♪ emily: it is one of the fastest-growing apps the world has ever seen that has revolutionized the way we express ourselves in a single photo. kevin systrom turned down a job for mark zuckerberg in college, shared a desk with jack dorsey as an intern with what would become twitter and in 2010, launched instagram as we know it. two years later, he reunited with zuckerberg and agreed to sell instagram to facebook for $1 billion. 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. kevin, thank you for joining us. >> thanks for having me. emily: so you were born in holliston, massachusetts at the kevin: correct. home of the panthers. emily: what kind of kid were you? kevin: nerdy. i don't know. i look back and i was into cross-country running. emily: you are on the lacrosse team? kevin systrom: i was. i wouldn't say i was a jock. emily: when did you start becoming interested in technology? kevin: i remember when my dad got our first computer at home, and i played video games all the time. i learned you could create your own levels, and then i learned programming and took classes in school. i wanted to make my own games. i loved it. emily: more importantly, perhaps, photography.

you got into photography at a young age. kevin: you couldn't find me without a camera in my hand. i used to get in trouble because you know those packs -- there of film, like, 10 packs -- i would go through those packs. i loved taking photos. my family has a rich visual history now. i studied in florence in college and sat in the dark room there 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? emily: yes. yes. my photography teacher took my camera out of my hands and gave me a plastic camera that took square film format. and i learned to love it. it was just easy to take good photos in square format. emily: while you were at stanford, you had an offer to drop out and work at facebook. what happened?

kevin: there was a girl involved, and i did not want to exactly leave school. [laughter] but also i talked to a lot of my mentors who said facebook is a fad that will go away. and to this day, i think about that decision. i think it was the right decision. i loved finishing stanford, and i loved what i learned there. but when i think about, i think about how many technologies that come out that people doubt at first. and then i think about the technologies that people thought wouldn't work in the first few years. people still nothing instagram will work it sometimes. it's hard to refute at this point. emily: you went on to google. you interned at odeo, and shared a desk with jack dorsey. what was that like? kevin: when i showed up for my first day of work, i got this puzzled look, and they said, that is right, we hired an intern.

but they were super nice to me. and without that experience, i don't think i would 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 did you learn? kevin: you learn that your first and you doesn't always work out. i learned at odeo, not at twitter. o notember very clearly ode quite working. as they made the transition, i realized that often when you are a company, you need to put it into something else. instagram has a similar history. we were working on a game called "bourbon," and that turned into instagram. emily: your first instagram photo was of your girlfriend's foot. a stray dog . it was maybe the first filter that was even more consequential. kevin: if i knew that instagram would get to this place, i would

have tried a little bit harder. my girlfriend is now my wife. she said she is not going to post photos unless i can make them 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. [laughter] i posted it as a test and it lived on forever. emily: so, how quickly did it become something that you realized could be not just a bit, but really big? kevin: i may have in a little optimistic, but the second we launched, i thought there was something new and different. i had worked at companies that have struggled to get 100 people to sign up in a day, and the -- that first morning, we had 25,000 people sign-up. i have never seen a service grow that quickly day one. the way we saw it, we had lightning in a bottle and it was our job to capture it and continue to work on it, not

screw it up. this day 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. emily: are you afraid enough of snapchat? ♪

emily: tell me about the transition where you began to contemplate selling the company or became more open to the idea of selling the company?

kevin: we were in very different places. i was four years younger. i did not have nearly as much experience as a ceo. when i look back about the decision to sell to facebook, i think the pros of it was that we got to pair up with a juggernaut of a company that knows how to grow and knows how to build a business and has one of the best management teams in technology. that was really the hope in the dream. like most acquisitions, they do not work out that way. you can look over the past years how many acquisitions have failed. founders have left abruptly after selling because of culture clashes, changes in vision, misalignment, whatever. we have been able to do this for over four years, and that is what is awesome about that decision. like, it came true. 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 were contemplating raising money. you were talking to twitter and then mark zuckerberg came in. what happened? kevin: 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. we are aligned. 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 months figuring out whether the deal would go through. once it did, we were able to partner, and immediately the value became clear. we got together and were able to fix our infrastructure.

