When Snap Inc. announced its Q2 financial results earlier this month, it reported 173 million daily active users – an increase of 21% year-over-year. But this fell short of what was expected. Analysts were expecting 175.2 million DAUs.
(Snap defines a DAU as anyone who opens the Snapchat app during a defined 24 hour period.)
Regardless of your position on this stock, one thing is clear about the company: they are very creative and they continue to innovate.
The company is currently testing a new feature called “Crowd Surf.” What it does is automatically stitch together related Snapchat Stories from the same location to form seamless videos.
It made its debut at a concert in San Francisco. The real magic is how Crowd Surf was able to assemble a continuous audio track using an assortment of 10-second Snapchat Stories, all taken from different locations at the concert and all from different users.
Click here and scroll down for a preview video.
To accomplish all of this, Snap takes a “sound print” of the audio playing in a particular location from people’s Stories. It then filters each of the clips so they sound more alike and autogenerates a stitched together video.
You obviously need a critical mass of users and content for this to work, which is why the feature was introduced at a concert. But it’s certainly a remarkable way of creating valuable content from decentralized user inputs.
I guess the only question is: How long until Instagram copies this?
Photo by Yvette de Wit on Unsplash
Instagram has a company chart that shows: Days to Reach the Next 100 Million Users. It is only the chart where they want to see it decline. The first 100 million users took 28 months. And the last took only 4 months. Instagram now has 700 million active users.
Instagram is also saying that they have 200 million people using their Stories feature – you know, the feature they blatantly stole from Snapchat. This would mean that more people are using Instagram Stories than Snapchat has daily users (~158 million).
Anecdotally, I can tell you that I’ve almost completely stopped using Snapchat. (Snapchat battery usage over the last 7 days = <1%.) I still prefer Snapchat’s direct messaging functionality, but not enough to continue using the platform. Instagram now provides basically the same functionality – plus my photos – in a single app.
But more importantly, Instagram’s network and my network are bigger there. And network effects are clearly the most important thing. In fact, by directly copying Snapchat, Instagram (Facebook) made sure that this competition was only about network size and not about features. Monopoly power.
In real estate, if you own a property in a great location, your position is pretty defensible. (Though you may not be completely immune.) But in tech, that is clearly not the case. Someone might copy everything you’ve done and beat you at your own game.
As someone who used to be very bullish on Snapchat, I am now wondering if I need to remove my Snapchat handle from the header of my blog emails. I mean, I’m not there very often anymore. But maybe, just maybe, Snapchat will find a way to compete outside of network effects at a game that Instagram/Facebook can’t play.
How would you or are you placing your bets?
“There is no higher God in Silicon Valley than growth. No sacrifice too big for its craving altar. As long as you keep your curve exponential, all your sins will be forgotten at the exit.” -David Heinemeier Hansson
Snap Inc. went public last week. Offering price was $17. Closing price on the first day was $24.48. Given that the company is not profitable and may never be profitable (their caveat, not mine), many people have been asking: Is a valuation somewhere around $34 billion justifiable?
This is a common question when it comes to tech companies. And the answer usually comes down to something along the lines of this:
The Snapchat story “is all about growth,” Mr. Nathanson said. “It’s not about economics.”
It’s about the future.
I love Snapchat and I think the company is run by a very creative founder. But now that Snapchat Stories was stolen by Instagram, they need, in my humble opinion, something new and killer to stick.
How else will they meet their growth targets?
On a related note, I recommend you read a piece by David Heinemeier Hansson called: Exponential growth devours and corrupts. That’s where the quote at the top of this post is from.
Here is an excerpt:
What sucker wants to earn $10 million/year at a 52.5% tax rate when you can get away with hundreds of millions in one take at just 15%? Nobody, that’s who.
It’s hard to argue that boards, founders, and their financiers aren’t just doing exactly what the incentives are coaxing them to do.
Which is why growth is now everything and residual value is nothing. In fact, the latter can be outright harmful to the former. When you’re being priced on the hopes and dreams of potential, reality can be a dangerous and undesired competitor. Best just to appeal to the exponential curve and let the imagination roam free. An epic capital gains score awaits!
