Prompt Cast
The Rise and Challenges of Snapchat: From IPO to Competition with Instagram
TLDR Despite facing competition from Instagram, Snapchat has experienced significant growth and innovation since 2014, with revenue growing almost 10x in the past year. Snapchat's IPO was successful, positioning the company as a camera company and brand advertising company, but the public market is now questioning the future of the company.
Timestamped Summary
00:00
This episode of the podcast is about the Snapchat IPO and the hosts are discussing the history of the company.
05:57
Snapchat has experienced significant growth and innovation since 2014, including the launch of various features, acquisitions, and becoming a hardware company, with revenue growing almost 10x in the past year, despite a recent slowdown in user growth due to competition from Instagram.
12:36
Snapchat's IPO had a unique voting structure where common shareholders had no voting rights, and the CEO received a bonus of an additional 3% of the company after the IPO.
19:23
Snapchat's IPO was priced at $17 a share, giving the company a $24 billion market cap at pricing, and the stock had a 44% pop on the first day of trading, closing at $24.48.
26:10
Snapchat wants investors to see them as a camera company that has transformed what we think of as a camera and what we use cameras for, rather than just a social network competing with Facebook and Instagram.
32:56
Snapchat's ad platform is focused on driving scale for brand advertising rather than offering granular targeting like Facebook and Google, and they argue that their high level of user engagement is comparable to television.
39:45
Snapchat's growth problem is largely due to competition from Instagram, which has added 100 million daily active users since launching Instagram Stories in August 2016, while Snapchat has flatlined in terms of user growth.
46:10
Snapchat's advantage over Facebook lies in its ability to come up with new features and attract new users that Facebook cannot copy, but it remains to be seen if Snapchat can find a dimension where Facebook cannot compete with them.
52:18
Snapchat's cost of revenue was higher than its revenue in the trailing 12 months before its IPO, making it the first company to file for an IPO with this kind of financial situation.
58:38
Snapchat went public with a negative gross margin, which is uncommon, and the public market is now questioning whether they trust Evan Spiegel and the future of the company.
01:05:17
Snapchat's potential future could involve acquiring Twitter or a television media company, given their relationship with Viacom and their ties to Hollywood and media.
01:11:57
Snap's product, Snapchat, has high engagement but struggles with growth due to its focus on a small set of users, making it difficult to expand into new markets.
01:18:34
Snap's IPO was brilliantly executed, positioning the company well and telling a great story about Snap as a camera company, Snap as a brand advertising company, and Snap as the most innovative and interesting product company of our generation.
01:24:35
Snap played the IPO process strategically by not directly competing with Facebook, positioning themselves as a camera company instead of a social network, which aligns with the principles of Sun Tzu's "The Art of War".
Categories:
Technology
Business
