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Snapchat raised $1.8B in a Series F round

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Re: Snapchat raised $1.8B in a Series F round

#231

Post by adotjdotr »

vonklaus wrote: post #76
argonaut wrote: post #35

People need to stop focusing their criticism on how stupid the app is or how they're going to lose all their users. It's almost a meme by now of how people say this every time Snapchat is brought up. By now it's a foregone conclusion, and requires active ignorance and not really caring to keep an open mind, to continue to hold onto that belief in the face of tremendous evidence that 1) Snapchat is very popular, 2) Sn…

look, I am all for giving snapchat the benefit of the doubt (or I did a long time ago) it was actully the classic zuckerberg boardroom story peter theil tells all the time, except zuckerberg was yahoo to snapchat(i think yahoo was the aquirer but IDRP). Mark Zuckerberg was a the full package, a super talented developer and shrewd business man. Maybe he was cocky, maybe he was super clever, but he doubled down on hims…

"Snapchat does not have a clear monetization strategy and the content they have is ephemeral. If a snapchat clone came out tomorrow, snapchat wouldn't be as sticky. Snapchat looks like twitter, the poster child for massive high engagement with disposable content and horrible biz fundamentals. In fact, twitter or facebook could clone snapchat probably super easy and enjoy crazy leverage and synergy. The only reason a 3rd unknown party can't is network penetration."

This is fundamentally wrong. I'm an advertiser and I have seen so many Snapchat campaigns work tremendously well for brand advertisers. All for large established brands who are spending solid amounts with the platform.

Much of the hard work is ahead for the platform in terms of measurement and clear steps to defining and achieving ROI metrics such as awareness, brand uplift all the way through to DR elements such as traffic, leads, mobile installs and conversions.

The company makes huge strides very often updating media packs, incorporating measurement (Nielsen) etc. I expect very smart acquisitions in terms of continuing to drive user growth on the consumer side and build out of measurement / ads API to cater to the agency world in the next 12-18 months.

An IPO for snapchat is some time away but it is building a very real commercial organisation amongst brands, advertisers, agencies, the TV community (look at the viacom deal recently).

Also to your point here:

"FB raised 16B in a horribly botched IPO."

You can't say a company raised $16bn and had a horrible IPO. This really doesn't make any sense irrespective of all the ratchets and clawback clauses (none of which will keep any FB exec up at night let alone the CEO). Look at FB today, you should be kicking yourself if you had the chance or even thought about buying the stock at $17 when it was being shorted like crazy by Wall Street.

Re: Snapchat raised $1.8B in a Series F round

#232

Post by gjolund »

shostack wrote: post #154
argonaut wrote: post #35

People need to stop focusing their criticism on how stupid the app is or how they're going to lose all their users. It's almost a meme by now of how people say this every time Snapchat is brought up. By now it's a foregone conclusion, and requires active ignorance and not really caring to keep an open mind, to continue to hold onto that belief in the face of tremendous evidence that 1) Snapchat is very popular, 2) Sn…

The monetization piece is interesting, because unlike FB, Snapchat has been all about privacy and anonymity from day one. Their recent ToS change makes it clear that this might not always be the case, and I'm really curious to see how their users react as they get more and more aggressive on monetization. The core functionality doesn't necessarily require the network effect to be useful, unlike Facebook, so there is…

They store all the photos internally. This was confirmed to me by several snapchat employees while interviewing.

Re: Snapchat raised $1.8B in a Series F round

#233

Post by nostrademons »

nickpsecurity wrote: post #187
nostrademons wrote: post #183

Earlier quoted context omitted.

I thought Facebook was way overvalued at $15B when they had zero in revenue. Now they've got about $20B in annual revenue and are worth $340B.

It's almost a good comeback. Yet, Facebook had obvious ways to monetize it's data plus lots of data types to monetize. It was inherent in its design. Also, semi-proven by MySpace. What is comparable for SnapChat? Seems more contrained.

The business model for SnapChat is the same as for TV ads (and for YouTube). Intersperse branded video advertising before the user can get to the content that they're actually seeking. TV ads is a $60-80B business. People in the 18-34 demographic (which in SnapChat's case really means the 13-29 demographic - I don't know anyone over the age of 30 that actually uses SnapChat) already spend 8x as much time on SnapChat as on TV. At some point, that attention imbalance will equilibrate, and SnapChat will be making a lot more than TV networks are.

Re: Snapchat raised $1.8B in a Series F round

#234

Post by argonaut »

gjolund wrote: post #230
argonaut wrote: post #35

People need to stop focusing their criticism on how stupid the app is or how they're going to lose all their users. It's almost a meme by now of how people say this every time Snapchat is brought up. By now it's a foregone conclusion, and requires active ignorance and not really caring to keep an open mind, to continue to hold onto that belief in the face of tremendous evidence that 1) Snapchat is very popular, 2) Sn…

I don't think anyone is debating the popularity of Snapchat. I think you hit the nail on the head when you said "I think there is legitimate reason to be doubtful about the appeal of these products because they have nothing to do with chatting with friends". In my opinion, when Snapchat is truly forced to monetize (such as twitter/fb after ipo) it will dillute the core product to the point that people will search for…

I don't buy this scenario. The failure scenario I have in mind is their monetized products fail to catch on, and they are basically like Twitter - no other products that directly compete in that niche, but not a cash cow either. Or WhatsApp - very popular, not a cash cow.

