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Snapchat CEO’s leaked memo on survival (techcrunch.com)
351 points by cpeterso 10 days ago | hide | past | web | favorite | 181 comments





Give credit where credit is due. Spiegel is digging deep, showing humility, and asking the right questions after Snap has been flailing for a long time. The crux of the issue is that they haven't launched anything fundamentally innovative and game-changing since the original Snapchat, which went insanely viral in the teen demographic.

In this sense they are following a similar path as Bebo, where I worked before they were acquired by AOL. Launch viral product to teens, blow up huge, score huge business deals, and then growth stagnates because it turns out the original vision only encompassed a product, not an entire platform. Bebo ended up selling to AOL right before it became clear the entire business model was failing thanks to Facebook. I saw a comment below about 2019 being the year that Snap is acquired. I could very much see that happening.

The only thing that would turn things around is if Spiegel can pull another rabbit out of his hat and launch a category-defining product somewhere. Augmented Reality could be where they do it. They did fail miserably with Spectacles, their first take on smartglasses, but again, give credit to them for having the balls to invest in hardware and ship a product. That said, the fact that they shipped a v2 of Spectacles that didn't fix any of the core problems with the original isn't a good sign.

Still, augmented reality is going to be the future of computing when it merges with consumer wearables. It's early days in this market. Every Big Tech company is racing to launch the iPhone of smartglasses. Snap has managed to be the first to launch consumer glasses with a camera. If they can pull their sh*t together and ship something that is actually useful and doesn't look ridiculous, they could still emerge as a dominant player.


> That said, the fact that they shipped a v2 of Spectacles that didn't fix any of the core problems with the original isn't a good sign.

What are the core problems you are talking about? Personally the biggest issue with me in v1 was how flashy they looked, v2 got rid of that and now it's a great device. I made some really good footage with it. People are missing a really good experience not having it imo.


They toned down the flashiness, that was a step in the right direction. The biggest things holding them back are

1) the camera is still way too conspicuous

2) only post to Snapchat


2 -> you can download the video and post it anywhere but yeah it would be nice to have it directly saved to phone rather than snapchat then save to phone

I believe the output is a circle video instead of the normal rectangle video.

You can export to another platform in circle, square, or widescreen format.

  Field of View: 105°
  F-stop: f 2.2
  Photos: 1642 x 1642 px
  Videos: 1216 x 1216 px at 60 fps
source: https://www.spectacles.com/shop/nico

Snap was first? We forgetting Google Glasses I guess.

Google tried but clearly market maturity is not there yet. Doubt it will be 2019. We need to squeeze more into chips before a regular-size glasses will be available with AR built in.

Also personally I doubt it will be iPhone of AR. Too many companies are working on it and probably will come up to light at the similar time. It will be more like cruise control that so many car makers basically invented at the same time.


Correction: first to put camera on glasses with enough fashion sense not to spawn a brand new word to describe just how much their owners looked like Borg assholes. I’m referring of course to “glasshole.”

All signs point to Apple launching their glasses in 2019 or maybe 2020 if they slip. I don’t have insider info at Apple but if you look at the rate they are hoovering up AR companies it’s clear they’re prepping for a big move. If they don’t launch by 2019 somebody else will steal their thunder with the first consumer smartglasses that don’t totally suck, most likely a fast moving startup with a killer niche product.


Glasshole has been used for a long time to describe a personal style of egotistical glass artists. It had a new meaning added.

I don't think we can consider Google's $1500 "explorer edition" Glass as a consumer product.

It was borderline. But they were clearly supposed to be the precursor to wider scale consumer glasses. Google would never have committed that much time and money if it was originally intended to be an enterprise product.

original Snapchat was not fundamentally innovative and game-changing...

Actually, their whole “disappearing messages” thing was perfectly positioned for the teen market as the polar opposite of “post once and it’s there forever” Facebook. I never used it myself, but for a certain subset of people, not just dick pic senders, this was a pretty big differentiator/selling point. Enabling a whole new class of behavior for millions of people.

