Why Zuckerberg chasing a ghost
The most popular messenger for the US youth this spring will be the third largest technology company in terms of capitalization, if we take the time of the IPO as an assessment. In a pinch, it will yield to Google’s 13-year-olds. And definitely overtake Twitter. Teenagers and young people under 25 years old. The United States occupied this photo and video messenger almost without exception. What is the secret of this communication channel?
Descriptions of how Snapchat works usually begin with the fact that it is an instant messaging service that disappears after viewing. But not only this unique functionality once made it popular. Imagine that you are watching Habr, where blog authors post photos and video reports about the life of each of them and related clever thoughts in the last 24 hours. Each author for a series of 10 second videos tells the main news, accompanying with small text and photographs, applying Chichvarkin-style cartoon filters, Avatar landscapes or People in Black for your photos. Having seen one multireal “diary” you will immediately start viewing the “diary” of the next author. The most interesting moments of reporting can be laid out on thematic pages of public headings. Text blogs also exist, but live from a second to a day, and each comment lives until the moment it is read. Can you say that the main thing here is the disappearance of posts and messages within 24 hours? This is an endless festival of self-made photo and video reports about your life and the surrounding world with cartoon jokes in the design.
')
Viewers of such festivals already have 160 million people around the world, Facebook has already tried to buy it twice, made an attempt to launch a competitor twice and is now attacking it from its two platforms, copying the intended key functionality.
Popular version of the success of Snapchat focuses on the prevailing social circle and common interests. Each social network has its own audience age. Something like our classmates, VKontakte and the Russian segment of Facebook. However, in popularity ratings they usually have different news. VKontakte American youth was unknown. That escaped to Snapchat. The disappearance of the photos here was not the main motive. For the entire history of use, only 14% of the audience sent intimate photos that would be worth erasing on viewing.
In real history and at every growth stage of Snapchat Snapchat, the growth drivers of the audience were different.
Snapchat was born as a means of protecting confidential photos and messages, but was initially presented by the founders as “a game for sending disappearing photos to friends”. This is the wording from the letter of the founder and CEO of startup Evan Spiegel (Evan Spiegel).
The first month brought 127 users. The first name Pictaboo was also unfortunate - it refers to the image of a child's game when an adult covers his face with his hands. It is not surprising that with such a name the game did not take off among the youth.
The name Pictaboo was soon abandoned due to a conflict with the author of the idea, which may have saved the startup. Although the character of Evan, this gap with a partner shows not too good.
Overcoming the “Valley of Death” by two, Evan Spiegel and Bob Murphy renamed the application to the now-famous Snapchat and by the spring of 2012 reached 30,000 installations. The functionality of the disappearing photos turned out to be more or less in demand for sending photos of an intimate or hooligan nature. But not only. In April 2012, Evana found an investor whose daughter-schoolgirl began to use this application for sending cheat sheets and answers to tasks. His half a million dollars allowed to run a version for Android and add video upload.
Zuckerberg became an unexpected benefactor of Snapchat in the late fall of 2012. He became interested in the application, tried to buy the company and even made a competitor. But the latter did not take the audience, but only drew attention to the functionality of the missing photos and to Snapchat itself in the app store and from journalists, which gave Evan and Bob an increase of up to a million users.
Evan took advantage of the attention of Mark Zuckerberg also for public relations among investors, having arranged in 2013 an investment auction between the Chinese and Google. None of them, however, seems to be not selling. No matter how sold and re-come for the purchase of Zuckerberg. Teasing the giants, he nonetheless raised $ 150 million in 2013 from lesser-known investors.
The money was spent on growth financing and on payments to the court for 2 years of compensation of $ 158 million excluded at the start by co-founder of the startup Frank Brown.
