Just because it's expensive doesn't mean it's a bubble.
Remember the outrage at Instagram's billion-dollar valuation? Looks pretty cheap now. Same thing with Facebook, Netflix, Uber. Snapchat's simple idea is every bit as transformative as the simple ideas behind these companies.
Here's what smartypants bubble-callers were saying in 2004 about Google before their $2.7 billion IPO[0], also built on a pretty simple but world-changing idea:
"Pent-up demand for hot tech stocks is driving Googlemania."
"There are serious questions about Google's long-term viability"
"Word has it that Microsoft will feature an immensely powerful search engine in the next generation of Windows, due out by 2006."
"Taking down Google with better search is in [Microsoft's] strike zone."
"Google stands a good chance of becoming not the next Microsoft, but the next Netscape."
"It's tough to see why many Windows users would even bother with Google."
"Yahoo! has the advantage of being able to cull demographic data from its millions of subscribers and match them with advertisers."
"Google relies on ads for 96 percent of its revenue making it a one-trick pony vulnerable to the swings of the market."
You're not really making me feel any better about this. Google's IPO was only 2.7 times the purchase price of Instagram? Even more, Google's IPO was a fourth of the current valuation of Snapchat? Those numbers don't feel right to me. Google also was actually profitable at the time of its IPO. It had a real business model.
Google had a monetization model by then and their IPO was a quarter of snapchats valuation. So where is snapchat's four times as good monetization model?
Remember the outrage at Instagram's billion-dollar valuation? Looks pretty cheap now. Same thing with Facebook, Netflix, Uber. Snapchat's simple idea is every bit as transformative as the simple ideas behind these companies.
Here's what smartypants bubble-callers were saying in 2004 about Google before their $2.7 billion IPO[0], also built on a pretty simple but world-changing idea:
"Pent-up demand for hot tech stocks is driving Googlemania."
"There are serious questions about Google's long-term viability"
"Word has it that Microsoft will feature an immensely powerful search engine in the next generation of Windows, due out by 2006."
"Taking down Google with better search is in [Microsoft's] strike zone."
"Google stands a good chance of becoming not the next Microsoft, but the next Netscape."
"It's tough to see why many Windows users would even bother with Google."
"Yahoo! has the advantage of being able to cull demographic data from its millions of subscribers and match them with advertisers."
"Google relies on ads for 96 percent of its revenue making it a one-trick pony vulnerable to the swings of the market."
Any of this sound familiar?
[0] http://www.newrepublic.com/article/politics/bubble-bath