So yeah, although the innovation never progressed beyond a killer feature for some users, it was still... innovative.


Technologically maybe - but I think it did define the idea of a social network being primarily (if not entirely) phone/camera based. I had been off social media for years but found Snapchat fun and interesting enough to rejoin (for a few years)

I used to be a heavy user of Snapchat, and fall into its dominant demographic - young* (edit, had forgotten this word) users.

I remember buying stock in the company, and the same week, their big update rolling out, and quite literally burying my friends and their stories underneath the "overcrowded pile of clickbait" mentioned in the article. That, I believe, is where Snap really went wrong, and what drove 3 million users away from its platform.

When you combine Instagram's own story implementation with the fact that Snap's focus seems to be mainly on Discover from this point, it seems unlikely to me that they'll ever regain the interest of people who abandoned it back in February.

It will be interesting to see which changes they roll out in the months to come, but honestly, as long as the Discover page has even less meaningful content than a Taboola "Content you May Like" block, I can't foresee it being a real draw in for new users.


I don't have many friends on Snapchat, but I follow a lot of celebrities.

Literally the same week, 90% of them stopped posting, and it never recovered. Now it's a ghost town.

People who followed friends got hit, people who follow celebrities got hit, I just don't get it what was on their mind.


I would have to wonder how many true celebrities, people whose fame come from outside of social media, felt the same frustrations at not being able to see their friends feeds as other users.

Why they didn’t do extensive internal testing before rolling out such a huge UX changes? At least they should have rolled it out to smaller groups, measure metrics and expand group over time. The general rule in UX update is that larger the changes, longer it needs the A/B testing for impact on metrics. All botched UX updates have root cause in circumventing this rule by some passionate folks.

It was forced down the company's throat by the CEO. 0 testing was done by Snap before rolling it out, and he was 100% behind it. All of product design/management said no, he over ruled them. This is what I was told by a snap employee.

They were changing things all the time anyway, in 6 months I had maybe 3 complete redesign of the home page. And if you were on Android like me, you know testing and stability certainly wasn't part of the company motto, Snapshat was easily the most buggy mainstream app I know.

One update broke notifications for me for like three months. The Android client is a joke.

Yeah notifications broke for a pretty long time indeed...

That's hard to believe but during my one year of usage before I gave up, I had an issue with playing videos. Videos were always laggy, they would play for two seconds and then freeze until the end. They did not fix that in one year of updates.

And that's a core feature of the app, it's unbelievably buggy, it would be the same as Facebook freezing when you like a post or Youtube freezing when switching videos.


One of the reasons they had the mass exodus of the celebrity / influencer content makers was due to statistics.

On "Instagram Insights" you can see: Interactions of the last 7 days, profile visits, email clicks, reach, impressions.

Also in-depth demographics by your audience as well: city/country breakdown, age range, age range by gender, gender percentage, followers per hour and per day.

And get similar statistics / demographics for all images and stories you post.

If you were paying someone to promote content - these help justify payments made for content.

Compare to snap with the stat of: "I have 10k follows" and that's it.

Marketers want to know they are getting value for money, so need these to help justify paying someone for promotions/ads.

eg. http://musemarketinggroup.ca/wp-content/uploads/2017/08/insi...


> Also in-depth demographics by your audience as well: city/country breakdown, age range, age range by gender, gender percentage [...]

Does Snapchat actually collect all this information about its users? If yes, when it's such an unbelievable miss.


Lost in all this is an important distinction that Snapchat wanted to make: they wanted to separate friends from influencers / celebrities / media. It was a good change. Another important thing Snapchat does is it doesn't show likes / followers publicly - when the whole world is chasing these numbers Snapchat has taken stance against it. The general philosophy they follow makes me think this is short term pain and the company will do fine in the long run.

It was a terrible change. People (most heavily: kids) like to consider celebrities their friends. People loved the close, barely filtered connection Snapchat gave them.

