Artifact

What did it do?

Artifact was a mobile app released in January 2023 by Nokto, Inc., the company founded by Instagram co-founders Kevin Systrom and Mike Krieger, that used recommendation systems to serve personalised news. Its name blended the English words 'article' and 'fact' with the 'arti' of 'artificial'. Over time the app also turned into a social network where users could share links, images and text.

Why did it shut down?

The app was free; revenue models such as advertising or subscriptions remained options that might be tried at some point in the future. Despite strong launch publicity, interest in the app stayed low. The product changed direction in quick succession: from news reader to SI features, and from there to a social network built on user posts. In January 2024 Systrom announced the closure, saying the market opportunity was not big enough to justify continued investment. In April 2024 Yahoo bought Artifact to use its technology in its own news app.

The story

In January 2024 Kevin Systrom announced that he would close the news app he had launched to great fanfare a year earlier. In the closing post on Artifact's blog, Systrom wrote that they had concluded "the market opportunity isn't big enough to warrant continued investment" in this way. The latest venture from the duo who had built one of the world's most successful social apps was ending after about a year.

Systrom and Mike Krieger had sold Instagram in 2012 to the company now called Meta, and left Instagram in 2018 after disagreements with the parent company. In March 2022 they founded a company called Nokto, Inc. in San Francisco. Their first product, Artifact, was released in January 2023; its name blended the English words 'article' and 'fact' with the 'arti' of 'artificial'. The Verge described it as a kind of TikTok for text: the app used recommendation systems to choose news according to the user's interests. The Financial Times presented it as a venture aiming to rival Twitter and fight misinformation. In February 2023 the waiting list was dropped and the app opened to everyone.

Run by a small team of seven, Artifact was free; the founders said models such as advertising or subscriptions might be tried later. The app added new features at a rapid pace: SI could rewrite clickbait headlines that users flagged and read articles aloud in a synthetic voice. In April 2023 Engadget wrote that the app was looking more and more like Reddit; in August 2023 Wired wrote that the app was really an SI play. In September users became able to share their own links, images and text.

Despite all these experiments, however, interest in the app stayed low, and the closure was announced in January 2024. The story still ended with an exit: in April 2024 Yahoo announced that it had bought Artifact and would use its technology in its own news app. In June 2024 Yahoo brought Artifact's underlying technology back to life in a new SI-powered news app.

Artifact's story shows that even the most experienced founders can struggle to create a new consumer habit. The team accepted that it had not found the fit between product and market it was looking for and pulled out before the losses grew; that decision also preserved the value of the technology.

Lessons for founders

• Famous founders bring the first wave of downloads but not lasting usage; track retention as your main measure of success from day one.
• If a product changes direction several times in a short period, it may be a sign that the core need has not yet been found; stop and go back to talking to users.
• Making the decision to close early and openly keeps the team and the technology valuable; Artifact's technology found a buyer a few months after the shutdown.

Sources

1. Artifact (app) (Wikipedia)
2. Instagram's co-founders are back with Artifact, a kind of TikTok for text (The Verge, 2023-01-31)
3. Yahoo is buying Artifact, the SI news app from the Instagram co-founders (The Verge, 2024-04-02)
4. Instagram's founders are back with a new app CNN Business (CNN, 2023-01-31)

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