I think you hit the nail on the head when you said "I think there is legitimate reason to be doubtful about the appeal of these products because they have nothing to do with chatting with friends".
In my opinion, when Snapchat is truly forced to monetize (such as twitter/fb after ipo) it will dillute the core product to the point that people will search for alternatives.
At that point a competitor will get some VC funding after grabbing some users and start the cycle again.
I view this behavior by SV to be just as damaging to the state of the tech industry as housing derivatives were to the housing industry.
I just view the constantly aging 18-24 year old demographic as the main driver of viral growth these days. As that demographic ages out a new flavor of the week will emerge.
Though I have heard the SnapChat CEO is a bit of an egotistical assclown, so he might ride it out alone until the bitter end. He also despises Microsoft, so that rules out one buyer.
I sincerely believe WhatsApp could have survived independently with a $1/yr subscription. They hit a sweet spot of having a 9-digit user base, a small team and not raising crazy amounts of venture capital.
Twitter's valued at only $10 Billion. Snapchat just raised at rumored $18 Billion valuation.
It might seem silly from the outside, but that's actually meaningful because it gets people used to the idea of modifying the "real world" with a contextual addition.
I'll be darned if an insurance provider can make a filter fun
It's also something most small businesses can't really make good use of, unless they are in the entertainment/lifestyle businesses
I closed Snapchat and didn't use it for the entire day. I'm boycotting the X-Men movie out of protest.
Seems you have a pretty good life.
Snapchat allows a follower to consume all of the stories that they follow in a single stream. You only have to tap quickly to go to the next media item. One can also skip one story and move on to the next with a single swipe.
The fact that everything has to be a direct photo or video from a phone also makes every story feel less manufactured and more genuine. For example, I can go to an NBA player's Twitter account and find that personal tweets and messages from their sponsors are completely mixed in a single feed, while their Snapchat feed is all about their day-to-day personal life (which some find much more interesting).
It's the opposite of a link blog, which is what I mostly do; I don't consider my own life to be nearly as interesting to the audience (presumed to be mostly people I don't know) as interesting stuff I can find on the Internet.
The core functionality doesn't necessarily require the network effect to be useful, unlike Facebook, so there is theoretically less reason to stick around if the monetization ramp-up negatively impacts the user experience.
"...we automatically delete the content of your Snaps (the photo and video messages that you send your friends) from our servers after we detect that a Snap has been opened or has expired."
Note that the deletion model is different for non-Snap media:
"Outside of Snaps, the rest of our services may use content for longer periods of time, which means those services may follow different deletion protocols. So, for example, we retain your Story content a bit longer than Snaps so that your friends have more time to view your Story."
Disclaimer: I'm an employee of Snapchat.
I imagine that's what they do.
Then I imagine they're "deleted" off of their servers, but not before being copied to another database that they use internally which isn't attached to the original servers directly.
The much better example is Twitter, which people did indeed say wasn't monetizable, still isn't profitable, and has absolutely tanked since its IPO.
http://www.forbes.com/sites/greatspeculations/2012/07/27/fac...
All the data showed that Twitter wasn't monetizable, yet people still threw huge valuations at it.
There is nothing wrong with building apps and platforms that don't have clear paths to monetization, I just don't see why any sane VC would ever invest in one.
I just don't like the acknowledgement that most of their investments will fail.
Snapchat turning him down was an echo of that enthusiasm and market knowledge. Quiet determinsim & with only that to go on, the market assumed it was a zuckerberg story: knowing much more than everyone else and being able to see the companies future.
That was bold, and that took guts to do what snapchat did, and turn down money. However, facebook grew up in a totally different time. After 7 years facebook raised slightly less than this capital raise and it was just fundamentally a better/different company. But chiefly, Facebook's value materialized after this as Mark expected it to. By value, I mean on many levels. Snapchat's has not. The product hasn't evolved (again I don't use it, but apparently) very much. Facebook, adn the team stormed pictures, mobile, developer centric apis (becoming a core authentication cornerestone and identity tool), streamlining feed data, and matching algorithims. Snapchat, to a non-user, appears to fall flat in positive significant improvements. There seems to be one feature I have read about that is relatively new, that is universally hated. It is the only thing I have read about that seems like a departure from text messages I can never see again.
First off, advertising revenue was super important and a semi-reasonable monetization strategy back then. Facebook had officially won the network effect social game. It was the beneficiary of the largest social network to exist, ever. Also, their content was aggregated and stored and has been for a decade. They have massive amounts of user data and a distribution network. You really can't replicate 5 years of content in a single place and a network that is ~1/10th the size of earth. Facebook is google for people, it is a search engine.
Snapchat does not have a clear monetization strategy and the content they have is ephemeral. If a snapchat clone came out tomorrow, snapchat wouldn't be as sticky. Snapchat looks like twitter, the poster child for massive high engagement with disposable content and horrible biz fundamentals. In fact, twitter or facebook could clone snapchat probably super easy and enjoy crazy leverage and synergy. The only reason a 3rd unknown party can't is network penetration.
