I just found Instagram, and … I didn’t try it immediately. In fact, I didn’t try it until several of my friends started using it, when I wondered whether I should try it. I still didn’t try it until I saw a co-worker using it. And then I was hooked.
“Eager Sellers, Stony Buyers” (Gourville, HBR 2006) suggests that users of a given product overvalue the current product they have by 3x. Gourville also found that sellers of a product overvalue the utility of their new product by 3x. Multiply those factors together and your product needs to be 9x better to get the customer’s attention.
I have lots of photo applications on my iPhone – some more specialized, and some less – and I consider myself an early adopter for most things technological, yet it took several interactions with friends before I even tried Instagram. And now that I’ve tried it? That’s the subject of another post (you should try it – it’s cool). My takeaway from today is that even with a clear value prop (sharing photos w/friends is cool) it’s hard to get customer attention unless your product is much, much better than the other product.
Information Maven 
Greg,
How is it any better then using Twitter or Facebook to share photos? I don’t see how it has any more inherent value then say TweetPhoto or YFrog. The iPhone has a fantastic “app” for taking, storing and even sharing multiple photos with people. If I want to send a single image to one (or a few people) and I don’t want the rest of the world to see it, I simply either go into the “Photos” app on my phone, select the photos I want, then click the share icon. I can then share these via SMS or e-mail.
If I want many people (aka the “public”) then I will share it via Twitter (YFrog or TweetPhoto) or Facebook. All of these sites have native functionality for commenting, liking, retweeting or sharing. What does the Instagram application due that these sites don’t already do? Or how does it do it better.
In my opinion, we have too much of our content being spread out across too many sites with no real ability to retain, find or (gasp) monetize it. Instagram is just another place to “lose” content in my opinion.