Snapchat has reportedly filed confidentially for its massive IPO(techcrunch.com)
techcrunch.com
Snapchat has reportedly filed confidentially for its massive IPO
https://techcrunch.com/2016/11/15/snapchat-has-reportedly-filed-confidentially-for-its-massive-ipo/
164 comments
From a shareholder and advertiser's perspective, Snapchat was already hitting viewership parity with tv's most popular shows nearly 2 years ago. 30% of millenials are on Snapchat, one of the most expensive demographics to reach through television. Like it or hate it, Snapchat hit critical mass a long time ago.
Snapchat vs. Television - https://gigaom.com/2015/02/24/snapchats-our-stories-are-gene...
Pretty Up-to-date Metrics - http://expandedramblings.com/index.php/snapchat-statistics/
Snapchat vs. Television - https://gigaom.com/2015/02/24/snapchats-our-stories-are-gene...
Pretty Up-to-date Metrics - http://expandedramblings.com/index.php/snapchat-statistics/
That is a massive demographic to dominate. The fact that boomers and x-ers don't understand makes Snap an undervalued buy.
http://www.goldmansachs.com/our-thinking/pages/millennials/
http://www.goldmansachs.com/our-thinking/pages/millennials/
Instagram still has very strict rules about nudety which makes it's a no go for the adult industry and has even ruffled quiet a few feathers with fashion designers and other content creators who may show the occasional nipple even in a none sexual way.
MAGNIFICENT analysis.
I'm fully aware this is anecdata. But I can tell you I'm not alone on this. I just shared my experience. Sorry.
People dont want to be tagged on snapchat, their audience likes exactly the opposite.
You are right. The point I'm trying to make is that brands (and some people) wants the opposite. It would be perfect if at least we had some option to allow tagging or something like a business account.
On instagram stories now you even can have a link to an external page!
On instagram stories now you even can have a link to an external page!
Snapchat is not going to do this. Facebook's business model is built around ads disguised as content, whereas Snapchat makes the ads clear and separate from the content. Snapchat is more like TV -- if you want to promote your brand, buy an advertising slot.
I'm not sure why you were responded to that way, these are all valid concerns that would stop growth in Snapchat, which an investor should be aware of!
>but I couldn't tag anyone, or hashtags, discoverability is a serious issues in that platform.
You're looking at it through the lens of a professional photographer, though. When I speak to young people the lack of discovery isn't a concern at all. If anything I'd contest that is one of the reasons Snapchat grew so quickly—you aren't tagged without you realizing it in a friend's picture, your parents aren't searching for your name, etc.
You're looking at it through the lens of a professional photographer, though. When I speak to young people the lack of discovery isn't a concern at all. If anything I'd contest that is one of the reasons Snapchat grew so quickly—you aren't tagged without you realizing it in a friend's picture, your parents aren't searching for your name, etc.
And you're looking at through the lens of a user, rather than a shareholder. The teens may not care about discovery, but the people selling to those teens do.
Oh, you can pay for discoverability. No shareholder issues there.
I sometimes wish I could be better at exploiting what shareholders believe -- which would involve a certain degree of cycicism. (I think your first paragraph is right, but I think you second paragraph is believed-by-shareholders-but-absolute-bollocks. I'm guessing you'll agree.)
¿Porque no los dos?
It definitely sounds like Instagram is a better fit for that. But is that really Snapchat's core use case?
There's definitely some overlap in uses, but instagram isn't a complete replacement for Snapchat. And the areas where instagram doesn't cover snapchat, it seems like are snapchat's primary uses.
There's definitely some overlap in uses, but instagram isn't a complete replacement for Snapchat. And the areas where instagram doesn't cover snapchat, it seems like are snapchat's primary uses.
Maybe you could describe the core use case? I was nodding my head all through that comment because I feel like I should like Snapchat, seems like everyone else does, but after each of several attempts I just uninstalled it because I would open it and wonder what I should be doing on it. I just didn't find myself experiencing things that were worth pulling out my phone for but not worth keeping permanently. And I just couldn't find accounts who posted anything worthwhile on there often enough.
It's great for a light, whimsical touch. Throw stuff at the wall and see what sticks. Photos of yourself making a fool of yourself, everywhere, all the time. Stupid puns, stupid jokes, stupid selfies, stupid stuff which is really the best stuff, if you ask me :). No ultra well thought out filtered perfect square omg look at the color chroma jesus on my toast kind of photos. That'd be a waste of time. Just passing thoughts, fleeting moments. It's so great for a light touch to keeping up with far away friends and family. You don't need a reason to send a snap of just your face doing O.O. And it reminds you of each other. But you wouldn't do that over e-mail or Facebook :P.
Do people really have that much time to create and view junk? Random photos of whatever? I'm unsure how this is better than SMS/MMS/iMessage, or how it has more value. Twitter with pics and video in private groups?
Have you been in a new relationship recently? Anecdotally it's pretty common for a couple to send pictures to one another of their faces through Snapchat - just nice to see each other and see what each other is doing. This is a classic Snapchat use case.
My wife and I do this all the time and we've been together 16 years...
> Do people really have that much time to create and view junk? Random photos of whatever?
Yes. It's the equivalent of a casual conversation. Think watercooler/bar. Or indeed HN. Do you really spend every waking minute doing stuff for the ages?
> I'm unsure how this is better than SMS/MMS
Cheaper. Working group support.
> /iMessage
Not iphone-only
> Twitter with pics and video in private groups?
Does twitter even do that? Don't you have to upload the pics/videos somewhere? Certainly I would never think to open the twitter app and send a photo or video with it.
Yes. It's the equivalent of a casual conversation. Think watercooler/bar. Or indeed HN. Do you really spend every waking minute doing stuff for the ages?
> I'm unsure how this is better than SMS/MMS
Cheaper. Working group support.
> /iMessage
Not iphone-only
> Twitter with pics and video in private groups?
Does twitter even do that? Don't you have to upload the pics/videos somewhere? Certainly I would never think to open the twitter app and send a photo or video with it.
Haha... exactly. today I didn't even have time to eat lunch at my desk. How do people have time to create and view that many random snaps?
Work-oriented people seem to have hard time understanding what makes most people happy. Friends, family, sex. Maybe they care about their friends and loved ones? Maybe seeing them brings happiness to them. A honest intimate photo which is not meant for public consumption.
My primary use of snapchat today was soliciting fashion advice from friends and showing a neat coffee art.
I don't think the dozen photos of me in different shirt and tie combinations need to be permanent, but it was immensely helpful my friends could see the options.
Similarly, I see neat coffee art every few days. For the last decade. I don't need 1000 photos of coffee art online (particularly since the collection leaks personal info), but it's nice to be able to share a moment with friends while reading the paper.
Snapchat is great for "here is a little, ephemeral peak at the banal reality of my life", which isn't useful for marketers but is great for a little moment between friends.
I don't think the dozen photos of me in different shirt and tie combinations need to be permanent, but it was immensely helpful my friends could see the options.
Similarly, I see neat coffee art every few days. For the last decade. I don't need 1000 photos of coffee art online (particularly since the collection leaks personal info), but it's nice to be able to share a moment with friends while reading the paper.
Snapchat is great for "here is a little, ephemeral peak at the banal reality of my life", which isn't useful for marketers but is great for a little moment between friends.
You are like the majority of people out there... fear not! Most of us go on a hike or run and our first thought is to enjoy the moment, not share via some contrived social apparatus designed to, ultimately, sell us shit.
It is actually a crime in our family to pull your phone out at dinner. Don't do it if you want to keep your fingers or keep Mama's fork from entering the back of your hand. No food selfies here!!!!
This is all just a phase.... I hope. Because social networking in the current form is insufferable.
It is actually a crime in our family to pull your phone out at dinner. Don't do it if you want to keep your fingers or keep Mama's fork from entering the back of your hand. No food selfies here!!!!
This is all just a phase.... I hope. Because social networking in the current form is insufferable.