Re: Snapchat raised $1.8B in a Series F round

#235

Post by hrrsn »

st3v3r wrote: post #166
vonklaus wrote: post #76

Earlier quoted context omitted.

look, I am all for giving snapchat the benefit of the doubt (or I did a long time ago) it was actully the classic zuckerberg boardroom story peter theil tells all the time, except zuckerberg was yahoo to snapchat(i think yahoo was the aquirer but IDRP). Mark Zuckerberg was a the full package, a super talented developer and shrewd business man. Maybe he was cocky, maybe he was super clever, but he doubled down on hims…

"If a snapchat clone came out tomorrow, snapchat wouldn't be as sticky." What makes you say that? Do you know how hard it is to get your social network to move to a new thing? The clone would have to have an amazing benefit, which Snapchat would be in a decent position to clone themselves.

Many have tried to clone Snapchat (including Facebook, twice) but nobody has similar user traction

Re: Snapchat raised $1.8B in a Series F round

#236

Post by argonaut »

gjolund wrote: post #205
qq66 wrote: post #192

Earlier quoted context omitted.

> If snapchat shutdown tomorrow would anyone actually care, or would they immediately shift to the next best platform? You can say this about a lot of great companies. Toyota shuts down tomorrow, I buy a Honda instead. Sure, I wanted the Toyota, but I'm not going to lose any sleep over it. UPS shuts down tomorrow, I use FedEx. Apple shuts down, I use Android. Starbucks shuts down, I go to Peet's.

Those companies employ hundreds of thousands of people and entire supply chains. Snapchat employ's next to no one in comparison and is worth more than entire industries.

Yep. That's why they're actually even worse off. All else equal, the more employees a company employs, the worse of an investment it is, because costs are greater.

Re: Snapchat raised $1.8B in a Series F round

#237

Post by vox_mollis »

gjolund wrote: post #131

The only real value of Snapchat is that now I dont have to scroll past the innane content snapchat is used for on other social networks. Im not going to say snapchat is or isnt worth $20b. I am going to say that I am sad that so much energy and money is being thrown at such a trivial application. Im a software engineer, and i like solving real problems. I cant imagine working at snapchat and trying to motivate myself…

While I completely agree with you, your ire should not be reserved specifically for snapchat. Nearly the entirety of the modern "tech" industry is trivial social applications like this. In a sea of Facebooks, Twitters, Instagrams, Pinterests, etc, Snapchat is not all that unique in terms of uselessness to society.

Re: Snapchat raised $1.8B in a Series F round

#238

Post by gjolund »

argonaut wrote: post #234
gjolund wrote: post #230

Earlier quoted context omitted.

I don't think anyone is debating the popularity of Snapchat. I think you hit the nail on the head when you said "I think there is legitimate reason to be doubtful about the appeal of these products because they have nothing to do with chatting with friends". In my opinion, when Snapchat is truly forced to monetize (such as twitter/fb after ipo) it will dillute the core product to the point that people will search for…

I don't buy this scenario. The failure scenario I have in mind is their monetized products fail to catch on, and they are basically like Twitter - no other products that directly compete in that niche, but not a cash cow either. Or WhatsApp - very popular, not a cash cow.

Just as plausible, if not more so.

I just view the constantly aging 18-24 year old demographic as the main driver of viral growth these days. As that demographic ages out a new flavor of the week will emerge.

Re: Snapchat raised $1.8B in a Series F round

#239

Post by argonaut »

gjolund wrote: post #228
andyfleming wrote: post #82

Earlier quoted context omitted.

Snapchat removes the hesitation about what you are sending. People don't worry about picture quality, etc. It's a temporary message. It really is about the content.

Or lack thereof.

Yes. By definition most people's day to day lives are average and not particularly special.

Re: Snapchat raised $1.8B in a Series F round

#240

Post by gjolund »

mdorazio wrote: post #116
chubot wrote: post #40

Earlier quoted context omitted.

Don't forget that lots of people said Facebook wasn't monetizable either, just a few years ago.

I don't remember that. People thought that Facebook couldn't match Google-level ad revenue, but the monetization model was abundantly clear for Facebook as soon as it became obvious how much personal data they were tracking. Facebook IPO'd in 2012, at which point it already had over $4B in revenue, and had been generating revenue for years before that. The much better example is Twitter, which people did indeed say w…

Exactly.

All the data showed that Twitter wasn't monetizable, yet people still threw huge valuations at it.

There is nothing wrong with building apps and platforms that don't have clear paths to monetization, I just don't see why any sane VC would ever invest in one.

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