Remember that old Steve Martin joke about the secret to becoming a millionaire? “First, get a million dollars!”
Perhaps Steve will change his answer after Facebook’s announcement yesterday that it will purchase a start up company called Instagram for $1 billion. It appears that the new secret to becoming a millionaire is to start a business that is a threat to Facebook. The really great news is that revenue is optional. You see, according to an article in the Wall Street Journal, Instagram has no revenue!
I think that what this provides us is an incredibly compelling answer to the question of how jumpy and nervous Facebook and Mark Zuckerberg are of new competitors and how vulnerable they think they are. Based on this acquisition, I think we have one billion reasons to believe that they aren’t nervous, they are panic stricken. An impending IPO has a way of doing that to a guy who, by most accounts, stands to make over $20 billion when the company goes public.