When Snap Inc. announced its Q2 financial results earlier this month, it reported 173 million daily active users – an increase of 21% year-over-year. But this fell short of what was expected. Analysts were expecting 175.2 million DAUs.
(Snap defines a DAU as anyone who opens the Snapchat app during a defined 24 hour period.)
Regardless of your position on this stock, one thing is clear about the company: they are very creative and they continue to innovate.
The company is currently testing a new feature called “Crowd Surf.” What it does is automatically stitch together related Snapchat Stories from the same location to form seamless videos.
It made its debut at a concert in San Francisco. The real magic is how Crowd Surf was able to assemble a continuous audio track using an assortment of 10-second Snapchat Stories, all taken from different locations at the concert and all from different users.
Click here and scroll down for a preview video.
To accomplish all of this, Snap takes a “sound print” of the audio playing in a particular location from people’s Stories. It then filters each of the clips so they sound more alike and autogenerates a stitched together video.
You obviously need a critical mass of users and content for this to work, which is why the feature was introduced at a concert. But it’s certainly a remarkable way of creating valuable content from decentralized user inputs.
I guess the only question is: How long until Instagram copies this?
Photo by Yvette de Wit on Unsplash
Instagram has a company chart that shows: Days to Reach the Next 100 Million Users. It is only the chart where they want to see it decline. The first 100 million users took 28 months. And the last took only 4 months. Instagram now has 700 million active users.
Instagram is also saying that they have 200 million people using their Stories feature – you know, the feature they blatantly stole from Snapchat. This would mean that more people are using Instagram Stories than Snapchat has daily users (~158 million).
Anecdotally, I can tell you that I’ve almost completely stopped using Snapchat. (Snapchat battery usage over the last 7 days = <1%.) I still prefer Snapchat’s direct messaging functionality, but not enough to continue using the platform. Instagram now provides basically the same functionality – plus my photos – in a single app.
But more importantly, Instagram’s network and my network are bigger there. And network effects are clearly the most important thing. In fact, by directly copying Snapchat, Instagram (Facebook) made sure that this competition was only about network size and not about features. Monopoly power.
In real estate, if you own a property in a great location, your position is pretty defensible. (Though you may not be completely immune.) But in tech, that is clearly not the case. Someone might copy everything you’ve done and beat you at your own game.
As someone who used to be very bullish on Snapchat, I am now wondering if I need to remove my Snapchat handle from the header of my blog emails. I mean, I’m not there very often anymore. But maybe, just maybe, Snapchat will find a way to compete outside of network effects at a game that Instagram/Facebook can’t play.
How would you or are you placing your bets?
“There is no higher God in Silicon Valley than growth. No sacrifice too big for its craving altar. As long as you keep your curve exponential, all your sins will be forgotten at the exit.” -David Heinemeier Hansson
Snap Inc. went public last week. Offering price was $17. Closing price on the first day was $24.48. Given that the company is not profitable and may never be profitable (their caveat, not mine), many people have been asking: Is a valuation somewhere around $34 billion justifiable?
This is a common question when it comes to tech companies. And the answer usually comes down to something along the lines of this:
The Snapchat story “is all about growth,” Mr. Nathanson said. “It’s not about economics.”
It’s about the future.
I love Snapchat and I think the company is run by a very creative founder. But now that Snapchat Stories was stolen by Instagram, they need, in my humble opinion, something new and killer to stick.
How else will they meet their growth targets?
On a related note, I recommend you read a piece by David Heinemeier Hansson called: Exponential growth devours and corrupts. That’s where the quote at the top of this post is from.
Here is an excerpt:
What sucker wants to earn $10 million/year at a 52.5% tax rate when you can get away with hundreds of millions in one take at just 15%? Nobody, that’s who.
It’s hard to argue that boards, founders, and their financiers aren’t just doing exactly what the incentives are coaxing them to do.
Which is why growth is now everything and residual value is nothing. In fact, the latter can be outright harmful to the former. When you’re being priced on the hopes and dreams of potential, reality can be a dangerous and undesired competitor. Best just to appeal to the exponential curve and let the imagination roam free. An epic capital gains score awaits!
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