(First published on 5/12/17 on 5ish Links, my newsletter — more)
Snap sure shat the bed on those first earnings as a public company, huh… A few folks asked me for my thoughts on this since I made a good call on Facebook as a public stock (when it was in the gutter) five years ago.
Of course, three grains of salt must be taken first:
1) While I was very right about Facebook — the stock went public at $38/share, then got killed, so I said I was absolutely buying if it went below $20, and I did at $19/share, and it’s now $150/share — I was very wrong about Twitter. I thought it wasn’t possible that we could live in a world where Twitter could be worth just 1/10th of what Facebook was worth. So far, I’ve been both right and very wrong there: Twitter is now worth less than 1/30th what Facebook is worth (in terms of valuation).
Which is both sad and crazy.
2) I believe I technically have a small amount of Snap shares through various acquisitions throughout the years related to the funds I’m involved with. Honestly, the positions aren’t big enough to even know what exactly they are worth. My wife has a more defined position through her fund at Spark Capital, but I’m speaking for myself here and have no inside information.
3) I’m not a stock broker, this isn’t investment advice, these are just a few thoughts :)
So, my quick thoughts here would be along the lines of Warren Buffett: “Be fearful when others are greedy, and be greedy when others are fearful.” Look, Snap’s numbers are not good. Even when you remove the stock-based compensation and payouts around the IPO, they’re not good. And the user growth isn’t great. BUT.
I refuse to believe the company doesn’t have any “tricks” left up their sleeve. Without question, Snapchat has been the key driver of several social paradigm shifts that are now norms. Yes, Facebook copied several of them with varying degrees of success (Instagram Stories: huge success, Messenger Day: less so, to put it nicely). But why do we think Snapchat will stop being at the forefront here?
Further, remember that Snapchat changed their name to “Snap” for a reason. While Snapchat will undoubtedly remain the key business for the foreseeable future (and possibly forever), all the best businesses in the world are able to constantly evolve, adapt, and extend into new businesses. Snap just revealed their broader ambitions earlier than most companies do.
While Spectacles haven’t turned into a huge business, it’s still a fascinating maneuver by such a young company. And it cements their “wild card” and innovative status in my head: again, they will have other tricks up their sleeve — they will continue to surprise, would be my guess.
Of course, none of that speaks to the ability to make money. But here too, I’m more optimistic than many others are, it seems. Everyone knows video is where all the advertising money is these days as the traditionally written content players trip over themselves to pivot operations to video to make a buck. Snapchat is a far more natural play in this environment. And if they can get all the big brand advertisers to buy into vertical video (which it seems like they are), they seem to be positioned well — in particular with the key demographics advertisers covet.
Traditional television is slowly but surely dying (fine, morphing). This doesn’t mean the end of advertising. It just means that it will continue to shift. As everyone knows, Google and Facebook are best positioned here right now, but it’s a massive, massive market. This is not game over, by any stretch.
Having said all of that, I have absolutely no idea why Snap went public when it did. That sure seems like a mistake to me. But then again, I’m not an insider. I don’t know what they know. I just know what I see: the business clearly isn’t mature enough yet to support a traditional public company narrative of any sort. Then again, Snap is not a traditional company of any sort. So… I’m still cautiously optimistic. 👻
Data are to this century what oil was to the last one: a driver of growth and change. Flows of data have created new infrastructure, new businesses, new monopolies, new politics and — crucially — new economics. Digital information is unlike any previous resource; it is extracted, refined, valued, bought and sold in different ways. It changes the rules for markets and it demands new approaches from regulators. Many a battle will be fought over who should own, and benefit from, data.
The analogy isn’t perfect, but it is pretty damn compelling.
Peter Elstrom and David Ramli on the rise of Pinduoduo, a fast-growing company/service in China.
The app has the feel of a game, with colorful photos and hidden bargains. Deals change every day and, as you scroll through a category, the discounted price is shown below the image. You click on an image of mangos at 34.8 yuan for eight and find the price is 39.9 yuan if you buy alone. To get the discount, you have to find a friend to join in the purchase. Because you’re already on WeChat, you can instantly pitch others.
The motivation can be compelling. Recently, a track suit in red, white or black was on sale at 48 yuan for a single purchase. You can click a button and pay 29.8 yuan if you say a friend will join. That sends shoppers off in search of friends willing to participate. If you can’t find another buyer, you get a refund. Ren Shuying, a Beijing accountant, is a dedicated user. “I check it out every day and chat about products with friends,” Ren says. “I’ve bought all sorts of products — things to eat or wear.”
This strikes me as decidedly more interesting and decidedly less fleeting and perhaps most importantly, decidedly more sustainable than the Groupon model…
Rich McCormick on SpaceX’s plans for internet satellites:
The company will launch additional satellites in phases until 2024, at which point Cooper says the network should have reached full capacity, with the craft operating on the Ka- and Ku-band frequencies. SpaceX will be using its own Falcon 9 rockets to get the satellites into low Earth orbit — a measure that will help it save costs, and ensure it’s not beholden to the launch schedules of other spacefaring firms.
Cooper said the plan would put 4,425 satellites into orbit around the Earth, operating in 83 planes, at fairly low altitudes of between 1,110 kilometers and 1,325 kilometers. The company will also support its network with ground control centers, gateway stations, and other Earth-based facilities. That makes it an ambitious plan, not least in terms of volume. There are only an estimated 1,459 satellites in orbit around our planet at the moment — the SpaceX scheme would launch triple that figure, potentially cluttering up the space around Earth, making future launches potentially difficult and dangerous.
All the focus on SpaceX always seems to be about the most ambition goal: colonizing Mars. And perhaps rightfully so. But this seems like one of those things that could have a far greater impact on a far larger number of people in a much nearer term — if it works, of course. And if it does, it’s also how SpaceX will get the money it needs for said Mars mission…
Mark Wilson spoke with Niantic (makers of Pokemon Go) CEO John Hanke:
Over the course of a decade working at companies in Silicon Valley, and developing platforms like Google Maps and Google Earth, he drove a 2.5-hour commute every day from the East Bay to Mountain View and nearby cities. One day he sat down and did the math, and realized that he’d literally wasted a year in his car on his way to work, not enjoying a moment of it. Then, during a “bike the drive” day, Hanke decided to ride in to Google’s San Francisco office instead.
“I biked from my house, caught the ferry from San Francisco, and was like, ‘this is incredible!’ he recounts. “It was such an eye-opener to me. A glimpse that this could be my life, if I did something to make it happen.” It inspired his work at Google, where he led the creation of the historical map platform Field Trip, and then, the Pokémon Go precursor, Ingress.
“I developed this idea, that maybe we could use technology to help people reclaim public space,” says Hanke. “Not from anyone, but from dereliction, from neglect.”
Always loved the concept behind Field Trip — a real-time guide for everything around you as you walk through a city — and believe it will work at a massive scale one day, it’s just a matter of time (maybe it’s the killer app for AR, we’ll see). Pokemon Go always just seemed like an easier inroad to the same core concept (thanks to both the gaming aspect and the killer IP thanks to Nintendo). But it’s just the first step.
Four writers, including, interestingly enough Brian Helgeland, are working on this — none of them are working on the current series. This could be either brilliant or awful. And they’ll undoubtedly still be done before the A Song of Ice and Fire books…
I didn’t realize it was still possible to “discover” new colors. Cool. 🖍
“It’s like giving somebody a glass of hell in ice water.”
(First published on 5/12/17 on 5ish Links, my newsletter)