With new investments, Snapchat has expanded its functionality - introduced filters and a “story” (collections of messages that have been saved for 24 hours). As a result, by the end of 2013, Snapchat was no longer just a messenger, but also a bit of a social network. In 2014, the audience reached 50 million, the chat functionality appeared, it became possible to publicly group messages by event, topic or location. In 2015, new filter lenses appeared, dialogs with embedded video messages, access to the global market, and broadcasting of someone else’s video tantalizer from media companies. The audience has grown to 100 million.
To create a filter lens was bought Russian-Ukrainian startup Looksery, developing technology to change faces in real time. After six months, we in Russia will learn about the MSQRD application with similar functionality, which Facebook will acquire in the unsuccessful at that time competition with Snapchat.
Like many other growth-oriented startups through capitalization, Snapchat has abandoned user monetization of the application in favor of growing the audience and all of its revenues are only from advertising. A short successful monetization through the sale of extended sets of lenses brought in a quarter of the advertising revenue, but after two months the paid sale of filters turned off. Another reversed decision by Evan was to create his own content. He hired the editors to produce it. The project was led by former Fox First Vice President. After 5 months the project was closed. In its place came 16 well-known media producers like BuzzFeed and Cosmopolitan, broadcasting their collections of videos and photon news.
In May 2016, Snapchat for the first time ranked the monthly ranking of the most downloaded apps for iOS. In this ranking, the instant messenger shifted the educational application iTunes U from the first position. Today, the average user logs in to Snapchat 18-20 times a day, and in the number of videos viewed by the videos, the users of Snapchat have already surpassed Facebook users. However, Facebook does not leave attempts to eat up an audience with Snapchat.
At the end of 2016, the audience audience unexpectedly ceased to grow rapidly, as indicated in the prospectus for IPO. In the prospectus, this is explained by the intrigues of Zuckerberg, who in August introduced Instagram Stories, resembling a selection of photographs of Snapchat. The threat from Zuckerberg comes not only from Instagram. although Instagram is also a youth audience, although older snepchatovskoy. In the fall of 2016, Facebook launched the endangered messages and avatar filters on samples in Poland and Australia already in its messenger.
Throughout its existence, Snapchat has quite successfully improved the product, responding to user requests or anticipating them. The news platform from the media companies (Discover), the grouping of custom videos from around the world devoted to a certain topic, event or place (Live) were good attempts to structure the search for an interesting video. But users increasingly complained about the difficulty of finding information. To combat this problem, Snapchat bought Vurb’s search service for $ 200 million. Content grouping is becoming increasingly difficult, and friends are further away, and my subjective opinion is that this could be the cause of Snapchat. The authors of the study in 2015 found that Snapchat is much better than all instant messengers and social networks replacing live human communication. The only way to communicate that has exceeded Snapchat on this indicator is real offline. The increasing complexity of grouping content and mixing friendly posts on a chronological basis make Snapchat look like Facebook in terms of avoiding friendly communication to an algorithmic and sponsored news show. And in the fight against Facebook, much will be decided only by money and the size of the audience.
To counter Facebook you need money and a lot. Therefore, Snapchat is going to sell part of its shares through an IPO in the amount of $ 3 billion, despite the weak market conditions. But not only therefore. Shareholders need to show the profitability of the investments made, and the founders to find resources for the development and promotion of a new product - points for creating augmented reality on the Internet based on the video content taken by the user.
Evan is not a programmer, but a designer. Perhaps that is why he easily buys companies when he has money. Most do this after an IPO. and Evan started long before him. He easily chose the tactics of buying technologies on the market from the first years of existence.
In 2014, a startup AddLive was acquired, associated with streaming video for $ 30 million. In 2014, Vergence Labs was bought, which produces “smart glasses” that can shoot video and transfer it to a smartphone. In 2014, Snapchat bought Scan.me service, which scans QR codes, for $ 54 million, and integrated the technology into the avatar of users. In 2015 snapchat bought the previously mentioned Looksery for modifying faces and the popular Facebook application Bitmoji, which inserts animation into messages. In 2016, we bought an application for creating 3D photos, Seene, and an Israeli startup for the development of augmented reality technologies Cimagine Media.
