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Snap’s Rise and Fall: How a Big, Splashy IPO Prompted the Doubters to Keep Mum

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Re: Snap’s Rise and Fall: How a Big, Splashy IPO Prompted the Doubters to Keep Mum

#71

Post by randoman »

nemothekid wrote: post #48
noncoml wrote: post #39

Earlier quoted context omitted.

> how to sell ads Why are we so obsessed with the ads model. Why not start charging? This is not a web app, where you have to take out your wallet and enter your CC info; all it takes is the scan of your fingerprint. I am sure people wouldn't mind paying a certain amount per year to keep using the app without creepy apps. Sure, the revenue will be capped by the amount per year a user is willing to pay, but maybe the…

1. Snaps core demo likely doesn’t have the discretionary income to pay for a social network. 2. Snaps main competitor would have a far lower barrier to entry - free 3. If all your friends can’t pay for Snap, you will likely move regardless if you are a paying customer. Why would I pay for a network with 80% of my friends when I can use a near clone with 100% of my friends. 4. Facebook nearly $7/user a month with an a…

Snap's ARPU is about $1 per quarter. Surely the core demo can afford even a 100% markup on that?

My problem with any ad model is it incentivises the maximisation of views/engagement that allow for more/stickier ad impressions which means a proliferation of viral/tabloid/divisive content like youtube/snap/facebook. Once that incentive can be minimised, the incentive to provide quality product that users then feel willing to pay for can become more important.

Of course, these networks didn't attract the user numbers they have by charging up front so for any challenger to come along and try this model will be extremely difficult due to the aforementioned friction in either getting out your credit card to pay or paying up front for an app. People will gladly shell out hundreds of dollars for a new phone but won't shell out a fraction of that for a quality app on that phone.

Re: Snap’s Rise and Fall: How a Big, Splashy IPO Prompted the Doubters to Keep Mum

#73

Post by godzillabrennus »

yusee wrote: post #56

Snapchat is a tabloid. The professionally made content is pure trash. I have Snap opened right now. Here is the top 5 pieces of Featured content it shows to me, a 25-yo male: 1) DailyMail: "Khloe [Kardashian] shocks with new FACE". 2) BROTHER: "Do You Actually Know The Right Way To Eat THIS?" (pictures of pizza) 3) FRIYAY: "Watch This to Start Your Weekend" 4) MTV: "These Rapper Names are SO Cringey" 5) NOW THIS: "CA…

Jobs ego was so large he’d probably love people aspiring to be like him regardless of how idiotic their business model actually is.

Re: Snap’s Rise and Fall: How a Big, Splashy IPO Prompted the Doubters to Keep Mum

#74

Post by LrnByTeach »

cft wrote: post #36

That means that FB was probably the last "web" or "app" big IPO. Now it's Amazon, Google or Facebook. Even Yelp is withering. Just like it has been impossible to start a new car or airliner manufacturer since the 1920s (except for Tesla), the opportunity for creating new large web companies has been shut by the entrenched trio.

I thought many times about world domination of these companies in each of these 4 areas which started their significant presence from year 2000 onwards .

Search - Google

Shopping - Amazon

Social - Facebook

Mobile - Apple ( Apple mobile journey started only after year 2000)

>The opportunity for creating "new large web companies" has been shut by the entrenched TRIO.

> Now it's Amazon, Google or Facebook.

> That means that FB was probably the last "web" or "app" big IPO.

> Even Yelp is withering.

> Just like it has been impossible to start a new car or airliner manufacturer since the 1920s (except for Tesla), the opportunity for creating new large web companies has been shut by the entrenched trio.

Re: Snap’s Rise and Fall: How a Big, Splashy IPO Prompted the Doubters to Keep Mum

#75

Post by KallDrexx »

noncoml wrote: post #39
exogeny wrote: post #30

Snap suffers from a fundamental paradox, one that is difficult for me to imagine an easy way to solve. They've made their bones by being a uniquely fun and social way of a certain subset of the population to share their lives without parents dipping their head in and seeing what they're doing, ala Facebook. The UI is designed to generally support this; it is confusing and messy and understandable only by someone who…

> how to sell ads Why are we so obsessed with the ads model. Why not start charging? This is not a web app, where you have to take out your wallet and enter your CC info; all it takes is the scan of your fingerprint. I am sure people wouldn't mind paying a certain amount per year to keep using the app without creepy apps. Sure, the revenue will be capped by the amount per year a user is willing to pay, but maybe the…

Snapchat is already losing people because Instagram is copying their core features. Charging money will just cause people to leave to Instagram even faster.

Re: Snap’s Rise and Fall: How a Big, Splashy IPO Prompted the Doubters to Keep Mum

#76

Post by wpietri »

noncoml wrote: post #39
exogeny wrote: post #30

Snap suffers from a fundamental paradox, one that is difficult for me to imagine an easy way to solve. They've made their bones by being a uniquely fun and social way of a certain subset of the population to share their lives without parents dipping their head in and seeing what they're doing, ala Facebook. The UI is designed to generally support this; it is confusing and messy and understandable only by someone who…

> how to sell ads Why are we so obsessed with the ads model. Why not start charging? This is not a web app, where you have to take out your wallet and enter your CC info; all it takes is the scan of your fingerprint. I am sure people wouldn't mind paying a certain amount per year to keep using the app without creepy apps. Sure, the revenue will be capped by the amount per year a user is willing to pay, but maybe the…

> Why are we so obsessed with the ads model. Why not start charging?

Short answer: Metcalfe's law. "Metcalfe's law states that the value of a telecommunications network is proportional to the square of the number of connected users of the system (n2)." [1]

Social networks are valuable to the extent that the people you want to talk to are on it. Charging raises a huge barrier to entry, making it very hard to create a large network.

