With Snap’s IPO it’s about the Brand, not the App.
I’ve read a number of analyst reports, and press musings on the upcoming Snap IPO, and I think most of them are missing the point. For me Snap Inc. is not about the app, it’s about the Snap Brand.
Snap and Evan are a brand. A brand that can be applied to anything, and make it instantly cool. Facebook can do that with Instagram to a certain extent, but not in the same way. Snap isn’t tech. It’s not Silicon Valley. It is LA, it’s Hollywood, it’s celebrity — it’s one of the most important brands that millenials have grown up with.
Snap is about effortless design and brand caché in the digital world that is perhaps only matched by Spotify. Snap can apply it’s brand to camera spectacles and make them instantly cool in a way that a Silicon Valley company struggles to do. It can even make vending machines look awesome.
As Tuvia Elbaum states: Snap is looking like the next Apple.
It doesn’t matter that the app has 1/10th the revenue per user of Facebook, in fact that is probably an advantage, since Snapchat isn’t overrun with ads and content marketing. Snap can and probably will bring it’s brand to a wider range of products, and has a far greater capacity to generate revenue from a wider variety of products than any other digital brand. Snap could take on YouTube and Netflix with original content, it can do news, media, hardware and most interestingly — augmented reality.
If Evan and Snap keep executing the way they are doing, gradually start to bring the brand to a wider group of products, and sort out their international strategy, then I believe that the post IPO trajectory could be similar to Facebook. A sharp dip post IPO, which will be a superb buying opportunity, followed by a relentless march of the brand into many other revenue generating areas. It’s not about Snapchat. It’s about Snap Inc.