By: Dave Farber
It has been reported by The Wall Street Journal that Snap, Inc. — previously Snapchat — is preparing for an IPO early next year that would value the company at around $25 billion.
This comes on the heels of Snapchat’s recent announcement that it’s expanding into the hardware realm with the coming launch of its new Snapchat Spectacles. All this from a company that makes yet another app in the crowded photo and messaging spaces. All this from a company that puts out a seemingly inferior product that offers far less functionality than its chief rivals in the social media realm. Yet, as we’ll explore in a moment, it’s precisely that “inferiority” that gives Snapchat its edge.
On the other hand there’s Twitter, which launched in 2006 — five years before Snapchat. Despite being a prominent early player in social media, Twitter has struggled of late to attract and retain users. In part, that’s because Twitter has taken the opposite approach, offering a plethora of features to no one in particular. Is Twitter a platform for startups to gain attention, individuals to get news updates, or big brands to address customer service complaints? With its recent agreement with the NFL to stream Thursday night football games, maybe Twitter is a place to consume television and other forms of media content. By trying to be so many things to so many people, Twitter has slowly been turning itself into a one-size-fits-none product that leaves potential users confused and frustrated.
Snapchat, by contrast, has focused pretty intently on helping a defined group of individuals satisfy a small number of specific “jobs to be done.” In particular, Snapchat helps individuals stay connected to friends and share what’s really going on in their lives. Users can send a quick selfie to show how they’re feeling or a short video of something they found funny. The photos and videos that are shared don’t have to be good, at least not in the way we would traditionally define the term. And that’s why the features that other social media platforms have added — things such as Facebook’s reaction feature or Instagram’s wide range of filters — aren’t necessarily valued when people are using Snapchat. When the job is to share a real moment in your life, a filter that glamorizes your photo isn’t a very good tool for getting that job done. In that light, Snapchat’s limited means for enhancing a photo suddenly become a benefit, not a drawback.
So what about the filters that Snapchat does offer? For instance, Snapchat provides a small number of selfie filters that let you do strange things to your photo, such as replacing your eyes with additional mouths. Assuredly, that doesn’t help anyone share a real-life moment. But these filters do help with the job of staying connected with friends, and they do so in a set of circumstances where the competition really doesn’t offer much. A filter that inexplicably lets you morph your face into that of a dog fills that desire to say “I’m thinking about you, even if I don’t have anything interesting to share right now.” While Facebook and Instagram are focused on conspicuous consumption — helping individuals show off their most recent vacation or their new car — Snapchat is winning on those average days when there’s just not much going on.
Snapchat is on a winning trajectory because it focuses not on what the competition is doing, but instead on how it can help its users accomplish jobs that they are struggling to get done in their lives. If Twitter wants to grow its user base and its user engagement, it’s going to need to do the same thing. Luckily, the timing for that may be just right. Reportedly, Twitter was fielding bids this past week from potential acquirers as diverse as Salesforce and Disney. Despite its challenges, Twitter has a large number of users, a strong brand, and a lot of data. With an acquirer that has a strong vision to help channel Twitter’s assets to serve a smaller, targeted set of jobs, an acquisition could be exactly what Twitter needs to get back on track. Until then, it seems as though Snapchat may be the one to beat.
Story by Dave Farber.
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