Evan Spiegel singles out three main monetization items in the company's business model: camera, content and communication.
In the prospectus for placement on the stock exchange, the emphasis is on the camera. In short - more and more video and geotagging will be sponsored by someone. The remaining directions of monetization are described very vaguely. Meanwhile, the purchases of 2014 and in the future could give grounds to suggest plans for augmented reality, for example, with the help of 3D stickers . What finally happened in the fall of 2016.
Spectacles glasses came to the market with a camera for shooting widescreen video (lens viewing angle - 115 degrees versus 74 for iPhone). The peculiarity of viewing such a video was the independence of the video stream from the rotation of the smartphone screen. The viewer can choose the angle directly when viewing. Both at horizontal and at vertical, even at a diagonal rotation, the picture opens up new details on the corners - as if you are shifting the focus of attention there. The video is a bit closer to the “window to the world” experience . But only on the screen of the smartphone. On a desktop computer and on TV, you simply see the round screen of the video stream instead of the usual rectangle - and moreover, a narrower one. Evan himself calls the glasses a toy.
The conjuncture of the stock venture capital market is not very successful now, but Snapchat is still going for an IPO .
Perhaps the fact is that the Snapchat audience growth rate declined by the end of 2016, and Instagram launches similar functionality? Evil tongues would find the connection between entering the IPO in the current not-so-good moment of going public and the sharp increase in advertising revenues 7 times over the past year. Earlier in 2015, a former employee already accused Snapchat of overstating the audience. Unproven, but there was no refutation or counterclaim. Maybe advertising fees can legally, but deftly exaggerated before an IPO?
Theoretically possible. If part of the advertising revenue would come from partners in advance. Accelerated placement of friendly advertising based on the return on growth of the stock price of a company that you cope with or simply sympathize with is not such a rare thing.
Sony Corporation of America CEO Mike Linton has been involved in the development of Snapchat since the company's early days (according to its statement). It is strange then that he was not the first investor. But in any case, since 2013, he has precisely acted as adviser to Evan Spiegel, joining the company's board of directors, and now before the IPO becomes Chairman of the Snap's board of directors. A very useful contact for the monetization advertising model. Absolutely legitimate of course, but offering the possibility of accumulating income at the right time for beautiful reporting ...
Recent contacts with Google also provide interesting opportunities for the game with advertising revenue in exchange for investment. The degree of integration with Google is generally a mystery of recent months. It is known about the recent contract binding Snapchat to purchase server services for $ 2 billion over 5 years. It is also known about the discovery of Snapchat in the portfolio of investment company Google Capital (now CapitalG). Perhaps Google didn’t buy the shares of Snapchat, but gave them a convertible loan, but the search engine seems to be an instant messenger investor. Google also has good opportunities to recommend advertisers where and when to advertise.
The above is exactly conspiracy, since advertisers are always late in placing budgets compared with the growth of the audience and the sharp increase in advertising in 2016 is not so surprising. And Google can play on the terms of Evan and just sold his services to him “in a long” and all the Snapchat investments, only the option of an advance sale of equipment or a convertible loan. Most likely, the KPCB fund investor (Kleiner Perkins Caufield & Byers) didn’t persuade Evan to buy his portfolio asset Bitmoji in 2015, just his animation technology successfully formed into the Snapchat filter strategy. Advertising jumps and early investment through IPOs are almost normal phenomena for startups. Trouble for IPOs can come from the other side.
A group of large American investors want to ban a stock of special classes that give more votes to certain shareholders over others. The coalition of equity lobbyists includes 16 funds, under whose management there are assets of more than $ 17 trillion. Snap, which is going to sell non-voting shares during the upcoming IPO, may collect less than the expected amount if this initiative becomes a boycott, for example. Now Evan and Bob have 45% of the shares in total according to the number of shares, including 70% of all voting shares.
