Full disclosure: I am a millennial non-Snapchat user, so please forgive any improper Snapchat related terminology in this post.
There’s been a lot of press the past few weeks on Snapchat’s upcoming IPO and it’s been very interesting for me to read analysis on the company’s filing documents. They show a tiny glimpse of the inner workings of a relatively secretive company that is asking for a whole lot of money. The company is certainly doing it it’s own way: the filing documents have a very casual and direct tone to them, but most significantly, Snapchat will issue entirely non-voting shares, a first for a US IPO. I personally think this is favorable for the company as it will allow Evan Spiegel, co-founder and CEO of Snapchat, the ability to develop his long term vision of the company rather than be required to appease short-term investors.
The company has gotten some great PR by doing something that even Google couldn’t even succeed in: making wearable cameras cool. With their rollout of the Snapchat Spectacles and the whole “game” of tracking down a vending machine that offers, they had people everyone scrambling just to get their hands on one.
Reading articles on analysts’ take on Snapchat’s strategy (https://www.wsj.com/articles/snaps-ipo-filing-offers-peek-into-its-advertising-strategy-1486078983) paints a picture of a company that is creating a different path than the social media titans Twitter, Instagram, and Facebook. Rather than focusing on rapidly growing the number of users, Snapchat is emphazing its ability to maintain high levels of “customer engagement”, something it claims its competitors can’t offer. From what I’ve read, it looks like Snapchat has had successes in the way it incorporates ads such as the Taco Bell face changing ad.
Despite all their successes with the 18-30 demographic, I still have to ask the question: will Snapchat be able to maintain engagement from me and my peers for the forseeable future? I ask because “customer engagement” is a bit of a fickle thing. Last week I read a few posts from my peers about how they’ve transitioned from AIM to Myspace to Facebook and then to Instagram/Snapchat/Twitter in the course of 5-10 years.
It already appears that Instagram is able to steal a bit of Snapchat’s thunder as its “Stories” function has received rave reviews for its design and simplicity (as well as significant comparisons to Snapchat, something Snapchat alluded to in its IPO filings as a potential threat). Obviously, credit always goes to the original creator, but the question still remains, how can Snapchat maintain customer engagement in a form of communication that is mainly used by 18-30 year olds? How can it avoid becoming the next Myspace? Something that is widely popular for a long time but then suddenly eclipsed by the next big thing.
I’ll admit that I’m probably not the best person to answer that question as I have so far avoided Snapchat. I’ve tried it a few times but didn’t like its interface and quite frankly I’m just not creative enough to come up with witty posts on a regular basis. I like the notion that there’s no “Likes” or “Comments” features built in, because it frees me from feeling like my posts are out there for public approval. But at the end of the day, it’s just a different format than what I’m used to and comfortable with. I enjoy my Twitter/Instagram/FB feed because I recognize that not everyone will see my post because of the algorithm the different platforms use. I could be mistaken on how the medium actually works, but I’m not comfortable with my posts showing up as a “bubble” on all of my Snapchat followers to see.
I have been getting a taste of the Snapchat experience from Instagram now that Instagram Stories has proliferated but I haven’t actually used it myself because I don’t see a scenario where “my” story would be worth sharing. I like posting my pictures/videos “as is” on a regular platform and don’t see the appeal with the Snapchat format.
I’m skeptical as Wall Street is widely optimistic about this IPO. Numerous articles point to a majority of analysts being very eager to get their hands on these shares. Personally, I see the optimism as investors excited about a big name IPO during a dearth of high profile private companies going public. A few of them have even admitted they don’t want to make the mistake of missing out on the next Facebook if Snapchat ends up having similar returns for the next few years. It will be interesting to see how the IPO plays out as Snapchat still has a ways to go to become profitable, but if it can somehow match even half of the profit that Facebook has shown over the past few years, it just might lay out a foundation that will allow to maintain its innovation and uniqueness. I might not be a believer, but I can certainly appreciate the creativity involved in the average Snapchat posts.