The wildly popular photo sharing iOS app is a year old -- where does it go from here?
NEW YORK (TheStreet) -- Within seconds of launching their photo-sharing service Instagram on Apple's (:AAPL) App Store last fall, co-founders Kevin Systrom and Mike Krieger knew they were onto something big.
"The moment we pressed launch, people started signing up in droves from around the world," Systrom said during an interview at a cafe near the company's San Francisco office. "I turned to Mike and said, 'I think we've created something that's different from most things I've seen in the world ... I think this is going to be big.'"
He paused. "I just didn't know how big."
Instagram has become one of the most popular mobile apps, attracting over 11 million users despite only being available for the iPhone and lacking a full-fledged Web site. It's also remained one of the top 25 most downloaded free apps on the App Store for months and is currently ranked ahead of Zynga's addictive Scrabble app Words With Friends and the official Twitter app.
Instagram, which lets people transform their mobile photos with over 15 retro-looking filters and then share them with other users, boasts 1 million photo uploads a day. People can also post their photos to multiple social networks including Facebook, Twitter and Foursquare at once with the click of a button.
"It's a great way to share your photos of your passions about any particular topic you're interested in through your cellphone," said Peter Weck, co-founder of photo book publisher Keepsy, which lets people create albums of their Instagram photos. "They've done a fantastic job of exposing folks to make it really to upload your photos to get feedback and of establishing a community."
Instagram has been adopted avidly by celebrities like Justin Bieber, Snoop Dogg and Ryan Seacrest to engage with their fans and is gaining traction with top brands.
Burberry uses Instagram to give its 113,000 followers a behind-the-scenes glimpse of photo shoots and new ad campaign images, while Banana Republic integrated the app as part of a marketing effort for its Mad Men inspired collection.
It's also been heralded by Apple itself, which made Instagram the app of the day when it launched, and whose marketing exec, Phil Schiller, is a user of the service.
And despite its growth, Instagram has only six employees.
All of the attention "is a little surreal," Systrom, a former product manager for Google(:GOOG), said. "At the same time, it forces you to please millions of people whether you're a celebrity or of more humble origins and want to share your life."
Having already achieved brand-name recognition in just a year, Instagram is now ramping up for its next stage of expansion.
The company raised $7 million in February in its first round of funding from investors including Benchmark Capital, Twitter co-founder Jack Dorsey Quora CEO Adam D'Angelo.
It is eyeing building an Android app, hiring more engineers, launching a full-fledged Web site and is rumored to be exploring adding video to the service, too.
One area the company hasn't yet figured out: a business model.
Instagram is free and has no plans to start charging users, though it's toying with the idea of premium services for brands. Charging 99 cents for filters, as other photo sharing apps have done, likely won't help the company achieve the scale it's looking for, Systrom said.
"We want to see Google-style revenue," he said. "I think the way to get there is to increase the network as fast as possible particularly because given how much competition there is these days."
In August, Twitter unveiled its own official photo sharing service which competes with Instagram and others including Twitpic and Yfrog. Last week, a study by photo search engine Skylines showed Twitter became the most popular service on the platform, with 36% market share, compared to Instagram's 13%.
Facebook is also rumored to be getting into the space with photo-altering filters of its own.
Systrom isn't worried. "At the end of the day, I don't think people love Instagram just because of the filters," he said. "They love it because of the community and how easy it is to share photos with friends."
Its Instagram's passionate users which have helped propel the service and differentiate it from competitors. Some of these users have even taken their communities offline into the real world.
Known as "Instagrammers," the group organizes get-togethers ("InstaMeets") with other users around the world to discuss their favorite filters, exchange tips and take photos.
Carli Kiene, an Austin, Texas-based photographer who goes by the name of Inked Fingers, is one of Instagram's top users. She was browsing photos on the service and found an image of a vintage typewriter she liked.
"I started messaging with the photographer and we ended up meeting up ... now she's one of my best friends and we just took a road trip to Oklahoma together."
A cottage industry of companies has also sprung up hoping to capitalize on Instagram's popularity.
Postagram lets users print and ship glossy Instagram photos to a recipient of their choice, while InstaGoodies turns your images into stickers. Instamaker transforms Instagram photos into t-shirts, mugs and postcards.
Kejia Zhu, the founder of U.K.-based StickyGram, which turns Instagram images into magnets, said within a week of his site launching, over 1,400 users had signed up just through word-of-mouth.
"Instagram images have a very distinctive look and feel because of their shape and form factor," he said. "In the same way you look at a Polaroid, you know what it is because of the border, and Instagram has done something similar ... it's a strong brand that goes out with all of its pictures."
Systrom said he's seen all sorts of tributes from fans, ranging from quilts of the Instagram logo to graham cracker cookies ("Instagrahams").
"There are some real addicts out there in the world," he said.
Yet he insists, the company has a long way to go.
"We're at 1% of where we want to be," he said. "Talk to me again when we have 100 million users ... and even then I'm not sure if we will have made it. When you think about Facebook and their 800 million active users, there are huge opportunities in the world to do something big. We want to do that."
--Written by Olivia Oran in New York.
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