The story continues here .
Escaped from parents
Descriptions of how Snapchat works usually begin with the fact that it is an instant messaging service that disappears after viewing. But not only this unique functionality once made it popular. Imagine that you are watching Habr, where blog authors post photos and video reports about the life of each of them and related clever thoughts in the last 24 hours. Each author for a series of 10 second videos tells the main news, accompanying with small text and photographs, applying Chichvarkin-style cartoon filters, Avatar landscapes or People in Black for your photos. Having seen one multireal “diary” you will immediately start viewing the “diary” of the next author. The most interesting moments of reporting can be laid out on thematic pages of public headings. Text blogs also exist, but live from a second to a day, and each comment lives until the moment it is read. Can you say that the main thing here is the disappearance of posts and messages within 24 hours? This is an endless festival of self-made photo and video reports about your life and the surrounding world with cartoon jokes in the design.
')
Viewers of such festivals already have 160 million people around the world, Facebook has already tried to buy it twice, made an attempt to launch a competitor twice and is now attacking it from its two platforms, copying the intended key functionality.
Popular version of the success of Snapchat focuses on the prevailing social circle and common interests. Each social network has its own audience age. Something like our classmates, VKontakte and the Russian segment of Facebook. However, in popularity ratings they usually have different news. VKontakte American youth was unknown. That escaped to Snapchat. The disappearance of the photos here was not the main motive. For the entire history of use, only 14% of the audience sent intimate photos that would be worth erasing on viewing.
In real history and at every growth stage of Snapchat Snapchat, the growth drivers of the audience were different.
As it really was
Snapchat was born as a means of protecting confidential photos and messages, but was initially presented by the founders as “a game for sending disappearing photos to friends”. This is the wording from the letter of the founder and CEO of startup Evan Spiegel (Evan Spiegel).
The first month brought 127 users. The first name Pictaboo was also unfortunate - it refers to the image of a child's game when an adult covers his face with his hands. It is not surprising that with such a name the game did not take off among the youth.
The name Pictaboo was soon abandoned due to a conflict with the author of the idea, which may have saved the startup. Although the character of Evan, this gap with a partner shows not too good.
Overcoming the “Valley of Death” by two, Evan Spiegel and Bob Murphy renamed the application to the now-famous Snapchat and by the spring of 2012 reached 30,000 installations. The functionality of the disappearing photos turned out to be more or less in demand for sending photos of an intimate or hooligan nature. But not only. In April 2012, Evana found an investor whose daughter-schoolgirl began to use this application for sending cheat sheets and answers to tasks. His half a million dollars allowed to run a version for Android and add video upload.
Zuckerberg became an unexpected benefactor of Snapchat in the late fall of 2012. He became interested in the application, tried to buy the company and even made a competitor. But the latter did not take the audience, but only drew attention to the functionality of the missing photos and to Snapchat itself in the app store and from journalists, which gave Evan and Bob an increase of up to a million users.
Evan took advantage of the attention of Mark Zuckerberg also for public relations among investors, having arranged in 2013 an investment auction between the Chinese and Google. None of them, however, seems to be not selling. No matter how sold and re-come for the purchase of Zuckerberg. Teasing the giants, he nonetheless raised $ 150 million in 2013 from lesser-known investors.
The money was spent on growth financing and on payments to the court for 2 years of compensation of $ 158 million excluded at the start by co-founder of the startup Frank Brown.
Stages of growth
With new investments, Snapchat has expanded its functionality - introduced filters and a “story” (collections of messages that have been saved for 24 hours). As a result, by the end of 2013, Snapchat was no longer just a messenger, but also a bit of a social network. In 2014, the audience reached 50 million, the chat functionality appeared, it became possible to publicly group messages by event, topic or location. In 2015, new filter lenses appeared, dialogs with embedded video messages, access to the global market, and broadcasting of someone else’s video tantalizer from media companies. The audience has grown to 100 million.
