In act three, Snapchat goes from being a recorder capable of capturing and broadcasting the world around you to a remote control capable of affecting the world around you. The best remote control app we have right now is Uber, which allows you to pull your phone out, tap a button, and be whisked away to wherever you’d like to go. Snapchat could fulfill the original goal of Scan, the QR code-scanning app it acquired, and bridge the digital and physical world.
Snapchat has been investing deeply in machine learning and image recognition, and it has trained users to constantly record the world around them. The company has worked on an image search, which would understand images in users’ photographs and provide information about them, like a Google search or a visual Shazam. Or they could take a photograph—of a barcode or QR code to start, but of a product itself in the future—of something they want to buy in a store, and be offered options to purchase it through Snapchat.
Alexa and Siri can hear. Soon, Snapchat and other cameras will be able to see.
On every front, Snapchat will continue to battle Facebook. But if by this point you’re only thinking about whether Snapchat will beat Facebook, then we haven’t looked at the bigger picture enough. Evan’s ambitions are much grander than that. He doesn’t merely want Snapchat to be a great technology startup. Nor will being a great technology company satisfy his appetite. He simply wants to be great. Period. Take a moment and appreciate the full scale of this ambition. There are very few people, or companies, who can be placed in a category of noncategorical greatness. Snapchat and Evan are obviously not there yet. But that is where he wants to go.
Famed business consultant and writer Jim Collins, the author of manager-bibles Built to Last and Good to Great, has written about three things that make a company truly spectacular: (1) superior financial results; (2) making a distinctive impact, where if you didn’t exist, you wouldn’t easily be replaced; and (3) lasting endurance beyond multiple cycles of technology, marketing, and people. Very, very few companies satisfy all three criteria.
Obviously Snapchat will need superior financial results to live up to its lofty market cap.
You could argue that the company has already made a distinctive impact. But can this distinctive impact last and deepen? Can Snapchat be cool in perpetuity? And if it can’t, how will it survive? Facebook made the awkward transition to middle age by acquiring cool companies and becoming a very useful utility. Facebook also made this transition because it is an exceptionally well-run company; Snapchat will need to hire and scale in an outstanding fashion if it is to match Facebook rather than fall into the organizational chaos of Twitter. Evan is so central to Snapchat that it is difficult to imagine the company without him, but, by Collins’s definition, Snapchat will have to one day be great beyond Evan and the current team if it is to be a truly spectacular company.
Snapchat has challenged most of our assumptions. Have we learned from it?
Mobile is a bigger and better market than desktop. Can we expect a mobile-only Amazon, et al., to be bigger and better than their predecessors? While tech’s giant companies, from Facebook to Google to Amazon to Apple, seek more and more data about us, Snapchat deletes everything and knows comparatively little about its users. Do we want everything, or even most things, on the internet to be permanent?
Fundamentally, Snapchat marked a rebellion against the social network status quo of the early 2010s, when the things that had made Facebook and Instagram so appealing—the ability to put forward an idealized version of our lives and get instant approval for it—began to feel less a novelty than a burden. It allowed young people to express themselves in a more genuine way without as much fear that presenting an imperfect and more real version of themselves would come back to haunt them.
Somewhere, perhaps in a Donner dorm room, or a continent away, the next Evan Spiegel is dreaming up a new way to interact on the internet. And it will arrive out of the blue, like a snap popping up on your phone.
We know it will not look or feel like Snapchat, or Instagram, or Facebook. It may well feel silly or self-indulgent. It will probably look like a toy. At least at first.
Snapchat’s interface circa 2012, when the app’s only feature was self-deleting pictures.
Engineers and early hires Daniel Smith and David Kravitz (top, left to right) celebrated Snapchat’s first birthday with cofounders Bobby Murphy and Evan Spiegel (seated, left to right) in September 2012. At the time the team was riding high, as they had just finished building an Android version and were close to adding video messaging. They didn’t know that they’d soon face a competitor in Facebook’s Poke.
(Left to right) Daniel Smith and David Kravitz visited Norway with Bobby Murphy and Evan Spiegel in October 2012. Norway was one of the young company’s fastest growing markets; the team flew there to learn what was appealing to so many early adopters.
The interface for Facebook’s Poke app, released in December 2012, bears an uncanny resemblance to Snapchat. Upon Poke’s release, Mark Zuckerberg emailed Evan, writing, “I hope you enjoy Poke.” The audio notification for the app featured Zuckerberg’s voice saying “Poke.”
Snapchat’s first real office, a bungalow painted baby blue, spilled out onto the Venice promenade. Not long after they moved there in 2012, Snapchat fans began taking selfies in front of the logo. It quickly became so popular and distracting that Evan and Bobby moved the company—by then struggling to fit inside the house—down the beach to larger, subtler offices. Years later, they bought the house to preserve Snapchat’s history.