I'd love to hear why you think that separating friends from influencers, celebrity, or media is a good change. The last element I get somewhat, but I don't think anyone has a conceptual issue identifying who is a fried and who is an influencer, and being able to see stories with minimal friction was a major draw for me.

I follow few friends and non-friends on FB and they are very distinct entities. The non-friends I follow are because of some common interest like a research field or outdoor sport. I would be happy to see weekend yard work photos from my friend but I wouldn’t care so much of that from non-friends. The intent of why I follow these two classes is very different. However Snapchat crowd might be different as I understand. Young folks would tend to consider both classes as same.

Why did Snapchat feel so strongly that it was necessary to separate them? Neither Instagram nor Twitter separate friends from influencers/celebrities/media, and that seems to work fine.

My understanding is that it was a philosophical standpoint Evan took, not 'Snapchat' as a whole necessarily.

As a college student who’s only social media comes through Snapchat, I’m glad that they will be making changes. The redesign doesn’t make much sense and just made things more confusing if anything. I have 12+ friends in a group which we use to coordinate hanging out and to generally chat about things we find interesting. I haven’t used the stories functionality in over a year. I really think the move to focusing on chat is the way to go, even though there’s a lot of competition there.

I started on Facebook at 12 years old when it first became popular, I’ve gone through many platforms but dropped them all and I’ve been using only Snapchat for over 4 years now and it seems to have the perfect level of privacy. It also doesn’t feed as much into the whole “look at how awesome my life is compared to yours” trap of facebookish platforms, at least the way my friends use it.


Just curious (I don't use Snapchat as I'm a fair bit older then the target demographic), why do you use it to chat rather than an actual IM? Eg Telegram or Discord or Wire.

I'm not OP but I use Snapchat a lot to chat. I like that the messages are not saved, it feels more natural for me as in I don't have to "think" too much about what I write, just as talking. This way it feels less staged, you can compare it to photos on insta vs photos on snap (likes and permanent vs none of that). With text it's obviously to a lesser extend but still. No one can go through years of messages and see what i said back then.

The discover shit what made me delete Snapchat, keeps throwing annoying people at my face every time I open the app, why? it was a fun way to chat with friends and share short videos but no let fill it with booty shaking and nasty stuff and force you to watch it

I read the whole memo, or tried to. Ridiculous. It means nothing at all. One OKR is "spread positivity". What does that even mean? How is it measurable? https://cheddar.com/videos/snap-ceo-evan-spiegel-company-mem...

Indeed. Looking at their OKRs, the only one I can see turning it around for them is "Lead the Way in Augmented Reality". The others are fluff in wording and in punch, and I can't see them gaining ground against IG when IG executes on these ideas much better than Snap does.

They had a working thing and then ruined it. I’m not sure how they managed to do that with a product change. Didn’t they have a way to release changes and measure impact before just forcing it on their entire user base?

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. Changes to that core product need to be treated as an experiment and conducted as such. Show some discipline.

You can still innovate but those ideas should be made to stand on their own, grow on their own. 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. It just means you will have more time and resources before those mistakes take you out of the game completely.

He should be punished for his mistakes by the board installing some experienced adult supervision for a while until he shows he can fix his current mess (reverse negative growth) and innovate in at least an additional major product category tangential to Snap. If he can’t do that in the next 24 months, he should step down for the good of the company.


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.


> 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..


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.


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 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.

> 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?


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

You have rights if you own enough right?

Also why are there two kind of shares?


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).

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

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”

[flagged]


I think if they work at Snap then they can find work at other companies, I wouldn't say their lives are 'ruined'

Ok, not ruined. But denial in creative fulfillment. Imagine working so hard to finish your music record, only to be destroyed by illegitimate forces.

We're talking about some of the highest paid people in the world here, with excellent job prospects should things go south. That's before we even get started on stock options and how many early employees of these startups become millionaires.

Sure they got good financial security, even if you are employed at some unknown third-world software company. You're prospects are still very good compared to a blue-colar.

However, financial security is not the only thing you need in life to be happy.


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.

