Snapchat has reportedly filed confidentially for its massive IPO
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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.
On instagram stories now you even can have a link to an external page!
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.
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.
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.
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.
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.
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.
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.
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...
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.
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...
Unless Snapchat is not after money...not now at least.
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.
I've never heard that expression before! Of course googling it I get a million steak recipes. Can you explain what it means?
Hope that helps!
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 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.
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. 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.
Meanwhile for companies like FB, who mine every aspect of your life, the service is now valued at over $300Billion
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?
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.
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.
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.
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 use snapchat soley for communicating with my close friends
so for me, they both have distinct use cases that aren't too overlapping
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.
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/
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.
They moved aside and let Schmidt be CEO for a while though, because Page was not ready.
[1] http://www.dailydot.com/debug/snapchat-porn-banned/
(The article is over a year old, but not much has changed since then.)
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.
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.
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.
It would be great for Snapchat and Twitter to be turned into nonprofits like Wikipedia.
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.
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?)
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.
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'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).
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.
"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)
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.
Or when Mom and Dad discover it and try to move in.
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.
I don't know about you guys, but my friends spend probably upwards of an hour a day at least.
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.
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!)
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.
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.
This is because you are not supposed to solicit people to buy your shares before it goes public.
I feel like Snapchat sees the writing on the wall, and this is their chance for everyone to cash out.
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?
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.
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.
"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.
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.
Finally a way to snap while I'm grilling fried rice! Seriously, this solves a problem for me: https://youtu.be/0fdVJLB-TM0
And also, get off my lawn !!
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...