This $27.8 billion dollar valuation tells me that somewhere along the line, my job and lifestyle have caused me to detach from a significant chunk of society. I've never used Snap or their platform. I don't even really know what the benefit of their service. I am curious if I'm in the minority or if there's lots of developers like me who aren't able to comprehend these valuations.
> my job and lifestyle have caused me to detach from a significant chunk of society
Yeah, the 13-21-year-old chunk of society. Do you, as a Linux Kernel Developer, happen to be within that demographic? Even their IPO roadshow video (which I see has now been removed) talks about their "13-34-year-old" user base, and then emphasizes the far higher levels of engagement and far higher potential among the lower half of that range.
MySpace had that one nailed, and look how that turned out for them. This is exactly the kind of demographic that is susceptible to fads and keeps leaving dead services in its wake.
Well to be completely fair, it is quite embarrassing even for me as an adult to have my parents/grandma looking at the stuff I post of facebook, which has caused me to reduce engagement there and post to instagram, which is restricted to close friends.
The MySpace argument is tired and stale and not even that insightful. MySpace made several mistakes as a company that had nothing to do with their premise (connecting people, the same as Facebook). It just turned out that Facebook had better execution in the long run.
Just because the myspace argument is stale doesn't mean it's wrong.
I don't know if you remember how that went down, but people loved myspace. It worked well, then all the cool kids jumped to Facebook. It was herd mentality.
Definitely a trend situation over product features.
With network effects, you live by the sword and you die by the sword.
I disagree, Myspace could have done incredibly well if they focused on their strengths in music early on. Instead they wanted to be a media company going in a bunch of different directions, which sounds very very familiar. Snap is doing publishing with content partners, they announced special formatted tv shows, hardware and glasses, AR and adtech.
Wanting to be big in music = wanting to be a media company, and comes with a similar set of pitfalls, namely being beholden to a bunch of anti-tech established music companies. Also, I'd challenge whether there is room for incredible success. What's the biggest music success? Spotify? Pandora? Compare that to Facebook, and it is clear which direction had more potential.
I would disagree, being a publishing company, a movie review company, a comic book company, video company ... these are all things Myspace was attempting, is not the same as being a music company.
I don't think that's quite right. Snapchat does have a chat feature which allows you to essentially send feedback on peoples snaps/stories, so you could absolutely tell people they're wrong for making some statement.
It also depends on whether you have friends that use Snapchat. I'm 24 and a college senior, so within the right age group, but none of my friends use Snapchat. It's only fun if you have friends who use it.
But do you think their actual sources of revenue (all the ads and paid stories) are focused towards older people? From what I've seen, it's mostly gossip and stories aimed towards younger people.
Oy, that. Honestly, with all their algos I'm confused why Facebook lets one friend cover my entire feed in Shah Rukh Khan. I don't even know who SRK is!
Heck, I'm 24 and have a lot of trouble understanding the appeal of Snapchat. Despite lots of friends trying to get me to use it I've never figured out how to get value from it.
Most of the value I get from Twitter, Instagram, and Whale is from people I don't know in real life. Facebook is the only social network for me that's mostly real life friends.
Since you said "society", it's worth noting that Snap is really not a player in Asia. In Japan and Korea, Line is dominant. In China, there is doubtless something else to take its place.
I have been struck with amazement at the rise of apps like Snap, Twitter, and Instragram. They have captivated an entire generation, leaving me on the sideline. As a developer, I suppose I'm not the most social being on the planet, but it does concern me that I have become "detached" from everyone else.
I spoke with an Uber driver the other day whos 14 year old son has 700,000 instragram followers and is making money selling advertising to big brands like Target. I'm not old, but that sure as hell made me feel old...
I think there's a socioeconomic side of this that isn't discussed enough.
I have a highly engaging, challenging job that pays well. I'm a holder of an advanced degree, regularly read long-form books, and am engaged and will be married soon.
Frankly I think I'm pretty typical a lot of people on HN, and developers in general. I don't consume much media, though. I entirely checked out from facebook and haven't looked back.
When I think about who the heaviest users of facebook and snapchat are, I think of people who have boring jobs that don't require their full attention: working retail in a mall, gym attendants, hotel workers, basically anyone working a minimum wage, customer-facing job with a lot of time to kill. These people tend to be young, but they also tend to be less educated and not earn that much.
Looking at my own life, I remember thinking how backward the rich were when I was young, they were late to the internet and some still don't even use email (I think Buffett does this?) It's ironic that as developers have risen in prominence and income, we may be excluding ourselves from using the very mass-market products we ourselves create. It's weird. Are we drug dealers?
Developers build the infrastructure that manufactures the drugs. The owners of that infrastructure are kingpins. The users of these platforms are drug dealers. Each follower or friend is an addict.