>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".


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.

> 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?


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!

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.


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.


> 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...


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

"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

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)

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.


Why did they ignore Android usability and performance for so long? Also, I guess one of the cool things was the mystery meat UX but I wonder if that hurt them as they tried to garner broad appeal? Sometimes I see other people's Snaps and have no idea how they did certain things like effects, text, or interactive elements.

They explicitly focused on teens in rich countries with high end phones and high speed mobile connections. They wanted to target that “rich” niche.

Yeah, I think instagram has eaten snapchats lunch just by having a much better (more performant) implementation. The snapchat app are so much more battery than anything else on my phone that I've actually completely uninstalled it, even though I quite liked using it.

Snapchat didn't have to be a fad. Spiegels incompetence as a CEO and as a product person killed the business.

Market segmentation. Apple users are worth more money. Which kinda makes this pivot to the developing world a bit of head scratcher. High ARPC was one of the key differentiators they promoted back during their IPO.

Snapchat has failed the test of feature vs. product.

Everything that made Snapchat unique is something easily emulated in a myriad of other apps. When you strip away the interface, the only unique part of it was the network/aggregator-effect they have. However, they were much smaller than Instagram and as a result would be fighting an uphill battle with a product that already has the network and could easily duplicate the features.


I think of any social media company as an interface into a network. If the network isn't fundamentally the moat then that's a problem because the interface can often (but maybe not always) be a commodity. In the early stages, a small social media company may use its novel interface as the moat. Interface moats can be fragile but they buy the company some time to grow the network and gives the initial set of early adopters a reason to join. However at maturity, the interface alone can't continue to be the only thing that can defend or provide a moat for a business.

The problem with Snap (as you pointed out) is that the network characteristics are similar to Facebook's or Instagram's....aka friends and family....aka people in your phone contacts. Facebook's fundamental value is that they were one of the first ones to capture the graph that already existed in your phone and brought it online at scale. However, the actual network they built isn't as novel or as difficult to build as something like Twitter which is a graph that existed nowhere else before.

LinkedIn is similar to Facebook in that the business contacts probably already existed in your phone or on a bunch of business cards. But because we don't want our professional lives and our personal lives to share the same spaces, LinkedIn was able to capture the professional opportunity by bringing business contacts online.

What does this all have to do with Snap? Well Snap has the unfortunate position of having similar network characteristics to Facebook's while also being in a similar social space albeit heavily skewed younger (I consider Instagram to be in a roughly similar social space). Snap probably felt like the demographic skew alone would be enough to balance out this weak position but I suspect they're finding out quickly that it is not since Instagram is proving to be a thriving space for young people too.

On the other hand, networks like Twitter, LinkedIn, and Nextdoor are all either unique networks underneath the primary interface or they share different social spaces that people usually don't want mixed. Anyone can make an interface but it's incredibly hard to grow a network in a particular social space. The latter almost always makes for a stronger moat. Snap needs to figure out how to make progress on the latter because I think many of their large problems stem from not having enough of a moat at the network level.


This is really well thought out. Thank you for posting :)

I disagree.

Snapchat, at least conceptually to me, is for more private, candid, or even meaningless conversations to close friends. I have very little of a filter on snapchat - and messages and snaps disappearing after a day certainly helps.

Whereas with Instagram, etc, it's about 'showing your best'. There's a layer of artificialness to it.

Unfortunately, literally 90% of my friends left Snapchat after the redesign. This blame can solely and directly be attributed to a brazen CEO.


I disagree with your disagreement ;)

In all seriousness, I understand your point, but what you’re referring to is a feature of a messaging/social product, not necessarily a product itself.

In Snapchat’ case, everything that makes it unique is easily duplicated by Instagram, outside of the people on it.

However, your comment on Instagram is actually about the marketing of the product, not necessarily the product itself.

Basically, if you take away the branding and the interface and distill down Instagram and Snapchat into the core functionality, there is little difference outside the network of users.