Bobby and Evan pose for a New York Times profile in Snapchat’s new beachfront office in Venice, California, in early 2013. Just weeks before, they had thrown an epic New Year’s Eve party in the still-unfurnished office. In the year that followed, they would turn down a multibillion-dollar acquisition from Facebook, get sued by their cofounder, and launch their most important feature, Stories.
After failing to copy Snapchat with Poke, Facebook tried again in June 2014 with Slingshot, which required users to send a picture back before they could view photos in their inbox. While this was a more unique spin on ephemerality than Poke, it lacked the conversational nature of Snapchat and also failed to catch on.
Snapchat introduced geofilters, visual overlays showing where a user was, in 2013. They started out in neighborhoods in New York and Los Angeles, as well as unique spots like SoulCycle and Disneyland, but eventually covered locations around the world. The geofilter for Venice, where Snapchat’s headquarters is located, was one of the earliest created.
Soon after introducing geofilters, Snapchat designed one of its mascot, Ghostface Chillah, pointing and laughing at Facebook’s headquarters in Menlo Park. Snapchat would later post specific geofilters at Uber, Airbnb, and Pinterest’s locations, urging their employees to come work at Snapchat.
In December 2015, a shooter killed fourteen people and injured seventeen more in San Bernadino, California. As the tragedy unfolded, Snapchat created a live story, bringing viewers photos and videos from the scene as well as narrative developments and statements from authorities. This potent format, aggregating the best clips from citizen journalists and adding professional narration, led some to believe that Snapchat could be the next big platform for journalists. But the hype was short-lived, as Snapchat decided to favor more lighthearted content.
In January 2016, Republican senator Ted Cruz mocked fellow nominee Donald Trump for skipping the final Republican debate with a geofilter asking, “Where is Ducking Donald?”
Snapchat frequently advertised without using the word “Snapchat.” This billboard was part of a March 2016 campaign in select cities around the country showing Snapchat geofilters for different localities.
In May 2016, a 22-year-old University of Wisconsin senior named Abby posted a video from the school’s library to its campus Snapchat Live Story, saying, “Guy wearing the Vikings jersey on the U-Dub Snap Story, I am seriously in love with you. Find me!” The guy, dubbed by classmates as “Vikings F
an,” responded, and the two started using the Live Story to coordinate a meet-up. Their classmates chimed in with Snapchats of their own, cheering them on and offering color commentary. They finally met at a campus bar, The Kollege Klub.
Evan and his then fiancée, model Miranda Kerr, attended a State Dinner at the White House in May 2016. Two months later, Kerr posted a photo of her engagement ring on Instagram with a Snapchat-owned Bitmoji cartoon laid on top, showing Evan proposing to her. The two married in a small, private ceremony at their home in May 2017.
Snapchat launched a pop-up store in New York, just off Fifth Avenue, in November 2016 to sell their new video-recording sunglasses, Spectacles. The Spectacles logo, set against Snapchat’s bright-yellow coloring, loomed behind the picturesque glass box of Apple’s flagship store, almost like a watching eye. The pop-up store was a plain, small storefront with a simple sign reading “Spectacles,” with no mention of Snapchat.
After announcing Spectacles in late September 2016, Snapchat made it quite difficult to buy the $130 sunglasses. Prospective buyers had to seek out the location of vending machines called Snapbots, which started in Venice and moved around the country. Even in the New York pop-up store, customers, some of whom waited in line for hours, had to buy the glasses through Snapbots rather than human salespeople.
Longtime Snap employees Dena Gallucci, Nick Bell, and Juan Barrero stand on the floor of the NYSE on Snap’s IPO day. $SNAP was priced at $17 a share, but opened at a much loftier $24. Standing nearby on the trading floor, Snapchat CFO Drew Vollero watched the stock jump and exclaimed, “That’s crazy!” When the market closed, Snapchat had a market cap of $34 billion, on par with Marriott and Target, although $SNAP would struggle in the months to come.
NOTES
1. Rush
1. A bid, or bid card, is an invitation to join a fraternity.
2. The basketball team did have its moments—the 1996–97 Crossroads Roadrunners were led to the state championship by Baron Davis, who went on to be an NBA All-Star.
3. Funnily enough, the founder or Crossroads, Paul Cummins, had an epiphany as a freshman at Stanford that drastically impacted his life’s work. He shared this story every year with Crossroads students at assembly, recounting, “While standing in line to register at Stanford, I met this guy who asked me what I was reading. I said, ‘What am I reading? Classes haven’t started.’ And he kind of rolled his eyes, like, ‘What kind of an idiot is this?’” The new classmate then bought him a copy of George Orwell’s Animal Farm. “And I just thought it was fantastic; There hasn’t been a day since that I haven’t been interested in learning something.”
4. Stanford is on the quarter system, so each year is divided into fall, winter, and spring classes rather than two semesters (fall and spring).