Welcome to the future. The economy's mostly driven by incredibly invasive advertising, normalized spyware, and kids sending each other naked pics. It's far worse than any 80s film ever imagined.
Social networking is becoming the dominant form of media. Media controls what people think, including their politics, and what products they buy.
You need to stop and see the big picture here. facebook is basically as powerful as the entire TV industry combined, with all the power concentrated in a single company. The NYT recently reported that the average US facebook user spends 50 minutes/day on facebook. And people are watching less and less TV all the time.
I'm not saying this is a good thing, quite the opposite, but I think it seems dishonest not to acknowledge what a huge effect these companies have had on every level of our society, from how people talk to friends, how politicians communicate with the electorate, how people decide what to buy, etc.
I never said social media was not powerful. The question is what percentage of the "economy" it makes up. This source[1] puts the share of the "internet economy" at 5.6% of US GDP. I'm not sure how those terms are defined in this study. But the point remains that no matter how powerful you think the internet and social media have become, the economy is large and diverse.
Here is one breakdown of GDP by category[2]. Even if you are generous and include all retail (6%), information (4%), and entertainment (4%), that is still only 14% of the economy. I think people forget just how much economic activity is tied to things like government, real estate, healthcare, manufacturing, etc. The poster I replied to seem to imply that social media was making up most of the economy, and I think that's demonstrably false.
My fiancee is an architect and I invest in real estate so I probably have a broader view of this than most (if only due to the luck of my draw/circumstances). Plus my father worked his entire career in factory operations.
Part of the problem is that HN is so software/Bay Area-centric, it's an industry cluster that pushes out a lot of traditional S&P 500 companies. To be honest, I have mixed feelings about this. On one hand, living here, you are definitely "in a bubble" thought and perspective-wise. On the other hand, living in the bubble means you get to see what's coming next, and let's face it, the S&P 500 is backward. It's hard to appreciate how backward so much of it is, it's practically incomprehensible to the average Bay Area tech person. People overall are paid just way less, 40-hour weeks are the norm, people don't read books or retrain much, everything is done via emailed word documents and playing "did you get the latest changes" vs. VCS), etc.
Arrogant? Maybe, but you tell me how companies here can post such exceptional operational performance relative to their more "average" peers.
Healthcare is enormous. Holy crap, what, 24% of GDP?
I think the truth is somewhere in the middle. Don't forget Google makes its money from advertising. And as more people grow up expecting to have everything for free, more people will bawk at paying for ownership of anything. It's why so many people will sustain countless invasive advertisements to play a mobile game over weeks/months/years instead of just paying a 1 time fee of a few dollars.
Advertising has transformed our economy over the past century, and especially this past decade.
> And as more people grow up expecting to have everything for free
I’m convinced this is more of a service problem than an inherent generational problem. At the moment many of the best-in-breed applications are ad supported because their whole raison d’être revolves around network effects and making people pay in or subscribe cuts against that.
As time goes on, though, places where a subscription based business model can fit will start to catch on as the underlying technologies mature to the point where you can get any old dude out of college to run them rather than needing top-quartile development talent. This is especially true as you become able to position applications or services as ‘premium’ products.
It’s easy to make people uptake new things with freeware business models. But as the products and services get more buy-in you’ll find more scope for other business models to thrive. For example, there is a cottage industry of subscription based matchmaking services that offer a more personal touch than typical online dating.
How does he sell the advertising? Product placement in the photos?
(I'm not interested in advertising. I'm just curious.) I'm surprised by Target: Why not rotate their product lines and improve selection rather than just advertise to teens? Most of them would probably go to Walmart where it's cheaper.
> How does he sell the advertising? Product placement in the photos?
Yes, that's probably it. It's the "influencer" model. If 700,000 people who are following you on social media see you wearing a cool jacket from Target, and you say something nice about it in the comments, then those people are more likely to buy that jacket than say, seeing some random person wearing it in a TV ad or a catalog.
I'm not sure, I didn't get his username, and even if I did, I'm not on instagram.
I did ask how he does it though, and he said target sends him pictures to use. I was confused by that response because, I thought instagram was more about product placement (him hanging out with his friends, with target logo in the background).
You are definitely not alone. The Snap product has been geared toward younger people as Facebook once positioned itself. Investors are betting that once the product and audience mature there will be huge payouts like they saw with Facebook.
There is a big risk here though. Twitter has crashed and burned when compared to Facebook.
I think it's worth noting that Twitter essentially lost to Facebook. Facebook's dominance pigeonholed and limited what Twitter could evolve to. And I'm not sure there's room for more than a couple social networks.
I don't see who SnapChat will lose to besides themselves (i.e. monetization). IMO Facebook/Instagram isn't well positioned win today's 13-25 demographic.
