SNAP: Media’s Backlash Accelerated Snap’s Ascension
Originally published on February 23, 2017
Snap Inc is set to go public. For multiple reasons this is a big deal — liquidity to the markets after a starved 2016, an awesome outcome for Snap’s investors encouraging more investment dollars to tech, validation that unicorns can have optimal exits, and a strong nod to LA’s thriving tech scene. As with anything that basks in outlier success, Snap’s journey was not free from challenges and naysayers. Rather with Snap, it seem liked a nonstop train full of naysayers, smacking headlines left and right. As a Stanford alum and friend to a few Snap employees, I peripherally felt linked to their journey; I intensely followed it, brainstormed and annoyingly proposed product ideas to my friends there, and defended it avidly against disbelievers. In following their story over the past few years it shed light to the enormous and unintended power that media backlash can have in actually accelerating a company’s ascension, particularly a company as early as they were in their life cycle.
Media Backlash — a surprise in Silicon Valley where innovation should and could come from ‘anywhere’
Snap founder, Evan Spiegel, did not lack his fair share of incriminating, slandering headlines. In fact, I almost applaud certain journalists for how lewd and creative their headlines were of Spiegel. They painted Spiegel as a lanky, arrogant, spoiled, juvenile, founder with ambitions well beyond his reach, as one journalist put it “a desperately unassured, lanky kid who covers up his insecurity with unabashed cockiness.” Right — at 23 I’m sure you were just peachy with confidence. As the headlines piled up, deeply questioning Snap seemed like the most popular conversation starter in the Valley. “I can see why it’s strategically valuable,” one leading venture capitalist tells Forbes. “But is it worth $3 billion? Not in any universe I’m aware of.” Well buddy, it’s now worth 8x that, and this is very much the universe you live and breathe in.
Yet what shocked me was neither the headlines nor the fraternity emails, but rather that, in the very corner of the world where innovation has fostered so profoundly, where tech giants are currently taking a vocal stand on inclusion, there was such visceral reaction to a founder that fit a slightly ‘different’ persona. He wore ripped jeans instead of a hoodie, he coded in a Stanford frat house instead of a Silicon Valley garage, and he didn’t wanted to connect the world, he wanted real friends to connect in unassuming and fun ways. Despite an industry and media channel that professes that innovation can come from anywhere and technology built with varying personalities and thought is better positioned to address the world, the millennial founder was met with disgust.
The Power of Media Backlash — helping Snap’s ascension to IPO
As the media spewed negative headlines of Spiegel and questioned Snap’s integrity and validity as a ‘real’ business, the media backlash helped Snap attain the prominence it enjoys today in 3 critical ways:
(1) Legitimized Snap as a Market Leade r: humans love villains. We’ve used villains to describe the world around us dating back centuries — Bible, Greek mythology, etc. And villains are never in second place, they are always market leaders. Yet, Snap’s ascension to villain-hood came stunningly early in their life cycle relative to other corporate peers who joined the camp of PR woes earlier on: Goldman Sachs, Google, Exxon, McDonalds, Wal-Mart. All public companies, all with market caps over $100B. With media as pervasive as it is today being identified as a villain may have hurt Snap lock down certain partnerships early on, but in the long run it offered credence and legitimacy to the Snap brand and signaled Snap as a market leader. It pinned them with the likes of these PR wounded corporate peers, despite at the height of media slandering in 2015 Snap had only generated $58.7 million revenue for the year, not even a full percentage point relative to Goldman, Google or any company listed above.
(2) Protected its Authenticity: The overwhelming tone of the media backlash against Snap was laced with anti-millennial sentiment, questioning the usage of a ‘silly’ photo disappearing app, balking at selfies, and recoiling at the idea of face altering dog filters. I read these pieces, somewhat understanding, somewhat disappointed but I shrugged them off. Those that didn’t understand the app were unlikely in Snap’s target demographic, and honestly were unlikely the kind of folks that I even wanted to communicate intimately on the app; and this is the incredible power behind it. You only share these real-time, authentic and voyeuristic glimpses into your life with your friends, not an ever-growing platform of acquaintances you’ve inconsequentially collected over the years. The backlash only fortified the sentiment of those not using the app to not join Snapchat, protecting those existing users from Snapchat becoming a platform similar to Facebook where ‘mom joins, now it’s uncool’. This enabled Snapchat to capture and concentrate on younger audiences, with the majority of their 158 million users under the age of 24 with intensely high usage rates; average user spending 25–30 minutes a day on the app and checking it an upwards of 18 times. This very demographic advertisers are desperately vying to reach as millennials represent the largest consumer group, and traditional media sources like TV are facing an average viewer who is 59 years old. The media backlash reinforced a focused and concentrated network effect, meaning content remained pure, audience remained solely your friends and the experience therefore was not diluted.
(3) Rallied Internal Team: The backlash gave the team something I personally love to see in founders — a hefty chip on their shoulder. Not only did they have the Herculean task all founders face to build their business, but they had to prove (1) their LA model would work and most importantly (2) their ‘silly’ disappearing photo app should be considered a serious tech player. Internally this pushed innovation to be faster and more creative than established tech companies who were blatantly open about replicating Snap’s technology. Snap was the first player to see massive adoption of AR with their lenses feature, despite PokemonGO bathing in the publicity sunlight for this same feat. Their subsequent products have either been replicated by tech titans (which for the record as a shareholder, I’m paying for innovation, not imitation! Let’s change that) or have rolled out similar products in really experiential and fresh ways as seen with Specs by Snap. As Snap came under PR fire, their response was to insulate, which reinforced an ideology and management style that prioritizes privacy above all else. Snap’s goal is to empower users to express themselves, in the moment, and to do so in a fun way without the pressure of building your ‘brand’ or telling a consistent story to your ‘followers.’ No better does Spiegel speak to the ethos of Snap than in his keynote addresses at AXS and LA Hackathon, highly highly recommended reading.
Media journalists, be wary of the power of ink you hold, sometimes you’re a force that oils the very machine you write about. As modern philosophers 50 Cent and Kanye West have echoed “if they hate, then let them hate and watch the money pileup”. At an $20 billion+ valuation, verge of going public in under 6 years, 50 and Kanye would be proud. Huge kudos to the team — excited for more awesome products and experiences to come.
Originally published at https://www.linkedin.com on February 23, 2017.