Use case wherein people get paid, yes.
There are a great many other ways to get paid than those in the OPs post.
Care to elaborate? Without any discoverability I'm having a hard time thinking of any.
[deleted]
This. IMO Snapchat is very hard to use for any kind of business application since it has no discoverability whatsoever.
My wife has 90k+ followers on Instagram and started using Snapchat up to the point where she had 4k+ views a day. When instagram launched the new stories thing she started using it slowly and has pretty much stopped using Snapchat now.
I always told that for her use case Snapchat wasn't a good fit because there is no way other than entering the username or scanning a qr code for her to be found and you have to rely on people not being lazy to add you.
Anyway, I still can't understand why hasn't Snapchat added some sort of search or trending profiles yet.
My wife has 90k+ followers on Instagram and started using Snapchat up to the point where she had 4k+ views a day. When instagram launched the new stories thing she started using it slowly and has pretty much stopped using Snapchat now.
I always told that for her use case Snapchat wasn't a good fit because there is no way other than entering the username or scanning a qr code for her to be found and you have to rely on people not being lazy to add you.
Anyway, I still can't understand why hasn't Snapchat added some sort of search or trending profiles yet.
Maybe this is why Snapchat is so popular: Because you don't have a shit-ton of businesses targeting you to cram ads down your throat?
Bingo.
But the bone is cooked with the steak. Eventually, the VCs will want a return on the cash, and then you need to have customers that want to use snap-chat. There are 2 options then: Turn it into a paid service that you pay to use, or turn on the ads. I think we all know that most kids aren't going to pony up to use snapchat, so ads it is. They have to turn on the ads, and then, as the marketers are the customers, their voices become the most important. Eventually, all the VC cash is eaten away and snapchat is yet another photo-sharing service with a 'community' and some lite blogging/captioning attached.
But the bone is cooked with the steak. Eventually, the VCs will want a return on the cash, and then you need to have customers that want to use snap-chat. There are 2 options then: Turn it into a paid service that you pay to use, or turn on the ads. I think we all know that most kids aren't going to pony up to use snapchat, so ads it is. They have to turn on the ads, and then, as the marketers are the customers, their voices become the most important. Eventually, all the VC cash is eaten away and snapchat is yet another photo-sharing service with a 'community' and some lite blogging/captioning attached.
The IPO is the liquidity event for the VCs. After that it's the shareholders left holding the bag.
You really think so? If that is the case, why the long delays in IPOs? You'd think that a 'pump-n-dump' scheme would be more profitable then. Provided that you cannot be implicated in this via many shell companies.
Their CEO seems to think so. According to this, he's been racing to IPO all along: http://www.businessinsider.com/snapchat-ceo-evan-spiegel-we-...
> But the bone is cooked with the steak.
I've never heard that expression before! Of course googling it I get a million steak recipes. Can you explain what it means?
I've never heard that expression before! Of course googling it I get a million steak recipes. Can you explain what it means?
Basically that it isn't all "tender and delicious meat," i.e. the good stuff. You have to have the bone (a way to generate revenue) with the meat (the fun content for users) before you can cook and serve it (continue to support it).
Hope that helps!
Hope that helps!
[deleted]
I'm calling it now: Snapchat adding discoverability features in a few years is the beginning of the end.
It makes sense and that's very acceptable strategy to follow. But, at some point everybody has to offer a way for business to work with them so they can earn some money, isn't that right?
Unless Snapchat is not after money...not now at least.
Unless Snapchat is not after money...not now at least.
Then how do they make money? If they are going public then they will need to satisfy their investors, not their users.
They sell sponsored filters, iirc Snapchat is already profitable.
Heck yeah, The wave of the future is filters of selfies! Ranks right up there with Insulin, Oil extraction, Bridge construction, Mining, and more! Who would've thought?
You'd be surprised then to learn that Line makes $270M/yr on stickers.
Think of these as fashion items. Trend-driven, fleeting, and a way for people to make statements about themselves. Many here might not have much interest in fashion, but there's no denying it is a massive industry.
As augmented reality becomes big and wearables become mainstream, filters like Snapchat offers will clearly grow in demand and value as virtual fashion goods. The interesting thing is the business model because right now advertisers foot the bill, not the consumer.
Think of these as fashion items. Trend-driven, fleeting, and a way for people to make statements about themselves. Many here might not have much interest in fashion, but there's no denying it is a massive industry.
As augmented reality becomes big and wearables become mainstream, filters like Snapchat offers will clearly grow in demand and value as virtual fashion goods. The interesting thing is the business model because right now advertisers foot the bill, not the consumer.
Actually I will go further. I live in Japan and use Line to communicate with everyone except really old people. Stickers are as basic as language. It is an evolution of our current mode of communication and is quite expressive. Like all languages, it occurs somewhat spontaneously, but I can tell you for sure that Line has the lightning in a bottle right now whereas Apple, Facebook, Snap, etc. just don't get it. Like with the original emoji, Japan is a ripe environment for this pictographic language evolution stuff. By the time it becomes cool in Los Angeles, Japan will have leveled up a few times. Related Aside: I'm posting this comment from the Nozomi Shinkansen at 300km/hr...the future is a beautiful place.
It's fleeting. There are lots of social phenomena in Japan that have never taken off in the States and vice-versa.
Remember when Zynga and Farmville were the best thing since sliced bread? Remember the dotcom days when companies were worth millions(Billions) based on potential? That is what is happening here. There is no hook to keep these users for the next 5 to 10 years. Something "cooler/hipper/awesomer/badasser" is being coded right now...
Remember when Zynga and Farmville were the best thing since sliced bread? Remember the dotcom days when companies were worth millions(Billions) based on potential? That is what is happening here. There is no hook to keep these users for the next 5 to 10 years. Something "cooler/hipper/awesomer/badasser" is being coded right now...
Your takeaway from my comment was that I think everything Japan does will later be popular in America? I didn't say that. I do see plenty of examples of stuff that pops in the west years after it was a hit in Japan. However, the point of my earlier comment is that Japan (and many other parts of Asia) have been adapting their language to new media, and stickers are an important extension of that, and thus are tied to quite a fundamental aspect of human life.
> As augmented reality becomes big and wearables become mainstream, filters like Snapchat offers will clearly grow in demand and value as virtual fashion goods.
This version of the future sounds pretty horrible. One could conceivably put a nudity/porn filter on everyone... or much, much worse. The hacks are going to be epic... can you imagine your fresh new filter getting a ddos attack? Or someone sending out grotesque filters as malware...
This version of the future sounds pretty horrible. One could conceivably put a nudity/porn filter on everyone... or much, much worse. The hacks are going to be epic... can you imagine your fresh new filter getting a ddos attack? Or someone sending out grotesque filters as malware...
Possibly horrible in some ways, awesome in others. I'd hope for an ecosystem where users have some semblance of secure(ish) control in terms of what is overlaid in their device's viewport, and what others see for them.
But as a user, like with browsers, I'd always want the ability to trump what settings others might be projecting unless it is part of say, an app experience where I'm agreeing to it under the ToS. That way if someone is being offensive with something I don't like, I can decide to switch it off. And I could of course just turn off the AR experience altogether if needed.
But nudity/porn filters will almost certainly be a thing, as will something that cross-references LinkedIn data with other websites to tell you everything you wanted to know about someone including their estimated salary, where they live, how much they paid for their home, etc.
The fascinating part of the next 10-20 years will be observing how the AR ecosystem evolves, how open it will be (hah...), and how society responds. I imagine that like most major shifts in communication and technology, young people will adopt this stuff instantly, and old people will push back because it is offensive, or they can't control it and enforce their viewpoints. History tends to repeat itself in that regard.
But as a user, like with browsers, I'd always want the ability to trump what settings others might be projecting unless it is part of say, an app experience where I'm agreeing to it under the ToS. That way if someone is being offensive with something I don't like, I can decide to switch it off. And I could of course just turn off the AR experience altogether if needed.
