Can Snap Keep Its Cool Factor?
Snapchat was always that cool kid you wanted to sit next to at school. The one all the hipsters partied with. But life changes, kids grow up – even the cool ones. These days find Snapchat trying to hold on to its cool rep as it simultaneously steps into maturity. And oh by the way, don’t call it Snapchat anymore. The name’s Snap Inc.
Now the company known primarily for that vanishing photo app, so popular with teens and millennials, stands poised for a record-breaking IPO with a $25 billion valuation. It’s being billed as the biggest offering of a U.S. tech company since Facebook’s debut in 2012.
But as Snap becomes answerable to shareholders and loses its indie street cred, can it maintain its edgy fun vibe? Snapchat’s popularity boomed because it made young people feel part of an exclusive trendy social media platform just for them. They make up most of Snapchats 150 million users. Will Snap lose its cool as it grows? Especially if Mom’s on it now? Maybe not.
Cool Moves – What Snap’s Doing Right
Here are some cool moves on Snap’s part that suggest the party’s just getting started:
Snap chose So Cal for its headquarters Snap’s founders reportedly came up with the idea for SnapChat at their Stanford frat house. In a cool move back in 2011, they moved out of the Palo Alto start-up ghetto and headed to the beach. Venice Beach, to be precise. A beachfront community with a boardwalk and surfing vibe on the west side of Los Angeles.
Snap’s incursion into the laid back sunny beach area prompted other major tech companies – weary of the inflated Silicon Valley living costs that they caused – to follow. YouTube, Facebook, Google, Yahoo and Netflix all have set up shop in new offices in the area now known as “Silicon Beach.”
“Snapchat is really the first Silicon Valley-scale company that’s been created in the L.A. area,” said Mitch Lasky, of the Menlo Park venture capital firm Benchmark, in a recent media interview. “I think it is going to have profound implications for the future.”
Meetings with sea views, breaks for surfing and volleyball on the sand definitely have a cool factor. And the mythic California beach life associated with the southern part of the Golden State has never lost its allure.
But beyond the cool life’s-a-beach factor, Snap’s La La land location positions it close to the heart of Hollywood. From this vantage point, Snap can capitalize on the region’s huge media and entertainment industry and snap talent from film companies’ special effects departments to further its own ambitions for marketable entertainment.
Plus – and a hefty plus – Snap’s paychecks at $127 K for an average base salary according to Paysa tower over the $112 K average base salary for the L.A. area. Although Snap salaries are a bit below Silicon Valley’s $132 K average base salary, it’s a trade-off many are more than willing to make.
Snap Rebranded As Snap Inc. Although this may seem too corporate for the kids, Snap’s recent rebranding is really a cool move because it blasts the doors open for all kinds of innovations in new products and services.
The company changed its name to Snap Inc. because, according to CEO Evan Spiegel, Snapchat plans to be more than just an app on a 13 year-old’s phone. That app, filters and all, remains Snapchat, but the company, with their newly launched line of video-enabled sunglasses, is proclaiming that it’s outgrown that sandbox. Spiegel said in a Vanity Fair interview, “Now that we are developing other products, like Spectacles, we need a name that goes beyond just one product — but doesn’t lose the familiarity and fun of our team and brand.”
Snap’s Created A Snappy New Wearable And they are being well, snapped up. The Spectacles – unlike the ill-fated Google glass – look like cool sunglasses. They feature a tiny camera on each lens to capture video in a 115-degree field of view, the same field as the human eye.
Google Glass was a computer in glasses form, so it was a pricey investment. Snap Spectacles’ only purpose is to capture short videos, so they only cost $130.
Spectacles captures video in a circular format, which, according to Snap, is how our eyes see. The default is 10-second clips, but can be extended to 20 and 30 seconds. Although designed to pair with Snapchat, the videos can be exported to a phone’s camera roll.
Thanks to stealth deploy of good old supply and demand, the Spectacles became an instant sensation selling online from secondary sources at well over their $130 price. With Snap logo vending machines mysteriously appearing and then disappearing in a matter of days, eager buyers queued up to buy their limited two pairs to the delight of the media which fanned the flames with loads of coverage. Free publicity? Cool move.
Snap has claimed that it is now “a camera company” but it’s likely that it’s an augmented reality company with more cool gadgets to come.
Snap’s New Overseas Base Is England Beatlemania, Bowie, Adele, The Crown and now Snap Group Limited. England’s been off the charts cool for eons. So savvy Snap is making the UK it’s official UK headquarters.
Claire Valoti, Snap’s UK general manager, told the British newspaper The Guardian, “The UK is where our advertising clients are, where more than 10 million daily Snapchatters are, and where we’ve already begun to hire talent.” The company says over 60% of British smartphone users aged between 13 and 34 are Snapchatters. Those numbers should get advertisers to snap to attention.
Snapping Up New Hires
What’s ambition for growth without staff to make it happen? Snap been busily stocking its pond by snapping up talent from other companies. While 36 percent of new Snap hires come from tech companies like Amazon and Google, a significant number of new staff hail from Goldman Sachs, a key financial player in the entertainment business, according to Paysa data. Other financial companies -Deloitte, Citi, and B of A – also can count recent defectors in new Snap staff. Also Paysa reports that a surprisingly high percentage of new hires are coming in at the director level, suggesting that Snap is beefing up its management side.
Forget Facebook, Snap’s Its Own New Phenomenon
Comparing Snap to Facebook is a favorite new hobby of tech industry analysts, but the two may be so different as to defy comparison. As Snap pushes beyond social media into hardware and entertainment gadgetry, a comparison to a company like Apple with both trendy hardware and software may be more apt. Or perhaps there is no comparison to any other company and we will just have to see what Snap throws against the wall next and where it sticks. In Paysa’s company rankings, Snap Inc. is climbing steadily. Although, ranked at #13, it still lags behind Facebook, ranked 5th in the U.S. But Snap is closing in with momentum for the IPO building.
“The user numbers, the cash flow, and the investor excitement seems to be proof that Snap, Inc. is the real deal; an honest to God unicorn at a time when they were supposed to be extinct,” says SnapMunk blogger Daniel A. Guttenberg.
Lots of investors are betting he’s right.