2. Future Freshman
1. While joining Kappa Sigma was a choice, Evan, Reggie, and Bobby all being placed on the third floor of Donner was complete coincidence. Maybe there’s something in the water there …
3. Million-Dollar Idea
1. There’s an inherent strangeness to writing about such a visual medium. If you haven’t downloaded Snapchat yet, I would suggest you download it and explore the app while reading this book.
4. The Other Startup
1. Zero to One is really quite a good read, and I would recommend it to any readers interested in startups and the future.
2. This $500,000 investment literally appears as a scene in The Social Network.
3. I was still a reporter for TechCrunch at the time and covered Clinkle’s fundraising announcement. In my story, I also included details about the product and how it worked, much to Lucas’s chagrin.
5. Lawsuit Possible
1. Seven-day retention is the number of people who open the app and return to the app a week later. So in this case, six out of ten people who opened Picaboo were coming back and opening it again one week later.
7. Snapchat
1. In a funny coincidence, Bobby’s full name is Robert Cornelius Murphy.
10. A Not-So-Innocent Toy
1. Wireframes are depictions of what the finished product will look like.
15. How to Turn Down Three Billion Dollars
1. A secondary is when founders (or other startup employees) sell their own equity in exchange for cash to put in their pockets; these differ from primary funding rounds, when the startup itself sells equity in exchange for cash to grow the business.
2. If Snapchat decided to start monetizing by charging a fee to use the app, only a small percentage of the user base would pay, and Snapchat would have to pay 30 percent of that revenue to Apple and Google, which levy an app store tax. For Snapchat, $30 million a year will not cut it revenue-wise, so they would likely need to look at a combination of in-app purchases, advertising, or other revenue.
3. Google’s AdWords is considered the best revenue model in the history of startups; Snapchat cannot plan to stumble across an advertising model that good.
4. The price employees must pay to exercise their stock options and buy the underlying common stock in Snapchat.
5. Snapchat’s current number of employees.
6. Institutional Venture Partners, another venture capital firm.
7. Jeremy Liew, the Lightspeed partner in the seed round, here wants to sell an equal amount of Lightspeed’s stake if Evan sells some of his stock in the round, but he will not sell his stake if Evan doesn’t sell his own.
8. Investors who seek to invest in a company they believe is trading at a price below what the company’s true worth is.
9. Investors who look to invest in a company they believe will be trading at even higher prices tomorrow because the stock has momentum.
10. Advertisements from major companies that are meant to build up a brand’s value, like a billboard for Budweiser. Much more on this later.
11. Advertisements to install mobile apps; usually app developers pay per click or per download.
12. The Life Time Value (LTV) of a customer is how much a company expects to earn from a customer over a certain period of time (often the average amount of time customers stay with the company). Calculating this LTV can be important in knowing how much to spend on advertising to acquire users or customers.
22. “We Need to Make Money”
1. Matt Cohler, the early Facebook employee who now works with Lasky at Benchmark.
2. More on this later.
25. Major
1. While Snapchat is primarily meant for friends who keep their accounts private (i.e., users have to accept and add back a friend in order for that person to see their Snapchat story), some people leave their profiles public so that anyone who adds them can immediately view their story.
2. He actually agreed to talk with me for this book when I sent him a message over Snapchat.
26. Keeping Secrets
1. Helen Nissenbaum, a professor of media, culture, and communication and computer science at New York University.
2. Milan Kundera is a Czech-born French writer and philosopher, best known for his 1984 novel The Unbearable Lightness of Being, which is Evan’s favorite book. Evan once wrote a school paper comparing Kundera’s book with photographer Josef Koudelka’s series of photos of 1968 Prague.
ACKNOWLEDGMENTS
This book has been incredibly fun and intellectually stimulating to write. I am deeply grateful to everyone who spoke to me for this book, particularly those who risked professional and personal relationships.
In May 2012, I had just accepted an internship with TechCrunch for the upcoming summer and was talking with my new boss, Kim-Mai Cutler, about writing a couple of stories profiling two startups that were hot on Stanford’s campus at the time: Clinkle and Snapchat. That turned out to be a pretty good idea. I covered Snapchat for TechCrunch for two years and learned an incredible amount from the company.
Fast-forward a few years, and I had graduated from both Stanford and TechCrunch. I was having lunch with Philip Taubman, a New York Times and Stanford Daily alum, who had taught and mentored me at Stanford. Phil urged me to continue covering Snapchat by writing a book about the company’s fascinating rise. Philip introduced me to his fantastic agent, Binky Urban, who in turn introduced me to my wonderful agents Amelia Atlas and Richard Pike. I particularly owe a major thanks to Amelia, who stuck with me through a wretched first proposal and many, many edits. Thank you to my tireless editor, Tim Bartlett, and the wonderful staff at St. Martin’s Press, particularly Alice Pfeifer, Donna Cherry, and Ryan Masteller, who copyedited the manuscript. Thank you to Jamie Joseph and the entire team at Virgin Books UK.
How to Turn Down a Billion Dollars Page 27
