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tv   Bloombergs Studio 1.0  Bloomberg  December 21, 2016 8:30pm-9:01pm EST

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♪ emily: it is one of the fastest-growing apps the world has ever seen that has revolutionized the way we express ourselves in a thing will photo. kevin systrom turned down a job for mark zuckerberg in college, shared a desk with jack dorsey intern with what would become twitter and in 2010, launched instagram as we know it. two years later, he agreed to sell instagram to facebook for
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$1 million. the company had 13 employees and 30 million users. today, over half a billion people on the planet use instagram every month, sharing more than 95 million photos and videos a day. joining me today on bloomberg "studio 1.0," instagram cofounder and ceo kevin systrom. oh -- emily: you were born in the holliston, massachusetts. kevin systrom: home of the panthers. emily: what kind of kid were you? kevin systrom: i don't know. i was into cross-country running. you are on the lacrosse team? kevin systrom: i was. i wouldn't say i was a jock. emily: when to interested in technology? kevin systrom: my dad got our first computer at home and i played video games all the time. i learned you could create your
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own levels and then i learned programming and took classes in school. emily: more importantly, perhaps, photography. you got involved in photography in young age -- at a young age. kevin systrom: you couldn't find without a camera in my hand. i loved taking photos. my family has a rich visual history now. i studied in florence in college , and sat in the dark room they're developing photos. that is where i learned about filtering. you could add these chemicals to the developing bath that would change the colors of the photos. i brought that along with me to instagram. emily: is that where you learned about square photos? kevin systrom: yes. my photography teak or -- teacher took my nice camera and gave me a plastic family the -- camera that took square film format and i learned to love it. emily: what you were at
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stanford, i understand you had an offer to drop out and work at facebook. what happened? kevin systrom: there was a girl involved and i didn't want to leave school, but also i talked to a lot of my mentors who said facebook is a fad that will go away. to this day, i think about this decision. i think it was the right decision. i loved vanishing stanford and loved what i learned there. stanford and what i learned there. and then i think about the that people thought would work in the first few years. people still nothing instagram will work it sometimes. it's hard to refute or this point. emily: you went on to google. you interned at odeo, and shared a desk with jack dorsey. what was that like? kevin systrom: when i showed up
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for my first day of work, i got a puzzled look and they were like oh, that's right, we hired an intern. they were super nice to me and without that experience, i would not have the same passion for social media as i do today. jack is super creative and an awesome engineer as well. it was great to meet them and learn from them very early on. emily: what you learn? learn thatom: you your first and you doesn't always work out. i learned at odeo, not at twitter. transition, ihe realized that often when you are a company, you need to put it into something else. we were working on a game called and that turned into instagram. emily: the first girlfriend was -- photo and instagram was of your girlfriends dog.
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that systrom: if i knew instagram would get to this place, i would have tried a little bit harder. wife.lfriend is now my she said she is not going to post photos and less -- unless they look great, so you should add filters. i did, and i added it to the build and took a photo of her foot and a dog. i posted it as a test and it lived on forever. emily: how quickly did it become something that you realize would be not just big, but really big? kevin systrom: i may have been a little optimistic, but the second we launched i thought there was something new and different here. i had worked at companies that have struggled to get 100 people to sign up in a day, and the first day we had 25 hundred -- 2500ign up -- but
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people sign up. we had lightning in a bottle and it was our job to capture it and continue to work on it, not screw it up. we think about that is our job, keep it going, it has a life of its own, don't get in its way and make it awesome. are you afraid enough of snapchat?
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emily: tell me about the moment
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or transition where you began to contemplate selling the company or became more open to the idea. kevin systrom: this was four years ago, so we were in a very different place. fours 13 people, i was years younger, i didn't have as much experience as a ceo. when i look back about that decision to sell to facebook, i think the pros of it are that we got to pair up with a juggernaut of a company that understands how to grow, build a business, and has one of the best management teams intact and got to use them as a resource. that is the hope and dream and most acquisitions don't work out that way. when you look at how many acquisitions have failed, others have left abruptly after selling because of kaiser classes -- culture clashes, changes in vision, whatever. we have been able to do this for over four years and that is what is awesome about that decision. it came true.