They could try charging by usage, as with SMS, but that's hard when key competitors are free. They could also try charging for premium features, but that could hurt user growth and it's tricky to find the right basket of features that will really get people to pay.

[1] https://en.wikipedia.org/wiki/Metcalfe's_law

Re: Snap’s Rise and Fall: How a Big, Splashy IPO Prompted the Doubters to Keep Mum

#77

Post by adventured »

cft wrote: post #36

That means that FB was probably the last "web" or "app" big IPO. Now it's Amazon, Google or Facebook. Even Yelp is withering. Just like it has been impossible to start a new car or airliner manufacturer since the 1920s (except for Tesla), the opportunity for creating new large web companies has been shut by the entrenched trio.

You're radically exaggerating.

Yelp? I don't see how that's a particularly good example. Priceline is 27 times their size in market cap.

Let's examine that withering though. Yelp sales by year:

2014: $377 million

2015: $549 million

2016: $713 million

2017: likely ~$850 million

Is that massive growth what qualifies as withering these days?

How about Zillow? Tracking to $1 billion in sales, growing very nicely still. Expedia also has a very good business, they just printed a huge quarter ($481m in operating income).

How about Uber and Airbnb? $100 billion in market cap, both fast growing businesses.

Netflix, $83 billion market cap, 100 million paying subscribers, still growing nicely.

How about Spotify? Over 60 million subscribers. Beating Apple, Amazon, Pandora and Google at streaming music.

How about Pinterest? They've just begun the process of making money with their platform. Things are looking just fine for them. Neither Facebook nor Google have been able to harm them in any meaningful way.

Since we're talking about Google and Amazon, let's switch gears into payments.

PayPal is a monster.

Stripe and Square are killing it.

How about in code, given we're talking about Google. Github? Google is a non-issue. Stackoverflow? No threats on the horizon, they have a serious, viable long-term business.

eBay and Craigslist are doing just fine. Amazon hasn't so much as dented either of them. eBay is printing $2 billion annually in net income and has an extremely healthy business. Even lowly Groupon is planning to stick around, they're doing $3b in sales and are now break-even.

Shopify is also killing it right now. $10 billion market cap, with a business that has grown by ~5 fold in four years (72% sales growth in their most recent quarter).

Then we get into dozens of other major web businesses, like LegalZoom, Coinbase, Redfin, DraftKings, GoDaddy, Shutterstock, Automattic, SoFi, Houzz, Lyft, Slack, Dropbox, Etsy, GrubHub, Credit Karma, SurveyMonkey, Reddit, Shutterfly and so on.

And that's while ignoring the vast array of major cloud businesses and enterprise companies, many of which compete with Google and Amazon (or will soon). Companies like Oracle, Microsoft, Cloudflare, Akamai, Digital Ocean and dozens more.

Re: Snap’s Rise and Fall: How a Big, Splashy IPO Prompted the Doubters to Keep Mum

#78

Post by Fej »

LrnByTeach wrote: post #74
cft wrote: post #36

That means that FB was probably the last "web" or "app" big IPO. Now it's Amazon, Google or Facebook. Even Yelp is withering. Just like it has been impossible to start a new car or airliner manufacturer since the 1920s (except for Tesla), the opportunity for creating new large web companies has been shut by the entrenched trio.

I thought many times about world domination of these companies in each of these 4 areas which started their significant presence from year 2000 onwards . Search - Google Shopping - Amazon Social - Facebook Mobile - Apple ( Apple mobile journey started only after year 2000) >The opportunity for creating "new large web companies" has been shut by the entrenched TRIO. > Now it's Amazon, Google or Facebook. > That means…

Apple does not dominate mobile by any stretch of the imagination, with about 15% market share. Google, on the other hand, is creeping up to monopoly status with Android and its roughly 85% market share.

Re: Snap’s Rise and Fall: How a Big, Splashy IPO Prompted the Doubters to Keep Mum

#79

Post by leroy_masochist »

KaoruAoiShiho wrote: post #67
nikcub wrote: post #43

Earlier quoted context omitted.

I'm also very optimistic about Snap - it's one of the only social networks I use regularly. That said, Snap could fix a lot of things and grow revenue and the stock could still not move - they're at about the same market cap of Twitter with a fraction of the revenue and user growth that is similarly stalling There seems to be a hard boundary with reaching the demographic of users in developed nations and both Snap an…

> There seems to be a hard boundary with reaching the demographic of users in developed nations and both Snap and Twitter are there I think Twitter and snap are very different. Snap is a messenger app and has the same potential as FB messenger or wechat. Twitter will never be that. The latest news has Tencent making a strategic investment and bringing chinese style monetization to Snapchat. I'm very optimistic about…

Interesting, what is Chinese style monetization?

Re: Snap’s Rise and Fall: How a Big, Splashy IPO Prompted the Doubters to Keep Mum

#80

Post by azinman2 »

randoman wrote: post #71
nemothekid wrote: post #48

Earlier quoted context omitted.

1. Snaps core demo likely doesn’t have the discretionary income to pay for a social network. 2. Snaps main competitor would have a far lower barrier to entry - free 3. If all your friends can’t pay for Snap, you will likely move regardless if you are a paying customer. Why would I pay for a network with 80% of my friends when I can use a near clone with 100% of my friends. 4. Facebook nearly $7/user a month with an a…

Snap's ARPU is about $1 per quarter. Surely the core demo can afford even a 100% markup on that? My problem with any ad model is it incentivises the maximisation of views/engagement that allow for more/stickier ad impressions which means a proliferation of viral/tabloid/divisive content like youtube/snap/facebook. Once that incentive can be minimised, the incentive to provide quality product that users then feel will…

How do you get a 12 yo to pay for anything, especially when Insta is free and does much of the same stuff?
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