But nudity/porn filters will almost certainly be a thing, as will something that cross-references LinkedIn data with other websites to tell you everything you wanted to know about someone including their estimated salary, where they live, how much they paid for their home, etc.
The fascinating part of the next 10-20 years will be observing how the AR ecosystem evolves, how open it will be (hah...), and how society responds. I imagine that like most major shifts in communication and technology, young people will adopt this stuff instantly, and old people will push back because it is offensive, or they can't control it and enforce their viewpoints. History tends to repeat itself in that regard.
If like me you've never heard of Line, it seems to be a series of apps around standard comms (like WhatsApp, etc.) and device theming.
https://line.me/en/family-apps
https://line.me/en/family-apps
The day IG stories debuted I stopped using Snapchat - removed the friction as I was essentially following the same people
Well you were using the wrong tool for the job. Snapchat is for sharing transient data with a small intimate group. It's not meant for business at all. Instagram is designed for the kind of thing you just described using Snapchat for.
It's just like if you displayed your art at your local bar instead of the local art museum, and complained that only your friends saw it instead of new audiences.
It's just like if you displayed your art at your local bar instead of the local art museum, and complained that only your friends saw it instead of new audiences.
I mean I had about 5k views per snaps. That means people were interested in the content I was posting. It's really that crazy to think that content creators wanted to monetize their fan base?
I don't think is a bad tool at all, I do believe that as it is today is just not good enough. To be honest, If it weren't for Instagram I'd still be using it.
I don't think is a bad tool at all, I do believe that as it is today is just not good enough. To be honest, If it weren't for Instagram I'd still be using it.
As an internet marketer I have got to agree with you on this completely.
No one wants to even give a second of time to the ads in Snapchat. They are obtrusive and in the middle breaking up the content you want to see.
For personal branding Snapchat is great. For communicating directly with people you care about, Snapchat is great.
I honestly don't see it going anywhere beyond that. Probably going out of business due to a lack of revenue.
No one wants to even give a second of time to the ads in Snapchat. They are obtrusive and in the middle breaking up the content you want to see.
For personal branding Snapchat is great. For communicating directly with people you care about, Snapchat is great.
I honestly don't see it going anywhere beyond that. Probably going out of business due to a lack of revenue.
Snapchat makes money from more than just ads.
People (and businesses) pay for filters. I've seen people do them for their weddings.
Also, there's the featured content, which seems pretty popular.
People (and businesses) pay for filters. I've seen people do them for their weddings.
Also, there's the featured content, which seems pretty popular.
The filters are a great way to monetize but recently they've had to go beyond that.
As they're launching their IPO they are expecting the platform to grow in order to make the investors money. I'm referring more to the IPO than the company's viability as a long-term small to medium size business.
As they're launching their IPO they are expecting the platform to grow in order to make the investors money. I'm referring more to the IPO than the company's viability as a long-term small to medium size business.
"Probably going out of business due to a lack of revenue."
No. This isn't really that true, the business has placed a great deal of investment on the following: hiring sales people, partnering with measurement (millward brown, nielsen) selling ads like crazy at a premium to the largest F500 brands in the world.
The biggest content creators, celebrities and normals are on the platform. They are creating new forms of expression which have been copied by incumbents namely Instagram.
They have made their first steps into hardware with spectacles which have generated similar type of hype as Yeezys.
So your arguments are not strong enough, its actually laughable you think it lacks revenue. When the S-1 document is public and the gross margins and employee count are revealed we'll see all the risk factors clearly.
Given that the founders most likely own most of the stock, this is a company that is definitely going to succeed as so many people want to work with them.
For an internet marketer you are woefully off the mark with comments like the above.
No. This isn't really that true, the business has placed a great deal of investment on the following: hiring sales people, partnering with measurement (millward brown, nielsen) selling ads like crazy at a premium to the largest F500 brands in the world.
The biggest content creators, celebrities and normals are on the platform. They are creating new forms of expression which have been copied by incumbents namely Instagram.
They have made their first steps into hardware with spectacles which have generated similar type of hype as Yeezys.
So your arguments are not strong enough, its actually laughable you think it lacks revenue. When the S-1 document is public and the gross margins and employee count are revealed we'll see all the risk factors clearly.
Given that the founders most likely own most of the stock, this is a company that is definitely going to succeed as so many people want to work with them.
For an internet marketer you are woefully off the mark with comments like the above.
> The biggest content creators, celebrities and normals are on the platform.
So does twitter and they are losing money every quarter. I can see snap becoming the next FB or the next twitter but I will definitely be betting on the latter due to the lack of data.
> Given that the founders most likely own most of the stock, this is a company that is definitely going to succeed as so many people want to work with them.
I'm sorry, what? How does that correlate at all?
So does twitter and they are losing money every quarter. I can see snap becoming the next FB or the next twitter but I will definitely be betting on the latter due to the lack of data.
> Given that the founders most likely own most of the stock, this is a company that is definitely going to succeed as so many people want to work with them.
I'm sorry, what? How does that correlate at all?
Companies where the founders own a large % of the stock will tend to do better. This will play out more strongly across all sectors over the long-term.
Also, given that I am a target customer that interacts with Snapchat and runs their ads and invests reasonably heavily I am better placed to judge than you are.
The ad products need a lot of work, no doubt about it, but the engagement and earned media generated is super high for a product that doesnt have a biddable solution in place just yet. My clients would agree with me.
The lack of data is being worked on, as I mentioned there are partnerships with Millward Brown and Nielsen. The business will also end up buying 3rd party data and matching it against its user base in order to provide a competitive solution to FB.
The difference is Snapchat doesn't want to collect every single datapoint about a user like FB does.
Despite a set of ad products that are far from the best they can be, this hasnt stopped advertisers wwanting to use the platform for campaigns. Early results are very positive and improvements will come leaps and bounds. Plenty of my most talented peers / colleagues have recently joined snapchat. They wouldn't if the company wasn't doing well, it is.
I am betting it will succeed where Twitter has sadly failed based on the fact it has created a completely different form of communication and expression.
Also, given that I am a target customer that interacts with Snapchat and runs their ads and invests reasonably heavily I am better placed to judge than you are.
The ad products need a lot of work, no doubt about it, but the engagement and earned media generated is super high for a product that doesnt have a biddable solution in place just yet. My clients would agree with me.
The lack of data is being worked on, as I mentioned there are partnerships with Millward Brown and Nielsen. The business will also end up buying 3rd party data and matching it against its user base in order to provide a competitive solution to FB.
The difference is Snapchat doesn't want to collect every single datapoint about a user like FB does.
Despite a set of ad products that are far from the best they can be, this hasnt stopped advertisers wwanting to use the platform for campaigns. Early results are very positive and improvements will come leaps and bounds. Plenty of my most talented peers / colleagues have recently joined snapchat. They wouldn't if the company wasn't doing well, it is.
I am betting it will succeed where Twitter has sadly failed based on the fact it has created a completely different form of communication and expression.
There may be brands looking to drive awareness, like a P&G or Coke or Nike looking to sell you more crap, but advertisers who care about driving sales, measurable sales are not going to be using the platform.
As a marketer for a F25, the platform is a joke.
So tell me why advertisers pour out billions for TV ads? Same concept/format?
Awareness, as I mentioned. But the TV medium is dying. Internet marketing is thriving b/c of the ability to target users/consumers with the right ads, at the right time...when you don't have am option to do that, then it falls apart.
Meanwhile for companies like FB, who mine every aspect of your life, the service is now valued at over $300Billion
Meanwhile for companies like FB, who mine every aspect of your life, the service is now valued at over $300Billion
[deleted]
I don't think that is snapchats appeal
There are a lot (15+) of people 25 and under in my family and I can tell you every single one of them uses Snapchat. While Instagram Stories very much replicates the general function of Snap, I really want to know some of those engagement numbers based on age, or even geography, and if it really has been all that much of a gut punch since that Instagram feature rolled out.