every day that went by, we were struggling to keep the site up, struggling under our own growth. we were able to figure out spam quickly and were able to start using their tools to fight spam. a lot of those things happened immediately after the acquisition and helped the company grow and skyrocket. emily: why not twitter? kevin: there were a lot of companies -- google, twitter, interested in instagram's growth. facebook was the one that took it seriously, and mark acted quickly and decisively. at the same time, i mean, you look at the pairing now and it feels native, and it feels like it makes sense. emily: so google was interested in buying you, too? kevin: i think everyone was. [laughter] i don't think it was google specifically. companies were interested in what instagram was up to. we were a bit of an anomaly. we were 13 people, but we had all this growth. people were kind of like, they could not get why those two things could be true at the same time. and i think people wrote off photos. no one quite understood how important photos would be for the future of social media and expression. if you look at the way people express themselves now, it is not just through chat, but it is through photos and sending them

to each other. no one quite understood that was the revolution we were about to embark on. emily: facebook bought instagram for about $1 billion. a year later, citigroup valued it at $35 billion. did you ever think, what did i just do? kevin: no, no. every entrepreneur measures value on impact, or at least i think so. when you talk to mark, he gave away 99% of his wealth. we are not in this business to make money, we are in this game to change the world. if you talk to entrepreneurs who matter, they all measure value based on what did we just do for the world? did we create something that did not exist before? did we unlock some kind of value? that is what mike and i focus on every single day. emily: when mark zuckerberg bought your company, he pledged to let you work independently. has he lived up to that? kevin: mark has been true to his word and then some. his involvement in the company is through meetings with me.

i have learned a tremendous amount from him about our transition to advertising, about the global community, strategy, he is one of the most long-term strategic thinkers i have ever met. think of it like having the best board member in the world. imagine how many companies would love to have mark zuckerberg on their board? that is what we get. it is independent, but you get amazing guidance from someone who has built a tremendous company. i think our transition to advertising was an interesting one. i was of the belief that if we had fewer advertisers, it would be better quality. but it was the opposite. if you have more advertisers and are able to bring in an entire ecosystem where they compete against each other, you get higher quality advertisements. that is something that i did not realize at the time. i remember him saying, i felt the same way when we introduced advertising. and it turns out i was able to learn a lot from them there. emily: you meet with not just mark, but jan and brendan.

how do you see instagram taking advantage of some of the futuristic thing is working on, like virtual-reality? kevin: if our vision is to make you feel like you can travel anywhere in the world and experience whatever is happening in the world, imagine a day when you can put on a headset and be at a coldplay concert, seeing something happen, like a big protest or riot anywhere in the world, or something as simple as a friend's wedding? that will play a critical role in seeing that vision come true. emily: how about artificial intelligence? kevin: for sure. emily: do see more of that in the future? kevin: for sure. one thing i have learned through the history of instagram is that the more personalization you add, if we can have an experienced that caters to you, if we know your interest in what you engage with, we can use machine learning and artificial intelligence to make a much,

much better experience for you on instagram. emily: what about e-commerce? do you think about adding a "buy" button to instagram? are there any plans for that? kevin: i am really excited about the future of e-commerce on instagram. 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. if we can make that more seamless in the future, of course we will. it is just we are starting to walk before we run. emily: who do you see as competition? kevin: where do i start? i mean, we as consumers only have limited amount of times -- to pull out our phone and do something. anyone who is competing for time. emily: one employee told us they are concerned that instagram and facebook are not more scared of snapchat. are you afraid enough of snapchat? kevin: it is not our job to be

afraid as it is to understand what is happening in the world. i think we are competing against many different services for time and eyeballs. getting 500 million users around the world is a big feat. 300 million people open up instagram every single day, 21 minutes a day. that is a big feat. we are absolutely not sitting happy, thinking it will last forever. we need to keep innovating and introducing products. emily: harassment is a problem of all social media. do you think instagram needs to take a harder line here? kevin: i think we work very, very hard on it. we take every report of abuse or harassment very seriously. we provide tools for a lot of public figures to moderate comments. that is something we are focusing a lot on. it is unacceptable for that to

exist on any platform, and we do take it very seriously. emily: you redesigned your logo, which some people did not like. [laughter] ♪

emily: there was a lot of drama when you hired twitter's former head of product, kevin weil. you are a product focused ceo. how much impact can a head of product really have when you are the decider?

kevin: building product is much more operational, the guts of the machine. how do you build product? once you have an idea, how can 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. i think the team will attest, but i love thinking strategically. so when you combine kevin's personality and expertise and my personality and expertise, not only do you get two kevins, but you get a great pair like a yin and yang of the product process. emily: i noticed you had a simple twitter handle. do you think twitter can turn itself around? do you think twitter can reaccelerate growth? kevin: i probably should use my twitter account. it is an amazing platform, and i think every company, a longer course of growth, will hit speed bumps.