The point is, someone will win. And right now I'm not sure who else is in the running.
I see Facebook as the email of this generation. It's not exciting, it doesn't change a whole lot, and virtually everybody has it. I think we're just seeing a lot of novelty, flash in the pan apps coming and going while Facebook maintains it's boring yet stable position.
Facebook is a better messaging platform than SMS, for me, because I have friends spread across the globe that I can contact with a simple internet connection.
You can use Hangouts for SMS and 'HoIP' still, but they made it a lot more difficult. I'm really not the target demographic for messaging applications, but I am baffled by how Google has handled Hangouts (which seemed to be incredibly popular and worked better 10 years ago - I'm avoiding the name changes over the years because I was able to use the same account continuously), Allo and Duo (I have never tried either and don't understand what they are trying to do).
It honestly feels like Google is actively trying to sabotage themselves for messaging. I just don't get it.
I'm gonna go out on a limb and blame google plus, wonder how much long term damage that did. Put off tons of people (aka me) from even trying these services during the time that they should have been gaining traction, and left everything in disarray as they tied, and then tried to untie, all of their services together.
I think duo is the right idea, where making a video call should be just as easy as making a phone call, but so far every time I've tried to use has been met with "install what? can't we just facetime?"
Internally, how do Googlers feel about its messaging "strategy"? I've heard the explanation that Google encourages the schizophrenia with the "launch a product to build your promo packet" philosophy, but that doesn't seem to cause issues in other product lines. But the strategy also certainly can't be intentional, since Google's squandered an obvious chance at dominating the messaging space and is teetering on irrelevancy there.
> You can use Hangouts for SMS and 'HoIP' still, but they made it a lot more difficult.
Yes, it's exactly that 'more difficult' I mean by 'you can't bundle them any more'. SMS and 'HoIP' with the same contact used to appear in the same conversation, but they removed the feature - disabling it for those with it enabled a priori, and disabling others from enabling it.
You can add Snow to that list. From what I gather it's basically a Snapchat clone by the same company that owns Line. I've noticed my Korean friends here in LA use it all the time to communicate with friends in S. Korea.
I've got really bad news for you, every month older you get the more likely you are to experience this. And the next thing you know you'll be tuning through available radio stations and find that you can't find a station with music you like on it :-) Just don't succumb to EOG[1] :-)
the fact that you havent used snap doesnt really speak to their valuation. here are some large cap (+$200B) U.S. companies that i have never used: jpmorgan chase, wells fargo, at&t, bank of america, pfizer, verizon.
Right but I think that most people have used a bank, telphony company, or prescription drugs in the past.
OTOH, depending on how loosely or tightly you define what snapchat is ("ephemeral image communication platform", "image communication platform", "communication platform", "social media", "news aggregator"), there are huge groups of people that have never used snapchat or any competing products. There are lots of people in the US who have never used snapchat, instagram (stories), whatsapp, or even facebook messenger (the app specifically), which are the closest comparisons to snapchat. I think that's the point.
Official company description, possibly useful in defining what Snapchat is:
"Snap Inc., formerly Snapchat, Inc., is a camera company. The Company’s flagship product, Snapchat, is a camera application that helps people to communicate through short videos and images known as a Snap. The Company offers three ways for people to make Snaps: the Snapchat application, Publishers Tools that help its partners to create Publisher Stories, and Spectacles, its sunglasses that make Snaps. Snaps are viewed primarily through the Snapchat application, but can also be embedded on the Web or on television in certain circumstances. Snapchat opens directly into the Camera, helping in creating a Snap and sending it to friends. The Company’s advertising products include Snap Ads and Sponsored Creative Tools, such as Sponsored Lenses and Sponsored Geofilters. As of December 31, 2016, on an average, 158 million people used Snapchat every day to Snap with family, watch Stories from friends, see events from around the world, and explore curated content from publishers."
>here are some large cap (+$200B) U.S. companies that i have never used: jpmorgan chase, wells fargo, at&t, bank of america, pfizer, verizon.
But you probably have used those companies without knowing. You've probably traveled through an area with cell towers owned and operated by att and verizon. You've maybe received financing on a purchases or had financial services through a smaller bank in some way aided by chase/wells fargo/bofa. And you've never used any of pfizers commercial products? How about advil, chapstick, dimetapp, or robitussin?
I think it more speaks to that the parent comment doesn't understand the product and why you should use it (I am with the parent comment I don't understand snapchat).
> my job and lifestyle have caused me to detach from a significant chunk of society
For the vast majority of Silicon Valley, this happened a long time ago. Tech valuations have been divorced from the lives people lead for quite a long time - Snap is just the first instance of this happening to people who are in the Valley, solely because of their age.
