Facebook Buys Instagram: Implications For San Francisco And The Bay Area

Yesterday, Facebook Founder and CEO Mark Zuckerberg put out a blog post announcing that his company spent $1 billion to acquire Instagram, the popular smartphone-based photo-sharing service. Moreover, the organization made even more famous in the movie The Social Network, gave the small, young, San Francisco-based organization a combination of cash and stock.

This has rocked the tech World, and because of the astonishing amount Facebook paid for a firm established on October 06, 2010, and with just about 15 employees as of this writing. Now, founders Kevin Systrom and Mike Krieger are rich, with the former reportedly owning 45 percent of the company, which comes to $400 million.

The blog and news takes on this deal are just hilarious, with some saying that Facebook’s Instagram’s new overlord, and other posts launching accounts of how Instagram started, and still other blog posts offering the “i KNOW THOSE GUYS!” point of view that’s to be expected when people hit it really big all of a sudden.

But the one take not offered is this: that Instagram (who’s currently cramped office is shown in the photo) is one of many San Francisco-based companies (about 50) located in the South Park area. South Park is a small neighborhood that surrounds a nice oval-shaped park, and the whole is tucked in a part of San Francisco’s South-Of-Market-Area that you would entirely miss even if you thought you knew San Francisco.

Most people, including this blogger, who know where South Park is, know because they’ve had some business to conduct there in the past. (And in my case, fell in love with a nice little cafe called The South Park Cafe. But that’s the point: the companies in South Park have been, for the past 20 years, web, and now mobile-app, based. One of those companies is Instagram.

I will boldly say that the Instagram deal would have been less likely to happen if the founders did not locate in South Park, San Francisco, or come from Stanford (or Cal) before that. As I write this, I’m in Suburban Atlanta Georgia, and in a metro area that has some “me too” social networking companies that are built off the work of Facebook, and a ton of marketing and public relations companies. The culture is not at a place where the next Facebook, or Instagram, or Tout will be established any time soon.

You have to be in the culture that is the San Francisco Bay Area to expect to build an Instagram, even before you get to the point where Mark Zuckerberg will recognize your startup. That’s the real story: the time spent with others writing code, getting little sleep, having too much burbon, getting laid, party hoping, then jumping back into the serious job of writing more code, that the San Francisco Bay Area Culture supports, and South Park has been an epicenter of.

Note, I wrote “an epicenter.”

The same cultural dynamic that created Instagram and caused the Facebook deal were seen at last year’s Code For Oakland event, where teams got together and made apps that helped low-income communities access information to help better their lives. This:

The implications of the Facebook / Instagram deal are tremendous for San Francisco and the San Francisco Bay Area. It means an affirmation of the already hot startup culture, with more companies formed around apps than ever before. And I predict more people moving into our area, because they realize they’ve got to be in the culture to stand a better chance of benefiting from it.

Watch.

Stay tuned.