Hipsters Increasing Unemployment?

We’re all familiar with Instagram, well at least 35 million of us are. The hipster camera app with the addicting ability to let us show off and share our photography skills, or lack there of photography skills, disguised by beautiful filters. If I had a nickel for every time Forest Perlmutter “instagrammed” a photo of his current meal, I’d be a rich man. Ironically, when Facebook acquired Instagram for 1 billion, the company had generated nothing in revenue, and only employed 13 people. 

See the metaphor within this instagram photo:

Is Instagram bad for the economy? The billion dollar company created 13 whole jobs, and showed the aspiring entrepreneurs of America that $ money can be made with few expenses and fewer employees, especially if going the app route. Using EC2 (a cloud computing system) and enough monitoring, Instagram can successfully scale to 1 million additional users overnight.

According to this article, “The average number of workers per office fell 10 percent between 2000 and 2011 to an average of 15.7, according to the Labor Department.”

Start-ups tend to be smaller, especially tech start-ups, and a recent trend shows that the founders are only hiring themselves. 12.7 million people are still unemployment, and unfortunately the trend of minimizing workers within budding businesses has begun. The advances in technology has allowed our most popular social media startups to find seemingly overnight success with so few workers, yet what exactly do certain social media companies like Instagram positively contribute to physical society? Has Instagram set a bad example for businesses and entrepreneurs to come?


5 thoughts on “Hipsters Increasing Unemployment?

  1. I don’t think Instagram is bad for the economy. Of all of the social media type creations, not many realize long-term success like Instagram. We can all name the few success stories on one hand. I think that great ideas like Instagram should be rewarded if they are successful, and not criticized because they don’t generate many jobs.

  2. I think I agree with jenna on this one. It is ridiculous that a company that does not produce revenue and is so small can be bought out for 1 billion dollars but I guess all I can say is good for Instagram. The company made a killing on a somewhat simple idea. So maybe it is not ideal to provide less jobs but you cannot knock Instagram for having an idea that became successful.

  3. Just to clarify, I am not at all criticizing Instagram. In fact, I love it. Founders Kevin Systrom and Mike Krieger are genius for taking such a simple concept, minimalist design, and executing it the way they did. Instagram is fun, addicting, and will continue to grow in users. But my blog post is not about Instagram as the concept. It’s about Instagram’s impact on the economy, specifically the unemployment rate. Plus the psychological effect that a billion-dollar-buyout will have undoubtedly have on ambitious entrepreneurs. All eyes have shifted towards mobile social media.

    Jenna, I have to disagree with you. Many social media companies have seen success, specifically within the last 5 years. You’d be surprised, many we probably have not heard of, but the industry is surprisingly growing. Here’s 15: http://www.ebizmba.com/articles/social-networking-websites

    You also mentioned not many social media companies have realized long-term success like Instagram. But honestly, has Instagram even proved to be successful in the long term? The app has still yet to earn a penny in revenue, what has proven its long-term success? In fact, Facebook has yet to even prove long-term success. Instagram founders Systrom and Krieger have lost over 300 million dollars from facebook shares they purchased. We are yet to witness any proof of long-term success.

  4. I agree with Ronjohn. I really think Instagram deserves credit in this case. I like the questions you raised in your reply though. What has Instagram really done to show that it’s capable of long-term success? You could argue that they haven’t done anything. I guess it’s all about the potential…

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