I think the key is at least from an enduser perspective instagram was a startup doing something "new". So there's first mover advantage, etc.

This is a different scenario, "we're just like amazon/walmart/wholefoods but greenwashed marketing and they have first mover advantage". Even greenwash marketing isn't a new idea. Its more like competing in the restaurant arena or maybe brick n mortar retail than real "startup".

It seems like in 2010 it would have been easy to get funding for an e-commerce site because investors all wanted a zappos, rue-la-la, net-a-porter, gilt, etc in their portfolio.

I assume they did even if it didn't have very impressive numbers. Surely they had a document that tracked balances and cash flows, no?

Why is the concept of a balance sheet so arcane that it needs to be wrapped in quotes?

Balance sheet != profits

I'm not even sure how businesses can operate without a way to organize and manage their organizational assets and expenses.

How do you even file taxes without preparing a balance sheet? Even if you're accruing a loss (especially if you're accruing a loss), you file taxes.

Balance sheet isn't about making money. It's about assets, liabilities, and equity.

Everyone should have and understand a balance sheet for their personal finances. You should know that your house is an asset, and the mortgage against it a liability.

Do they spend money? If so, they need a balance sheet.