I've used printstagr.am, and liked it. The prints are fun just like the instagram photos. It would be cool if this were built in to Instagram, and I could mail the prints as a gift.
Yup that's what I was thinking. Build in the functionality to order prints straight from the app. They could expand to postcards which I think would be awesome.
Expand it out even more. If you make a postcard or printout of my photo, give me a cut of the money (even if it's a small one). Let me use that credit towards my own postcards, or if I get a ton of it, cash it out.
It would also encourage brands to put good content up, rather than just being a boring corporate mouthpiece, which is always a plus.
