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šŸš€ Is IG now a TikTok clone?

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šŸš€ Is IG now a TikTok clone?

Plus, red flags to avoid in your pitch deck.

Justine & Olivia Moore
Jul 31, 2022
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šŸš€ Is IG now a TikTok clone?

www.readaccelerated.com

trending šŸ“ˆ

šŸ›ļø Shopify conducts layoffs. E-commerce platform Shopify laid off 10% of its employee base, totaling ~1,000 people. CEO Tobi Lutke said in a memo to staff that he had over-estimated where e-commerce penetration was headed due to COVID, anticipating a permanent ā€œleap ahead by 5 or even ten yearsā€ that caused the company to over-hire. In reality, adoption has returned to the pre-COVID trend line.

šŸ¤‘ Snapchat+ has strong start. One month ago, Snap launched Snapchat+ - a paid subscription to access features like seeing who rewatched a Story and ā€œpinningā€ a BFF in your chats. Early data now suggests that Snapchat+ brought in $5M in revenue in its first month. We’re not sure exactly how many people subscribed (a monthly subscription is $3.99/mo, but there are also six and 12-month plans), but it’s an interesting data point for social apps studying the viability of paid subscriptions. Twitter, which just raised the price of its own subscription, is likely watching closely šŸ‘€

šŸ“Š Tech earnings continue. This week’s news on the earnings front:

  • Meta saw its first ever revenue decline as a public company, down 1% YoY for Q2 2022. CEO Mark Zuckerberg said that the economic downturn’s impact on ad spend ā€œseems worseā€ than it did in Q1, and forecast a weak Q3 as well. Meta has also seen a decline in e-comm ads from the ā€œpeak pandemicā€ period.

  • Amazon beat topline estimates for the quarter, with revenue climbing 7% YoY. AWS and the company advertising business performed ahead of expectations. The company took a $3.9B loss on their investment in EV maker Rivian, and saw online store sales fall 4% YoY (we’re sensing a theme….šŸ¤”).

  • Apple also beat both sales and profit expectations, but still saw relatively muted growth of 2%. The company hit an all-time high in installed base across all product categories, aided by programs that make it easier to consumers to purchase their products (e.g. installment plans, trade-in programs).


what we’re following šŸ‘€

Announcing a16z’s seed and Series A investment in Nash!

Twitter explains why you’ve seen so many (random) viral posts recently.

Hunter Walk on pitch deck mistakes that are red flags to investors.

My take on Glossier products being spotted at TJ Maxx.

Twitter avatar for @chrissyteigen
chrissy teigen @chrissyteigen
@mosseri I guess for me it’s not just that I suck at making videos. It’s that I don’t see my actual friend’s posts and they don’t see mine, and I see the same people over and over and over then the feed goes ā€œyou’re all caught up!ā€
5:26 PM āˆ™ Jul 26, 2022
3,992Likes98Retweets

The other shoe finally dropped with Instagram this week. After months of complaints from users about how the app is starting to look like a TikTok clone, Head of Instagram Adam Mosseri posted a video addressing the situation. He also responded to questions and comments - some of which came from high profile users šŸ‘€

Here’s the core of the issue: many users believe that Instagram now excessively prioritizes content from people you don’t know & videos - particularly Reels (the app’s TikTok competitor). As a result, they no longer see photos from their friends in their feed, which is frustrating if that’s the main reason they’re using the app. It’s also a bad experience when you post, because your content gets less engagement.

@courteeepaigew/e that app feels dusty anyways
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The obvious question is why Instagram would continue evolving towards a more TikTok-esque product when so many users (including Kylie Jenner) are asking for the ā€œold Instagramā€ back? IMO, there’s two potential explanations:

  1. Proactive - the IG team has strong conviction that the future of social media is short-form video, delivered algorithmically. There will be growing pains as users mourn the old app, but Instagram is willing to ā€œburn the boatsā€ and essentially torch the existing product (sharing photos w/ friends) to get there.

  2. Reactive - IG is moving towards this new iteration because the old product has stopped working. Growth, engagement, and retention metrics started to flatline or decline, and the team is trying to copy features from other apps that are working (TikTok, maybe even BeReal) in an attempt to revive it.

We’re leaning towards #2 as the more likely explanation. If the core IG product was still seeing strong growth and engagement, why make such a drastic move away from it? Adam Mosseri seemed to confirm this - he essentially told users that most of them no longer have enough content from friends to fill their feed, which is why they’re seeing so much ā€œrandomā€ content. And he noted that while users may say they want the old IG back, their actions on the app don’t align with this.

Twitter avatar for @mosseri
Adam Mosseri @mosseri
One thing I hear a lot is people asking to see more friend content in Feed. I'd love for there to be more friend content in feed, but all the growth in photos and videos from friends has been in stories and in DMs.
6:38 PM āˆ™ Jul 26, 2022
1,497Likes172Retweets

So how did we get to a place where users aren’t posting on IG enough? One theory is that Instagram adding algorithmically-served content (photos and videos from users you aren’t friends with) essentially ā€œpoisonedā€ the Feed. Making the Feed more crowded made it harder to see your friends’ content. As a result, your friends got less engagement on their posts, and may have stopped posting as frequently - which forced Instagram to rely on more algorithmic content to fill your Feed.

A competing theory is that Instagram is simply going out of style - and this would have happened with or without the algorithm. Social apps are driven by trends and FOMO, and it’s hard to stay on top forever. Remember when Facebook was the cool app that everyone was using? It may be time in the social media lifecycle for another app to take Instagram’s crown (and if that is the case, it’s been an amazing run).

But this is a story that’s very much still being written. On Thursday, the company announced that it’s phasing out a new version of the app being tested with some users that featured full-screen photos and videos on a scrollable screen (sound familiar?). In addition, Instagram will be reducing the number of ā€œrecommendedā€ posts in users’ feeds and work to improve its algorithms.

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All views are our own. None of the above should be taken as investment advice. See this page for important information.Ā 

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šŸš€ Is IG now a TikTok clone?

www.readaccelerated.com
2 Comments
Zach Parker
Writes Zach Off the Clock
Aug 1, 2022

Maybe IG could solve this problem with "tags"? I'd like to be able to tag the accounts I follow as "Friends", "Influencers", "Brands", etc and then filter the feed by these tags. The feed would look like the current feed (which I like: I can find new accounts to follow with it) by default but then I could hit "Filter by..." or something to quickly look at my Friends' posts. (Maybe cleaner on the engineering side if you make it binary, i.e. Friends v All, don't allow arbitrary tags, which I think also works for the main issue.)

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Minh D
Writes Life with MD
Aug 1, 2022

Honestly from my experience, most friends I follow have shifted from posting weekly to may be monthly or once every few months, focusing more on stories. So I guess IG has a point in saying that even though users say they want to see their friends, most people actually don't post that much : )

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