How to Turn Down a Billion Dollars

by Billy Gallagher

  The company’s Twitter account retweets a wide range of positive and negative reactions to its product updates. They have slapped their eponymous logo—with no mention of Snapchat or any words at all—on the luggage bins at security at LAX and on massive billboards in Times Square. Many of the billboard panels in Times Square simply were covered in Snapchat yellow. People who know what the logo means are in on the cool secret; those who don’t either ask or simply remain ignorant and uncool.

  Evan doesn’t have a public Snapchat, something that would be unthinkable for Jack Dorsey, Mark Zuckerberg, or Kevin Systrom, all of whom make their profiles on their social networks public. Zuckerberg has a team of eight people curate his Facebook page, posting almost daily to craft a perfectly curated public persona. This is the exact opposite of what Evan wants for Snapchat users—and himself. Evan deleted his Facebook account long ago, and he used to tweet occasionally before he decided to delete all those as well.

  * * *

  Evan’s speeches at smaller events, where he is less guarded, are often better than those he gives at bigger venues. At high-profile events, like Recode’s conferences, he talks about how Snapchat is entertainment. But in private speeches we see Evan’s core philosophy for Snapchat is a vision on how he thinks the world should be. For example, this excerpt from his April 2014 keynote at LA Hacks reveals his philosophy on the distinction between privacy and secrecy:

  Unfortunately, privacy is too often articulated as secrecy, when, as Nissenbaum1 points out, privacy is actually focused on an understanding of context. Not what is said—but where it is said and to whom. Privacy allows us to enjoy and learn from the intimacy that is created when we share different things with different people in different contexts.

  Kundera2 writes, “In private we bad-mouth our friends and use coarse language; that we act different in private than in public is everyone’s most conspicuous experience, it is the very ground of the life of the individual; curiously, this obvious fact remains unconscious, unacknowledged, forever obscured by lyrical dreams of the transparent glass house, it is rarely understood to be the value one must defend above all others.”

  In America, before the internet, the division between our public and private lives was usually tied to our physical location—our work and our home. The context in which we were communicating with our friends and family was clear. At work, we were professionals, and at home we were husbands, wives, sons, or daughters.

  On the internet, we organize information by its popularity in an attempt to determine its validity. If a website has been referenced by many other websites, then it is generally determined to be more valuable or accurate. Feelings expressed on social media are quantified, validated, and distributed in a similar fashion. Popular expression becomes the most valuable expression. Social media businesses represent an aggressive expansion of capitalism into our personal relationships. We are asked to perform for our friends, to create things they like, to work on a “personal brand”—and brands teach us that authenticity is the result of consistency. We must honor our “true self” and represent the same self to all of our friends or risk being discredited.

  But humanity cannot be true or false. We are full of contradictions and we change. That is the joy of human life. We are not brands; it is simply not in our nature.

  Evan closely cherishes privacy to allow Snapchat to become what he wants it to become away from prying eyes so that the company has room to tinker and grow. Board member Mitch Lasky once noted that Evan is “already super paranoid and I don’t want him to go deeper into the bunker.” New hires are indoctrinated from day one to not talk about what they work on, even down to telling them not to put a specific role on their LinkedIn pages. They are indoctrinated into the cult that places a huge value on secrecy. Information is shared on a need-to-know basis as employees are separated into their teams. Early employees set the example as they take pride in maintaining the secrecy to the external world.

  Spiegel’s preferred meetings with employees and investors consist of walking along the two-mile beachfront cement path from Snapchat’s Venice office to the Santa Monica pier. He feels these meetings have a hidden-in-plain-sight privacy, as it’s difficult to overhear someone’s conversation when they’re walking in a crowd.

