Animated GIF capture tool and social network Phhhoto is shutting down its app due to server costs becoming unsustainable after getting slammed with competition by Instagram’s copycat Boomerang. Phhhoto will pivot to focus on its parent company HYPNO’s original business — a physical photobooths for events service.
Phhhoto launched in July 2014, making it easy to hold down its shutter button and capture a sequence of photos that were turned into a back-and-forth looping GIF that could be shared to the app’s feed. But in April 2015, Instagram cut off Phhhoto from its social graph, then launched a clone called Boomerang in October that went on to be integrated into the popular Instagram Stories feature.
“We watched Systrom and his product team quietly using PHHHOTO almost a year before Boomerang was released. So it wasn’t a surprise at all” co-founder Champ Bennett tells TechCrunch about being copied by Instagram. “They even secretly tried to hire RON – our spiritual leader. You have to give massive respect to anyone at their scale, but I’m not sure Instagram has a creative bone in their entire body. That’s a weakness we tried to exploit.”
Phhhoto peaked at 10 million registered users, 4 million monthly actives, and 1.6 million daily actives who created 400 million images in its GIF camera. It had raised $1.73 million in total, including a $1.5 million seed round in 2015 led by Eniac Ventures. With the app shut down, Phhhoto’s team will concentrate on expanding its physical photobooth business where it installs booths at 70 events per month.
Some of the Phhhoto app’s features including the ability to post will turn off over the next few days, though users can keep the app for shooting GIFs and saving them to post elsewhere. Inside the News section of the app, users will find a Save button so they can download their past posts.
The end of Phhhoto shows just how valuable owning the social graph is for Facebook, Instagram, and WhatsApp. Even if another startup comes up with an innovative feature, Facebook’s apps have your friends and their attention. It’s easier for Facebook to copy a startup’s feature than it is for Facebook’s users to switch to that app. It’s all a grim tale that should put a shiver down Snapchat’s spine.
Here’s the entirety of Phhhoto’s statement to TechCrunch about getting copied and beaten by Instagram, and a screenshot of the message the team left for its users:
tfw when u get copied by Instagram…
“We stepped on their turf – they reacted. That’s the game!We watched Systrom and his product team quietly using PHHHOTO almost a year before Boomerang was released. So it wasn’t a surprise at all. They even secretly tried to hire RON – our spiritual leader. You have to give massive respect to anyone at their scale, but I’m not sure Instagram has a creative bone in their entire body. That’s a weakness we tried to exploit.Over time we added stuff like moving filters, sound, parties, screenshhhots, and crazy shit like video profiles that play your favorite music while you’re browsing around the app. It’ll be sad to see that stuff go.
In the end, we brought our best game and tried to build things no one had seen before. A lot of people liked it, and we made a few million friends a long the way. 100% would do it all over again for the same result.
As one of our investors said…we’ll get the next one.”