A little over 3 years ago, Snapchat CEO, Evan Spiegel turned down a $3 billion dollar acquisition offer from Facebook in a move that made the world go W, T, F. The audacity, the ego, the stupidity, the balls. Evan’s decision after he met with Zuck, was nothing sort of focused and calculated and was seen as both bold and foolish. Whatever it was, he was prepared, going as far as to buy his whole team The Art of War, by Sun Tzu, imploring its tactics, paired with an addictive product to drive his team into battle.
Fast forward to 2017 and the yellow ghost is at its prime. Now rebranded as parent company Snap Inc, where Snapchat will be one of many products focused on the camera, Snapchat is about to IPO on the NYSE for a projected 8X the amount it turned down just years ago. Last week was riddled with news of the public filing and the company once completely shrouded in secrecy gave us the most intel we’ve ever seen.
There’s a lot of speculation on whether you should buy or not and what all the data means for the company and its investors. The gist is essentially that Snapchat has strong engagement, slowing traction (due to Facebook, Instagram, and international apps like Snow straight up copying its features), but a solid plan for monetization and a stern promise of innovation. With 158 million insanely engaged daily active users, no shareholder control, halting growth but a strong team, the future of Snapchat is pretty uncertain and may be just as ephemeral as a disappearing snap, or a serious contender in the future of communication and visual storytelling.
Whether you like him or not, Spiegal is a visionary, he controls the Snapchat product, and the success of Snapchat comes down to Evan Spiegel and the company’s ability to innovate. So far he’s hit consistently. Disappearing messages were original to Snapchat, no one could have ever predicted Stories, and that too was original to Snapchat. Lenses that fit on your face and interact with daily life, are original to Snapchat. Spectacles…Snap Inc for the win. Everyone else has been the copycat and Snapchat the originator, leading many including Google chairman Eric Schmidt to call its supreme leader the next Zuckerberg or Bill Gates.
In the filing Snap says “The best way to compete is to make great products that people will want to use.” Sounds like they get it. The quick move to IPO suggests they need this money to innovate, but we need more than just TV on Snapchat. We need the next Snapchat. If Snapchat can continue to see future they’ll have an edge, but it’s important for Snapchat to create things that are a little more defensible, so other companies can’t quickly copy.
Snap Inc is a camera company, they are right to focus on this. Will Snapchat be successful? We’ll see. We’ve often heard that Evan doesn’t make product decisions based on data, but on his gut, and so ultimately, that’s our advice to you, go with your gut. Until next time…