YC
Brian Donohue on Operating Instapaper Through an Acquisition
@ Y Combinator
11/14/18
Takeaways
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Brian Donohue
11/14/18
@ Y Combinator
Instapaper was started by Marco Arment in 2008 as a bookmarking service that allowed users to save articles and read them later, leveraging a text parser to extract the main content from web pages.
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Brian Donohue
11/14/18
@ Y Combinator
In the early days of Instapaper, it addressed three key consumer pain points: slow mobile networks, the lack of good reading applications on the iPhone, and the need for a better reading experience on mobile devices.
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Brian Donohue
11/14/18
@ Y Combinator
The launch of Pocket as a free competitor in 2012 led to a decline in Instapaper's downloads, prompting Marco Arment to consider the future of Instapaper and eventually sell it to Beta Works.
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Brian Donohue
11/14/18
@ Y Combinator
After being acquired by Beta Works, I joined Instapaper as an iOS developer in 2013, where I advocated for transitioning Instapaper to a freemium model due to the strong competition from free apps.
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Brian Donohue
11/14/18
@ Y Combinator
In December 2013, we executed a plan to make Instapaper free for a week, resulting in a significant increase in downloads and a 10-15% boost in subscriptions after the trial period.
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Brian Donohue
11/14/18
@ Y Combinator
By September 2014, we officially made Instapaper free and launched a new subscription pricing model, which led to a recovery in revenue and a growth trajectory for the app.
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Brian Donohue
11/14/18
@ Y Combinator
Pinterest acquired Instapaper in August 2016 after a lengthy negotiation process that began in December 2015, driven by interest from both Pinterest and other media companies.
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Brian Donohue
11/14/18
@ Y Combinator
In late 2016, I proposed several options for Instapaper's future, including staffing a dedicated team or putting it in maintenance mode, ultimately deciding to keep it running with minimal resources.
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Brian Donohue
11/14/18
@ Y Combinator
After the acquisition, I was tasked with maintaining Instapaper while also focusing on my work at Pinterest, dedicating a few hours each week to updates and server maintenance.
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Brian Donohue
11/14/18
@ Y Combinator
The decision to spin Instapaper out of Pinterest was made in early 2018, as I felt it was important to keep the product alive and aligned with its original mission. I believe Instapaper can continue to be self-sustainable based on existing usage and a reasonable conversion rate from free to paid subscriptions.
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Brian Donohue
11/14/18
@ Y Combinator
In early 2018, I reached out to Pinterest CEO Ben Silbermann to discuss the future of Instapaper, as I felt it was on a trajectory towards shutdown.
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Brian Donohue
11/14/18
@ Y Combinator
I recommended that Instapaper either be treated as a business unit within Pinterest or spun out into an independent company, as it didn't align with Pinterest's top-line metrics.
BD
Brian Donohue
11/14/18
@ Y Combinator
After spinning out, I continue to run Instapaper similarly to how I did at Pinterest, dedicating my nights and one weekend day per month to fix issues and launch updates.
BD
Brian Donohue
11/14/18
@ Y Combinator
We raised $80,000 from friends and family to support Instapaper after it spun out, with the goal of making it a long-term sustainable business.
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Brian Donohue
11/14/18
@ Y Combinator
Our pitch to shareholders included a 25% return on their investment within a year, with preferred shares converting to common shares after that return is met.
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Brian Donohue
11/14/18
@ Y Combinator
We're now cash flow positive, which is great, and a lot of that success comes from significantly reducing server costs and continued growth in subscriptions.
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Brian Donohue
11/14/18
@ Y Combinator
I prioritize user requests when building our product roadmap, focusing on features that users want and that provide a competitive advantage.
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Brian Donohue
11/14/18
@ Y Combinator
I focus on building a product that is simple for the majority of users while hiding advanced features for power users who seek them out.
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Brian Donohue
11/14/18
@ Y Combinator
Our biggest growth hack was removing the paid download barrier in 2014, which significantly boosted our user growth.
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Brian Donohue
11/14/18
@ Y Combinator
To manage my reading, I set aside dedicated time on weekends or evenings to catch up on saved articles, as I often save more than I read.
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Brian Donohue
11/14/18
@ Y Combinator
I use the mobile app's sorting feature to prioritize shorter articles, allowing me to quickly read through many pieces and save longer ones for later.
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Brian Donohue
11/14/18
@ Y Combinator
I delete articles that are no longer relevant, especially those that pertain to fast-changing news, to keep my reading list manageable.
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Brian Donohue
11/14/18
@ Y Combinator
I believe in balancing the enjoyment of outdoor activities with safety, especially when it comes to mountain climbing and hiking.