Why Snapchat Will Never Be Worth $3 Billion
It's big with fickle teens, but that's a poor indicator of success.
Wed, December 04, 2013
IDG News Service — It was the number that ricocheted across the Internet, a number so large it couldn't be real: 3 billion. Dollars. In cash. Facebook reportedly offered that tidy sum for Snapchat, the disappearing-message app that has become tech's most sought-after startup.
Messaging apps are the future, or so the conventional wisdom goes.A Facebook has a stand-alone Messenger service and tried to beat Snapchat at its own game with Poke (which went nowhere). Twitter has experimented with its direct-messaging feature and is reportedly exploring ways to separate DMs from the rest of the microblogging service. The market has a slew of over-the-top messaging apps--WhatsApp, Kik, Viber, and the like--but Snapchat stands apart because, like Japan's Line, the app is less a text-messaging replacement and more of an experience.
Snapchat is unique, but the app makes no money, and it doesn't have many users compared with other popular services that skyrocketed to success and then sold out to larger companies--and did I mention it makes no money? An offer of a few billion dollars is a lot of pressure for a little startup to handle. So let's look at why Snapchat has captured the imagination of an undisclosed number of young people, and why that magic-carpet ride can't last forever.
Is this thing on?
When I was a teenager in the early aughts, personalization was huge. You were defined by your MySpace page, with its blinking graphics and autoplaying theme song that spoke volumes about your personality. Your Top 8 reflected your changing alliances. Teens in my day chronicled their lives on diary sites such as LiveJournal, DiaryLand, and Diary-X.
Today's teens are less into spilling their guts through prose and poetry in a digital diary--especially one open to public scrutiny--than they are into sharing images of their lives. Photo-heavy social networks such as Instagram and Tumblr are huge with teens, but Snapchat is the social startup that every analyst and tech CEO is watching. What's the appeal?
I am just outside Snapchat's core demographic--13- to 25-year-olds, according to Snapchat's 23-year-old CEO Evan Spiegel--and I have no real need or desire to send disappearing photos to anyone, so I decided to see what else Snapchat is good for.
The great thing about Snapchat is that it's incredibly simple to use. Sign up, pick a username (this was the toughest part because all the good ones are taken), and then import your contacts into the app. Snapchat searches the people you have stored in your phone to see if they're already signed up, rather than mining your friends lists from other social networks. You might run into trouble here: If none of your close friends use Snapchat, you have to recruit them. Good luck getting professionals with busy lives to sign up for yet another app. (I know, I tried. It was like pulling teeth.)