  Evan deeply dislikes giving presentations, so he scrapped Snapchat’s all-hands meetings, which he used to hold as often as once a week. Before they were discontinued, all-hands meetings, called company gatherings, were used for lighthearted announcements like birthdays and work anniversaries instead of hard-hitting presentations or Q&As on strategy and product. Employees often found out about new Snapchat features via an all-company email on launch day—or by reading about them in the press. At one all-hands meeting an employee asked Evan, “What is the vision for Snapchat as a company?” Evan replied that the goal is just to build fun things. He continued that he doesn’t want to have a generic mission statement like Google or Facebook, because he thinks it restricts what the company can do. Evan doesn’t want employees to feel like they can’t build cool things just because they fall outside the bounds of the company mission statement. Evan has a strong vision of the future and five- and ten-year plans for the company. But he is only willing to share those plans with close confidants and a select few Snapchat employees, notably designers and long-time team members.

  This culture can make the transition to Snapchat difficult for employees coming from other tech companies. Many Silicon Valley giants like Facebook, Twitter, and Google are more open and have regular all-hands meetings, Q&As with executives, and generally more of a shared sense of trust in what the company is working on and striving toward. Orientation at Snapchat has a secrecy policy similar to Fight Club.

  Every Wednesday night, Snapchat employees have Council, where they sit in a circle with nine colleagues and talk about their feelings. Council ranges from deep, introspective talks to community service, like serving meals or furnishing a home for homeless families, to typical team-bonding activities like boxing classes, volleyball, karaoke, painting, and happy hours. When employees join Snapchat, they become part of three core teams: their starting class, their actual work team, and their Council group, which is randomly assigned. Council has three rules (Evan likes the number three). One, speak from the heart. Two, you are obligated to listen. Three, everything that happens in Council stays in Council. Evan believes this privacy creates a space for employees to make themselves vulnerable and share their deepest thoughts and feelings.

  Council originated for Evan at Crossroads. The school’s founder, Paul Cummins, took the idea from the Ojai Foundation, a nonprofit about 90 miles north of Los Angeles between Oxnard and Santa Barbara that aims to bring connection and wholeness to the world through Council and retreats at its Land Sanctuary. Cummins introduced Council as the core part of a new program he created in the mid-1980s at Crossroads called Mysteries. Students sat in a circle, and only the student with the talking stick could speak. The other students sat in silence or encouraged the speaker with a Native American response, “A-Ho,” meaning they agreed with or were moved by something the spaker said. Crossroads seniors took a multiday trip to the Ojai Foundation, where they lived in a yurt, ate vegetarian meals, and bonded with each other. Council had a major impact on Evan at Crossroads, and he took it with him when he started forming Snapchat’s culture.

  CHAPTER TWENTY-SEVEN

  EVAN’S EMPIRE

  MARCH 2015

  VENICE, CA

  In March 2015, Evan gathered the company in the cafeteria for a rare all-hands meeting. He tersely told the assembled staffers that Chief Operating Officer Emily White—Snapchat’s putative Sheryl Sandberg—and VP of Business and Marketing Partnerships Mike Randall—effectively the company’s revenue chief—had left the company.

  White had turned out not to be Snapchat’s Sheryl Sandberg, but rather its Owen Van Natta. Van Natta, a former Amazon executive, joined Facebook as COO in 2005, served stints as chief revenue officer and a
vice president of operations, and eventually left the company right before Sandberg joined.

  White had agreed to join Snapchat instead of starting her own company or taking a CEO role because she believed she would have broad responsibilities and an enormous opportunity to grow with Evan and Snapchat. She and Evan agreed that she would handle business operations, sales, and human resources, while Evan focused on the product. White and Mike Randall were hugely important in getting Snapchat’s initial ad products to market. The two worked well together and had long-standing relationships with advertisers and marketers dating back to their days at Facebook.

  But Evan came to realize that Snapchat’s advertising products, and the way that Snapchat would make money more broadly, would have an enormous impact on users. In short, he came to believe that Snapchat the business and Snapchat the product were inseparable. This left White with little to run.

