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I think you hit the nail on the head here. There were reports that came out from several sources that Evan ignored all feedback from product and design including hard numbers from early tests. There were apparently several groups internally that tried to stop the massive changes from dropping without adequate testing and iteration. Those groups were overridden by Evan in favor of "vision" and that apparent lack of discipline led to the situation they're in today.

If Evan can't show that he has the discipline to lead a company at this stage of it's life in the public market then the board should absolutely give him the boot in the next 24 months.

I think the narrative of "product visionary" has been spun a bit too hard by the tech media and it likely has gotten to his head.

He also took a $500mm bonus for successfully executing the IPO at a time when the company lost over $700mm in 2017. That's not a great look - but I digress.

> He also took a $500mm bonus for successfully executing the IPO at a time when the company lost over $700mm in 2017.

So part of that $700mm loss was his bonus? Meaning if he hadn't taken a bonus the loss would "only" be $200mm?

No, wrong way to interpret that.

He just received a massive bonus in $ value. It was massive because it was lots of Snapchat stock back when it was expensive.

Although it’s quite normal to sell such stock award as soon as they vest, in this case it looks bad.

I was a little off on the numbers.

Snap posted a $2.2B loss in Q1 of 2017, it's first quarter as a public company. A lot of that was one-time stock payout to various employees, including a massive bonus to Spiegel which was 3% of Snap worth roughly ~$550mm at the time. If you take out all the one time stock compensation from that quarter, the loss comes out to $188mm.

Here's a Recode article with some sources: https://www.recode.net/2017/5/10/15617740/snapchat-two-billi...

The $700mm loss figure I initially stated for 2017 is likely the loss figure with the one-time stock expenses deducted: https://investor.snap.com/news-releases/2018/02-06-2018-2116...

This stock award made Evan Spiegel the highest paid CEO in America in 2017, that's the kicker.

Ah okay, that makes a bit more sense. Thanks!

"product visionary" is hilarious for an app literally designed for college girls to send nude photos.

Edit, it's true the co-founders were in a dorm room and came up with an idea for girls to securely send nudes. There is a reason it is commonly referred to as snachchat.

According to their s1, most users are tweens, so: s/college girls/preteen girls/g

>I think the narrative of "product visionary" has been spun a bit too hard by the tech media and it likely has gotten to his head.

It has, and not only for this guy. Like the GP says, success in these things is more luck than anything else, like "vision".

> then the board should absolutely give him the boot in the next 24 months.

Very funny, Snapchat has two classes of stock and he owns enough of the kind that matters that no one can oust him. I looked through the S-1 when they were going public and decided owning the shares they were selling to the public was the equivalent of a "board observer" seat. You are free to watch him run his company, but it is still his company

https://www.recode.net/2017/2/21/14670314/snap-ipo-stock-vot...

The sad thing is that it applies to many other companies these days, most notably Facebook, Google et al.

Why do people buy common shares which give them no voting rights as a shareholder?

Sure while company is minting money (or debt and marketshare) you can find a greater fool to offload your shares.

However when things turn the Zynga way, what recourse do you have with these no vote shares?

At least Bond holders and Preferred Shareholders have certain rights.

PS Then there are the Chinese stocks such as BABA where you do not even own the assets of the main company but I digress..

You have rights if you own enough right?

Also why are there two kind of shares?

Because the original investors don't want their shares to be diluted.

Google stock is organized into different classes with different voting rights and amounts of shares (a few years ago a new class came out without voting shares but got dividends first, if I recall correctly), and the founders have control as long as they want it. At the time, I thought this was dangerous since the current king might be good (ie the founders) but what if the next king who has control was someone who has wants to control people through tyrannical means using their entire life histories (ie google tracking on everything).

I think we're going to see less of that. A few companies with founder control through multiple classes of stock have screwed up badly. It's now a negative with investors.

For many decades, the New York Stock Exchange refused to list stocks that had multiple classes of stock, except for a few companies such as Ford Motor that were grandfathered in. But they no longer have enough clout to make that stick.

Google and Facebook got away with it because they were highly profitable before the IPO. Snap was not like that.[1] They went public while still losing money, and with way too high a valuation. It's been all downhill since the IPO.

[1] https://www.forbes.com/sites/robertberger/2017/03/07/snapcha...

>Google and Facebook got away with it because they were highly profitable before the IPO. Snap was not like that...

So basically, we'll see it with the companies that are profitable at the time of their ipo's, but we won't see it with the companies that are unprofitable, (and maybe even losing money), at the time of their ipo's.

Sounds to me like the future Facebooks and Googles of the world will continue to set up structures like these. Before anyone jumps down my throat, I'm not complaining. I know, it's the founder's company. I get that. I'm free not to invest if I don't like the terms. I just wanted to point out that HN User "Animats'" conclusion that founders will choose this structure less and less is flawed. It really does seem to me that this structure is just going to be more and more of a reality in the future for any of the startups that are actually worth buying into. (ie - Any of the startups that actually make money.)

