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Comment by sheer_horror | Hacker News Reader

If Snapchat is able to sell this product to only 5% of their 150M userbase that's 7.5M * $130 = 1B in revenue. Then they diversify their future product line somehow and keep selling to the other 95% of their users. Forget a re-monetization strategy for ads - ads make a product worse and it is refreshing that there may be another way for VC-backed companies to monetize.

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How much of their userbase of 13-30 year olds wants to plunk down $130 for a toy? Less than 5%, I'd guess.

.005 if lucky

Lots of people in the 13-30 demographic spend $100 on sun glasses or $200 on headphones. I don't think this product is out of reach.

The <5% who are mega influencers on one of the most influential social networks on earth, as opposed to the <5% comprised of the dorkiest people on earth (not that I have anything against dorks, seeing as I myself am somewhat dorky).

You couldn't even wear Glass in Silicon Valley, land of graphic tees and dad jeans. I could imagine seeing these anywhere from Santa Monica to NYC or Lake Tahoe to Macchu Pichu.

Quadcopters, 'hover boards' are a good example. Lots of people age 13-30 buying them, and that's people can't save money. Buying stuff they don't need and would not use - only to look cool.

Devils advocate here. You overlooking quite a few things. Realistically, let's break some things down:

Background: Google Glass

Cost: $1,500 for early adopters (irrelevant) Cost to Manufacture: ~$100 USD Sale Price: $299 Margin: ~33% (low)? Probably. Yes!

Yes with economies of scale...blah....blah...blah...

Let's assume (I'll use the 150M, but I don't want to):

A. 5% of their 150M userbase that's 7.5M * $130 = $1B USD B. 5% of their 150M userbase that's 7.5M * $89 = $668M USD C. 5% of their 150M userbase that's 7.5M * $50 = $375M USD

Let's play with some more numbers because I think 5% is super generous. Why? Yes, Snapchat's demographic is 18-24 yr olds but as you may know, new users over 35 is growing at 2X. Personally, I am under the impression that this means Snapchat is losing it's appeal with their current demographic.

A. 1% of their 150M userbase that's 1.5M * $130 = $195M USD B. 2.5% of their 150M userbase that's 3.75M * $89 = $334M USD C. 3% of their 150M userbase that's 4.5M * $50 = $225M USD

$1B seems a bit off from your calculations. We haven't even factored in COGS, manufacturing costs, etc. Not to mention their margins will be extremely low until they square away manufacturing which could take several years. > Diversify their future product line...

I highly doubt it is going to happen.

> Forget a remonetization strategy for ads...

I agree! I didn't say it was the best idea, but snapchat will need to go all in or not. They can't put a toe in and decide the market isn't ready or they need to raise more capital - it will send the wrong message to investors.

Again, I am operating under the assumption that Snapchat is trying to become a brand.

I would expect glass to have cost a multiple of that $100, with negative or no margin.

You say 'realistically' but you're speculating that they are losing appeal and that they won't try and sell another product.

The only thing to realize is they have a $100+ device that is compelling to their 150M user base. That's a great sign. I think that the manufacturing chain for 'cheap shit electronics toys' is developed enough in 2016 to make good margins.

Snapchat only has a userbase because it's an application that runs on a cell phone.

Yeah and you know what userbase that is? Product hungry 15 year olds whose identity is tied to superficial shit just like this. Apple should have taught us something: People do not care about what they're buying, they just care that it's the 'cool' thing.

If they can make them at a cost of $0, sure

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