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we got a little lucky. meaning not a lot of people get to this point, but we worked hard to get here. emily: at the time you are contemplating raising any -- money. you're talking to twitter about selling to them. what happened when mark zuckerberg came into the picture? kevin systrom: we decided it was the right thing to do and closed over the weekend, i think it was easter weekend. i was at his house and we were like let's do this. lawyers were everywhere, we were signing documents, figuring this out. it was a whirlwind, because we were in a no man's land for 6-9 to figure out if the deal would go through. when we were able to partner immediately the value claim clear -- came clear, because we were able to fix the infrastructure. for struggling to keep the site ownstruggling under our growth. we were able to figure out spam
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quickly and were able to start using their tools to fight spam. a lot of the things happened immediately after the acquisition and help the company grow. emily: why not twitter? kevin systrom: there were a lot of companies. google was instagram -- interested in instagram's growth. this book was the one that took it seriously and mark acted quickly and decisively. it feels native, and it feels like it makes sense. emily: google was interested to? kevin systrom: everyone was. come straight -- companies were and just said and what instagram was up to. we were an anomaly. people, but we had all this growth. people could not figure out why to those things could be true at the same time. people wrote off photos. howle do not understand
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important photos would be for the future of social media and expression. when you look at how people express themselves, it is not just through chat it is through photos and sending them. no one saw that in the revolution we were about to embark on. you sold it for $1 million, a year later silly group -- citigroup valued it at 35 billion. -- $35 billion. did you ever think about what you just did? talk tostrom: when you mark, he gave only 99% of his wealth. we are not in this business to make money, we are in this game to change the world. if you measure value on what it does for the world and you unlock some kind of value, that's what we focus on every single day. when mark zuckerberg about the company, he pledged to let you work independently. has he been true to that?
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kevin systrom: he has been true to his word. his involvement in the company is through meetings with me. i have learned a lot about the company through him, about the global community, strategy, he is one of the most long-term strategic thinkers i have ever met. imagine how many companies would love to have mark zuckerberg on the board. it is independent, but you get from someonence who has built a tremendous company. our treatment -- transistor into advertising -- transition to advertising was interesting. if you have more advertisers and are able to bring in an entire ecosystem where they compete getnst each other, you higher quality advertisements. i did not get that at the time. same way whenthe we introduce advertising, and it
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turns out i was able to learn a lot from them there. emily: you meet with not just mark but jan and brendan. taking onstagram things facebook was looking at, like virtual-reality? kevin systrom: if you can experience -- feel like you experience whatever is happening in the world, an imagine putting on a headset and being at a coldplay concert, being at a riot anywhere in the world, or something as simple as a friend's wedding. that is what we want to create, and i think virtual-reality will create -- play a critical role in having that come to -- true. emily: how about artificial intelligence? do see more of that in the future? kevin systrom: for sure. one thing i have learned through the history of instagram is that the more personalization you add, if you can have an ,xperience that caters to you
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you can use machine learning and artificial intelligence to make a much better experience for you. emily: what about e-commerce. do you think about adding a button to"buy" instagram? kevin systrom: where we start and where we and our two different places. we have a button like that on instagram, but the transaction does not take place on there. we want advertisers to create their own products or post, and then they take action on the advertiser's website. we are starting to walk before we run. emily: who do you see as competition? kevin systrom: where do i start? we only have a limited amount of time to pull out our phones and do something, so anyone competing for time. emily: one employee told us they are concerned that instagram and
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facebook are not more scared of snapchat. are you afraid of snapchat? kevin systrom: it is not our job to be afraid as it is to understand what is happening in the world. we are competing amongst a lot of different services for eyeballs. users is anmillion amazing feat. we are absolutely not sitting happy, thinking it will last forever. we need to keep innovating and producing product. productarassment is a -- problem of all social media. do you think instagram needs to take a harder line here? kevin systrom: we worked very hard on it. abusek on every report of very seriously. we provide tools for a lot of public figures to moderate comments. something we are focusing a lot that is that is --
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unacceptable to exist on any platform, and we do take it very seriously. emily: you read a lot -- redesigned your logo, which some people do not like.
