Instagram and the $1 billion reminder

Instagram and the $1 billion reminder

This young couple loved their new house, except for the loud creak in the hall floor. They called a carpenter to fix it.

He arrived, walked around for a few minutes, found a precise spot on the floor and hammered in a single nail. The creak was gone.

The carpenter handed the couple a bill for $100.

“That’s an expensive nail,” the exasperated husband said.

The carpenter took back the bill and made a few notes. He handed it back to the man.

It read: $1 for nail, $99 for knowing where to put the nail.

There’s been a lot of handwringing online since the Instagram purchase yesterday: $1 billion for a company with 13 employees and relatively little capital investment.

I really don’t care that Facebook paid that much the company. Good for Instagram. And good for Facebook. Both got something they wanted.

What is pretty clear is that Instagram didn’t get $1 billion for building better photo technology. Yes, good technology was necessary.

Instagrammers woke up this morning with fat bank accounts for creating a photosharing experience that inspired a loyal following. Just another reminder to all of us how much experience matters.

Does Apple’s $643 per share price seem too high when most hardware companies hover around $20 per share?

You can do well building cool stuff.

You can be legendary building great experiences.

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