In the end, the founders of the winning companies don't want their money or power diluted.

The big change is that S&P is no longer going to consider adding companies with structures like this to the S&P 500. Existing companies got grandfathered in.

Aren't both Google and Facebook on NASDAQ and not NYSE? Anyway, I can't also find any reference to NYSE refusing to list dual class shares so I would be grateful if you can point me to some resources.

The indexing and exchange listing changes have meant that it’s less and less likely to see multi class shares now.

> Why do people buy common shares which give them no voting rights as a shareholder?

Because you believe in the people who have the voting rights?

Let's get real here: for those of us buying stock with voting rights, we don't really have voting rights. The proportion we have is so vanishingly small it's the same as not having voting rights in the first place.

Exactly, Just like democracy is the same as a dictator

Well, in an actual democracy you'd have one person being worth one vote. That certainly doesn't exist where I live (USA), and it doesn't exist with corporate voting shares either (where money = votes), so that analogy is pretty much bunk at the start.

I've heard various 'arguments' that the US is not a democracy, but not based on the fact that one person-one vote is untrue; what do you mean by this? Is it something to do with the electoral college system, or perhaps the large class of disenfranchised persons?

Short answer: the US has two senators for each state, some states have much more population than others, so proportionally a vote in Wyoming counts "more" than a vote in California. This has direct effects in the legislative branch (the Senate) and indirect effects in presidential elections (electoral college) and thus also indirectly in the Supreme Court (nomination + approval).

Well, the US also has the House of Representatives where representation is proportional.

A bicameral congress most certainly does not disqualify the entire system from being considered a democracy.

Yeah, I am not trying to make a political statement, I'm just explaining why people say that

Here's an example. There are 600,000 people in Wyoming. They have 2 senators.

There are 700,000 people in Washington DC. They have zero senators. There are over 3 million people in Puerto Rico. They also have zero senators.

> Why do people buy common shares which give them no voting rights as a shareholder?

Because they trust the founders to protect the long-term interests of the company more than activist investors trying to maximize short-term profit?

Exactly, I was going to write the same thing, although with a small, but perhaps quite important correction: “You are free to watch him ruin his company, but it is still his company”

This is general pattern and it’s a good thing. More often than not founder is much better bet to execute on vision and longer term success. However, recently it has been shown that investors still are able to excert good level of influence and control. The way this happens is via controlling the future flow of investment. If big investors gang up on not buying a stock or sell out en mass, the founders with dictatorial powers will have to bent. Uber is example where founder got ousted despite of his retaining voting majority.

Personal emotions and business don't work well together. They are great to sell an idea but the same person shouldn't be in charge of actually executing it because they will still do it even when everybody else tells them it's crap.

I had to experience it and I think it's actually one of the greatest dangers in startups.

There are two sides to that idea, though. You can make incremental improvements through data and metrics and objective thinking, but no amount of selective user testing of incremental improvements would have, say, created the iPhone and subsequently turned Apple from an almost fallen star into the biggest company in the world.

A real leader would resign.

A real leader who resigns is no longer a leader; source _The Prince_. A real leader controls power and makes things better. Let's see if he is. (I know nothing about Snapchat but I know word meanings)

There's multiple legends of CEOs famously shunning the rational advice of their team and charging down a path they believe in. You're a genius if it works out (ie. Steve Jobs) and second guessed if it doesn't.

The problem here is that Evan isn't Steve Jobs so much as he's just cargo-culting Steve Jobs without really understanding why Jobs was successful. Steve was able to see untapped markets, holes that could be filled by new products, completely different ways of doing things.

Most of Apple's biggest successes were had by coming up with something completely new and novel, not by ignoring user feedback when iterating on an existing product.

The iPhone was new and novel in what way, exactly?

It was an iterative improvement on the Blackberry.

The UI experience was completely unparalleled at the time

> Steve was able to see untapped markets, holes that could be filled by new products, completely different ways of doing things.

One could say the same about Snapchat's astronomical success in its early days...

I think it's unsurprising when founders of unicorns eschew A/B testing in favor of vision.

Admitting part of their success was luck is tantamount to admitting "I went from nothing to a billionaire because the dice came up right."

I don't know many people who would be comfortable truly accepting that. And even fewer who could do so AND be the type of driven person necessary. All while everyone around you is looking to you for answers.

Purely anecdotally, the one place I worked at that embraced A/B testing went to such an extreme that it stifled the vision. It became so risk averse that nothing was really happening, yet at the same time the business was not in the place to sustain growth or even profit that way.