I definitely think there's an "age thing" with regard to Snapchat.
I'm 37 and I can think of maybe two or three friends around my age that use Snapchat. On the other hand, both my recent ex-girlfriend (24) and current girlfriend (22) use Snapchat constantly (exaggeration perhaps, but 20+ times a day is not unusual) and, of course, all of their friends do too.
I'm 37 and I can think of maybe two or three friends around my age that use Snapchat. On the other hand, both my recent ex-girlfriend (24) and current girlfriend (22) use Snapchat constantly (exaggeration perhaps, but 20+ times a day is not unusual) and, of course, all of their friends do too.
I'm a photographer and a college student
I use instagram for posting photos, I have a lot of followers who aren't my friends
I use snapchat soley for communicating with my close friends
so for me, they both have distinct use cases that aren't too overlapping
I use snapchat soley for communicating with my close friends
so for me, they both have distinct use cases that aren't too overlapping
plus now I can tag brands/models/makeup artists/ etc.
I think snap do not give this option because they want have control about who pays and who get paid using the platform. At least for now.
Maybe their next step will be in this direction, making something similar to youtube. Sharing the revenue of ads with a larger pool of content creators.
I think snap do not give this option because they want have control about who pays and who get paid using the platform. At least for now.
Maybe their next step will be in this direction, making something similar to youtube. Sharing the revenue of ads with a larger pool of content creators.
Anecdotal, but as a casual snapchat user I've noticed a significant 50%+ drop in activity by my friends + peers since Instagram launched stories. I use to sign in and have 20+ stories to watch, this morning it is 4.
I feel like Snapchat sees the writing on the wall, and this is their chance for everyone to cash out.
I feel like Snapchat sees the writing on the wall, and this is their chance for everyone to cash out.
I use snapchat a lot to communicate and follow friends. I think their difficulty in monetization will be from not being able to target ads as effectively as Facebook or Google can.
I do not think closed systems have much of a future. They may be hot now, they are not going to last.
When are people expecting this IPO to happen? Early 2017?
It's not so confidential anymore, is it?
Could someone explain
a) Why they need so much money? Don't tell me it's to produce some spectacles
b) Why they are worth so much? I get that they have an interesting user base (young people), but they are having a hard time making money, aren't they?
That $19b WhatsApp purchase hasn't exactly earned a lot of money yet, has it? It's still a very long bet, especially with Facebook being forbidden to collect the data now in some countries.
a) Why they need so much money? Don't tell me it's to produce some spectacles
b) Why they are worth so much? I get that they have an interesting user base (young people), but they are having a hard time making money, aren't they?
That $19b WhatsApp purchase hasn't exactly earned a lot of money yet, has it? It's still a very long bet, especially with Facebook being forbidden to collect the data now in some countries.
a) To build an ad business capable of handling $100m of ads. You need massive investments in sales, infrastructure, tools, etc. to build a business like that
b) They have one of the fastest growing user bases in the social space, their users spends an astounding amount of time on the app (estimated at 30 minutes per day), and their user base is the most targeted demographic for demographics. Also they have literally barely turned on the advertising machine and their initial forays have already hit a revenue run rate of $300M+.
So essentially they have a shitload of eyeballs, the eyeballs are growing massively, their eyeballs spend a lot of time on their app, and advertisers love those eyeballs. Their business valuation is based on massive potential, not current revenues, but their advertising efforts already show huge promise. There is almost no startup with anything close to their engagement, growth, and monetization potential and the last company that looked like them was Facebook. Hence, the HYPE.
b) They have one of the fastest growing user bases in the social space, their users spends an astounding amount of time on the app (estimated at 30 minutes per day), and their user base is the most targeted demographic for demographics. Also they have literally barely turned on the advertising machine and their initial forays have already hit a revenue run rate of $300M+.
So essentially they have a shitload of eyeballs, the eyeballs are growing massively, their eyeballs spend a lot of time on their app, and advertisers love those eyeballs. Their business valuation is based on massive potential, not current revenues, but their advertising efforts already show huge promise. There is almost no startup with anything close to their engagement, growth, and monetization potential and the last company that looked like them was Facebook. Hence, the HYPE.
> 30 minutes per day
I don't know about you guys, but my friends spend probably upwards of an hour a day at least.
I don't know about you guys, but my friends spend probably upwards of an hour a day at least.
Why are advertisers so interested in teenagers?
I spend more money in a month at 25 than I did in a year at 18 and with less thought put into it too. I would have assumed people like me would be the primary advertising target demographic.
I spend more money in a month at 25 than I did in a year at 18 and with less thought put into it too. I would have assumed people like me would be the primary advertising target demographic.
some possible theories:
-teenagers may have less disposable incomes, but they are far less rational and discerning in their purchases. they make purchases much more based on emotion and trends, rather than utility or value. yes, i also have more money at 25 than 18, but at 25 my purchase decision is informed by different reasons because i'm making my own money now so i need to be smarter about how i spend it.
-teenagers are at the brink of adulthood. if you can successfully get someone in that age to buy in, there's a good chance they will remain loyal to your brand. e.g mcdonalds marketing happy meals to kids to encourage them to continue "lovin it" as adults.
-teenagers are far more "hivemind", so if something catches on with a popular group, aka the thoughtleaders or trendsetters, the marketing effect cascades across the entire landscape very quickly.
I wonder if the user base that rushes in so fast to Snapchat might not rush as quickly to the next cool app, whenever it pops up.
Especially once it starts getting cluttered with annoying ads.
Or when Mom and Dad discover it and try to move in.
Or when Mom and Dad discover it and try to move in.
The way Snapchat is designed is basically anti-Mom-and-Dad -- you get to choose who each message will go to specifically (like texts), and everything disappears after it's been sent or opened. For a parent trying to monitor their kids on Snapchat, there's really not that much you can do.
As a teenager, it's almost constantly open on everyones phone - I wouldn't be surprised if I have it open/constantly checking it over 5 hours a day.
Agreed. As a relatively light user (relative to friends), I easily spend hours a day with the app open. It's easily the most popular app for people in the teenage demographic, and anyone who's spent any amount of time with teenagers will realize this.
To your point b... so it's all about bubbles? A race for eyeballs before they disappear to the next "new, cool" thing?
Because advertising isn't working for the people that sell "things." If social networks are supposed to create spending/buying in retail (both online and meatspace) they are not doing a very good job. Google: Retail sales 2016.
Because advertising isn't working for the people that sell "things." If social networks are supposed to create spending/buying in retail (both online and meatspace) they are not doing a very good job. Google: Retail sales 2016.
Fair point re: connection to the actual economy. But remember - the point of advertising is mostly not to increase sales overall, it's to steal sales from your competition in a zero sum game.
Re: WhatsApp.
WhatsApp was a possible existential threat to FB (usage moving from streams of posts from many many "friends" to more direct conversation in smaller chat groups), so $19B when spread across the many years of "non-death" of the company can be recuperated even if they don't earn a dime from WhatsApp thereafter.
WhatsApp was a possible existential threat to FB (usage moving from streams of posts from many many "friends" to more direct conversation in smaller chat groups), so $19B when spread across the many years of "non-death" of the company can be recuperated even if they don't earn a dime from WhatsApp thereafter.
a) Why they need so much money?
"Need" is probably the wrong word. I imagine they're trying to maximize their return: sell enough stock to make lots of money, but not so much as to flood the market.
b) Why they are worth so much?
That's the question, and it really does boil down to "they're worth what people will pay". One side might argue that it's a game of musical chairs--someone assuming they can find a greater sucker to buy into it for more money down the road. Another side might be that they have a massive user base of people just starting to make money (high school & college graduates) who are willing to spend $5/mo on stickers and filters and stuff, as well as watch some ads.
