Oh Snap!

In the midst of all the gloom surrounding Snap, Inc.’s stock’s nose-dive after their Q1 earnings call this week, I wanted to share a couple of reasons why I’m still long on Snap:

Teenagers aren’t going anywhere…

If you go to a venue where teenagers hang out — say an 18+ music venue so most of the place is full of 18–21 year olds (they can’t get into other 21+ spots, duh!) and observe the apps that they use, Snapchat beats anything else hands down. I’m still never able to find a single person sending a story on Instagram! Sure, Instagram stories caught like fire, and even though it already has more users (~200M monthly uniques versus Snapchat’s ~160M), I’m still highly curious to see what % of the 13–21 demographic converted to Instagram stories. I’m extrapolating 13–18 from 18–21, but my guess would be a very small number — because it’s very hard to change the culture of a network. Instagram has always been a curated version of you, and although Instagram made it really easy to let you block certain users from viewing your story, a teenager doesn’t want to risk putting something up, only to find out later that their 50 year old uncle also viewed it. Snapchat has always been the private space where just your actual friends hang out — where you can be comfortable sharing anything without any judgements, especially from your parents. Don’t get me wrong: everyone loves their parents, but there are parts of any teenager’s life that they’d rather not share with them, and hence I’d bet they aren’t going anywhere…

…because their parents are not on Snapchat.

One of the biggest potential problems with Snapchat’s network as it continued to grow would’ve been your parents eventually signing up for it, and then pestering you to accept their friend requests. This happened with Facebook and it’s the reason why most teenagers don’t use it any more — it’s a directory of everyone I know, and unless I want to share something with everyone I know, I don’t post it on Facebook. Snapchat, on the other hand, feels like a safe haven with 15 of my closest friends, and I’m okay sending them frivolous shit all the time. Looking this way, maybe Instagram almost did Snapchat’s core users, the teenagers, a favor by taking away the older generations and adopting them in its app, leaving them alone in their Snapchat haven!

Instagram is going to be the new Facebook — I’ll only share the photos and stories I want everyone and their mom to be seeing on Instagram, but for my most intimate communications with my closest friends, Snapchat is still going to be the tool of my choice. This is true even now — a good chunk of my friends use both Instagram stories and Snapchat, and the content they send out on Snapchat is much more authentic, prolific & engaging than the cultivated persona they nurture on their Instagram stories.

Snapchat still gets the lion’s share of my social media time…

More friends/audience doesn’t equate with how much time I spend in an app. There are way too many avenues for broadcasting my life to everyone today. Teenagers, and for that matter, everyone yearns for smaller private spaces where they can share whatever they want with their closest friends. Teenagers use Snapchat, my generation uses messenger groups, my mom’s generation uses email chain groups— but the point is that as these teenagers grow older, the tight knit and private nature of the Snapchat network is going to keep it more attractive over a network like Facebook. And, from what I can see, the amount of time spent in an app is highly correlated with the depth of your relationships with other nodes on that network, and not with the size of your audience.

…and is using Innovation as a moat

Let’s just use the latest thing from Snap as an example: the Spectacles. I have been using Snap Spectacles for about 2 months at this point. When you take out your phone and point at someone, your subject changes. It reminds me of this little thing I learned back in school:

Heisenberg’s uncertainty principle:

There’s a fundamental limit to the precision with which certain pairs of physical properties of a particle, known as complementary variables, such as position x and momentum p, can be known.

This applies so well to capturing your daily life on a camera — you can either precisely experience a person’s reactions to (or emotions about) a certain thing, or precisely capture the person on camera, but not both. For instance, it’s nearly impossible to capture someone’s real reaction when they see you after a long time, since if you have a phone pointing at them, they will suddenly morph to their camera-self, and will no longer be their actual-self. (and probably call you a weirdo later for walking in with your phone out!)

Snap Spectacles flip that.

With the Spectacles, at least for now, you can actually capture someone’s real emotions or reactions because despite the spinning recording indicator, almost no one realizes at first that they are being recorded. This will probably change over time as Spectacles become more common and people get educated on how to check if it’s recording or not, but by then, it would be an acceptable behavior to just let yourself be since the videos captured on this new camera don’t leave the very private network of your friends.

In conclusion, I’ve loved Snap as a company for a long time, and I like their pitch of using innovation as a moat: they have consistently innovated in the consumer web space every year since their founding (Ephemerality, Stories, AR filters, Memories, Spectacles), and have a core set of users who really really love them, and would be the last ones to die. (Sorry, that got dark real quick!)