To create a filter lens was bought Russian-Ukrainian startup Looksery, developing technology to change faces in real time. After six months, we in Russia will learn about the MSQRD application with similar functionality, which Facebook will acquire in the unsuccessful at that time competition with Snapchat.
Like many other growth-oriented startups through capitalization, Snapchat has abandoned user monetization of the application in favor of growing the audience and all of its revenues are only from advertising. A short successful monetization through the sale of extended sets of lenses brought in a quarter of the advertising revenue, but after two months the paid sale of filters turned off. Another reversed decision by Evan was to create his own content. He hired the editors to produce it. The project was led by former Fox First Vice President. After 5 months the project was closed. In its place came 16 well-known media producers like BuzzFeed and Cosmopolitan, broadcasting their collections of videos and photon news.
In May 2016, Snapchat for the first time ranked the monthly ranking of the most downloaded apps for iOS. In this ranking, the instant messenger shifted the educational application iTunes U from the first position. Today, the average user logs in to Snapchat 18-20 times a day, and in the number of videos viewed by the videos, the users of Snapchat have already surpassed Facebook users. However, Facebook does not leave attempts to eat up an audience with Snapchat.
Problems or respite
At the end of 2016, the audience audience unexpectedly ceased to grow rapidly, as indicated in the prospectus for IPO. In the prospectus, this is explained by the intrigues of Zuckerberg, who in August introduced Instagram Stories, resembling a selection of photographs of Snapchat. The threat from Zuckerberg comes not only from Instagram. although Instagram is also a youth audience, although older snepchatovskoy. In the fall of 2016, Facebook launched the endangered messages and avatar filters on samples in Poland and Australia already in its messenger.
Throughout its existence, Snapchat has quite successfully improved the product, responding to user requests or anticipating them. The news platform from the media companies (Discover), the grouping of custom videos from around the world devoted to a certain topic, event or place (Live) were good attempts to structure the search for an interesting video. But users increasingly complained about the difficulty of finding information. To combat this problem, Snapchat bought Vurb’s search service for $ 200 million. Content grouping is becoming increasingly difficult, and friends are further away, and my subjective opinion is that this could be the cause of Snapchat. The authors of the study in 2015 found that Snapchat is much better than all instant messengers and social networks replacing live human communication. The only way to communicate that has exceeded Snapchat on this indicator is real offline. The increasing complexity of grouping content and mixing friendly posts on a chronological basis make Snapchat look like Facebook in terms of avoiding friendly communication to an algorithmic and sponsored news show. And in the fight against Facebook, much will be decided only by money and the size of the audience.
To counter Facebook you need money and a lot. Therefore, Snapchat is going to sell part of its shares through an IPO in the amount of $ 3 billion, despite the weak market conditions. But not only therefore. Shareholders need to show the profitability of the investments made, and the founders to find resources for the development and promotion of a new product - points for creating augmented reality on the Internet based on the video content taken by the user.
Other Technologies
Evan is not a programmer, but a designer. Perhaps that is why he easily buys companies when he has money. Most do this after an IPO. and Evan started long before him. He easily chose the tactics of buying technologies on the market from the first years of existence.
In 2014, a startup AddLive was acquired, associated with streaming video for $ 30 million. In 2014, Vergence Labs was bought, which produces “smart glasses” that can shoot video and transfer it to a smartphone. In 2014, Snapchat bought Scan.me service, which scans QR codes, for $ 54 million, and integrated the technology into the avatar of users. In 2015 snapchat bought the previously mentioned Looksery for modifying faces and the popular Facebook application Bitmoji, which inserts animation into messages. In 2016, we bought an application for creating 3D photos, Seene, and an Israeli startup for the development of augmented reality technologies Cimagine Media.
Where to grow
Evan Spiegel singles out three main monetization items in the company's business model: camera, content and communication.
