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Comment by blantonl | Hacker News Reader

I'll never understand the reasoning for social media platforms to get into the hardware business.

SNAP getting into drones and phones - you might as well just light stacks of money on fire, which is what happened here.

Whatever happened to just doing what you are good at? Or is the end result for every startup global world domination?

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What is snap good at? What is their moat? Hardware is a logical step for companies looking to not put their eggs all in one basket. Amazon has Kindles, Echo, Ring etc. Google has Nest, Pixel Phone. Microsoft has their laptops

Their moat is Apple/Google promotion while they are the only Meta alternative.

TikTok eats into that but not much because of the geopolitical issues surrounding it.

The answer is lock-in. Once someone has spent $100s on some hardware that only works with your network it’s less likely they’ll switch.

Also control of the market. Some people said Google was insane to buy Android when they did but now they’re one of two players in the smartphone market. Meta would dearly, dearly like to have that kind of control (hence, IMO, the oversize focus on the metaverse)

Meta using the same playbook with their glasses and VR headsets and portal. Not owning the railways (the device) is a strategic risk and makes you always at the mercy of the device owners (eg. Apple cutting tracking for meta). So it’s just like every other business, vertical integration, reduce risks and improve the “moat”

That kind of device is very different from a drone camera though.

look social media and all that online stuff is waaayy too saturated. nobody needs another useless app. people need real things that do real stuff. it may be hard, really hard, nearly impossible even. but, it's infinitely better for companies to start getting in on real world products, even if success is difficult, rather than keep producing the same useless apps.

Humanity needs innovation and progress in the primary areas of living: housing, transportation, water, food, and health insurance. am i asking for the impossible? yes. but, do take those moonshots, otherwise, the next 50 years will just be more of the same nonsense.

Happily surprised by your comment. It's not expressed often enough that the vast majority of what we call "tech" today is frivolous entertainment in the leisure domain. Almost none of it actually improves lives or addresses very pressing common needs.

> I'll never understand the reasoning for social media platforms to get into the hardware business.

They probably felt like their primary revenue stream was built on a pretty flimsy, easily-copyable foundation that might crumble at any time due to social trends (i.e.: TikTok). Hence, they are desperately trying to diversify their business model using the cash they have before it's too late.

They should've embraced Snapcash and there wouldn't be an OnlyFans.

Growth must be eternal, regardless of how unsustainable, or Wall Street will decapitate you. The bankers thirst for profit must be slaked.

If this means burning giant piles of (other people's) money to maybe have a 2% better rate of return next year then you do it.

> Growth must be eternal, regardless of how unsustainable, or Wall Street will decapitate you

Note this is only for publicly traded companies. If you don't want your company to be like this, don't go public and you won't have to answer to shareholders and have to produce eternal growth.

This would require that the company is owned by itself or its founders. Startup companies like Snapchat have raised capital from external sources and need to pay it back which is a bit hard with no meaningful profit. The founders probably don't even have a say in this, these companies usually have a board of investors which will force the IPO or sale of the company.

Choosing to give up control of your startup to investors is also a business decision.

This is backwards.

Companies that cannot survive without massive infusions of cash go to Wall Street asking for money while promising growth.

So if there's anyone to blame, it's companies who are unable to sustain businesses without raising massive sums of other people's cash.

Look there is a reason Wall Street focuses on growth: the thing (company, organism, population, whatever) that does not grow will (eventually) be overtaken by that which does, no matter how small the latter's growth rate is. So when the "market" is composed of 1000s of companies, one of the easiest ways to differentiate the good from the bad is to filter by PROFITABLE growth. Now here is the rub... "PROFITABLE" often becomes hard to define so we have long periods of time where just "growth" is used as a proxy... and at the ends of bubbles you typically have lots of companies with unsustainable growth trends being valued at assinine multiples. But again... there is a (good?) reason the heuristic exists.

Snap will continue having an existential crisis as long as their platform is dependent on companies like Apple and Google. They are a camera company, and they need to use their expertise to beat Apple at the camera game, which is no easy task.

Underrated comment in my opinion. Snap's long term potential lies in differentiating themselves with their hardware and UX like Apple did with the iPod /iPhone in the 2000s. An extremely hard task, but a more visible direction than a trench war with TikTok and Meta over generic social communications.

How’s differentiating on cameras working out for Sony smartphones?

Considering they sell that investment to the other big companies that put their cameras in their phones… probably good. Do you know otherwise about their financials?

I meant market and mind share wise.

Sony camera hardware has massive marketshare on phones. Sony hasn't particularly invested much in the phone camera hardware space, instead they basically ported the software of their full cameras on it, targeting the professional and prosumer market with features beyond easy good looking pictures for more demanding applications, and seem to be fairly successful for the fairly small niche they're going for.

46% market share. Largest chunk of the market.

https://www.diyphotography.net/sony-dominated-the-smartphone...

>They are a camera company...

Huh? Forgive my ignorance, and perhaps this speaks more broadly to a failure on Snap's own part to accurately convey that image, but the last thing that ever comes to my mind would be calling Snap a camera company. What makes them a camera company as opposed to a social media company?

It’s their own self-definition. They call themselves a camera company.

That’s the justification for the investment in hardware, in AR filters, etc. They do “camera stuff”. To be fair, their camera stuff is good… their attempts to increase ad inventory (in app professional content etc) are not so good.

Apps that are just database front-ends are eventually going to get less and less money. Even I would rather have more "things that are useful" than just another database schema surrounding my email address. Yes there can be room for some iteration of it, but increasingly investors want something more than database + react + app

I think hardware is not a reason for their current downfall. Going into hardware is away to diversify and avoid the problems they are facing right now: TikTok.

Content is king, and one of the primary objectives of this hardware is to capture more & unique content.

SNAP couldn't make any money just being snap chat, so they had to at least look like they were going to make money with some new avenue when they IPO'd. During that time period, it was 'spectacles' and everyone around here was shilling hard for them.

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