Snap Inc. Third Quarter 2017 Results • Hacker News Board

Re: Snap Inc. Third Quarter 2017 Results

#41

Post by weej » Tue, Nov 07, 2017, 10:50 PM UTC

addicted wrote: post #15

sjg007 wrote: post #4

Earlier quoted context omitted.

The kids still snapchat so... me thinks a while.

This is like that Silicon Valley episode, where the only users are underage who are gonna get you fined per use. That's basically SNAP's audience. Young kids who you cannot monetize, and obviously cannot build billion dollar companies on. Maybe once they grow up they will be valuable, but (a) can SNAP wait that long and (b) will those users stick to SNAP once they've grown up?

Child Online Privacy Protect Act = COPPA

https://www.ftc.gov/enforcement/rules/rulemaking-regulatory-...

Re: Snap Inc. Third Quarter 2017 Results

#42

Post by georgeecollins » Tue, Nov 07, 2017, 10:52 PM UTC

The thing that is killing them is not the hosting costs, it is the ARPU. They are getting like $1 ARPU per quarter while FB gets like $4-5. That is what they have to change.

Re: Snap Inc. Third Quarter 2017 Results

#43

Post by panabee » Tue, Nov 07, 2017, 10:53 PM UTC

nl wrote: post #19

The headline figure misses quite a lot: Daily active users (DAU)(1) – DAUs grew from 153 million in Q3 2016 to 178 million in Q3 2017, an increase of 25.2 million or 17% year-over-year. DAUs increased 4.5 million or 3% quarter-over-quarter, from 173 million in Q2 2017. That's good growth year-to-year, but not spectacular. Still, they aren't being completely killed by FB/Insta/WhatsApp Average revenue per user (ARPU)(…

thanks for digging into the details and analyzing results in a balanced way!

if DAUs increased, perhaps the average user also used snapchat more often, which would increase costs. this is pure speculation, of course, so please share if you discover the cause.

either way, hosting costs per DAU is an incomplete metric -- something like cost per minute (i.e., minutes in app or otherwise interacting with snap) would be a helpful supplement.

Re: Snap Inc. Third Quarter 2017 Results

#44

Post by candiodari » Tue, Nov 07, 2017, 10:55 PM UTC

liquidise wrote: post #21

> Hosting costs per DAU were $0.68 in Q3 2017 as compared to $0.64 in Q3 2016 and $0.61 in Q2 2017. Those are staggering figures to me and the trend is equally surprising. Maybe it's ignorance about hosting costs at such a scale, but i feel like cost/DAU should be declining over time, right? Is there something i'm missing here?

They use Google App Engine. Not known for being cheap at scale.

https://www.recode.net/2017/3/1/14661126/snap-snapchat-ipo-s...

Re: Snap Inc. Third Quarter 2017 Results

#45

Post by spyspy » Tue, Nov 07, 2017, 10:58 PM UTC

jondubois wrote: post #39

rblion wrote: post #25

How long do you think they have left? OR Do you foresee them surviving beyond 2027?

- They lost $3 Billion in 9 months. - For every $6 they spent, they got back $1 in revenue. - The product is an app which is free to use. - A large chunk of their system runs on Google App Engine; which is probably the most expensive and highest lock-in infrastructure solution that you could possibly use. - The CEO, who was basically fresh out of university, turned down a $4 Billion offer buy the company. So basicall…

> most expensive

Not really. Like any hosting platform, if you know how to tune it properly costs can be kept low. We cut our infra costs in half moving to GAE. YMMV.

Re: Snap Inc. Third Quarter 2017 Results

#46

Post by Devolver » Tue, Nov 07, 2017, 11:02 PM UTC

Snap went from an incredible growth rate to a terrible growth rate because of a few simple (and sadly, quite common) strategic mistakes:

1. Underestimating the competition.

Evan Spiegel clearly believed that Zuckerberg would never figure out how to beat him. He seems to have concluded that he was smarter, more creative, and more agile than Zuck. He profoundly miscalculated Zuck's relentlessness and is now losing badly as a result.

Takeaway Lesson: Hubris kills.

2. Attacking a market where you have few/zero major advantages.

Evan seems to have concluded that the only scaleable way to monetize a social app is with digital advertising.

The problem?

With Answer: They wouldn't, and likely never will.

Takeaway lesson: Don't take a juggernaut head on. You will get crushed every time.

3. Misunderstanding your own advantages.

Snapchat originally took off because it offered an underserved segment of the market (young people) something Facebook and Instagram did not: a relatively safe, low-judgment place to express themselves.

By focusing on the advertising market (and inevitably turning to privacy-destroying data aggregators like Experian to buy ad targeting data on its users), Evan threw that away.

Takeaway lesson: Never lose sight of the needs and desires that led your users to choose you.

More here: https://exponents.co/snap-facebook-key-competitive-strategy/

Re: Snap Inc. Third Quarter 2017 Results

#47

Post by mandeepj » Tue, Nov 07, 2017, 11:13 PM UTC

giarc wrote: post #9

elsewhen wrote: post #7

SNAP down 16% in after hours trading (at 4:54pm eastern time): https://finance.google.com/finance?q=NYSE%3ASNAP&ei=bSsCWpmn...

For those wondering, click on the chart and type 'e' to show after hours trading.

I use Yahoo finance and it displays after-hours stock price by default - https://finance.yahoo.com/quote/snap

Re: Snap Inc. Third Quarter 2017 Results

#48

Post by mrkurt » Tue, Nov 07, 2017, 11:14 PM UTC

Devolver wrote: post #46

Snap went from an incredible growth rate to a terrible growth rate because of a few simple (and sadly, quite common) strategic mistakes: 1. Underestimating the competition. Evan Spiegel clearly believed that Zuckerberg would never figure out how to beat him. He seems to have concluded that he was smarter, more creative, and more agile than Zuck. He profoundly miscalculated Zuck's relentlessness and is now losing badl…

I think the simpler explanation is: a social media monopoly replicated a smaller competitor's best features and let their dominance do the rest.

Let's not pretend it's possible to compete with Facebook on a level playing field.

Re: Snap Inc. Third Quarter 2017 Results

#49

Post by mrkurt » Tue, Nov 07, 2017, 11:15 PM UTC

gkoberger wrote: post #18

sjg007 wrote: post #4

Earlier quoted context omitted.

The kids still snapchat so... me thinks a while.

My data is anecdotal, but Snapchat is hemorrhaging "kids" to Instagram.

We have matching anecdotes!

Re: Snap Inc. Third Quarter 2017 Results

#50

Post by marcell » Tue, Nov 07, 2017, 11:16 PM UTC

Devolver wrote: post #46

Snap went from an incredible growth rate to a terrible growth rate because of a few simple (and sadly, quite common) strategic mistakes: 1. Underestimating the competition. Evan Spiegel clearly believed that Zuckerberg would never figure out how to beat him. He seems to have concluded that he was smarter, more creative, and more agile than Zuck. He profoundly miscalculated Zuck's relentlessness and is now losing badl…

From the article:

> But it did not work with Snapchat and Evan Spiegel, who seems to have turned down Facebook’s $3,000,000,000 without hesitation or second thought.

I think it did work out pretty well for Evan Spiegel and Snap Inc., since they're trading at around $18B on the stock market despite lots of concerns around their business...