it happens. it has happened to instagram, facebook. it is about how you get out of it. that is a hard question to answer. i respect a lot of what they have done in the past year. emily: you mentioned that every day gets more complicated. but how much of instagram's success has been the focus to simplicity? kevin: that is the complex part of instagram. it is easy to let a product get bloated. you guys, go work on whatever you want. before you know it, you have a product all over the place and does not have a singular voice. that itself is complex. managing something to be simple and straightforward, even now it has a tremendous amount of complexity behind the scenes, that is the hardest part of any ceo's job. actually saying no more than you say yes.

emily: what are some features you ponder, threw around that you ultimately said no? kevin: we had a lot of people asking for sponsored filters at one point. one company wanted a toothpaste whitening filter. that is a funny example. it makes sense because we should probably just do sponsored versions. we focused on simplicity and doing the right thing by the consumer, which is not to make it commercial and make it great, focus on what people love most. there are decisions like that every day that are like easy, you can make a few bucks by doing them, but they end up adding complexity to the product and it does not add a lot to your bottom line either. emily: you redesigned your logo, which some people did not like. [laughter] kevin: really? emily: what did you learn from that? kevin: i knew it would be a difficult change. there is not a single company that i have seen, whether you are starbucks, or what have you, that has changed logo and it has been easy. not a single company. how much work have you put into it before you get there?

how much resolve do you have? are you doing it for the right reasons? what we wanted to do is give people an idea that we were not just about photography. we were more general than that. we were about creativity. colors, simplicity. we wanted something that would scale across different mediums, looks great on teasers, billboards, anywhere. our current logo would not do that. as much as i love it because i had a heavy hand in designing it. we have an amazing design team that thought through all of these things and did this awesome presentation. what you see with every brand is that it goes from being complex to simpler and simpler and simpler to iconic. you can do that with apple, at&t, you name it, the big brands do this. we just skipped a few parts.

that is ok. it is going to be hard. what did i learn? it is hard. what did i also learn? and it is going to be ok. emily: you also made your timeline chronological. some people did like that. how did that work out? is it working the way you hoped? kevin: sure. yes, it is absolutely working the way we hoped. engagement is up because of it. people are liking instagram more. they have more feedback on their posts. more feedback on the posts they want to give feedback to. the good news about an algorithmic feed is regardless of what people believe is not actually not too chronological, but fairly chronological. it reorders it to make sure you see the best stuff at the top. people miss more than 70% of their feed, and that is not ok with us. it is not ok to them. emily: you have been traveling around the world, fashion shows, events. major what has the last year been like to you personally? kevin: i do not think i would say the nerd in high school would be at a fashion show. [laughter] it still feels weird. but i go to these things because i am a representative of the brand and of instagram. and i believe by having

relationships with people in these 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 personally on boarded the pope. you met him not once, but twice. what was that like? kevin: it was really 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 for hundreds if not thousands of years, and they are choosing your product to connect with the people that care most about their message, that is awesome. emily: silicon valley is accused of being arrogant and full of overnight billionaires, and if anyone comes close to that story, it is you. you made $1 billion. not overnight. you made a lot of money.

how have you adjusted to that personally? kevin: you know, it is not an easy answer because i don't know if there is a guidebook for it. what you begin to realize is that money matters in the sense that it puts a roof above your head and feeds you and your family, but beyond that, what matters most is your impact in the world. your relationships with people, family, friends. i think what you realize is a lot of people were their entire lives to make more money and it is a fruitless voyage. what you should be aimed at is what is your impact on the world? emily: how have you changed? kevin: i have learned a 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. you learn a lot of patience. you learn to have resolved

through tough situations, not just personnel situations, but company situations. you learn to ride the bumps a little more easily. emily: you are 32 years old. do you ever want to start something new? kevin: totally. in some ways, whether it is philanthropicly or helping other people start businesses, there are ways i do this now. i do angel investing. there are a lot of ways to have impact without starting another company. a that is how i scratch that it right now. emily: what is your single piece of advice for aspiring entrepreneurs? kevin: it sounds cheesy, but just follow your passion. i turned down so many jobs that would have paid more what have been the "right thing to do" coming out of school like stanford. i just did what i loved. emily: kevin systrom, ceo and cofounder of instagram. thank you so much for doing this. ♪

♪ >> i am caroline hyde. this is the "best of bloomberg technology." where we bring you from all our top interviews from this week in tech. the reviews are in, the galaxy s8 hits the market. but will the demand be there? how it stacks up against the competition. plus, facebook's f8 congress and mark zuckerberg's plan for augmented reality. the scoop that has twitter buzzing, a $400 juice are feeling the squeeze.