Instagram is quickly becoming the next great social network

My favorite new tech product over the past year is Instagram, a photo sharing app for the iPhone. But it’s not just a cool app: It also seems to be growing into the next great social Internet company.

The stats alone are very impressive: Instagram announced yesterday that in less than 10 months since launching, it has attracted 7 million users, who have uploaded 150 million photos to the site. And it has done this with an unusually tiny staff, having just hired its fifth employee, a community manager/evangelist.

The best and most important thing about Instagram so far is its product. What matters at this stage in Instagram’s development is that it’s useful, addictive, and simple. Sort of like how Facebook was before it became your portal to everyone you’ve ever met, or how Twitter was before it became your window into The Matrix.

Instagram is my favorite new place to waste a few minutes on my phone every couple of hours, checking out cool pictures that people are posting.

And, even better, “normal” people seem to be discovering it. I’m impressed by which non-geek-types among my friends are starting to join. (The app sends you an alert when Facebook friends join Instagram.) It’s a sign that Instagram is starting to reach the mainstream — and then it’s really in for a growth spurt. Already, it’s routinely in Apple’s list of the top 25 most popular free iPhone apps, never far behind Facebook, and currently ahead of Pandora and Twitter.

The easy criticism for Instagram is that it’s just a feature — mobile photo sharing — that Facebook, Twitter, and Flickr will replicate and then dominate. But it almost never works that way; most would-be “killers” aren’t.

Instagram isn’t popular because it does something that Facebook and Twitter don’t do — both services offered iPhone photo sharing long before Instagram existed. Instagram is popular because it only does mobile photo sharing, and it does it in a way that’s so fun and magical that it’s worth the time to set up and continue using.

The next logical question is whether Instagram will ever be able to make any money. The answer is: Who knows?

As a company with easy access to investor capital, that’s not something it needs to be worrying about right now. Instagram isn’t — right now, at least — a commerce company, and it doesn’t seem to be burning cash at an obscene rate. So making money is worth thinking about from time to time, but laboring over it can come later when there are more users.

Time is finite, and for the foreseeable future, Instagram’s small team should continue to focus on building an awesome product and keeping it running during periods of high growth.

So far, they’re on the right track.

Also: What’s on my iPhone?