This is because the introduction of such a data driven mentality meant the only people empowered to suggest decisions or experiments or approve the work were all in marketing. Because they were basically deciding what workload they wanted and of course you won’t put more on your plate if you don’t have to.

This isn’t to say it’s about data vs. vision. The original success is usually created in large part due to a healthy collaboration between the visionaries, the engineers, and whoever else is in the mix. Once you take one part of the team out of the equation and tend too heavily towards a particular bias then you might well have lost the secret to the initial success.

Your experience is similar to mine. I'm a marketing consultant so I get to work with a lot of different teams. People that either over-rely on Founder vision AND people that overly rely on data tend to not do well. It's why I've stopped saying data-driven and now say data informed. The best teams have a solid vision, but let the data guide the specific implementation of said vision. You need a healthy mix of both.

I really like "data-informed" as an alternative to "data-driven". I'm going to copy that! It is important to honestly acknowledge the limitations of the data.

me too

This isn't quite fair.

You can just as easily A/B your company to death.

A/B usual represents an incremental comparison from one situation to another, and it helps 'walk down the feature path' ... but when you need to change paths, A/B testing is not going to help, this is where a bit of great PM talent is going to work.

Moreover, the more subtle the change, or more the basis' are not very comparable (two different apps), the less A/B has value.

For example: Snap was considered 'too complicated' for many users, they needed to make it simpler. But by doing so, they may alienate a bunch of current users, with the objective of making the app more amenable to the masses. This is a serious strategic issue. They might have gone about it somewhat differently but it's a difficult thing to do in any case, and they had to make changes.

The existential issue for Snap's problems is not this app change, it's the fact that all of Facebook's products are trying to eat them. Instagram, WhatsApp, Messenger etc ... these are the real threats.

To expand on what you're saying: when a user base forms habits around a product—especially something they use on a daily basis—changes no matter how good can be jarring as a result, and thus have a negative impact.

Perhaps Snapchat as it exists now would've taken off just the same, but because the new version represents such a jarring departure from the old, it flops.

A better example of this might be Microsoft keeping the Start Menu for over 20 years. While some cheered for its demise, most users decried the change at the time.

That said, the problems with Snapchat as it exists today run far deeper than merely disrupting people's existing habits, so it's not the best example. Personally I think the app is now poorly-engineered trash. Nonetheless, the notion is an interesting one to at least consider, if only in an abstract sense.

> Didn’t they have a way to release changes and measure impact before just forcing it on their entire user base?

Many possible changes have positive effects short term, but negative or even disastrous effects long term. A/B tests won't ever run long enough to discover these long term costs. When A/B facts displace common sense instead of it complementing it, you can a/b yourself into your own grave.

If you run an experiment and time spent per day is cut in half, that's a pretty clear signal the experiment shouldn't ship, vision or not.

What sort of web site do you run where customers pay by the minute?

It's generally assumed that with advertising, more time == more money, but even that's somewhat questionable.

In a B2B context, time spent per day cut in half sounds like a huge productivity boost. Of course, it could also be that you've made it so difficult to use now that people do a little bit, export to CSV and then use some other tool. But the data won't tell you that.

This isna thread about snapchat. People aren't on snapchat for efficiency. Those people moved to instagram instead.

> they need to recognize the role that luck played into their original product and design.

That's a strong lesson I've learned in life. Successful people _rarely_ know the precise reasons that they are successful, almost exactly for this reason.

You may be aware of many of the components of your success, but you won't be aware of all of them and it will be impossible for you to rank their importance correctly.

Keep this in mind when successful people talk about their success and offer suggestions on how to replicate it.

The hand that was dealt to you when you were born is probably the biggest luck factor of all.

There is a good Warren Buffett documentary on HBO where he says the same thing. Or he’s just being humble. Or both.

If he is saying it because he simply wants to point this fact out (or even brag about it), and do not care doing anything about it. Then not so humble IMO.

It is however still a merit that somebody raises it. It's probably the biggest Elephant in the room that there ever was. Especially if you are born in the third-world slums paying rent to the slumlord.

>Just because you have control over a platform with millions of users and can make changes doesn’t automatically mean you can do no wrong at this point.

Reminiscent of Digg v4.

This is the lesson everyone should have taken from digg.com but it is still being played out again and again.

> Once a company gets to this level, they need to recognize the role that luck played into their original product and design. They hit a resonance with people, and it was probably more luck and timing than anything else.

Perfectly stated. "Pivoting from something shiny to an actual business plan" should be SV CEO's prime skill.

Did they ever reverse the product redesign back to the original design? Haven't really used Snapchat at all but curious to know, thanks

They completely reverted some small changes, and partially reverted more changes. But it wasn't a clean reverse; I still prefer the old snapchat to the new.

I genuinely believe the best path forward for Snapchat is to completely reset back to pre-redesign as a way of making amends to all the users that left, and then re-designing again from there with their new focus.