Snapchat’s biggest value to me is that they aren’t owned by facebook. So many jumped to Instagram and use it as a cross-platform messenger now as well—I don’t want to use Facebook (Instagram) messenger.

I would love a more legit chat feature. It’s great that you can keep messages around for longer now. A safer UI that prevented accidentally adding the wrong friend to an image share would be awesome, as would as unsends.

Unfortunate that their main revenue source seems to be really, really bad clickbait stories.


At least the memes are decent.

Most of the incremental growth in our core markets like the US, UK, and France will have to come from older users who generate higher average revenue per user.

Changing the design language of our product and improving our marketing and communications around Snapchat will help users understand our value

Aging-up our community in core markets will also help the media, advertisers, and Wall Street understand Snapchat.

To be honest, this seems like wishful thinking to me. It's going to very hard for them to regain momentum in their current demographic. It's going to be close to impossible to create a network effect outside of their current demographic.


”Adults, not teens. Messaging, not Stories. Developing markets, not the U.S.”

So... Snap basically wants to be Facebook?

Adults, messaging, developing world — Facebook is already enormously entrenched in the overlap of those markets thanks to Messenger and WhatsApp. FB has also shown the ability to clone Snap’s product innovations.

I have a feeling 2019 is the year when Snap is acquired. The market cap is already below $10 billion.


The USP of Snapchat was that parents could not go through past messages as these would get deleted once read. So, if you had planned a night out on the town doing silly things you could still pretend to the parents that you would being having a sleep over at a best friend's house. Even if they went through the phone with a fine toothcomb the parents would not find evidence of plans for wrong-doing.

Facebook is not about regularly messaging your best friends, it is about messaging/stalking people you knew from school onwards up to now, including workmates, parents and other people you don't message important things to, such as plans for tonight.

Snap are pretending here that their 'besties' market isn't already consumed by WhatsApp!, which it is, so Facebook have already eaten their lunch there. They don't actually acknowledge their 'secret sauce' in this memo, which was the instantly deleting messages that appeal to teens.


I also viewed Snap as an platform built on a single missing SMS feature, temporal messages. They have added a bunch of other stuff, but that single feature was always the adoption driver, and eventually users figured out screenshots trump deletion. I also thought that the other features were in direct conflict with that adoption driver, as in actively providing negative user incentives for continued use.

> "Developing markets, not the U.S.”

I thought he hated developing markets?


“This app is only for rich people,” Spiegel said, according to Pompliano. “I don’t want to expand into poor countries like India and Spain.”

Delicious irony.

https://variety.com/2017/biz/news/snapchat-evan-spiegel-only...


He does. And poor people. And old people. He still wants the money of advertisers targeting these groups though.

Who would be the buyer, though? Microsoft? Alibaba? I can't see many acquirers wanting to get into the competitions that snapchat has gotten themselves into.

maybe Google finally gets their social network

Maybe Apple. They’ll just pull most of the ads and make it “privacy focused”. If they gave people an alternative to Facebook it would be a big move.

Apple's not going to buy an app with a significant Android user base unless it's such a compelling app that it causes people to abandon Android and buy an iPhone. Snapchat ain't that app.

How do you square that with their purchase of Shazam?

When I was much younger, I thought that adults didn’t know how to use new tech, and that’s why they didn’t bother with new fangled tech like Facebook.

Now that I’m closing in on my 30th birthday, I realize I had it all wrong. I can use snapchat, I just don’t understand why I would want to use it.

I’m curious what Snapchat will do to try and entice people like me into using it. From where I sit, I’m having a very hard time imagining what they could possibly do.


Snapchat filled a niche that sat between directly messaging your friend/family group and putting something on display on Facebook. You could share random thoughts, things that happened in your day or interesting things you come across.

It was walled version of Twitter with a focus on photo and video.

What made it really interesting for me is that, because it uses your phone book to gather your contacts, you end up with a somewhat different circle to who you might have on Facebook. There were some people I hadn't spoken to for years, or people who were in my friends circle that I didn't talk to much, that became some of my most-interacted with people on Snapchat.