If they can effectively maintain their audience (a huge "if"), they will make lots of money. If they lose them to the next funny app, then they'll be a gigantic bust. So far they've continued to grow.... (Personally I think they're trying to IPO before the bottom falls out, but hey, what do I know)
"Need" is probably the wrong word. I imagine they're trying to maximize their return: sell enough stock to make lots of money, but not so much as to flood the market.
b) Why they are worth so much?
That's the question, and it really does boil down to "they're worth what people will pay". One side might argue that it's a game of musical chairs--someone assuming they can find a greater sucker to buy into it for more money down the road. Another side might be that they have a massive user base of people just starting to make money (high school & college graduates) who are willing to spend $5/mo on stickers and filters and stuff, as well as watch some ads.
If they can effectively maintain their audience (a huge "if"), they will make lots of money. If they lose them to the next funny app, then they'll be a gigantic bust. So far they've continued to grow.... (Personally I think they're trying to IPO before the bottom falls out, but hey, what do I know)
A) They have the capacity to deliver state-of-the-art technology and can easily dominate with a surge of money for mass-production of electronics. On a whim they could deliver unparalleled face recognition for instance: https://hackernoon.com/is-snap-inc-building-a-wearable-face-...
B) They're worth so much because on any given day, the app reaches 41 percent of all 18-to-34-year-olds in the United States. They have amazing potential as a platform for advertising, recruiting, sales, and so much more. They're probably not making money yet because they're not done honey-potting everybody like Facebook circa-2008.
You may be right about a bloated WhatsApp $19B price, because the Snapchat data is much more valuable and going for $4B.
B) They're worth so much because on any given day, the app reaches 41 percent of all 18-to-34-year-olds in the United States. They have amazing potential as a platform for advertising, recruiting, sales, and so much more. They're probably not making money yet because they're not done honey-potting everybody like Facebook circa-2008.
You may be right about a bloated WhatsApp $19B price, because the Snapchat data is much more valuable and going for $4B.
Is there any indication they can monetize their audience? Twitter claimed to. How is snapchat different?
They have the ability to monetize unexplored territory like face recognition and AR in real, meaningful ways. They've built an amazing technical team and are in position to execute on ideas that could have an incredible impact on the way humans interact in real life. They are among a few tech companies whose tech could cause a cultural paradigm shift akin to what we saw with the introduction of the smartphone. This should be an exciting couple of years.
While I agree they are working on cool things, this is entirely separate from an ability to monetize it. This is the part I doubt; I don't see anything that indicates they would succeed where twitter failed.
On a - I have no idea.
On b-
Not sure if it's worth $25 billion, but I have noticed that it is the "Facebook" for younger generations, and that when they use it, they use it all the time, not just a few times a day like other social media. It's a way to share their lives - in real time - with their friends and followers, and have their friends do the same.
(Look at me sounding like an old man!)
On b-
Not sure if it's worth $25 billion, but I have noticed that it is the "Facebook" for younger generations, and that when they use it, they use it all the time, not just a few times a day like other social media. It's a way to share their lives - in real time - with their friends and followers, and have their friends do the same.
(Look at me sounding like an old man!)
That isn't "old man" that is practical thinking. Kids don't have any money!!!!!!!!!!
But kids do have income increases and their highest years of earning ahead of them. That has to be worth something.
How visible are AOL Instant Messenger ads to you these days? ;)
Point. But I'm not going to discount the non-zero effect they likely still have on my reasoning for choosing certain brands when all else is equal.
that's a fundamental misunderstanding of marketing. you probably subconsciously remember some of the ads, and even assimilated some of those messages into your psyche without realizing it. these probably manifest in ways like when you want to buy something and can't help but seem partial to a particular brand even though you're not sure why.
It will be worth something when they actually spend those dollars. Until then, we are talking about potential. Remember the dotcom days, lots of potential.
I won't tell you to 'produce some spectacles' but Snapchat has been incredibly blunt about their goals. They claim to be reinventing the camera, and with AR, that probably means lots of R&D $. So probably not spectacles, but their next camera products.
"Need" money? You mean "want" money, right? And there's no wrong reason to want money since this is the US. Maybe he'll turn into a huge benefactor like Bill Gates and return all that money back to charitable foundations, etc.
Really interested in learning if Snap is more Facebook or Twitter.
This could be a big litmus test for the tech IPO.
2 things I'm very interested in:
1) If the rumors are correct that they are looking to raise 4 Billion at a roughly $40 Billion valuation.
If you assume that their absolute pie in the sky max valuation ever is similar to what facebook is now, roughly 340 Billion, then that's not alot of upside for investors for a company that probably isn't yet profitable.
2) I've heard that the founders have locked up voting control. I'm always half watching companies like this to find out just how far they can push wall street before wall street says no more. Mark Zuckerberg and the Google founders have done a great job of managing their companies while maintaining voter control.
I want to see a tech company where the founders own voting control but manage the company like Twitter, this is not a positive reference.
If Snap get's their rumored IPO price but can't grow revenue then they could be the poster child for SEC minority shareholder reform, but then again President Trump has said he wants to remove regulation in the markets so.....
Twitter had a very dedicated and professional audience, journalists, investors, etc who used their product and they couldn't live up to expectations.
Snap now has to better than twitter and they'll have to do it by taking advertising dollars from Google and Facebook. That's a tough fight to get into.
This could be a big litmus test for the tech IPO.
2 things I'm very interested in:
1) If the rumors are correct that they are looking to raise 4 Billion at a roughly $40 Billion valuation.
If you assume that their absolute pie in the sky max valuation ever is similar to what facebook is now, roughly 340 Billion, then that's not alot of upside for investors for a company that probably isn't yet profitable.
2) I've heard that the founders have locked up voting control. I'm always half watching companies like this to find out just how far they can push wall street before wall street says no more. Mark Zuckerberg and the Google founders have done a great job of managing their companies while maintaining voter control.
I want to see a tech company where the founders own voting control but manage the company like Twitter, this is not a positive reference.
If Snap get's their rumored IPO price but can't grow revenue then they could be the poster child for SEC minority shareholder reform, but then again President Trump has said he wants to remove regulation in the markets so.....
Twitter had a very dedicated and professional audience, journalists, investors, etc who used their product and they couldn't live up to expectations.
Snap now has to better than twitter and they'll have to do it by taking advertising dollars from Google and Facebook. That's a tough fight to get into.
>1) If the rumors are correct that they are looking to raise 4 Billion at a roughly $40 Billion valuation.
Was under the impression Snapchat was given a $3-5 billion valuation.
I find it hard to accept that Snapchat is worth the same as Tesla and SpaceX combined.
In other words, is [a 400-employee company whose core product works only on cell phones to show annoying ads to teenagers as they send each other photos, and whose annual income is barely $100m] worth the same as [a 15,000-employee company that produces autonomous electric vehicles, with a net income of a few billion/year] and [a 5,000-employee aerospace company that builds self-landing rockets, with income of a few billion/year] combined? I don't bloody think so, especially given what an asshole Evan Spiegel has been in public lately.
If anything, this is a sign that we're in a soon-to-pop bubble. If Snapchat ever goes public, it deserves to die the same slow death on the stock market as Twitter did earlier this year, or a violent pets.com style death.
Was under the impression Snapchat was given a $3-5 billion valuation.
I find it hard to accept that Snapchat is worth the same as Tesla and SpaceX combined.
In other words, is [a 400-employee company whose core product works only on cell phones to show annoying ads to teenagers as they send each other photos, and whose annual income is barely $100m] worth the same as [a 15,000-employee company that produces autonomous electric vehicles, with a net income of a few billion/year] and [a 5,000-employee aerospace company that builds self-landing rockets, with income of a few billion/year] combined? I don't bloody think so, especially given what an asshole Evan Spiegel has been in public lately.
If anything, this is a sign that we're in a soon-to-pop bubble. If Snapchat ever goes public, it deserves to die the same slow death on the stock market as Twitter did earlier this year, or a violent pets.com style death.