In the prospectus for placement on the stock exchange, the emphasis is on the camera. In short - more and more video and geotagging will be sponsored by someone. The remaining directions of monetization are described very vaguely. Meanwhile, the purchases of 2014 and in the future could give grounds to suggest plans for augmented reality, for example, with the help of 3D stickers . What finally happened in the fall of 2016.
Spectacles glasses came to the market with a camera for shooting widescreen video (lens viewing angle - 115 degrees versus 74 for iPhone). The peculiarity of viewing such a video was the independence of the video stream from the rotation of the smartphone screen. The viewer can choose the angle directly when viewing. Both at horizontal and at vertical, even at a diagonal rotation, the picture opens up new details on the corners - as if you are shifting the focus of attention there. The video is a bit closer to the “window to the world” experience . But only on the screen of the smartphone. On a desktop computer and on TV, you simply see the round screen of the video stream instead of the usual rectangle - and moreover, a narrower one. Evan himself calls the glasses a toy.
Conspirology about IPO motives
The conjuncture of the stock venture capital market is not very successful now, but Snapchat is still going for an IPO .
Perhaps the fact is that the Snapchat audience growth rate declined by the end of 2016, and Instagram launches similar functionality? Evil tongues would find the connection between entering the IPO in the current not-so-good moment of going public and the sharp increase in advertising revenues 7 times over the past year. Earlier in 2015, a former employee already accused Snapchat of overstating the audience. Unproven, but there was no refutation or counterclaim. Maybe advertising fees can legally, but deftly exaggerated before an IPO?
Theoretically possible. If part of the advertising revenue would come from partners in advance. Accelerated placement of friendly advertising based on the return on growth of the stock price of a company that you cope with or simply sympathize with is not such a rare thing.
Sony Corporation of America CEO Mike Linton has been involved in the development of Snapchat since the company's early days (according to its statement). It is strange then that he was not the first investor. But in any case, since 2013, he has precisely acted as adviser to Evan Spiegel, joining the company's board of directors, and now before the IPO becomes Chairman of the Snap's board of directors. A very useful contact for the monetization advertising model. Absolutely legitimate of course, but offering the possibility of accumulating income at the right time for beautiful reporting ...
Recent contacts with Google also provide interesting opportunities for the game with advertising revenue in exchange for investment. The degree of integration with Google is generally a mystery of recent months. It is known about the recent contract binding Snapchat to purchase server services for $ 2 billion over 5 years. It is also known about the discovery of Snapchat in the portfolio of investment company Google Capital (now CapitalG). Perhaps Google didn’t buy the shares of Snapchat, but gave them a convertible loan, but the search engine seems to be an instant messenger investor. Google also has good opportunities to recommend advertisers where and when to advertise.
The above is exactly conspiracy, since advertisers are always late in placing budgets compared with the growth of the audience and the sharp increase in advertising in 2016 is not so surprising. And Google can play on the terms of Evan and just sold his services to him “in a long” and all the Snapchat investments, only the option of an advance sale of equipment or a convertible loan. Most likely, the KPCB fund investor (Kleiner Perkins Caufield & Byers) didn’t persuade Evan to buy his portfolio asset Bitmoji in 2015, just his animation technology successfully formed into the Snapchat filter strategy. Advertising jumps and early investment through IPOs are almost normal phenomena for startups. Trouble for IPOs can come from the other side.
A group of large American investors want to ban a stock of special classes that give more votes to certain shareholders over others. The coalition of equity lobbyists includes 16 funds, under whose management there are assets of more than $ 17 trillion. Snap, which is going to sell non-voting shares during the upcoming IPO, may collect less than the expected amount if this initiative becomes a boycott, for example. Now Evan and Bob have 45% of the shares in total according to the number of shares, including 70% of all voting shares.
The story continues here .
Source: https://habr.com/ru/post/321372/
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