Last week, Artifact, a trending news app from the co-founders of Instagram, announced it was shutting down after failing to gain critical mass. The news came as a surprise as the app was generally well-received by its core audience, cleverly leveraged ai to drive recommendations, summarize news and rewrite clickbait, and featured a clean, modern design that made it easy to use. So what went wrong?
New data indicates that Artifact was unable to catch up to the competition and had trouble growing its user base outside the US. It also saw app downloads drop dramatically after launch, indicating that it failed to catch up to a more general audience.
In a company blog entryKevin Systrom, co-founder of Instagram and Artifact, explained that the decision to close the app came because they realized that the market opportunity was not large enough to justify continued investment. It was a difficult decision, he said, but making it “sooner is better for everyone involved.”
However, it's rare to see a startup throw in the towel so soon, particularly among an app that from the outside seemed to have traction. Posts in the app (usually news articles and links to other interesting finds on the web) offered social features that allowed users to like and comment. Based on activity on the app, it seemed as if Artifact had gained a following, as many posts included active discussions filled with comments and often featured thousands of “reads” (views). Additionally, many of the app's creators (i.e., those who contributed content to the app as journalists or link curators) also had hundreds of followers.
When you participated in the Artifact community, you didn't feel like shouting into the void. That's an experience that even larger apps, like X (originally Twitter), can't always reliably offer. On Artifact, people browsed their feeds, read headlines, socialized, followed others, and bookmarked items to read later. Much of this activity was visible to other users, making the community feel alive.
Unfortunately, the reality is that Artifact did not generate sustained interest after its initial debut, so it was this core community that kept it afloat.
According to data from application intelligence provider Application Figures, Artifact has recorded approximately 444,000 downloads since its launch in February 2023. However, a large portion of those downloads, just under 100,000, came around its launch. By October 2023, the app had plateaued and there were only 12,000 new installations. In late November and early December, there was again a brief surge, perhaps a final push from the Artifact team before making the decision to close. But that didn't save the app from its fate.
Image credits: Application Figures
Another problem the app faced was tough competition. Although rival news aggregator SmartNews was also losing downloads and active users at the time, in addition to its CEO restructuring, it managed to attract many more users than Artifact. During the time Artifact was on the market, SmartNews recorded 2 million downloads. The device had less than a quarter of that figure.
The app also had to compete with the new ways people get news in the age of artificial intelligence, where search engines and chatbots provide information and answers without the need to click on links or read long news stories. That's something that's impacting web publishers' traffic, leading outlets like The New York Times to sue artificial intelligence company OpenAI for training on their content. Other publishers, such as Axel Springer, are licensing their content to OpenAI for a fee, hoping to get ahead of market developments. For consumers, this means there may be less demand for a secondary news app to complement the news readers built into their smartphones, like Apple News or Google News, for example.
Artifact also had trouble gaining an international following, which could have helped it thrive even if downloads in the United States stagnated. Appfigures found that the United States accounted for 44% of all app downloads. Meanwhile, no other country had more than 4% share. That indicates that the name recognition of Artifact's famous founders, Kevin Systrom and Mike Krieger, who created Instagram, may not have had as much appeal outside of the tech scene within their home market here in the US.
Then there was the issue around Artifact's growing feature set, which began to dilute its strong focus on delivering a better ai-powered news reading experience. Suddenly, the app allowed users to post their links, similar to Pinterest, followed by the ability to post text content, like on Twitter/X. Shortly after, it added a place sharing option, turning Artifact into a real-world recommendation engine. Then the question arose as to what Artifact wanted to be: was it a social news readout or just a social network? By adding more features, Artifact may have confused users about when or why they should use it.
The company also continued to dabble with the latest ai tools, such as a generative ai feature to add images to posts or ai summaries in fun styles like “Gen Z speech,” “explain like you're five,” or even just emojis. It started to look like the team wanted to create a completely new app, like a new social network, maybe an ai-powered Instagram? An Instagram for news? This also caused some to wonder if Artifact was now just a playground for founders to test out the latest technology or if it had a roadmap planned.
Artifact was originally self-funded by the co-founders in the single-digit millions. This could be another reason why they decided to cut their losses earlier than expected. They may not have wanted to put themselves in the position of raising funds from investors who could not earn returns.
In any case, Systrom hinted that the end of Artifact may not be the end of his return to the world of tech startups, noting in the blog that he was “personally excited to continue building new things, although only time will tell what might happen.” be”. “
Based on Artifact's progress, it looks like they have plenty of ideas to choose from.
