Why did Flickr miss the mobile photo opportunity that Instagram and picplz are pursuing?

Innovator's dilemma, e.g. in order to compete with Twitpic we would have had to be willing to sacrifice our own login system in favor of Twitter's (insecure) one.  The Yahoo! Paranoids would have shut us down in a heart beat (See also: http://laughingmeme.org/2009/07/01/flickr-twitter-oauth-a-secret-history/) Additionally we fell into the trap of thinking like an incumbent, we spent 6 months off and on talking to Twitter about preferred product placement rather then just shipping the integration we had built. We also spent *years* debating whether or not to build iPhone apps/iPhone optimized sites or bet on a HTML5/multi-device strategy.  And work like the award winning iPhone optimized Flickr mobile site was viewed ambivalently even within the team as it happened largely as a skunk works and was very much hard coded around iPhone's limitations. Lastly, Marco Boerries was without a doubt one of the most viciously political, and disliked Yahoo! execs and he reigned for 4 years over the Yahoo "Connected Life" team which had universal control over all native mobile experiences within Yahoo.  Several Flickr internal attempts to build and ship native mobile experiences (going back to 2006) were squashed relentlessly.   The Flickr iPhone app that eventually shipped was built by CL. That said it's easy to look at the successful products and wonder how **anyone** could have missed something so obvious, but the debate about what the future of mobile photography and photo sharing looked like was a fairly active one.  Perhaps less remembered the innovated http://Radar.net social/mobile photo app/site was very visibly struggling to gain traction throughout this whole time period, and many less interesting attempts never made it to the gate. Prototypes like Flickr for Busy People (http://flickrforbusypeople.appspot.com) and the semi-integrated Photos Nearby (http://www.flickr.com/nearby) both built by , as well as the afore mentioned iPhone optimized http://m.flickr.com were partially byproducts of those long running internal debates about how to do mobile. It would actually be incredibly straightforward to build something like an Instagram on top of Flickr using the API, especially if you could convince Flickr to release an API to "Beehive" the friend finder tool, which among other things, benefits from Y! backdoor deal with Facebook.

This is a question, which is heard quite often about many different innovations. Just look around the industry (not only the IT industry) and you will see that major innovations, especially disruptive innovations, rarely originate within big, publicly listed companies. Please note, that I am not saying that big, publicly listed companies can not be innovative. Some of the textbook examples about institutionalized innovation, i.e. P&G and 3M, are big, publicly listed companies. But the innovations originating there are rarely fundamental, disruptive ones. There are probably many reasons for this phenomenon, some of which have already been mentioned here. The three most important ones, IMHO, are: Innovations are usually created in small teams - not necessarily within the head of one "innovator", but large teams tend to water down radical ideas. It is hard to keep teams small in a big organization - especially when a project looks "promising". Innovations are usually created by the proverbial "thinking out of the box". Organizations, which have reached a certain size, can not survive without elaborate processes and "rules". People in such organisations are not rewarded for ignoring these rules - no matter what is said in internal workshops intending to further innovative thinking. Creating a product based on a truly radical innovation is usually accompanied by a huge risk. It is hard - nearly impossible - to judge the market acceptance of a truly innovative product or service. Executives in a publicly listed company are not rewarded for taking risks but for meeting forecasts, which were made a year ago. This might sound overly cynical but is not meant this way. It is just meant as a (rather simplified) description of the market. There are big organisations moving slowly, innovating incrementally. There are small organisations and teams moving quickly and innovating radically - which usually fail. The ones which do not fail become big, successful companies. A big organization has certain advantages. To leverage these advantages it is necessary to follow certain behavioral patterns - which are not necessarily beneficial to the creation of radical innovations. Individuals and organizations investing in these companies are NOT looking into high risk/high yield opportunities. They are looking for stability and continuous (slower) growth. That's what the management of such a company has to achieve. It is much easier to come up with - and implement - radical ideas in a small organisation. Most of these ideas do not work in the market, though, and as a result, that small team (company) might go down. Most investors do not like this possibility. Those wich do, are called venture capitalists. They invest in small companies, not big ones because they know the mechanisms described here, very well.

