more than double? (Right.)
The other half of the story is Instagram’s plan to advertise, presumably by inserting photos from braaands into your stream even when you don’t follow them.
“I think the advertising experience is going to be extremely engaging,” [Instagram CEO Kevin] Systrom said. “It’s much harder with text,” but Instagram offers photos, and brand names such as Audi, Kate Spade, and Burberry have joined Instagram.
“They’re sharing pictures of products and the message of their brands. That shows we’re at the beginning of what will come with brands,” he said.
“Obviously, we didn’t start a business to not make money,” he said. “Our focus now is on growing the network. You really need to build up the network, or no advertisers care.”
When app-based startups have the goal of “get as many free users as possible”, they need to port their app to every major platform.
For most VC-backed consumer web startups, the goal is to get as many users as possible by making everything free, spreading everywhere, and figuring out how to make money later, which usually relies on selling your userbase’s attention or privacy to corporate customers.
I’d guess that Instagram could have charged a few bucks for their app from the start, made us their customers, budgeted carefully, and avoided VC funding and advertising. But they chose the free-now-ads-later model, and it appears to be working very well.