Instabug: shake it till you make it

In March 2020, San Francisco-based software company Instabug raised $5 million in a Series A round led by the prestigious Silicon Valley venture capital fund Accel, who had also led the company’s $1.7 million seed round in 2016.

Founded in 2014 by Egyptian software engineers Omar Gabr and Moataz Soliman during their last year at Cairo University, the latest fundraise was based on some phenomenal statistics: at the time of the Series A round, Instabug’s software had been installed on 2.5 billion devices globally, reporting bugs in 25,000 apps – with a total 700 million issues reported.

The figures are all the more startling given that Instabug came about purely by accident. As Gabr explains, in their last year at university he and Soliman built a social app “just for fun – something that helps you create events with your friends” and, before launching it, sent it to a few friends to get feedback.

But this was Egypt in 2012, the country was in the grip of the Arab Spring movement, the app was only on iOS, and “we did not have many friends who had iPhones”. They then looked around on the internet but could not find anything that did what they wanted – leading to what Gabr describes as the first of many ‘aha!’ moments as the idea for a platform to connect developers with testers was born.

“Everyone hated it”

After doing some more research, they went on developing the website – a beta-testing, crowdsourcing platform to give developers instant feedback on how their app performed. Unfortunately, the feedback from the mobile app developers in Egypt, who numbered around 60 to 70 companies at the time, was almost entirely negative – “everyone hated it!”

It was almost entirely negative, because there was one feature that developers absolutely loved: the way you reported bugs. You didn’t have to leave the app, go to your email and go through a lengthy reporting process to submit feedback: you just shook your mobile to bring up a dialogue box and give instant, heat-of-the-moment feedback.

That, Gabr says, was another aha! flash of insight: “It was really intuitive – you get angry because of a problem or a bug and you respond by shaking your phone. It’s like when your TV remote doesn’t work and you shake it as if you’re expecting something magical happen. We built that intuitive response into the product. You’re using the app and something goes wrong, so you shake your phone and instantly Instabug pops up and asks, ‘Is something wrong? Do you want to report a problem?’ If the answer is yes, it takes you through a simple fault-reporting process. The product is built on human behaviour.”

Omar Gabr, CEO and Co-founder of Instabug talks to Professor Julian Birkinshaw about the serendipitous way his app came to realisation.

 

A forced pivot

In light of the response, Gabr and Soliman decided to pivot the website (a “forced pivot – we didn’t really have a choice”) to a simple in-app tool. They then recorded a short video showing how someone reported a bug by just shaking their phone, uploaded the video to Hacker News and, in yet another aha! moment, were amazed by the response: “People loved it!” Gabr remembers. “One hundred people applied to use the product on the first day and we had dozens of questions concerning how to use it, the cost and so on, including enquiries from some very big software companies – and it wasn’t even a product yet. We realised that it wasn’t just a problem that Egyptian developers were facing – it was a global problem for the whole development community. That was when we thought we should do something significantly bigger than the website and the app.”

Gabr and Soliman went to Silicon Valley and got feedback from some of the top software developers in the world, and “it was extremely obvious that we needed to double-down and build this product,” Gabr says.

With the global tech community taking up the concept at breakneck speed, the founders built a minimum viable product for testing which, besides securing support from a startup incubator in Egypt, won first place at the 2013 MIT Enterprise Arab Forum (along with prize money of $50,000) in a gruelling competition that involves pitching to more than 40 expert judges and coaches.

The company went on to grow exponentially, securing backing from legendary venture investor Y Combinator, as well as Accel Partners.

Effect of the Covid pandemic

Surprisingly, given that one might expect software development to slow down in the wake of the global Covid-19 pandemic, Instabug secured dozens of new enterprise customers and saw overall usage grow by 45%, a scenario Gabr attributes to the fact that, with more people spending more time at home, there is simply more app downloads and usage.

The company has been “touching profitability” since January 2015, a situation Gabr attributes to the fact that the founders have always run a disciplined business and “kept an eye on our burn before it was mainstream.”

Continually adding features to the product, Instabug has evolved to offer real-time contextual insights throughout the entire mobile app lifecycle through its bug and feedback reporting, secure crash reporting, and in-app surveys.

Much like penicillin’s ability to repel bacterial infections, Instabug’s ability to help eradicate a different kind of bug was discovered purely by accident – but an extremely happy one for developers everywhere.