And once again you read "slowed down and ruined it" (aside from the language, which is too strong) ... people REALLY respond to latency.

I wish Google would pay attention to this. Especially Gmail. It's just unacceptably slow and there is just no excuse.


I am just surprised that a publicly traded, multi-billion dollar company either did not think to A/B test major changes to the product or did not know how to properly conduct A/B testing.

I assumed every one of the top apps/websites did this automatically, but I guess I was wrong.


They certainly did, but reports are that the CEO overruled the data and even multiple internal efforts against the change.

Did Snapchat really flop, or is the equity market undergoing a correction and return to sanity? Snapchat was a fun fad, not a sustainable enterprise. Everyone involved should have taken money off the table in the high times and realized the bubble component would pop.

You can call it a fad, but the truth is that they had and still have the opportunity to build a real business.

The reality is that despite how seemingly old the internet is, we're still in the relatively early stages. There aren't that many companies globally building content systems at scale and working through the challenges of what that means - at scale. Those skills in an organization are extraordinary valuable as old media starts to crumble and information infrastructure on the internet becomes the new fundamental fabric of society - moreso than even today.

I know that sounds a bit grandoise but that's the thinking behind the big bets behind companies like this. If Snap can just get some experienced, less impulsive leadership in place - they can still build an extremely valuable global media property. 180mm daily actives is no joke.

As you can tell, I'm skeptical of Snap in it's current state of management but I'm bullish on social media overall.


Snapchat is still bleeding money, losing $353 million last quarter.

I literally do not understand what they can be spending that much money on, can anyone clue me in? It can't be on infra and bandwidth.


For one thing, they are contractually obligated to pay Google and Amazon at least $600mm per year for the next few years.

So that’s $150mm per quarter, as a minimum (if their usage doesn’t meet that amount they have to pay the difference).

They are paying something like $200mm on R&D/quarter, and over $100mm on advertising and administrative each.

Their “cost of revenues” (I’m not exactly sure what this means for them...I wonder if it is discounts offered to advertisers) is another $190mm.

So a few hundred million here and a few hundred million there adds up to a $350mm quarterly loss.

What’s interesting is their R&D expenses have dropped 20% from the year ago quarter, while their sales and marketing have increased substantially. That does not bode well for the future either in my opinion (although it’s easily arguable that even $200mm per quarter on R&D seems excesssive for Snap).

Edit: I quickly compared them to Twitter, which isn’t known as the most leanest of run companies in the first place, but Twitter’s R&D costs are $139mm/quarter compared to over $200mm for SNAP. Their administraative costs are $74mm/quarter, compared to over $100mm for SNAP. How is SNAP spending so much more money than Twitter, and clearly producing a fraction of the output?


For the year ending 12/31/2017 it looks like $1.5 billion in R&D and $2 billion in sales, general, and admin expenses. https://www.nasdaq.com/symbol/snap/financials?query=income-s...

Q1 2018 financials here: https://investor.snap.com/news-releases/2018/05-01-2018-2115...


Snapchat may have lost a lot of users across the world, but it's still extremely popular in Norway. I'd say probably more than half the population aged 18-50 has it installed.

Any idea why?

From what I've seen, people are addicted to streaks.

If that's the case, the popularity won't necessarily translate into revenue.

Oh, so now Evan Spiegel want to prioritize developing countries... https://www.theguardian.com/technology/2017/apr/17/snapchat-...

I'm pretty sure he still doesn't. He just needs to boost the user numbers so the eventual takeover price tag isn't embarrassingly low.

I don't use Snapchat, but now I understand why the redesign I saw so much hate on was pushed into production. I can't speak to the specifics of what changed, but I don't see why you wouldn't even A/B test such a massive change to your service.

Instagram Stories seem like they might've had a big impact on the popularity of the app as well.


Coming off of the recent SEC case against Elon Musk, does anyone know how they look at leaks from public companies, especially high impact ones like this? Are there any examples of SEC action in the past?