While i'm generally in the same boat with you, i do have a couple of 30+ friends who use Snapchat. That's a couple more than Twitter. I personally don't know a single person who uses Twitter, regardless of whether they're in tech or not, which paints a slightly different perspective on the whole Snapchat phenomena for me. I also want to point out that the possibilities of what Snapchat can become scares the shit out of me. They have the largest database of people's faces and they can do a lot of things with it.
If you have no need for integrated texting/flirting/sexting/following, it's not of benefit right now.
Microsoft paid something like $40/user for hotmail, and IDK what for LinkedIn (20B?). What other platform will these kids move to? Maybe Instagram, but that leaves two big, well-funded players with ~500M users down the road. Billions to create/integrate with media/virtual content.
Unless something supplants snap for the tweens, I think they've got a lot of long-term capture. Their "phones" are their universe.
I can't tell you how much this blows my mind. So no, you're not alone. I consider myself a pretty normal person, one that can have an open mind and get along with people. I can't for the life of me figure out why snapchat is so popular. I also can't figure out how to use the app or what it's use case is over Instagram (an app I use heavily). I'm 27 by the way.
It's funny, because I find the app thoroughly confusing to use and understand. I initially blamed myself for being dumb or not giving it enough of a chance, but when I asked a few of my friends who do use it, they kind of just shrug their shoulders and can't really explain how it works either.
You're not alone. I'm 24 and only had it installed for a day or two before I gave up on it.
Maybe I'm the type of person who doesn't need a constant glimpse at other people's lives... or maybe I already had Facebook and Instagram for that. It's likely that the same inertia will help Snap hold onto its older user-base as it matures.
I started using Snapchat after they added their dynamic filters. My kids, aged 2-7, think it's hilarious to have their faces warped or overlaid with funny images. My wife and I mostly take videos of them giggling while their face has puppy ears and then send it to each other and/or their grandparents.
I've seen older people (30+) use it to share trivial moments of their lives to people who don't live with/near them. The barrier to sending a disposable short moment is a lot lower than having a video chat or sending a permanent video file, so there's definitely utility to it.
I'd recommend Tim Wu's "The Attention Merchants: The Epic Scramble to Get Inside Our Heads" for broader understanding.
The only valuable currency of the information economy is human attention, and those who harvest it most efficiently tend to command higher prices while re-selling it to advertisers, who all vie for a piece of it.
In this sense Snap, Facebook, television networks, books, Netflix, newspapers, churches, 9gag, radio stations, PlayStation Network, billboards, blogs, professional sports leagues and magazines all compete for the same currency and those who accummulate the most get to name their price.
Yeah.... you know I bet there's a lot of 30bn companies out there you've never heard of, or have never used their products. Society is BIG, 7bn people in the world.
However, if you've eaten food in the United States, John Deere likely had something to do with it. It's just further up the supply chain. However your point is still well taken.
The two single guys in my circle of friends use it for the kinds of communication you wouldn't want to occur in the same app where your relatives are (say, Facebook/Whatsapp). One of them's outside the app's usual age demo but is definitely around them enough that it's a very valuable app for him (network effects—everyone at any given bar has it and you'll have much greater success connecting with them over Snapchat than anything else).
I don't know anyone else who uses it, but the rest of us are boring married people who don't go to bars much (and not for the same reasons if we do). A couple of the marketing guys at work send stuff out on it for the company, I gather, which is really weird to me since my impression is that it's (still) mostly used for sending clips of drunken stupidity and nude pics or hookup arrangements. They definitely don't use it to message grandma—that's what Facebook is for.
The vast vast vast majority of snaps are not nudes or drunken debauchery. Most of them are just mundane moments of life: I saw a building while walking down the street, or, here's my lunch.
Snapchat is useful and popular because it is a way for people to say hi to their friends without having anything to say. You just take a selfie with a filter, make a face, and you're done. This lets you feel close to your friends without having the pressure of actually having a conversation topic.
The genius of Snapchat is that because photos are ephemeral, the bar to create content is as low as it gets, which results in orders of magnitudes of more content creation and sharing compared to platforms like Instagram. On Instagram, you spend all of your time obsessing over the perfectly angled and filtered photo, hoping to get as many likes as possible. As a result, you'll post on Instagram once a week, but you'll post 5 times a day to snapchat. That's a two-orders magnitude of difference in usage, which is why Snapchat is so successful.
Valuation are not very meaningful pre-IPO I suppose because there are a lot of downside. So you can invest $1M at a $1B valuation, sell the company for $30M and still come out with $XX millions.
I guess the same is not true for the average person who buys into a public company. Because if you buy at $1 and tomorrow it is worth $.32c I do not see how you will not loose money.