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emily: there was a lot of drama when you hired twitter is former .ead of product, kevin weil
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you are a product focused ceo. how much impact can a head of product have when you are the decider? building product is much more operational, the guts of the machine. how you build product? how you get it to become a reality? i think that is something kevin brings an amazing expertise to instagram. he has done it before. i do not like to say i am a good product manager. the team will attest, but i love thinking strategically. when you combine kevin's personality and expertise and my personality and expertise, not evins, butu get two k you get a yang and yang of -- yin and yang of product head. emily: do you think twitter can turn itself around? kevin systrom: i think it is an
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amazing platform and i think every company, along their course of growth, hits speed bumps. it happens. it is all how you get out of that. it is a hard question to answer from anyone's perspective, and i respect a lot of what they have done in the past year. mentioned every day gets more complicated. how much have -- of instagram's success has been contributed to simplicity? kevin systrom: that is the hard part of the success. it is easy to lay products get loaded. it is easy to say the work on whatever you want. youre it, you haven't -- know it, you have a product that is all over the place. managing something to be simple and straight forward, even though it is complex behind the scenes, that is the hardest part of any studio's job. saying no more than you say yes. emily: what are some features
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that you ponder that you eventually said no? kevin systrom: we had a lot of people asking for sponsored filter is at one point. a toothpaste company that wanted a teeth whitening filter, a funny example but it makes sense . focused on simplicity and doing the right thing by the makemer, which is not to it commercial and make it great, focus on what people love most. -- our decisions like that there are decisions like that every day that you can make a few bucks from, but add complexity to the problem -- product. emily: you're redesigned your logo, and some people did not like it and called it a travesty. knew going into it it would be a difficult change. there is not a single company i've seen, whether it is or what that has
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changed their logo and it has been easy. how much work and you put into it before you get there? how much resolve do you have? are you doing it for the right reasons? we wanted to give people the idea that we were not just about photography, it was more general than that. it's about colors, simplicity. we wanted something that would scale across different mediums, looks great on teasers, billboards, anywhere. i had a heavy-handed designing it. -- the first one. we have an amazing design team that brought through -- thought through all these things. what you see in every brand is that it goes from being complex -- simple or two iconic to iconic. simple,
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what did i learn, it's hard. your: you also made timeline chronological. some people did like that. is it working the way you hoped? upin systrom: engagement is because of it. people are liking instagram more , they have more feedback on toir post, post they want give feedback to. unlike what people believe, it is not actually not chronological. it is fairly chronological, it takes the stuff you haven't seen an reorder that to make sure you see the best stuff at the top. people miss more than 70% of their feet, and that is not ok with us. it is not ok to them. emily: you have been traveling around the world, fashion shows, great events. what has the last year been like to you personally? kevin systrom: it still feels
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weird. i go to these things because i am a representative of the brand, instagram, and i believe by having relationships with these people in different industries, whether it is the pope or doing fashion dinners with anna wintour, they could not be more different but they are extremely important to the instagram community. emily: you met the pope not once but twice. what was that like? kevin systrom: it was inspirational. there are not many moments you think why am i here, but also when it happens you realize you will remember it for your entire life. you realize you will onboard somebody who will go down in the history books were not only hundreds of -- but thousands of years, and they are using your product to get to the people that care most about their message. that's awesome. emily: silicon valley is accused of being arrogant and full of overnight billionaires, and if
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anyone comes close to that story it is you. you made a lot of money. have you adjusted to that personal? kevin systrom: it is not an easy answer, because i do not think there is a guidebook for it. you begin to realize that money manners in the sense -- matters in the sense of the roof above your head and feed your family, but what matters most is your impact in the world. your relationships. a lot of people work their entire lives to make more money, a fruitless voyage, when you should be wondering what your impact in the world is. emily: how have you changed? learn astrom: i had to lot. someone who didn't manage a single person six years ago, we have a big team of over 500 people that makes you change. you learn to communicate a little more clearly.
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euler resolve in tough situations, not just personal situations but company situations. are 32 years old. do you ever want to start something new? kevin systrom: definitely. in some ways, whether it is philanthropic lady -- philanthropic lady -- philanthropicly or helping other people start businesses, there are a lot of ways to have impact without starting another company. emily: what is a single piece of advice for aspiring entrepreneurs? kevin systrom: it sounds cheesy, but it is to follow your passion. i turned down so many jobs that would have paid more what have been the "right thing to do" coming from stanford. systrom, ceo and cofounder of instagram. thank you so much for doing this.
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♪ almost 10:00 a.m. in 9:00 p.m. on the eastern seaboard of the united states. i am rishaad salamat. haidi: i am haidi lun. this is "bloomberg markets: asia." ♪ rishaad: japan approves a record budget for 2017, rewarding companies that play along with government policies. haidi: a third banker convicted
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in singapore. wins thedonald trump battle for air force one. alibaba back on the u.s. blacklist, but it says it is taking the fight to counterfeiters. the companyually has hit back at those but it's been four years since it has taken off. haidi: this time has a political element. rishaad: let's find out what is moving these equity markets. of course, the dow failing to hit that 20,000 point level. year is a mixture story, end positioning like japan, where we have seen record highs. then,

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