Snapchat appeared in the landscape of social networks providing something thatafterwards, would end up being absorbed (not to say directly plagiarized) by all. The format storys, his formula for sharing in an ephemeral way, spread to become almost a meme a couple of years ago, when even LinkedIn or Twitter incorporated it.
Filters, glasses with cameras that are very similar to those recently launched by Facebook with Ray-Ban… Along the way, without a doubt, Instagram, the Meta network, is the one that most appropriated Snapchat’s innovations without any hesitation , something that has even led to question to what extent why no regulation was protecting that heritage.
Since its emergence (Snapchat was founded in 2011 but had its peak in 2016) things, however, have changed a lot. It is no longer the trendy network or platform that everyone copies. Its shares have gone from touching $80 a year ago to now being worth just over $11.. Everything, after continuous attempts to change its business model.
The last sample we had this week. Snap, its parent company, announced that it is laying off 20 percent of its employees, discontinuing at least six products and appointing its first chief operating officer in seven years. The company has also admitted that it is in financial difficulties.
The cuts will affect about 1,300 of Snap’s 6,400 employees, the company said.. Snap is shutting down its division that produced exclusive short shows with celebrities and other influencers, as well as its social mapping app, Zenly; its music creation app, Voisey; and its Pixy camera-drone just a few months after launching it.
In an email sent to employees by Evan Spiegel, one of the founders and CEO, he blamed difficult macroeconomic conditions for forcing these decisions.
“While we will continue our work to re-accelerate revenue growth, we must ensure Snap’s long-term success in any environment,” he wrote. He added: “I deeply regret that these changes are necessary to ensure the long-term success of our business.”
An ad-based model, being a “camera company”
Snap, which is still popular especially in the United States, did not achieve the hatching that TikTok has had. It has more than 347 million active users worldwide, but has been struggling for months. Apple’s privacy changes have affected its advertising business, and rising inflation and economic uncertainty have made advertisers nervous.
Last month, Snap reported its slowest quarterly growth rate since going public in 2017. and said it would “substantially slow” its hiring pace. He also declined to predict its financial performance for the current quarter due to “uncertainties related to the operating environment.”
Many social media companies are dealing with the prospect of a recession. Meta, the parent company of Facebook and Instagram, and Twitter have also slowed their hiring in recent months. But Snap, like Twitter, is especially vulnerable to economic downturns because it’s a smaller company and relies heavily on a unique way of making money.
Snap has also been stumbling with its strategy. It currently presents itself as a camera company. Yes, cameras.
Snapchat: Some Ephemerally Loud Beginnings
Snapchat started under the name Picaboo in 2011. Initially, Reggie Brown pitched the ephemeral concept that everything is based on to Evan Spiegel, who brought in Bobby Murphy to code the app. Brown was the one who designed the Snapchat logo, called Ghostface Chillah, inspired by the hip-hop group Wu-Tang Clan. Brown was then forced to leave the company, at which point it was renamed Snapchat.
Facebook had acquired Instagram for $1 billion in 2012. But Snapchat was racking up users so quickly that it caught Facebook’s eye. Thus, Facebook would have offered to acquire Snapchat for 3,000 million dollars, which Spiegel immediately rejected. And it looks like Instagram was repurposed to essentially become a Snapchat. killercopying everything and more.
That’s where the dances began for Snapchat, which experimented in the financial space and introduced Snapcash in 2014. It was a feature that allowed users to send and receive money through the app. However, there were already well-established players in that space. Let’s think about PayPal and Square. And it seemed that mixing a social messaging app with finance didn’t mix well. Thus, Snapcash stopped working in 2018.
Snapchat was still acquiring users at a rapid rate. Daily active users averaged 158 million at the end of 2016. The user base was mostly made up of people between the ages of 18 and 34, but it was above all in those under 25 years of age where he was most successful. Just the weak point of Facebook at that time.
As a company, Snapchat was renamed Snap in September 2016. This coincided with the company’s dip into hardware products a few months later. Snap introduced the Spectacles, smart glasses that allow users to record videos of up to 10 seconds. That has never worked well.
To end up being Snap, the camera company that can’t find advertisers
Snap went public in 2017. The stock price immediately soared, giving the company a valuation of $33 billion at the end of trading. Investors hoped that Snap would be the next Facebook. But Facebook was already profitable on its IPO date, something Snap certainly wasn’t.. His losses widened to $3.4 billion in 2017.
In late 2017, Snap announced a redesign that was so controversial that over a million people signed a petition to remove the update. Kylie Jenner tweeted about leaving Snap, causing her shares to drop and the move to Instagram to drag on.
Innovation — or maybe hiding behind it — has been Snapchat’s formula ever since.which seems to be insufficient insofar as what has always been its main leg has suffered: the ads.
Now, with a somewhat shaky future ahead, we will have to see what the next steps are for Snapchat, a company and platform that has contributed something fundamental to the ecosystem of other large companies, but has not been able to defend its own terrain. Or maybe yours is simply an unfair story.