I don’t understand Snap and naturally I’m seduced.
Yesterday morning, I woke up at 7:40 am for an 8'o clock exam. I browsed a little Facebook while waiting for my body to boot up, and The Verge told me that Snap had filed for an IPO. By the time I finished reading that article (and a bunch of follow up articles), it was 7:59 am. I was late for the exam; but I was thankful that I’d read that article, and satiated my recent curiosity about Snap to a large extent.
The thing is, I don’t understand Snap, Inc. and naturally I’m seduced by it. I am in university appearing for my last semester, but I am a little older than the Snapchat generation. The app comes with little on-boarding help, and you’re supposed to figure out all the swipes and gestures to unlock the screens and filters (and maybe more stuff that I’m unaware of).
The app made has made me curious for about two years now, but since I’ve been following the company’s happenings I’ve been left equal parts charmed and confused more than a few times. The company is notoriously (in)famous for its secrecy. Employees get to know about product releases from news articles. This was true for Spectacles launch, and for Lens’s launch. Employees get fired with a day’s notice, in the most ambushing manners.
CEO Evan Spiegel explains his knack for secrecy as “Keeping secrets gives you space to change your mind, until you’re really sure that you’re right”. Most signs point at Spiegel being a towering presence, a secretive orchestrator in the company. He lives a very private and heavily guarded life, doesn’t like addressing media very often; and has created Snap very much into the Anti-Facebook. Most founders embed their characteristic traits into the company culture. Larry Page and Sergey Brin, with their solid research background, made it part of the Google culture to be scientific about the innovation process. Mark Z made Facebook into a hack-first-polish-later company with openness written into the company DNA, and it can be seen in their product launches. And Snap, well it would be interesting to see if they look to create more enigmatic marionettists, besides Evan Spiegel of-course, if and when they try to scale to the big billion users mark.
Spiegel hosts this much desired but less possessed skill of understanding people to a deeper level than most. His understanding of the age group 5-10 years younger than him shows in the massive success that Snap has piled up. To top that off, he is engaged to a woman who might be seen as the pinnacle of mainstream beauty in the age group 5-10 years older than him. The question that looms large today, is whether his understanding of public companies would prove right on point.
It looks a little off the point as of now. As the Verge article reports, Snap wipes out some fog around its revenue projections with “We have incurred operating losses in the past, expect to incur operating losses in the future, and may never achieve or maintain profitability.”, which I’m not sure stands very encouraging for potential investors as it is. In fact, it sounds a little bewildering for a listed company to have “cost of revenue greater than the revenue itself”. There is enough reason for doubt about the success of Snap’s IPO. But I’m not sure if I’m willing to bet against Spiegel’s understanding of it. For all I know, he might very well be the chosen one in this new era of Tech Unicorns.
Like I said before, I don’t understand Snap, Inc. and naturally I’m seduced by it.