4 Things Every Business Can Learn From Snapchat’s IPO
Even if you don’t understand how to use Snapchat, here’s what you do want to understand.
PHOTO CREDIT: Getty Images
When fledgling app Snapchat went viral almost exactly five years ago, many people believed that the app, similar to its main feature, would quickly disappear into the ether. Instead, by the end of 2016, the app had evolved into a robust product with almost 160 million daily active users, and its parent company Snap Inc., went public last week with a market capitalization of $33 million. Though you may write off Snapchat as a unicorn product with a right-place-at-the-right-time millennial founder, the company's journey may not be so different from yours. In fact, there is a lot that every company can learn from Snap's evolution and success.
Here are four ways every company can (and should) apply a Snapchat filter to its decisions.
Learn from early adopters
When they first launched Snapchat, then college students Evan Spiegel and Bobby Murphy and struggled to attract users in their community. Further, VCs initially didn't see any purpose to the app. But this didn't mean that nobody was using the app. It turned out to be increasingly popular in middle and high schools where students were using the app to pass notes and send funny faces to each other. The ephemeral nature of content made it a perfect solution for students to communicate without being caught.
Instead of changing the app to better attract its target customer, Snapchat honed in on its early users. These early users helped them clarify the core benefit of the app, which could then be marketed to more users.
Start with the experience
When you first open Snapchat, you see yourself through the camera. First and foremost a camera app, Snapchat focuses on a design that was simple and intuitive for its core user base. Because content disappears within twenty-four hours, the app inherently created a sense of urgency for users--they frequently opened to the app so as not to miss anything.
Notably, when it first launched, Snapchat's founders didn't have any ideas or plans for a revenue model. While it eventually started to test different monetization strategies, its initial laser-focus on a sticky user experience likely fueled its steadily growing daily active user base.
Stay true to your vision
In 2013, Snapchat rejected a second offer form Facebook to purchase the company for $3 billion. In explaining his decision, the CEO said in an interview, "There are very few people in the world who get to build a business like this. I think trading that for some short-term gain isn't very interesting." One might speculate that Snapchat believed it was worth more or that it didn't want to "sell-out" to a conglomerate, especially one that many of its users deliberately do not use (Facebook's demographic is older than that of Snapchat).
The bigger takeaway, however, is that by turning down multiple purchase offers when the company itself made $0 in revenue, Snapchat established its unwavering vision and mission. The lure of money is difficult to ignore, but in this case staying true to the company's north star delivered more value in the long-run.
Present a consistent personality (aka, be human)
Snapchat's ephemeral content--the first and only of its kind on the internet--was revolutionary in that it was the closest social medium to the way humans interact in real life. Spoken words disappear into thin air just like Snaps. Early on, the company realized how this benefit lowered the barrier to using the app. In addition to creating a very human experience, the company itself positioned itself in a human way, with simple interactions, fun filters, and accessible language. Last September, the company became "Snap Inc." as it transitioned into a company with multiple offerings (ie, Spectacles).
After the transition, the company blog maintained its human voice, explaining, "You can search Snapchat or Spectacles for the fun stuff and leave Snap Inc. for the Wall Street crowd :)" As the company grows, it is being careful to maintain the identity around which it has built its following so as not to alienate its most valuable users.
Though Snapchat's success is partially attributable to the fact that it was at the right place at the right time, providing a necessary solution for a sizable demographic and presenting an experience that more closely mirrors human interaction than any other internet product, it is also founded on strong principles that can be applied to any business. Pay attention, because these principles aren't disappearing any time soon.