Filter Failure: What You Can Learn From Instagram’s Terms Debacle

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Guest Blogger
Guest Blogger
April 9, 2013
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The following is a guest blog post from Sammy, who offers advice on how small businesses can learn from Instagram’s recent faux-pas.

Instagram recently made waves by releasing new terms of service which stated that the photo-sharing social network could sell user photos to whomever it liked. Perhaps the company, which was acquired in Facebook in 2012, according to Mashable.com, thought on-the-go users would blindly give up their right to artistic ownership. Instead, the perceived money grab created an uproar, causing some users to delete their accounts and swear off the burgeoning social network all together.

While most small businesses don’t operate under the same business model or provide the services as Instagram, there are still lessons to be had from this public debacle. As it witnessed the importance of privacy, Instagram ultimately learned a lesson in humility that probably saved the business.

Privacy Issues

The direct takeaway from Instagram’s terms fail is obvious: consumers value their privacy. According to Dailymail.co.uk, celebrities led the backlash against Instagram’s ability to sell photos. From Kim Kardashian to Seth Green, prominent figures expressed their outrage at the new terms, which would give Instagram the ability to exploit celebrity sharing for cash. A #boycottInstagram campaign followed on Twitter.

Like Instagram, businesses that obtain consumer information may be tempted to sell it for a quick buck. According to Identitytheft.com, a major credit bureaus was guilty of selling customer information. The money is appealing, but information in the wrong hands puts consumers at risk to identity thieves. As Instagram found out, if consumers realize they’re being exploited, they won’t take it quietly.

Small businesses looking for a financial boost have other options. The Plum Card from American Express offers a 1.5% cash back bonus for early payment, along with other business rewards. Businesses with a strong cash flow can take advantage of this benefit without stretching customer relations.

Operate in Daylight

Perhaps the reason Instagram experienced such a backlash was because it tried to insert this significant change under the cloak of a legal document. Not only did users disagree with the decision, they were also forced to question Instagram’s integrity.

Growing small businesses that have based their decisions on a ready, shoot, aim strategy may have found lightning in a bottle once or twice, but this philosophy is bound to backfire at some point. By shooting from the hip, these business compromise the long, hard work that has created success.

All Is Not Lost

Instagram didn’t completely botch this unfortunate episode. After the outrage, the company backed off of its terms in a statement that discussed selling photos as part of an advertisement. “We do not have plans for anything like this and because of that we’re going to remove the language that raised the question,” Instagram co-founder Kevin Systrom wrote on the company blog.

Instagram’s pliability and willingness to react to its users demonstrates a quality that could keep it in business for the long haul. In any small business, change will be met with opposition. It’s the job of owners and managers to realize when the opposition has a reasonable claim and react accordingly. In Instagram’s case, it meant putting its tailing between its legs and removing the questionable terms. In the long run, that humility may be the quality that keeps it thriving.

Once an editor and lifeguard, Sammy has had many vocations. She is very content to be writing about social media and graphic design and learning about the latest trends as they happen.

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