The thing about twitter, is that it is a realtime sentiment protocol that allows data-mining by forcing humans to condense thoughts into a single data object called a tweet. Creating your own data transmission protocol and having end-to-end control of it has huge potential. They can distribute their api & data objects to news, politicians, entertainers, hedgefunds and also allow advertising and purchase execution.
Uniting this data object with something like a hashtag allows them to track global trends. Where as Snapchat allows you to send dickpicks to horny girls you want to sleep with. So I am all for people trying to procreate and I have even had sex once or twice myself, but snapchat has a worse monetization strategy than twitter, and they really would need a facebook size IPO to pay back investors.
FB raised 16B in a horribly botched IPO. That would 10x the last money in, which has probably horrifying ratchets and clawback clauses. So, an admittedly super popular app that has existed for 5 years doesn't justify a 16B ipo at 100+B in 2 years like facebook did unless they think they can charge like $1 like whatsapp did, but that proved to be shitty for them. Was that acq. worth it? IDK, but certainly no PE firm would do it, only a huge company based 100% on realtie social connectedness.
I don't want to hate too hard, snapchat is cool (i don't use it myself) and many people find it a staple of their day. Especially trnedy demographics like postlennials. However, if my generation (millenials) is any indication, these kids are going to have way less money, be much less willing to pay, and came out of the womb with adblock, ublock and a propensity to jump around numerous social networks.
edit: fossuser pointed out, which I had forgotten/totally missed, that post facebook/snapchat deal facebook did clone snapchat with poke in a 2 week sprint and spent the next 1.5 years hacking on it. It did fail, and they shunted the project. Here is the IBM advert fossuser was speaking about and the Evan Spiegal quote[0]
[0]http://techcrunch.com/2012/12/21/snapchat-co-founder-evan-sp...
This is fundamentally wrong. I'm an advertiser and I have seen so many Snapchat campaigns work tremendously well for brand advertisers. All for large established brands who are spending solid amounts with the platform.
Much of the hard work is ahead for the platform in terms of measurement and clear steps to defining and achieving ROI metrics such as awareness, brand uplift all the way through to DR elements such as traffic, leads, mobile installs and conversions.
The company makes huge strides very often updating media packs, incorporating measurement (Nielsen) etc. I expect very smart acquisitions in terms of continuing to drive user growth on the consumer side and build out of measurement / ads API to cater to the agency world in the next 12-18 months.
An IPO for snapchat is some time away but it is building a very real commercial organisation amongst brands, advertisers, agencies, the TV community (look at the viacom deal recently).
Also to your point here:
"FB raised 16B in a horribly botched IPO."
You can't say a company raised $16bn and had a horrible IPO. This really doesn't make any sense irrespective of all the ratchets and clawback clauses (none of which will keep any FB exec up at night let alone the CEO). Look at FB today, you should be kicking yourself if you had the chance or even thought about buying the stock at $17 when it was being shorted like crazy by Wall Street.
however, like pg said about whatsapp acq, it was like taking the atomic mass of company. who are you going yo believe, mark zuckerberg, the guy who is betting hos company amd his own money and furure on it after extensive talks, internal fb ops kniwl, and access to WA books, or TC pundits. (clearly my summary, not direct wuote. was video interview, tough to find source)
i do believe still, to disagree somewhat, that fb ipo was botched. point i was making is that facebook was a very strong company (at least rel to SC) and the IPO was indervalued because of scandal and technical errors. even undervalued, a comparative IPO for snapchat would still require a huge increase in real revenue and numbers.
it is a steep climb, if we say FB was $100B and dont adjust for the interference of several problems (glitch, scandal, info leak) snapchat would have to justify real profitability and massive rev growth. maybe they have that, but (advanced apologies for no citation) facebooks revenue indicated by their s-1 filing was 3.7 billion with 0.845B users.
This is a real question not rhetoric: Do you think snapchat can achieve these numbers given 3 years?
I do expect the revenue to ramp significantly for FB, TWTR, IG, Snapchat etc over the next 3-5 years based on client demand. In five years time, all the strongest aspects and best practices will really be established by brands and agencies and the ad dollars will subsequently follow. Much of the overall digital budget is moving quickly downstream to social platforms. This pace will quicken over time as all brands will need to spend on these platforms to fulfill reach capabilities. All big brands need to be able to reach millions of users at scale which comes with significant media investment or revenue for these social platforms. We're only four years in and it will be an area I am betting the next 5-7 years of my career on.
there have been plenty. facebook even launched one
what was the Facebook snapchat clone? I haven't heard of a large scale effort to clone snapchat yet. If I were to build a comparable universe of companies for snapchat, I would say it is a lot like tinder, twitter and foursquare.
Then Evan responded by copying Apple and saying 'Welcome Facebook, Seriously'. On an unrelated meta note I found this annoying because it originally came from people building personal computers and not dumb ephemeral messaging apps.
Maybe Snapchat can do what Facebook and Google have done and become a real technology company, but so far feels more like twitter (lots of users, but unclear vision).
Its launch: http://techcrunch.com/2012/12/21/facebook-poke-app/
A comparison with snapchat: http://techcrunch.com/2012/12/21/facebook-poke-vs-snapchat-w...
