What the Instagram Story Means
Reflections on Tech Cannibalism
Even if you’ve been living under a rock, you’ve probably heard that Instagram is adding a Snapchat-like story feature to their app. At this point in the news cycle, I’m pretty much beating a dead horse if I simply talk about how it stacks up to Snapchat and which of the two is superior. So I’m not. Instead, I’m going to be looking at the big picture. Because, again, even if you’ve been living under a rock, this isn’t a new thing by any stretch of the imagination.
“There is no such thing as a new idea. It is impossible. We simply take a lot of old ideas and put them into a sort of mental kaleidoscope.” — Mark Twain
You see, tech companies have been cannibalizing one another for years now. In fact, innovators from every industry and trade have been doing it for centuries. As Mr. Twain said, there is no such thing as an original idea. We simply reinterpret and rearrange the ones we see around us, creating new and (hopefully) exciting experiences and combinations. If we look solely at the tech world, we can see a prevalent, recurring cycle of this. Blogs begat Friendster, which begat Myspace, which begat Facebook, which will eventually sire some new successor that will go on to do things beyond Mark Zuckerberg’s wildest dreams. Zuckerberg himself is well aware of this fact. Why do you think Facebook bought out Oculus? Continued relevance!
Zuckerberg and all the other execs at the big tech firms buying up smaller companies doing interesting things are very much in tune with the concept of mortality and how it relates to businesses, especially in the vicious world of technology, where what’s revolutionary and enthralling today can very swiftly lose traction and go belly up starting tomorrow. Therefore, the best strategy as the head of a major tech firm is to diversify your portfolio as soon as possible. Then, if one side of your company fails, you can simply pivot to focus on one of your more profitable or lucrative acquisitions, rather than throwing in the towel and selling.
In fact, Instagram (and by extension, Facebook) trying to get a slice of that sweet Snapchat pie should really come as no surprise, considering that Facebook acquired Instagram back in 2012, then tried to do the same with Snapchat, but failed to seal the deal. So what was Facebook to do? Just quit? No. In tech, if you can’t acquire them, you join them. And in Facebook’s case, who better to leverage for that purpose than Instagram, who they acquired for 1/3 of what they were offering to Snapchat?
In the end, it remains to be seen how this new wrinkle in the Facebook vs The World story will pan out, but what has been made abundantly clear, both by this action and by Facebook’s history is the following:
- Facebook is well aware that their primary business will have to change. Currently, their plan is transition to more of an e-commerce platform, as well as to diversify their portfolio with as many interesting acquisitions as possible, so as to form a funnel back into Facebook, allowing them to trade novelty for data, which is their primary commodity.
- Facebook’s strategy to prolong their hold on social media is to acquire, and failing that, leverage their assets to compete with, potential threats. Their only mistake regarding Snapchat is that they may have waited too long. Enabling Snapchat to take root and grow.
- Finally, the fact that Facebook feels threatened by Snapchat’s gains is just another example of what makes the tech industry so riveting: It’s a dynamic playing field, where small companies grow to challenge the giants, or at least intimidate them, on a semi-regular basis.
Regardless of how you feel about this turn of events, it will surely be interesting to see where it will go. Will Facebook take a chunk of Snapchat’s market share? Will Snapchat fire back with something of their own? Only time will tell.