The SEC allows companies to make corporate announcements through social media. Tweets of a public company’s CEO are thus corporate announcements. Leaks are reported on by third parties, and thus don’t fall under the same rules. The leaker might get in trouble for Reg FD violations, or for violating an NDA, but given the reduced risk of damage (particularly when the leaked information is not fabricated), it’s been a low enforcement priority.

I don't think that there's any kind of SEC impact to memos that talk about strategy and product goals. It's different if you offer material previously non-public finding info, as Musk did.

Success in entertainment (and this includes social media startups) is really hard to replicate! I wonder why that is. It seems easier to consistently start enterprise software companies than it is to create new social media apps.

Facebook's strategy of just buying what works and creating a media conglomerate for advertisers seems very smart to the casual observer.


Maybe unconventional successes in entertainment tend to be hard to replicate because they require years gaining expertise and creating a strong product and that the ebbs and flows of public taste happen to favour that product when it comes out.

If you're lucky, you might score a long shot at a moving target from very far away, but it will be hard to score a second one.


Snapchat’s lens studio product is a definite category defining product. As an AR developer, it’s been soo much fun and enjoyable creating AR experiences, and its one of the first times I can make an experience and directly engage a large audience.

Makes me laugh every time when people lionize some platform because "all the cool teens are on it!". It's obviously not a demographic you can profit from. And they will easily abandon your platform once they grow up.

I'm not sure they can make a comeback, Instagram ripped off all the good parts and executed on their vision better. Adding all of the celebrity ads and discover feature was a huge mistake, all users wanted to do was communicate with their friends.

15 pages? It's not a leak if it's meant to get out, and 15 pages means it was meant to get out.

He blames “impatient strategic moves.” If they’re done hastily, are they even strategic?

They forced me off their platform. I have an older iPhone 4s and can not update past ios 9.3.5. Snapchat eventually forced an update and that required me having the latest ios which I could not even do since Apple stopped supporting this device years ago despite it still being a pretty good phone.

Maybe this will be the beginning of the end for the social media bubble?

Is there really a bubble? The players look fairly solidified to me.

You have Facebook, which might not be as cool in all countries with younger users, and has had a lot of controversy surrounding fake news, election influence, and privacy, but it's doing well.

You have Instagram, which is doing very well, was a great Facebook acquisition, helping their parent company even more.

You have Twitter, which seems to be struggling by, and is still very relevant.

Reddit is doing very well if you can even call it social meddia.

Apps like Yik Yak, Whisper, Snapchat, and such all seem to have been going downhill or are gone for some time now. But I think the players we have are here to stay.


Reddit is certainly trying to pivot toward social media, with probably the least enthusiasistic and most hostile user base for that change they could possibly have.

The magic of reddit has always been in its detachment from real-world social structure. Reddit is successful because it grouped users by common interests and eliminated the burden of having your real identity associated with your online alter-ego. If they ruin that in an effort to sell more ads, it will be a sad loss.

Reddit has always been social media, unless you're thinking of a different definition of it?

You've also got LinkedIn which is doing well by all accounts (even after the Microsoft exit).

And Nextdoor which is much younger but cemented itself with steady growth and a unique network.

I don't think any of these companies will have trouble making substantial money at scale for the foreseeable future.

Snap's problems are unique to Snap.


I think what people forget, or don't really consider, is that a third of the human race alive today is a monthly active user of Facebook. Yes, they're doing well.

Here's coverage without an insanely user hostile "WE ARE PART OF OATH YOUR PRIVACY IS IMPORTANT (BUT IT'S DIFFICULT TO FIND SETTINGS TO DISABLE COOKIES)" lightbox which cannot be dismissed:

https://cheddar.com/videos/snap-ceo-evan-spiegel-company-mem...


Alternatively, disable JS: the page looks perfect, just the article and its images. I have to congratulate the TC frontend devs.

Wow, yes what a speed increase and it works just fine anyway! Thankyou!

It has autoplaying video with sound instead... Brave new world indeed.