Expanding on 's response: the David vs Goliath story is a recurring theme in the history of innovation. Some of the answers in this thread allude to the following texts. Together, they offer a comprehensive answer to the general question "why did Large Incumbent fail to maximize an opportunity exploited by Smaller Challenger?" See also Innovator's Dilemma by Clayton Christensen http://www.amazon.com/Innovators-Dilemma-Revolutionary-Business-Essentials/dp/0060521996/ Crossing the Chasm by Geoffrey Moore http://www.amazon.com/Crossing-Chasm-Geoffrey-Moore/dp/0060517123/ Blue Ocean Strategy by W Chan Kim and Renée Mauborgne http://www.amazon.com/Blue-Ocean-Strategy-Uncontested-Competition/dp/1591396190/ The Master Switch by Tim Wu http://www.amazon.com/Master-Switch-Information-Empires-Borzoi/dp/0307269930/ The Entrepreneur's Guide to Customer Development by Cooper and Vlaskovits http://www.amazon.com/Entrepreneurs-Guide-Customer-Development-Epiphany/dp/0982743602/

They're owned by a publicly traded company.  As a result, Flickr is subject to quarterly P&L forces that, by definition, restrict innovation.   Moreover, Flickr is a mature product that is catering to a late majority audience.  Unfortunately, by catering to this audience, they're more predisposed to incremental innovation on their core browser-based application.  Instragram, on the other hand, is a new product that is designed for innovators. They are not subject to the same constraints both from a customer and business perspective.  As a result, Flickr left a window open for Instagram and others to disrupt them in a the mobile photo sharing space.

That's a question for Yahoo and Google (for Picasa). Instagram, Picplz, Twitpic and others created a "Blue Ocean" product vertical that was new and emerging.  Flickr and Picasa were batting in the "Red Ocean" of online photo albums. Collectively they were not focused on the mobile photo sharing market and were quickly passed by these innovators in technology and social media.

I think there is no 'competition' here as such. Flickr is about: 1. Great UI 2. Incredible tools for organising large number of photos 3. Photo editing also 4. Great, high quality content 5. A paid CDN Instagram seems to be about: 1. Quick pics 2. Sharing pics on Twitter 3. Canvasing 4. Light hearted, usually crappy and irrelevant photo based chatter These two services are very far from each other and therefore there is no real competition between them. To add to this discussion does anyone here use PhotoBucket for example? It's a huge photo hosting service, but noone seems to say 'oh it's a huge competition to Flickr' as it essentially is not. They are very different.

You guys are looking at it way too helicopter view. Flickr is a community orientated product and it kept its focus on that (even though it did launch a mobile app a while ago). Instapaper provided a super-simple fun product that people could integrate into the "newsfeed" reality socnet junkies live in nowadays. They differentiated through filters, Flickr never added any filters (afaik) to the photo-experience, because the community would feel that Flickr was manipulating *their* photos. It's like comparing apples & oranges. The only thing you can learn from it is that if you stick to a simple focus (Flickr collections, Instagram sharing+filters), and people like it, it will stick (for a while). Flickr has been around for a number of years, Instagram for a few months, there's a lot of me-too sharing+filter apps in the app store today, so let's see how the playing field looks end of 2011.

This reminds me of a discussion I had with a senior Boston Computer Society activist and inventor innovator William Reisman. He had come up with an improved sound system for theaters. He tried finding financing for it from among other sources Dolby and THX. We came to the conclusion that the two companies which had each caused a major revolution in theater sound systems were in the same situation. They were experts in their innovation not the process of innovation. They had commitments to systems which they previously had to overcome obstacles for. They were unwilling to have innovation and fighting the obstacles to innovation to the degree that their acquiring and backing Reisman's system would have entailed. He is the same William Reisman who disappeared and is presumed to have drowned after falling off a cliff in Brazil. http://en.wikipedia.org/wiki/Ilha_Grande

Creating a great product or customer experience is at the hear of any success.  However, that is still only half the equation.  Great products or great customer experiences can only exist for the long haul if they have a great business model as well.  The challenge, and opportunity, for both Flickr and Instagram is whether they can have a great product or experience AND have people willing to pay for it.  When a great product and business model collide, you get someone like Apple.