Here's how things went for 5 founders who sold to Facebook

September
January 27, 2018

7 min read

The last seven months have been some of the most tumultuous in Facebook's history for 14 years.

In March, the public learned about the Facebook usage data scandal and the now famous Cambridge Analytica. The following month, CEO Mark Zuckerberg testified at a series of congressional hearings. May reported that the FBI and the Justice Department were investigating the social media giant, and weeks later, other alleged data sharing partnerships were uncovered. In July, the company's shares fell nearly 20% after its quarterly earnings report and a misguided interview with Zuckerberg – when he mentioned that Facebook would not necessarily suppress the content of the Holocaust deniers – sparked a public outcry. In August, about twenty important leaders had left the company.

But this month has been one of the biggest problems for the social media giant: the co-founders of Instagram, the popular photo-sharing app, which is expected to generate a significant share of Facebook's growth, have announced their resignation. Here's their story – and the stories of four other founders who sold their businesses to Zuckerberg.

Kevin Systrom and Mike Krieger (Instagram)

The backstory: When Kevin Systrom created one of the first versions of Instagram, he had extensive experience – in a company that would later become Twitter, in a start-up specializing in travel that's sold on Facebook and at Google. It was early in the year 2010, and the application – called Burbn – allowed users to connect to certain places or publish their plans. Instead, Systrom noticed that they shared the pictures more than anything else. His co-founder, Mike Krieger, came on board and both worked on creating a social photo sharing application. Instagram was launched in October 2010 and less than two years later, Facebook has spent $ 1 billion to call Instagram.

The split: On Monday, Systrom and Krieger announced their resignation from Instagram and its parent company with a diplomatic declaration. But the reports point to growing tensions between the co-founders and Zuckerberg himself as the key to their decision. Recently, Zuckerberg has increased his involvement in the daily operations of Instagram. In addition, Systrom and Krieger reportedly clashed with Facebook over a series of decisions, including the latter's reaction to the creation of IGTV for fear of competing with Facebook Watch.

The statute: In their statement, Systrom and Kriger said they wanted to "explore [their] curiosity and creativity again ". As for what else is on their horizon? "Building new things requires us to step back, to understand what inspires us and what the world needs; that's what we intend to do, "they wrote.

Palmer Luckey (Oculus)

The backstory: Oculus co-founder, Palmer Luckey, has played an important role in the rise of virtual reality, thanks to a VR helmet that he built in his parents' garage. The prototype Kickstarter campaign was a big hit with investors including Andreessen Horowitz and Founders Fund, even attracting Facebook, which paid $ 2 billion for Oculus in 2014.

The split: Luckey remained as Facebook's employee until last year, when he and the company split after announcing that Luckey would have financed a group of pro-Trump trolls before the 2016 presidential election. Zuckerberg argues that the policy did not take into account Facebook's decision to terminate his relationship with Luckey.

The statute: In his new company, Anduril Industries, Luckey is working on a new system for detecting unauthorized border crossings at the US border. It aims to replace Trump's idea for a physical wall with a digital device – an intelligent surveillance tool built into virtual reality – that still monitors the country's border. Luckey hopes to work with the Department of Homeland Security to implement the technology.

Brian Acton (WhatsApp)

The backstory: Brian Acton, Yahoo's 44th employee, met Jan Koum in 1997, when Koum came to inspect the company's advertising system. The two became fast friends – and after leaving Yahoo ten years later, Facebook rejected their candidacy. When Apple launched the App Store, Koum went through a few iterations of the secure international email application before almost throwing in the towel in 2009. Acton convinced him to stay with WhatsApp and a few months later, he raised $ 250,000 in seed funding – earning the title of co-founder, granted by Koum. Five years later, Facebook bought WhatsApp for nearly $ 22 million during a bomb acquisition, paying about $ 55 per user.

The split: When Mr. Acton left Facebook last year, he attributed the decision to his desire to focus on a non-profit organization. But in March, the Cambridge Analytica scandal provoked Acton to to write a bold message on Twitter: "It's time #deletefacebook. "He remains the most recent post on his Twitter page. (Koum, for one, left Facebook in April.) Acton spoke publicly for the first time on Wednesday Forbes that he and the executives disagreed on the level of encryption needed for WhatsApp – as well as on Facebook's desire to incorporate targeted ads and commercial messages. He left the social media giant in September 2017, deciding to leave up to $ 850 million on the table in unvested securities.

The statute: Acton has invested $ 50 million in Signal, a messaging application he works with to realize his dream for WhatsApp: free end-to-end encrypted calls and messages without advertising partnerships. It has also diverted $ 1 billion of its revenue on Facebook for philanthropic actions in health care in low-income areas and early childhood development.

Jonathan Perlow (Beluga)

The backstory: In 2011, three former Google employees launched Beluga, a group messaging service for Android and iOS designed to be easily used with Facebook. One of them, Jonathan Perlow, used his experience in developing the Gmail user interface. After Beluga became viral – and less than a year after launch – Facebook acquired the company by recruiting Perlow and his co-founders. The social media giant aimed to create a standalone email client, and Beluga would become the basis of today's Facebook Messenger.

The split: Perlow left Facebook in June 2016 to launch Trove Technologies, a full-service storage service that retrieves, stores and returns items to customers. He co-founded the company with Michael Pao, the former Uber product manager, and the online display of your own Trove-designed storage space, with items photographed, cataloged and available for delivery.

The statute: Perlow's roles at Trove are similar to those of Beluga: co-founder and chief technology officer. In 2017, Trove received $ 8 million in funding.

Nikita Bier (TBH)

The backstory: Nikita Bier has launched TBH, an application allowing users to send anonymous compliments to their friends, with three co-founders in the summer of 2017. He did not have much hope – he had tried to run up to 14 apps in the past, and he knew that the team would soon run out of funding. But in the two days since TBH was gently launched in a high school in Georgia, about 40 percent of high school students had downloaded the app, and it spread to three other schools. In order to fight against trolling, Bier made sure that the application's questions were structured in survey format – for example "Who has the best laugh?" Followed by the possibility of selecting one of the four friends. By October 2017, Facebook had acquired TBH for less than $ 100 million.

The split: In July, Facebook announced the closure of TBH because of its "low usage". The application had 5 million downloads at the time of the acquisition and the day after the transaction, it was ranked number one on the daily download of the App Store. graphics. But a little over a month later, TBH had dropped from the list of the top 500 daily downloads, which was not good for its future.

The statute: Bier says Internal business Despite Facebook's decision to terminate the application, he would remain in the company and, as product manager within the Youth team, continue to create new products with the former TBH team.