Ah apologies - I block that by default. I haven't yet found a way to block the stupid GDPR cookie pop ups.

Firefox + NoScript works great.

Brave browser takes care of that too.

Ublock Origin plus Cookiemonster list - I never see a cookie banner.

Thanks for mentioning this[1]! I just realized that I was only using the Prebake[2] list, which doesn't appear to be actively maintained.

[1] https://www.fanboy.co.nz/fanboy-cookiemonster.txt

[2] https://raw.githubusercontent.com/liamja/Prebake/master/obtr...


Thanks for that. Didn't know about this list.

works on mobile?

I don’t get any of that lightbox junk you’re talking about on my iPhone - did they update the link to a different site?

[flagged]


We detached this subthread from https://news.ycombinator.com/item?id=18161289 and marked it off-topic.

GOTV in apps was fairly common during the Obama years as well.

In a democracy there is only one correct side in the “get more people to vote” and “get less people to vote” argument.

The fact that some think getting more people to vote is a partisan endeavor says more about the anti democratic leanings of one side of the partisan divide than anything else.

(Edited)


It is partisan because because people’s votes are predictable. An armed forces GOTV is going to benefit one side, an African American GOTV is going to benefit the other. Who a GOTV targets shows which side they are on.

Honestly, how did the mention of soft OKR, spread positivity, lead to post about elections? That a throwaway account was used tells a lot. Not being American, this kind of discours is troubling.

Preface:I'm my opinion all groups in politics currently are capable and engaging in propaganda. What I have seen lately here appears to come from one group

Hacker news appears to have recently entered the targets of the same sort of posters who pioneered the propaganda techniques used in r/t_d during the election. I keep seeing throwaway accounts bring up altright talking points that are barely related to the topic at hand if related at all. Here we have someone equating getting people to vote with liberal partisanship. The other day I had someone tell me the Republican party was the party of tolerance because white men let other people vote and then a continuing stream of wild claims[1].

People espouseing their viewpoint from any given side isn't the problem here, when they give evidence and backed up reasons. This group appears to just be pushing statements they want to be true with no evidence and trying to pull a Gish gallop[2] frequently to derail the conversation into their topics. Luckily the community culture here seems to catch this sort of behavior and kill it quickly

You'll have to set your account to see dead as the comment was flagged to death

[1]https://news.ycombinator.com/item?id=18148520

[2]https://en.m.wikipedia.org/wiki/Gish_gallop


What's next? Politicians informing people of their stances will now be seen as "influencing the outcome of elections"; an obviously unreasonable partisan tactic. If you tell someone what they should do -- or now even ask them to make their own decisions -- you're an enemy of democracy, I suppose. Funneling millions anonymously into super-PAC campaigns is ok, but telling people to vote... that's too much politics for a company.

Critical thinking also means analyzing your own biases, not just those of others.


They're fucked.

Please post something useful, insightful or worthy of discussion. Otherwise, don't post at all. Thank you.

Please don't complain that a submission is inappropriate. If a story is spam or off-topic, flag it. Don't feed egregious comments by replying; flag them instead. If you flag something, please don't also comment that you did.

Thanks, I didn’t realize I can flag it. I shall do that going forward.

>The biggest mistake we made with our redesign was compromising our core product value of being the fastest way to communicate,” Spiegel stresses throughout the memo regarding “Project Cheetah.”

Hmmmmmmmmmm. The Google Mail redesign comes to mind. Gmail has 1.4 billion users. (April 2018 figure, Gmail's Wikipedia page.)

Google management, if you're listening: the writing is on the wall. You have it there black and white: "The biggest mistake we made with our redesign was compromising our core product value of being the fastest"

In this comment I outline some reach goals for you:

https://news.ycombinator.com/item?id=17873576

(That comment is written in a wishful style, what I know you can do and what I imagine you can do.)

You can do it! Just hire the best. Put the best on that team. 1.2 billion users mean you can afford it. You can do it.

Do it. You can do it. I believe in you with all my heart.




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