Last week, Artifact, a buzzing news app from the co-founders of Instagram, has announced it’s 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. intelligently leveraged AI to power recommendations, summarize news and rewrite clickbait. and featured a clean and modern design that made it easy to use. So what went wrong?
New data suggests that Artifact has been unable to keep up with the competition and has struggled to grow its user base outside the US. Also, the app’s downloads plummeted after launch, indicating a failure to reach a more mainstream audience.
In a company suspension, Instagram and Artifact co-founder Kevin Systrom had explained that the decision to shut down the app came about because they realized the market opportunity wasn’t big enough to justify continued investment. It was a tough call, he said, but making that call “sooner is better for everyone involved.”
It’s rare to see a startup throw in the towel so soon, but especially among an app that seemed from the outside to have traction. Posts in the app—general news articles and links to other interesting finds from around the web—offered social functionality, allowing users to like and comment. Based on activity within the app, it appeared that Artifact had built a following, as many posts included active discussions filled with comments and often had thousands of “reads” (views). In addition, many of the app’s creators—that is, those who contributed content to the app as journalists or link editors—also had hundreds of followers.
When you joined the Artifact community, I didn’t like you shouting into the void. That’s an experience that even bigger apps like X (originally Twitter) can’t always reliably deliver. At 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 didn’t gain sustained interest after its initial debut, so this core community kept it alive.
According to data from the application information provider Appfigures, Artifact has had approximately 444,000 downloads since its release in February 2023. However, a large portion of those downloads, just under 100,000, arrived at launch. By October 2023, the app had stalled, with just 12,000 new installs. In late November and early December, there was another brief spike – perhaps a final push by the Artifact team before they made the decision to close. But that didn’t save the app from its fate.
Image Credits: Appfigures
Another problem facing the app was stiff competition. Although rival news aggregator SmartNews was also losing downloads and active users at the time, in addition to changing its CEO, it managed to attract far more users than Artifact. During the time Artifact was on the market, SmartNews saw 2 million downloads. Artifact had less than a quarter of that number.
The app also had to compete with new ways people get their news in the age of artificial intelligence, where search engines and chatbots provide information and answers without having to click on links or read long news stories. This is something that affects web publishers’ traffic, leading outlets like the New York Times to sue artificial intelligence company OpenAI for training on its content. Other publishers, such as Axel Springer, instead license their content to OpenAI for a fee, hoping to get ahead of where the market is headed. For consumers, this means there may be reduced demand for a secondary news app to complement their smartphone’s built-in news readers, such as Apple News or Google News.
Artifact also struggled to gain an international following, which could help it thrive even if US downloads stalled. Appfigures found that the US accounted for 44% of all app downloads. Meanwhile, no other country had a share above 4%. This suggests that the name recognition of Artifact’s famous founders – Kevin Systrom and Mike Krieger, who created Instagram – may not have had as much traction outside the tech scene in their home market here in the US.
Then there was the issue of Artifact’s ever-growing feature set, which began to dilute its strong focus on providing 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 Twitter/X. Soon after, it added an option to share locations, turning Artifact into a real-world recommendation engine. This raised the question of what Artifact wanted to be — was it a social news reader or just a social network? By adding more features, Artifact may have confused users as to when or why they should use it.
The company also continued to tinker with the latest AI tools, such as an AI creation feature to add images to posts or AI summaries in fun styles like “Gen Z speaking”, “explain like I’m five” or even and simple emojis. It started to look like the team wanted to create a new app entirely, like a new social network – maybe an AI-powered Instagram? An Instagram for news? This also left some wondering if Artifact was now just a playground for the founders to try out the latest technology or if it had a planned roadmap.
Artifact was initially 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 capital from investors who might fail to perform.
In any case, Systrom hinted that the end of Artifact might not be the end of his return to the world of tech startups, noting in the blog that he was “personally excited to keep creating new things, though only time will show what that can be. “
Based on Artifact’s progress, it looks like they have a lot of ideas to choose from.