A company is worth the percentage it captures of the value it creates. You alluded to it in your comment--Snap has a much lower headcount and an order of magnitude less operating costs, so if anything it kind of makes sense that they'd be valued at a relative premium.
Also, you may not like Snapchat, but to say it deserves to die when it both a) employs real people and b) clearly serves a market need is such a terrible thing to wish for.
Also, you may not like Snapchat, but to say it deserves to die when it both a) employs real people and b) clearly serves a market need is such a terrible thing to wish for.
I like Snapchat; it's a great service. However, if they keep introducing more ads while demanding ridiculous valuations, my generation will stop using it.
It would be great for Snapchat and Twitter to be turned into nonprofits like Wikipedia.
It would be great for Snapchat and Twitter to be turned into nonprofits like Wikipedia.
Tesla and SpaceX aren't worth that much for much the same reasons you've outlined - they have massive capex requirements, high employee overhead and retention costs, and really real technology risk (it's literally rocket science).
At least they have something they can sell afterwards...
If I sell you a Book for a million dollars, I make 1 million dollars. If I sell a million books for a dollar each, I make a million dollars. My Company is worth a million dollars. It makes no difference to the quality or what i am selling.
That's not how valuation works, and that's not how revenue models of companies work. Please make less useless comments.
> whose core product works only on cell phones to show annoying ads to teenagers as they send each other photos
Rather than trying to call something stupid before you know what it is, it would probably help you to look into Snapchat some more. Other than the fact that it's only on your cell phone, how is any of this different from Facebook/Twitter/Instagram?
Anyways, the reason I believe Snapchat stands out here as a profitable service is exactly what you said. Snapchat is really fast-paced -- while a lot of time goes into most people's Instagram posts, it's not worth the effort for a photo someone will see for 10 seconds max. Like Twitter, this enables rapid use. It's not unheard of for people to send/receive hundreds of snaps a day. Plus, Snapchat is perfect for advertisers. All you do is roll out some filter and probably half the people using the app on that day will try it out. Combine the two and you'll seen realize that not only are users voluntarily sharing advertisements, but they're also doing it often 10+ times a day (and viewing those same advertisements hundreds of times). Yes, more people might see a single ad on Facebook/Instagram/Twitter, but it won't be ingrained into their mind to nearly the same degree as it could be with Snapchat. That's the kind of value that could put them ahead of Tesla or SpaceX.
Rather than trying to call something stupid before you know what it is, it would probably help you to look into Snapchat some more. Other than the fact that it's only on your cell phone, how is any of this different from Facebook/Twitter/Instagram?
Anyways, the reason I believe Snapchat stands out here as a profitable service is exactly what you said. Snapchat is really fast-paced -- while a lot of time goes into most people's Instagram posts, it's not worth the effort for a photo someone will see for 10 seconds max. Like Twitter, this enables rapid use. It's not unheard of for people to send/receive hundreds of snaps a day. Plus, Snapchat is perfect for advertisers. All you do is roll out some filter and probably half the people using the app on that day will try it out. Combine the two and you'll seen realize that not only are users voluntarily sharing advertisements, but they're also doing it often 10+ times a day (and viewing those same advertisements hundreds of times). Yes, more people might see a single ad on Facebook/Instagram/Twitter, but it won't be ingrained into their mind to nearly the same degree as it could be with Snapchat. That's the kind of value that could put them ahead of Tesla or SpaceX.
It's pretty clear to me that people value Snapchat. Imagine totaling up the time voluntarily spent on Snapchat. Capturing that value...that's another question but there's a lot of economic value provided by Snapchat (as in people chose to use Snapchat over doing something else).
I've never used Snapchat and only barely know what it is (an even shorter lived instant messaging thingy where messages disappear and gamification techniques are used to keep you enganged?)
I've never used Snapchat and only barely know what it is (an even shorter lived instant messaging thingy where messages disappear and gamification techniques are used to keep you enganged?)
> the Google founders have done a great job of managing their companies while maintaining voter control.
They moved aside and let Schmidt be CEO for a while though, because Page was not ready.
They moved aside and let Schmidt be CEO for a while though, because Page was not ready.
I wish we could get some visibility as to how many Snapchat users are adult content creators. This is a segment that everyone seems to ignore, but I think we would be surprised to learn its scale and the amount of money flowing through it. It's also probably the group of users which most use Snapcash and driver huge numbers across all metrics.
Hot much underage porn does Snapchat carry. What's the potential liability on that given (in UK) ISPs are starting to filter porn by default.
Snapchat's rose in the mass media as the app children were using to send images of their body parts. Not just that, mean/bullying messages and "pranks" too. Of course you can do those things on other apps or through other media, just Snapchat's transient messages seemed designed for it.
Snapchat's rose in the mass media as the app children were using to send images of their body parts. Not just that, mean/bullying messages and "pranks" too. Of course you can do those things on other apps or through other media, just Snapchat's transient messages seemed designed for it.
It's force of the platform: A reaction to parents asking to overview the teenager's activity on the mobile phone – "Can't show you the messages I've received or sent, dad, they're timebombed!" Actually I've never gotten over the idea that Snapchat was for porn, especially since their icon looks like the shadown of an exhibitionist opening his coat...
I would be very interested to know this too, but of course it's all technically against the ToS[1] and so I doubt Snapchat will ever even acknowledge it, much less give numbers on it. Don't want to offend those delicate advertisers!
[1] http://www.dailydot.com/debug/snapchat-porn-banned/
(The article is over a year old, but not much has changed since then.)
[1] http://www.dailydot.com/debug/snapchat-porn-banned/
(The article is over a year old, but not much has changed since then.)
Maybe someone can enlighten me. I read awhile back (when the rumors just started) that a company can not engage in advertising/marketing in the pre-IPO period. If that's the case I assume the timing of Spectacles release is a way around that?
They cannot make large product announcements or changes in the "quiet period" between when the IPO is publically filed and when it goes live. This is a rumor of a private filing, not the public filing, so yes Spectacles are well in the clear. You can make large announcements right up till the day the IPO is published on the SEC website.
This is because you are not supposed to solicit people to buy your shares before it goes public.
This is because you are not supposed to solicit people to buy your shares before it goes public.
Do you mean any and all advertising or advertising for the IPO specifically?
Maybe I'm alone here, but I love the way Evan and Snapchat, er Snap, communicate as a company. They are incredibly tight lipped, but also very honest and blunt. They've talked about this IPO for years, and made no secret about becoming a camera company.
I agree. Tight lips with "information leaks", makes for an intriguing situation. Apple is the master at this. They never announce anything but the media's love to search for information(mostly useless, if not leaked by the company's communication's dept) gives then a ton of constant publicity - very smart.
If they really plan to be a camera company then this stock will be the next Twitter, but possibly worse.
You might love it, but the rest of us really don't.
Can some one tell me why they use "confidentially"? When they have been talking about this for months and everyone in the tech/social business knows about it.
I guess it's confidential since they didn't blast fireworks and cannons.
Anyhow, I say that they will soon(if not now) be known as the cool social network while Facebook will live as the old but reliable techie social network , similar to the Apple/Microsoft delineation.
I guess it's confidential since they didn't blast fireworks and cannons.
Anyhow, I say that they will soon(if not now) be known as the cool social network while Facebook will live as the old but reliable techie social network , similar to the Apple/Microsoft delineation.
Its a type of filing. Confidentially means that we cannot go so EDGAR and look up the filing right now, and they will not need to disclose the documents publicly until very close to the actual IPO. This is a relatively new type of filing that was introduced in the JOBS act, designed to encourage emerging businesses to go public. You can read about the specifics here:
https://www.sec.gov/divisions/corpfin/guidance/cfjumpstartfa...
Normally, if the company does not qualify for confidential filing, we would be able to go and see the draft S-1 on EDGAR 6 - 9 months in advance of the actual IPO.
https://www.sec.gov/divisions/corpfin/guidance/cfjumpstartfa...
Normally, if the company does not qualify for confidential filing, we would be able to go and see the draft S-1 on EDGAR 6 - 9 months in advance of the actual IPO.