Its death: http://www.theverge.com/2014/5/9/5700732/facebook-poke-is-de...
That's how absurdly sticky Snapchat is.
It's been emulated many times over (incl. as mentioned above, by Facebook) – yet you haven't even heard of a single one.
Say you have a Snapchat account and follow 25 of your friends. Each of them are active and contribute 30 second snap stories maybe 4 times a day.
That means it's 50 minutes of footage. A day.
Say it's not just friends anymore but you're also following brands or brands pay your friends to act out something as well.
Snapchat is the new MTV.
With instant ability to chat with whoever, whenever, in augmented reality.
After 20 years on the internet this shit is so future.
Think like a younger Millennial (18-25 right now). Their whole social lives have been in public on FB/etc. They're going through a horribly awkward time in their lives, but it's all public. When they act like an immature kid, or aren't sexy, or whatever, that is recorded for all time.
So they feel incredible pressure to be sexy/fit/cool/smart/doing interesting things. People take hundreds of selfies to find the one that meets (what they think) their peers expect.
The pressure to be cool and attractive is intense. With FB, there is no escape.
Now Snapchat offers the opposite. People can "let their hair down", not have to look sexy or be cool, because the message is just temporary.
Most of the time I want candids, not portraits. FB made everything a portrait (intended for consumption by future selves/others).
SnapChat brought it back to the present by making it temporary.
Can't they just change how the stuff they posted on FB is shared?
Does it really matter to you that someone got billions of dollars so that 100 million people every single day gets an hour at least of entertainment intermixed with native advertising that snapchat charges $100k a day for?
Does the world really need you, personally, to worry and save them from this?
Does the world really need you, personally, to wander around a museum and remarking on how much a Picasso or Hirst is really worth?
Your ego makes you blind. Your cynicism makes you jaded. Go build something and don't stop until your work is being considered as such.
> go build something.
i mean, i am. but again, i was just legit curious what i was missing. no need to be a dick about it.
edited out some info
> Brilliant and great insights building on what’s happening now and been happening in the tech industry. Interacting with someone/something that doesn’t judge me opens up a new dimension of conversations. It might normalize honesty in society.
Quote I found interesting.
What makes you say that? Do you know how hard it is to get your social network to move to a new thing? The clone would have to have an amazing benefit, which Snapchat would be in a decent position to clone themselves.
With that said, that is probably the least percentage reason as to why people use it. The greatest being for sending half naked photos to strangers.
Snapchat has more features than sending a simple text. I still use text message pictures when I just want to send a picture. Snapchat lets you caption and draw on photos, which is a big draw. The erasing part of it is a feature too, and not just for nude pics. For example, sometimes I send off color humor to my friends and knowing that the joke's going to go away in 5 seconds makes me less hesitant to send. I don't think my friends themselves are going to screenshot the pics and try to disparage me, but I would feel uncomfortable if I were to email something to them that may accidentally be seen by an SO or parent.
I'll grant you the feature of drawing on pictures though.
I'm not concerned or uncomfortable with the message itself; my concern is that the message goes exclusively to its intended audience. An email or text message can sit around and eventually be viewed on accident or by someone nosy. At least with Snapchat, I have a level of assurance that this possibility is minimized.
Hell, most of us do it in real life. I say plenty of things I wouldn't necessarily want provided to my mother or employer, and small audio recording devices are cheap. I trust my friends and partners to not save and share unflattering snaps the exact same way I trust them to not record our real life conversations.
If you're planning to run for President some time in the future, maybe it's worth it to always act as if the public is watching. I think the rest of us are fine.
I'd argue it's stupid that we archive and collect every meaningless conversation we have.
Another way of phrasing that argument is that if you look through my snapchat screenshot folder vs the received images from my SO, the snapchat screenshot has a higher density of content worth keeping.
Between my SO and I, for stuff that's more memorable and may want to be saved, we'll use email, but for stuff like "look at this weird sign I saw downtown", we'll use Snapchat. An app is all about its use cases.
All the person wants is confirmation of existence, and most of the time they are not actually interested in a real conversation.
That because you, personally, don't understand why you would do such a thing therefore said thing is invalidated.
It's lazy.
Additionally taking that point of view outs you.
Much like how when I was 16-23 and creating things on the internet when there was only 100MM users and people were wondering why anyone would want to spend all that time on the computer.
Or ever make a webpage.
Or put their information online.
Or meet people you've only emailed.
Or use a credit card to buy things.
All in all, the answer is always: there are 7 billion of us out here, the world doesn't revolve around you, grow up.
Personally, I think one good way to see why people use the product is to 1) be in a relationship, and 2) regularly send pictures of what you're doing / funny things you've encountered / your face, back and forth with your partner.
Where I feel like there is legitimate criticism of Snapchat is their ability to monetize. Unlike Google, there is no purchasing intent. Unlike Twitter or Facebook, there is little ability to target users beyond age/gender/location (and no amount of computer vision in the short term will change that). Their Discover / Live products (which allow you to see snippets from brands / news channels / publishers) are promising but unlike the core product, I think there is legitimate reason to be doubtful about the appeal of these products because they have nothing to do with chatting with friends.