It has been 10 years since Apple launched its most revolutionary product, the iPhone, one of the best-selling products of all time. Then along came apps, a popular and lucrative industry.
Here’s a look at a few of the iPhone apps who made their backers very wealthy.
Evan Spiegel and Bobby Murphy, Snapchat
Snapchat has made its way to being one of the top the social media apps in the world. Look around you in public and chances are you’re going to see somebody making a face for a Snapchat filter to be sent to friends for their one-time viewing pleasure. Snapchat’s journey started on the iOS App Store.
Evan Spiegel and Bobby Murphy created Snapchat after meeting at Stanford University.
“What if you could send photos to friends and have them disappear? For fun,” recalled Spiegel to USA Today in a 2013 interview.
After the original app Picaboo failed to gain traction in 2011, they rebranded the app as Snapchat and added the captioning feature .They relaunched Snapchat in the iOS app store and reached 100,000 users in 2012.
When Snapchat launched, a disappearing photo-sharing app was a novel idea.
“Snapchat isn’t about capturing the traditional Kodak moment. It’s about communicating with the full range of human emotion — not just what appears to be pretty or perfect,” wrote Spiegel in a blog post in 2012.
It quickly gained popularity over the next year. Facebook CEO Mark Zuckerberg offered the creators $3 billion for the app in late 2013, and was rebuffed.
By 2017, more than 166 million people were sending over 3 billion snaps a day and users spent an average of 30 minutes a day on Snapchat to see stories, text and even get the news, according to its parent, Snap Inc.
In March, Snap went public in the biggest U.S.-based tech company IPO since Facebook. Spiegel and Murphy, ages 26 and 28, each sold 16 million shares in the IPO, reaping $272 million each. They retained stakes of about 210 million shares each, worth more than $5.1 billion as of their first-day closing price (the stock has since fallen nearly 30% since then.)
Snapchat remains in the top five overall apps on the iOS App Store.
Tinder revolutionized the dating landscape and simplified the process by turning it into an app. People join Tinder looking for anything from casual relationships to marriage proposals, picking their candidates with just a swipe.
Sean Rad and Justin Mateen met at the University of Southern California in 2004. Both were entrepreneurs working on their own projects before teaming up. They were on their way to creating another app when they met Jonathan Badeen at incubator Hatch Labs. The three of them thought of a dating app and dropped everything to create Tinder.
“We were passionate iPhone users, and I was also an iPhone developer, so we set out to make the best app for meeting new people on the iPhone,” Badeen told USA Today in an email interview.
The app launched in the iOS app store in 2012. It initially targeted college students, with 90% of users 18 to 24 years old.
“(The iOS App Store) was definitely one of the most important parts of our launch,” said Badeen. “The ecosystem allowed us to deliver a premium product to a huge audience.”
The user base continued to grow rapidly and by 2013, there were 7 billion profiles and 100 million matches on Tinder. But its executive suite was roiled by allegations of sexual harassment. Rad was ousted as CEO in 2014 after the company settled a suit with a former senior staffer who made sexual harassment charges against Mateen; Rad returned to that job in 2015.
In November of that year, parent Match Group (which also owns OKCupid and Match.com) spun off from IAC/Interactive in an IPO worth $400 million.
According to Forbes, under terms of a revised deal between IAC, Hatch and the founders, Rad owned 10% of Tinder, and Badeen and Mateen just under that. Two years ago, Bank of America Merrill Lynch estimated Tinder was worth $1 billion to $3 billion.
Badeen told USA Today there were several technologies needed to make Tinder successful, such as a touch screen, Internet access and GPS technology.
“While all of these technologies existed prior to the iPhone, never had they been packaged together in a single mobile product that was so quickly adopted by the mainstream,” said Badeen. “Tinder was designed as a mobile product. It is used in social settings and on-the-go. Without the creation of a great mobile device, there would have been no Tinder.”
Tinder said it produces 26 million matches per day and has accounted for more than 20 billion matches since its launch. It continues to be in the top 100 overall apps on the iOS app store.
Kevin Systrom and Mike Krieger, Instagram
Instagram has become the main platform for sharing pictures, with more than 34 billion pictures posted as of 2016. Users share pictures of everything from life-changing moments to what they had for lunch on Instagram. It is used to connect people across the country to the daily lives of individuals.
Kevin Systrom and Mike Krieger both went to Stanford, but didn’t know each other while attending school there. The pair met after Systrom released the first version of what would become Instagram, then called Burbn, and Krieger was a fan. Together, they worked on the app to make it more compatible for the iPhone and released in on the iOS App Store in October 2010.
Instagram was an overnight success with 25,000 people downloading the app the first day. After two months, it had one million users and in September 2011, 10 million users. In 2011, it was named the iPhone App of the Year.
Instagram told USA Today the app’s rise in popularity coincided with the release of the iPhone 4, “giving people everywhere powerful cameras in their pockets.”
Just six days after Instagram launched on Android, Facebook bought the company for $1 billion. Systrom was estimated to have made $400 million and Krieger $100 million from the buyout.
In 2016, it brought in an estimated $1.5 billion in sales.
Forbes estimated last year Systrom was worth $1.1 billion.
Instagram continues to be in the top 10 overall apps on the iOS App Store.
Mikael and Niklas Hed, Angry Birds
Angry Birds took the iOS App Store and the rest of the world by storm when it was released in 2009. The simplistic nature of the game attracted the attention of millions.
Angry Birds was created by a small game developer, Rovio, which was co-founded by Mikael and Niklas Hed in Finland. The company was facing bankruptcy and they needed a ground-breaking idea to save them. Their game plan was to develop a game for the iPhone, which was relatively new at the time.
A senior game designer at Rovio, Jaakko Iisalo, came up with the characters of Angry Birds one night in his home and pitched the idea the following week.
“As soon as I saw those characters I liked them,” said Niklas Hed in a 2011 interview with the U.K.’s Telegraph. “Straight away, I had a feeling that I wanted to play the game.”
They raced to work to create the game and launched on the iOS App Store, where it quickly gained success, becoming one of the top games in early 2010.
By 2011, it had been downloaded more than 50 million times and captured 200 million minutes of play per day. It was named iPhone’s Most Popular App in 2011.
According to Mikael Hed in that 2011 interview, they recognized what Apple wanted and knew what they had to do to become one of the featured apps on the iOS App Store.
“We looked at the App Store and realized the power of the brand,” said Mikael Hed.
In 2012, the company received an buyout offer from Zynga, another game developer, for $2.25 billion, making Niklas Hed worth $96.8 million and Mikael Hed worth $13.5 million, according to an analysis by Business Insider. Rovio rejected the offer.
Since then, Rovio has created six spin-off games, including Angry Birds Star Wars, and a movie released in 2016, which brought in more than $100 million, according to BoxOfficeMojo.com.
These are just a few of the people who have found success by creating apps since the iPhone was first released in 2007. More than 2 million apps are on the iOS App Store and that number continues to grow.
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