  Thanks to Van Natta’s hiring at Facebook not working out, Zuckerberg knew exactly what he needed in a COO by the time he hired Sandberg. Zuckerberg spent over 100 hours with Sandberg before he hired her, making sure they would work well together and outlining her role. Sandberg joined the company in early 2008 when Facebook was four years old. When Emily White joined Snapchat, the company was about two and a half years old. That may not seem like a big difference, but it’s an eternity for a company growing as fast as Snapchat was in 2013 (and Facebook in the 2000s). White had cut her teeth at the much larger and more established Google and Facebook; it was difficult for her to translate those experiences to the rapidly changing Snapchat, which had only fifty employees when she arrived.

  Once she left Snapchat, White joined the board of directors of Hyperloop Technologies, a startup trying to realize Elon Musk’s vision for a high-speed, tube-based transportation system. White also founded Mave, a high-end personal concierge startup in Santa Monica.

  White’s departure was made worse by the sheer number of high-level executives who left around the same time. Many didn’t survive a year at Snapchat. Mike Randall, who had been hired by White and reported to her while at Snapchat, left after seven months. HR head Sara Sperling and VP of Engineering Peter Magnusson were each at the company for just six months. Communications head Jill Hazelbaker lasted a year at the company before departing for Uber.

  While Evan is difficult to work with and played a role in these departures, most people around the company don’t believe this was the primary reason for the exodus. Snapchat was growing at such an unbelievable rate that it was very difficult to hire people who fit their responsibilities and Snapchat’s culture and were able to move and scale at a breakneck pace.

  Evan continued to be very aggressive in hiring, spending 40 percent of his time recruiting. (He devoted the rest of his time to product and attending meetings and events, 40 percent and 20 percent, respectively.) He hotly pursued other executives, trying to land former White House press secretary Jay Carney, who ultimately joined Amazon.

  Snapchat cheekily tried to poach San Francisco startup employees by adding Snapchat geofilters to their offices. At Uber’s headquarters, a geofilter read, “THIS PLACE DRIVING YOU MAD?” along with Ghostface Chillah sadly driving a cab. At Airbnb’s office, the ghost lay scared in bed, underneath the caption “NOT SLEEPING WELL?” At Twitter, the shtick was a ghost with a halo and angel wings to the tune, “FLY HIGHER!” And finally, at Pinterest, a ghost lay next to falling bowling pins, asking, “FEELING PINNED DOWN?” All of the filters featured an address for Snapchat’s jobs page.

  It wasn’t always easy to convince talent to leave Silicon Valley for Los Angeles. There are so many great companies to work for in the San Francisco Bay Area, most of which value engineers more highly than Snapchat does. Several of the executives who lasted less than a year still had their families in the Bay Area; while this was not the primary reason that most of them parted ways, it certainly didn’t help.

  Those who joined Snapchat would work for Evan Spiegel in his kingdom. The company runs through Evan, and his say is final. Ambitious people who buy into the company’s mission and fit with the culture tend to stay at Snapchat for a long time. But many leave quite quickly. Arguing with Evan can get you fired. In addition to being CEO, Evan is Snapchat’s unofficial head of quality assurance. He will kill features he doesn’t like and push for ones he personally loves. He has been known to kill an advertising deal at the eleventh hour. In one instance, an engineering team was ready to launch a new feature, but no one could figure out why it was slowing down Snapchat on Evan’s phone specifically. Evan pushed the new feature’s launch because it made Snapchat look slow and buggy on his phone, and he didn’t want to risk that happening to a single user.

  Executives who have succeeded in this environment manage to get along with Evan, handle his quick changes of opinion, scale with the company, and maintain their voice in the company’s direction. The short list of power players in the company consists of Chief Strategy Officer Imran Khan, engineering lead Tim Sehn, content lead Nick Bell, Live head Chloe Drimal, and, of course, cofounder Bobby Murphy.

  From day one, Bobby had kept a low public profile at Snapchat, handling engineering in the early days before moving to a research role behind the scenes while Evan handled investors, the media, and partners as the face of the company. While Tim Sehn ran the engineering team day to day, Bobby retained his title as Chief Technical Officer and headed up a small engineering team focused on research and innovation.