Thanks, very informative.
It reflects a change in IPO filing law. Quoting Wikipedia:
"Under the JOBS Act, it has been possible since April 2012 for "emerging growth companies" to file a Form S-1 on a confidential basis, only making the contents public 21 days prior to the road show for the IPO."
With many IPO filings, the financial docs are immediately available to review. Because Snap filed confidentially, we are not given access to these docs until shortly before the actual sale of the IPO shares.
"Under the JOBS Act, it has been possible since April 2012 for "emerging growth companies" to file a Form S-1 on a confidential basis, only making the contents public 21 days prior to the road show for the IPO."
With many IPO filings, the financial docs are immediately available to review. Because Snap filed confidentially, we are not given access to these docs until shortly before the actual sale of the IPO shares.
So people are super hyped about the Snapchat Spectacles. I get the excitement, they are Google Glass at a proletariat price, so owning them doesn't make you a GlassHole. Snapchat is one of the most popular LA Unicorns. Everyone is waiting for them to go public.
So how did they release their big hardware add on? Limited time vending machines. They are spinning it as cool, but with XMas, their supposed capitalization and user base, it's a pretty big warning that these are not released through a consumer channel. They are probably experiencing major headwinds keeping them out of commercialization, or a major cash crisis.
I'm want to side with the cash crisis. I'd love to be proven wrong, but I don't think their balance sheet is going to be very strong, if the fundamentals were there, Amazon and Best Buy would be distributing the product. Sure, tell me its a marketing strategy for exclusivity, I agree, it's great. It should have been done over the summer, moving into store shelves last week for Xmas sales.
So how did they release their big hardware add on? Limited time vending machines. They are spinning it as cool, but with XMas, their supposed capitalization and user base, it's a pretty big warning that these are not released through a consumer channel. They are probably experiencing major headwinds keeping them out of commercialization, or a major cash crisis.
I'm want to side with the cash crisis. I'd love to be proven wrong, but I don't think their balance sheet is going to be very strong, if the fundamentals were there, Amazon and Best Buy would be distributing the product. Sure, tell me its a marketing strategy for exclusivity, I agree, it's great. It should have been done over the summer, moving into store shelves last week for Xmas sales.
My personal hypothesis on this is that they're eating a loss at the price range right now and are trying to figure out if people are interested in the spectacles and at what price.
If anything they are creating a whole lot of media buzz, likely to be perfectly timed ahead of their IPO. The message isn't "we have head mounted cameras, head mounted cameras will dominate the world", the message is "we are more than just another entry in the endless stream of icq successors, continue to expect the unexpected".
This might turn out to be more valuable to founders and VCs than the total hardware cost of the first few batches of camera sunglasses. For that function, the final spectacles price could be purely a balancing act between looking financially responsible to future investors and not deterring consumers to much, with no relation to hardware cost at all.
This might turn out to be more valuable to founders and VCs than the total hardware cost of the first few batches of camera sunglasses. For that function, the final spectacles price could be purely a balancing act between looking financially responsible to future investors and not deterring consumers to much, with no relation to hardware cost at all.
That, is totally great. It doesn't get me excited as a market investor. Twitter has been living off their hype and not their balance sheet, and eventually it degrades and erodes a business until it practically isn't one. My experience is of course entirely anecdotal since I'm so heavily involved in hardware startups now. As an ancillary to bolster hype, I agree, it's great.
I've scanned through twitter, they have users driving hours to try to buy them. I'm confident people are super excited. Being in the consumer electronics space myself, it takes about 80% of expected sales as capital to get anything into commercialization. This is just throwing huge flags for me as an investor.
They'll probably create different models for different price points. Capturing the teen market is more important than the tech yuppie market, but if you can gouge a willing audience, you probably should.
I'd say they're more like wearable GoPro at a prole price.
Yet another platform to tickle our narcissism and voyeurism. The fact that this kind of innovation is so lucrative make me despair.
And also, get off my lawn !!
And also, get off my lawn !!
At least you can't create news filter bubbles or troll with Snapchat.
Maybe that's why it's so popular. Most people are fed up with trolling.
To anyone on HN (or elsewhere) who doesn't get Snapchat, revisit Justin Kan's explanation: https://news.ycombinator.com/item?id=10859860
Looks like the blog post linked in that thread now gives a 404.
Here's the correct URL: https://justinkan.com/why-i-love-snapchat-23d31ea87d3c
> $250 million and $350 million this year, according to those documents.
That's pretty impressive but is it a sustainable source of income?
Seems like this socio-consumer space is extremely volatile. Facebook & Twitter was the last platform I interacted with....3 years ago. Haven't even used instgram, vine, now snap chat. The fact that billions of dollars were spent buying out instagram, whatsapp, I wonder how facebook is aiming to make back all that cash expenditure. Linkedin barely gets a pass because it's enterprisey and Microsoft validated by buying it out.
Take my view with a grain of salt as I consider these social networking type of websites our generation's "cigarette" -everyone is doing it and nobody wants to stop and examine it's impact on the quality of your life.
I guess when everybody is around me is so concerned with the avatar version of themselves online and how they think they are perceived, therein emerges a divergence of values and attitude towards such mediums and the type of personalities it generates that leaks into real life (which I steer away from).
That's pretty impressive but is it a sustainable source of income?
Seems like this socio-consumer space is extremely volatile. Facebook & Twitter was the last platform I interacted with....3 years ago. Haven't even used instgram, vine, now snap chat. The fact that billions of dollars were spent buying out instagram, whatsapp, I wonder how facebook is aiming to make back all that cash expenditure. Linkedin barely gets a pass because it's enterprisey and Microsoft validated by buying it out.
Take my view with a grain of salt as I consider these social networking type of websites our generation's "cigarette" -everyone is doing it and nobody wants to stop and examine it's impact on the quality of your life.
I guess when everybody is around me is so concerned with the avatar version of themselves online and how they think they are perceived, therein emerges a divergence of values and attitude towards such mediums and the type of personalities it generates that leaks into real life (which I steer away from).
I realized that facebook had made it when old people started using it, and I don't mean silicon valley old, but like for real old. Snapchat hasn't hit that threshold yet. It could be the next myspace of facebook, but at 40 billion there is a plenty of upside.
A lot of good points in this thread.
I do want to point out that the investment market is hot. That likely plays into their decision. Why wait when you know you can get a great valuation now, and there is a chance the market could cool.
I do want to point out that the investment market is hot. That likely plays into their decision. Why wait when you know you can get a great valuation now, and there is a chance the market could cool.
I don't follow the numbers on Snap, but my personal experience is that Snow is eating their share in Asia. You can build a big business without Asia, but it won't be enough to keep The Street happy. This IPO feels like a liquidation for investors who see the end of the road ahead for Snap.
Many people here are underestimating Snapchat. It is the only app where I enjoy the ads. They are not intrusively at all, most of the time they show up at the end of a story or between 2 user's stories. They are all video ads which is the best form of getting attention (atleast for me) and interacting with the ad is as simple as swiping up on the video. If it is an app install ad: Swipe up and it brings up the App Store download view. If it's a shopping ad: swipe up and its bring a web view of the advertiser's ecommerce site. It is great! Facebook is boring and repetitive, Snapchat is lively and fun to use. I see it going extremely far but it will be tough to reach Facebook-scale.
Anyone who gets in on this IPO is going to know what pain feels like. How can a company that doesn't make any money go public in good faith?
If you have a chance to buy Spectacles go for it. They are super cool.
Finally a way to snap while I'm grilling fried rice! Seriously, this solves a problem for me: https://youtu.be/0fdVJLB-TM0
Finally a way to snap while I'm grilling fried rice! Seriously, this solves a problem for me: https://youtu.be/0fdVJLB-TM0
A lot of people seem to question Snapchat's vision and profitability (even in this thread) especially with such a high evaluation. I thought I'd take a stab at it (all speculation based by current trends).
