What is shown
The picture shows Barack Obama in an outline drawing in the rage comics style: the face is tense, the lips are pressed together and slightly pushed out, the eyebrows are raised, and the gaze is turned to the side. The expression comes across as both doubtful and appraising, as if someone is trying an unfamiliar dish and deciding whether they like it. The jacket and bow tie are indicated with simple lines, so attention stays on the face.
The image is based on a real photo, so the meme has a specific reference to an actual event. For a viewer familiar with the original situation, the drawing immediately connects to that specific moment, and the caption "Not bad" turns the expression into a joke about a pleasant surprise. It's exactly that link between a recognizable face and restrained praise that makes the picture so convenient to reuse.
Origin
The original photo was taken by a Reuters photojournalist on May 24, 2011, during the first state visit of Barack and Michelle Obama to the United Kingdom. While the couple was meeting Queen Elizabeth II at Buckingham Palace, Obama was caught on camera with a tense, somewhat bewildered expression. The Telegraph published the photo in its "Picture of the Day" feature two days later.
On May 26, 2011, a user with the handle joeyjoejoe99 posted a comic called "Not Bad Obama" on the subreddit f7u12, in which the photo was rendered in rage-face style and captioned with the red word "Not Bad." The same day saw a version called "Not Bad, Michelle" with Michelle Obama's face, followed by variants swapping in other faces. The image came together very quickly, just days after the photo was published in the press.
How the meme spread
Following the first comics, the meme was picked up by sites that collected rage faces: Memebase, Ragefac.es, and All The Rage Faces. The Daily Mail ran a caption contest for the photo, and The Daily What published a roundup the same day. The expression began being used without any connection to Obama, becoming a general shorthand for that kind of look and for restrained praise in general.
Interest in the meme lasted a long time: search queries started rising in late May 2011 and remained noticeable as late as January 2012. It's also known that during a Reddit AMA in August 2012, Obama typed the words "NOT BAD" in capital letters, although a connection between that remark and the meme hasn't been confirmed. That episode shows how internet expressions sometimes outgrow their original context.
Typical use and how the joke works
The meme is usually used as a reaction to a pleasant surprise or a result that turned out better than expected: a successful exam, a surprisingly good dinner, winning an argument, or good news. The caption is short and sounds like restrained praise without excess emotion, matching the image's overall tone.
The humor rests on a mismatch. The face looks not thrilled but rather doubtful, and the caption "Not bad" sounds calm. Hence the effect: the person says everything is fine, but their expression gives away that the result genuinely impressed them. That tone made the meme convenient for everyday conversation, where you want to acknowledge success without a lot of fanfare.