Snapchat silences the critics

The same Evan Spiegel that was nuts when he rejected a three billion offer from Facebook, now sees his company valued at ten billion… not bad, huh? What’s Snapchat’s secret sauce?

In December 2012, Facebook began working on a clone of Snapchat, which allows senders to set a time limit on the life of a message, and that was growing at a skyrocketing pace. Facebook took the project seriously, with Mark Zuckerberg personally overseeing it, writing code, and even providing the voice behind it.

But the app, called Poke, failed dismally, and was easily seen off by Snapchat, proving in the process that young people don’t see Facebook as a serious option for this type of communication.

Applying the principle that if at first you don’t succeed, Facebook then tried to buy Snapchat, offering no less than $3 billion for a company with no business model and little indication that it was interested in drawing one up. Evan Spiegel, the company’s co-founder, rejected the offer, prompting many analysts to question his sanity. It is rumored that he rejected another offer, this time from Google, for $4 billion. Surely he’d lost his head?

Today, Snapchat is on the front page of the world’s leading financial and technology publications after Chinese e-commerce giant Alibaba announced it valued the company at $10 billion. Some say that even that price is a bargain. Alibaba’s motive is simple: it wants to take on its rival Tencent, which owns WeChat.

Suddenly, Snapchat, which has improved its product steadily since Facebook’s first, measly offer, is attracting more and more attention from advertisers, earning the respect of analysts in the process, who no longer question Evan Spiegel’s sanity, and are instead hailing him as a prophet. The company has shown itself impervious to competition, scandals, and security issues. Why? Because, as Mark Zuckerberg himself said, “it’s a super interesting privacy phenomenon”, and could be on the way to becoming a generation’s preferred communication method.

Snapchat also fascinates investors. One of the first to provide seed money said it had come across the application thanks to his youngest daughter, who told him that the three most popular apps at her school were Angry Birds, Instagram, and… Snapchat, which he had never heard of until then. The founders are no newcomers: Snapchat is, they say, just one of 34 projects that they tried to get off the ground.

Let’s get one thing clear: critics who dismiss Snapchat as solely for sexting and other similar uses are wrong, and there is no way that it could have become so widely used just on that basis.

For the moment, Snapchat seems to have silenced the critics who saw it as a novelty, soon to pass, as well as those who thought that Siegel was insane to pass up those acquisition offers, saying that the only three reasons for not taking $3 billion was that Snapchat was hoping to be the next Facebook, or Twitter, or that Siegel was nuts. Since then, this app has grown, as has its valuation, suggesting that the first two reasons now seem the more likely… which is saying something!

(En español, aquí)