Saturday, August 12, 2017

I hate to say I told you so but…

I don’t even think but that a post is due for this final week, but there are two things that I have an inexorable need to do: (i) get some extra credit (wink, wink – talking to you Jeremy), and (ii) rant about Snapchat.  If you have taken the time to read any of my previous blog posts, you might have noticed that I have neither any affinity for nor understanding of the phenomenon known as Snapchat.

My understanding of the Snapchat investor value proposition is that the platform will be able to scale and penetrate an older user demographic – me. Yeah right. It looks like that value proposition might prove to be untrue as the number of daily active users in Q2 is down from the prior quarter. Ominous much? I think so. The hype around Snapchat will never be higher and in order to realize the potential underlying its value proposition, I would have thought that the growth in new users would have continued to increase.

If the new trend is augmented reality, this seems like old hat to a degree – didn’t Niantic (on of Google/Alphabet’s “Other Bets”) capitalize on this over a year ago with Pokémon? This doesn’t seem like any sustainable competitive advantage unique to Snapchat. From my perspective, the only real barrier to entry is the switching cost that Snapchat’s asinine interface imposes on its users. I’m not going to lie, I can’t figure out how to use the app and don’t have the need (none of my friends, colleagues, or family members on using the app) to attention to take the time to figure it out.

I’m still baffled that they keep pushing ad tech to appeal to a younger generation because they have soooo much disposable income that isn’t devoted to Taco Bell (I do love that taco head). I would have thought that this demographic would be at risk to jump off the platform if they are bombarded by ads.  To be fair, Snapchat does do some cool things – who doesn’t like a dancing hot dog! They also had something Game of Thrones related for the premier, but alas they couldn’t capitalize on this avid fan of all things Westerosi as I’m on their platform. I even went so far as to open the app on my phone but then got bored and didn’t set it up…I just don’t need another platform. To put this in appropriate context, I lobbied incredibly hard to keep my $400 replica of Long Claw hanging in my now three month old’s nursery – and I mean incredibly hard. Now, if the allure of looking like a White Walker isn’t enough for me, an ardent supporter of the King in the North, to sign up for Snapchat I’m not sure how they are going to penetrate into their older target demographic.

Oh and have we talked about how great a leader Spiegel is? If you had any doubt, this little excerpt from the article really sums it up:

At one point in the quarterly conference call, Spiegel sounded impatient with one of the questions from an analyst who asked about "growth hacking," which apps use to attract more visitors by sending notifications. The analyst asked which types of techniques Spiegel didn't like. There were plenty of examples to look for online. Spiegel told him to Google it.

Really, you are the CEO of a publicly traded company and you have the gall to tell someone on your earnings call to ‘Google’ an answer…way to go BRO.

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