So Snapchat needs to be broken down into 3 key components:
1. Users/Growth
2. Business
3. Tech
So let's look into each...
1. Users/Growth:
Snapchat is growing rapidly (~150 million active users[0]) and seems to know how to generate hype using various tactics (like the Spectacles for example...instead of just selling it, they appear at specific places at specific times, similar to timed filters and stories). Furthermore, they don't seem to mind experimenting - I had recently seen rumors floating around of Snapchat getting into the drone game too - based on some of their recently open positions). They seems to have gotten a tight grasp at the younger-ish market (14 - 30ish?) and either they'll continue to be hip and keep attracting that age group or they'll grow with their current userbase. Eitherway, the userbase is (very) loyal and hooked (~30 mins/day of usage [1]).
2. Business
Based on 1, we know Snapchat is growing and it's got a loyal base, which means they are a great place to advertise. As of right now, it appears that only the "big" players have the access to advertise their content effectively - movie filters, stories etc. (and Snapchat seems to be making a lot of revenue from just this alone - ~ $350 million [0]). But from this subset, it can be seen that Snapchat is an effective medium for the current demographic (they are young, generally willing to spend and do or will grow up to have expendable income to spend).
Smaller players (those who can't afford filters and stories) generally pay Snapchat celebrities to advertise to their large(-ish) user base but given Snapchat's intentions (for IPO), that could change pretty soon.
To add to the above, Snapchat seems to be poised to move into the physical-virtual (augmented) ads space too, with geo filters. (Given their recent release of Spectacles, I'd say it'd be trivial to have something along the lines of Google Beacons/iBeacons - providing hyper local filters, discounts and so on. Furthermore, this can easily expand/integrate into a marketplace, providing even more revenue.
3. Tech
If you have noticed, they have gotten their users to use AR (filters, geo-filters, Spectacles) without the "geekiness" involved that others currently involve. (yes, Hololens is still a lot geeky, pricer and a extra device than a iPhone) They appear have stumbled onto great ideas, but I have a feeling that it's highly calculated (I could be wrong) and they seem to have an idea / vision of what their future is or where they want to head.
Current Competition (Subjective):
Facebook seems to be intent on trying to capture the Snapchat market - most recently with Instagram Stories. In my opinion, Instagram Stories is not exactly similar but close enough. I feel like it'd not take off as much as Snapchat (but it does not have to) as much (I'd probably eat my words later), because it's easier to track users (I know this is what marketers are looking for, but from a user's perspective - It does not feel natural, feel a bit more judged and overall just like a nice facebook for photos. It's great if you want to grow a userbase and so on but you can do so on Snapchat too.
My take:
I feel that Snapchat for companies/marketers/users who are looking for more, require a change of perspective. Similar to how it took everyone to get used to the Internet, Social Media etc., it will take a while to get used to Snapchat. Furthermore, there is a lack of tooling around Snapchat which has made matters worse. That said, those who can grasp this and figure it out...they are in for a treat.
Obviously, what I've written above is my take on Snapchat (both as a user and as a someone who loves technology). It's completely arm-chaired CEO talk but I'm interested in what people have to say/think about it.
[0] https://techcrunch.com/2016/11/15/snapchat-has-reportedly-fi...
[1] http://www.businessinsider.com/how-much-time-people-spend-on...
So Snapchat needs to be broken down into 3 key components:
1. Users/Growth
2. Business
3. Tech
So let's look into each...
1. Users/Growth:
Snapchat is growing rapidly (~150 million active users[0]) and seems to know how to generate hype using various tactics (like the Spectacles for example...instead of just selling it, they appear at specific places at specific times, similar to timed filters and stories). Furthermore, they don't seem to mind experimenting - I had recently seen rumors floating around of Snapchat getting into the drone game too - based on some of their recently open positions). They seems to have gotten a tight grasp at the younger-ish market (14 - 30ish?) and either they'll continue to be hip and keep attracting that age group or they'll grow with their current userbase. Eitherway, the userbase is (very) loyal and hooked (~30 mins/day of usage [1]).
2. Business
Based on 1, we know Snapchat is growing and it's got a loyal base, which means they are a great place to advertise. As of right now, it appears that only the "big" players have the access to advertise their content effectively - movie filters, stories etc. (and Snapchat seems to be making a lot of revenue from just this alone - ~ $350 million [0]). But from this subset, it can be seen that Snapchat is an effective medium for the current demographic (they are young, generally willing to spend and do or will grow up to have expendable income to spend).
Smaller players (those who can't afford filters and stories) generally pay Snapchat celebrities to advertise to their large(-ish) user base but given Snapchat's intentions (for IPO), that could change pretty soon.
To add to the above, Snapchat seems to be poised to move into the physical-virtual (augmented) ads space too, with geo filters. (Given their recent release of Spectacles, I'd say it'd be trivial to have something along the lines of Google Beacons/iBeacons - providing hyper local filters, discounts and so on. Furthermore, this can easily expand/integrate into a marketplace, providing even more revenue.
3. Tech
If you have noticed, they have gotten their users to use AR (filters, geo-filters, Spectacles) without the "geekiness" involved that others currently involve. (yes, Hololens is still a lot geeky, pricer and a extra device than a iPhone) They appear have stumbled onto great ideas, but I have a feeling that it's highly calculated (I could be wrong) and they seem to have an idea / vision of what their future is or where they want to head.
Current Competition (Subjective):
Facebook seems to be intent on trying to capture the Snapchat market - most recently with Instagram Stories. In my opinion, Instagram Stories is not exactly similar but close enough. I feel like it'd not take off as much as Snapchat (but it does not have to) as much (I'd probably eat my words later), because it's easier to track users (I know this is what marketers are looking for, but from a user's perspective - It does not feel natural, feel a bit more judged and overall just like a nice facebook for photos. It's great if you want to grow a userbase and so on but you can do so on Snapchat too.
My take:
I feel that Snapchat for companies/marketers/users who are looking for more, require a change of perspective. Similar to how it took everyone to get used to the Internet, Social Media etc., it will take a while to get used to Snapchat. Furthermore, there is a lack of tooling around Snapchat which has made matters worse. That said, those who can grasp this and figure it out...they are in for a treat.
Obviously, what I've written above is my take on Snapchat (both as a user and as a someone who loves technology). It's completely arm-chaired CEO talk but I'm interested in what people have to say/think about it.
[0] https://techcrunch.com/2016/11/15/snapchat-has-reportedly-fi...
[1] http://www.businessinsider.com/how-much-time-people-spend-on...
I do not understand the value of Snapchat as a social network at all, and I use it on a daily basis.
There's no way to reshare anything, which means the only way you can find people is through other channels external to Snapchat. And they make it really hard to add someone that isn't in your immediate vicinity with their logo ready to snap. This seems ludicrous to me. How can a social networking app not try to capture all of the activity surrounding it? How can a social networking app not do everything it can to encourage people to build their network?
There's no way to reshare anything, which means the only way you can find people is through other channels external to Snapchat. And they make it really hard to add someone that isn't in your immediate vicinity with their logo ready to snap. This seems ludicrous to me. How can a social networking app not try to capture all of the activity surrounding it? How can a social networking app not do everything it can to encourage people to build their network?
Just an anecdote but my kids (2 10 year olds in Chile) use Instagram and Snapchat about the same. They use Whatsapp and Musically several times more frequently.
It is amazing that the best business model of current era is - Build something that allows people to feed their ego (ahem social activity ahem) and sell ads, simple :)
I used snapchat to stream behind the scenes photos and videos and retouching tutorials, but that was a black box.
Yes, I had comments open and I interacted with my friends and fans, but I couldn't tag anyone, or hashtags, discoverability is a serious issues in that platform.
I started using Instagram stories and now I have the same views per snaps that I had on snapchat plus now I can tag brands/models/makeup artists/ etc.
Instagram is going to EAT snapchat, specially for content creators discoverability is everything.