  Tim Sehn had joined the company from Amazon. Like Evan, he’s very set in his ways, and he and Evan often butted heads on work issues. But once a decision was reached, he supported it. Sehn was not personally a big proponent of Snapchat Discover, but once Evan decided to move forward, Sehn got the engineering team on board and working hard on it. He also matches Evan’s intensity, often telling engineers that it isn’t his main priority to make them feel comfortable but rather to get the best out of them. When Snapchat began hiring rapidly in 2015, Sehn sternly reminded engineers that if their work didn’t meet standards they would be fired.

  Few employees besides the high-profile executives have left the company voluntarily. Snapchat has also locked employees up by requiring nonlinear stock vesting, where employees get 10 percent of their stock options after their first year, an additional 20 percent after their second, 30 percent after their third, and the final 40 percent after their fourth year.

  Evan believed it was essential to Snapchat’s success to rebel against what he saw as tech companies touting highfalutin mission statements. While every company in Silicon Valley, even photo-sharing apps, claimed they were on a mission to change the world, Evan wanted Snapchat and its team to focus on having fun and being happy. After all, most of Snapchat’s users were there to have fun. Snapchat threw annual parties for seemingly every holiday, from Halloween to a December holiday party to the Fourth of July to New Year’s Eve to a September party for Snapchat’s anniversary. The parties were open to Snapchat employees and their friends and featured Snapchat signs and yellow decorations everywhere, open bars, food, and bags stuffed with Snapchat-branded swag, from sweatshirts to ghost socks.

  Evan tended to spend time with the designers or his aforementioned short list of Snapchat confidantes while at work. On the weekends, if he wasn’t working, Evan went out with Bobby and some of Snapchat’s earliest hires, like engineers David Kravitz and Daniel Smith. Head of Content Nick Bell was one of the rare few who ran in Evan’s close work and social circles.

  Chief Strategy Officer Imran Khan joined Snapchat in December 2014, leaving his post as head of internet banking at Credit Suisse. An affable thirty-eight-year-old, Khan was born in Bangladesh and attended the University of Denver’s Daniels College of Business, where he majored in finance. He spent six years at JP Morgan Chase analyzing internet stocks. In 2009 Khan was the lead author of a report on mobile advertising and the continued decline of the newspaper industry; funnily enough, Khan’s report was skeptical that social networks had significant potential for
long-term profits, as he believed advertisers wouldn’t want to place their brands alongside “content they can’t control.”

  Khan has been credited with reviving Credit Suisse’s reputation with tech companies. During his time there, he strengthened relationships with Asian contacts and advised on behemoth IPOs for Weibo, King, and Groupon. But the biggest fish Khan reeled in was getting Credit Suisse on as an advisor for Alibaba’s $25 billion IPO. When he joined Snapchat, it was natural to believe Khan would help with fundraising and, ultimately, the road to an IPO of its own. Spiegel and Khan discussed potential investment and partnership opportunities with Prince Alwaleed bin Talal in Saudi Arabia. And Khan was key to Alibaba investing $200 million in Snapchat, even though Snapchat is blocked in China (more on this later).

  “The reason I joined here was Evan,” Khan later told The Wall Street Journal. “Because it was evident that he was the best product visionary I’d met in my entire life. And with technology companies, if you don’t have good product, you die.”

  While the initial role Evan and Khan had discussed included corporate strategy and advising the CEO, Khan’s role dramatically expanded in 2015. He has served as Evan’s proxy on all things advertising, relaying feedback from advertisers and marketers back to him. Khan is the only member of Snapchat’s inner circle besides Evan who has a significant public presence in the media, another hallmark of Snapchat’s secrecy. Khan has stepped into the vacuum left by departed executives and become Evan’s right-hand man on business and partnerships. His is a crucial role that helped steer Snapchat’s direction for years to come.

  Evan and Imran can often be found in the Tree Room, an area in the back of Snapchat’s main building, on the first floor below Evan’s office, centered around a potted tree. Evan, Imran Khan, Tim Sehn, and other executives sit back there together. Sometimes Evan’s then-girlfriend and now wife, supermodel Miranda Kerr, would sit with Evan and the executives in the Tree Room.