And both Twitter and Snapchat knew the game they were playing by raising so much venture capital at such high valuations. They could have stayed private longer, raised less at lower valuations and laser-focused on product and making nominal returns. But they chose to go the other route and that means they have to deliver on outsized profits eventually.
There is also a zero-sum game in the war for how I choose to stay in touch with my friends. For each person, they are going to choose one or maybe two ways to do group updates.
SnapChat is this quirky interesting app for people you know and actively want to share things with. You all see each other's stories and have chats that disappear and don't mean anything, in fact a lot times the messages disappear by accident and that's the fun of it, it's an ongoing dumb chat for friends.
I actually find it interesting that SnapChat doesn't push you to connect with other people by e-mail or other oddball algos, it's mostly just through phone number- your uncle's friend can't "friend request" you. It's one of the few apps where if I want to connect with you, I gotta really want to connect with you and if I don't, good luck finding me!
Facebook is a phonebook. It serves a different market, the way LinkedIn serves a different market. The way Twitter serves a different market
Facebook can copy all the features of SnapChat, infact, great! I hope SnapChat can get some royalties for the idea, but I'll reckon a large subset of FB users don't have SnapChat, nor want to even bother messing around with its "confusing" UI. It's nice that this subset can have these new "toys".
SC users aren't going to abandon it for FB though, it's still just THAT vanilla social site where, literally, everyone and your mom is on.
That's correct because their valuation is currently based on future growth. If their growth just stops and let's say they barely add (and let's say they even keep) users, what would the value of the company then be? Certainly a lot less than the currently traded value.
The second question isn't relevant at all. Essentially no one is saying there is something wrong with competition.
I have absolutely no interest in rebuilding or managing my social network across numerous sites or services. The value offered would have to be truly extraordinary to get me to invest the time and effort. I only barely care enough about Facebook as it is to maintain that.
Let Snapchat be Snapchat, Twitter be Twitter, etc. The constant media frenzy over how fast everyone's growing and if they stop growing (aka Twitter) it's the end, just seems bonkers to me. The only reason for this rationale is Wall Street and public stock offerings. Twitter's stock price will sink if they don't continue a hyperbolic growth path. Never mind if the product is good, or if the existing users are happy. I would actually argue that Twitter's product has been floundering and its existing users feeling the blues BECAUSE of Twitter's need to drive growth. If Twitter had decided a couple of years ago to focus on making its existing userbase happy as well as third-party developers contributing to the capability of the network, Twitter would be in a stronger position today.
So I don't agree at all with the premise of this article. Facebook isn't "beating" anybody. If everyone suddenly leaves Snapchat and goes back to using only Facebook, that's not because Facebook is evil, it's because Snapchat looses its ability to develop products people want. If everyone suddenly leaves Twitter and goes back to only Facebook, that's Twitter's own fault, plain and simple.