9 ms·

Snapchat Has Been Faking Growth Numbers, Ex-Employee Alleges

273 points by rlanday 10y ago

bruceb 10y ago
TL;DR According to the complaint from Anthony Pompliano: When they were trying to hire him Snapchat said they would hire 40 people under Pompliano for his growth team. Based on this promise he left FB to join Snapchat. He then found the numbers they were touting were not accurate and they were not committed to what they told him. When the complaint gets to what happened starting the day Pompliano was hired and more specifically what happened when working there, it is blacked out for the next 8 pages. After those pages it says he was fired after 3 weeks and Snapchat told employees, media contacts, and a company looking to hire Pompliano he was fired for being incompetent. This misrepresentation has cost him his reputation, money, etc.
- bhouston 10y ago
  It is common knowledge that you risk getting sued if you give negative references to ex-employees: Source: https://www.totaljobs.com/careers-advice/money-and-legal/references-faq https://www.totaljobs.com/careers-advice/money-and-legal/ref...
  - rlanday 10y ago
    The guy was probably also super pissed that he was fired after only three weeks, after going through all the trouble of moving to LA.
    - ChuckMcM 10y ago
      I could certainly see that as being an issue. Can't go back, can't go forward, now sort of stuck.
  - tehlike 10y ago
    it is probably a bit hard to prove competency/incompetency in just 3 weeks.
    - probablybroken 10y ago
      It can be in extreme cases, and in these situations it's better for both parties to resolve things quickly.
    - Shivetya 10y ago
      proving competency is more difficult in short order unless you end up an emergency situation and respond well, incompetency can be demonstrated in a day but at that level should be weeded up through a good interview process. still I have seen developers gone in a weeks time, some voluntarily
  - nthcolumn 10y ago
    So the lovely people that hired him and went through that rigorous selection process are they being canned too? They too must be incompetent. Given a big part of Snapchat is trust - and they are clearly not trustworthy - it might be time to divest.
- abraca 10y ago
  I don't think that's an accurate summary of the complaint.
  - poikniok 10y ago
    Seems pretty accurate to me, do you mind stating what exactly you think is inaccurate about the summary?
    - abraca 10y ago
      The summary misses the focus on false metrics that is the core of the complaint, and emphasizes the "hiring 40 people for growth team" part. It sounds like the summary is saying "he thought Snapchat would hire a team around him and they didn't" vs "he pointed out Snapchat's metrics were inaccurate and then they fired him." I would summarize the complaint as: Snapchat hired this guy from Facebook. He claims Snapchat falsely represented their growth during the process (two metrics which are redacted turned out to be false.) After he joined, he alerted the VP of finance that some of Snapchat's representations were false, who apparently agreed with some of it and told their VP of Comms to stop representing that to advertisers and some redacted group. He thinks that Snapchat fired him because of this, that they thought he would "blow the whistle" on upcoming IPO. Further, Snapchat continually pressured him to breach his confidentiality agreements with Facebook. After he was fired, Snapchat told people internally and externally that he was incompetent. In the details, a lot is redacted but it mentions there were specific metrics given to him in the hiring process - that were also given while raising capital in Asia - that were false.
      - xiphias 10y ago
        Wow, this means that Snapchat's valuation went down a lot just because of this one case.
        dsacco 10y ago
        Well, no, this is still all alleged. It will have to stick. Even if it is all true as presented here, it may not have a significant impact. For reference, take a look at how Facebook publicly admitting it was misrepresenting certain advertising metrics has impacted the long term outlook of the company's stock (it hasn't). Also take a look at how long Theranos maintained its valuation despite widespread, grievous fraud.
- jondubois 10y ago
  Snapchat did something strange here. You cannot possibly know if a technical employee (at this level) is incompetent after just 3 weeks. Not possible. It's the same as firing a CEO 3 weeks into the job... It doesn't make any sense unless that CEO did something blatantly illegal/dodgy during those 3 weeks. The reality is you won't know how good they are until at least 6 months in. As an engineer, 3 months is the absolute minimum amount of time I need to figure out if I'm a good match for a company.
  - mootothemax 10y ago
    > You cannot possibly know if a technical employee (at this level) is incompetent after just 3 weeks. Not possible. You may be assuming a baseline competence, though. I've interviewed many alleged senior developers who talk a good talk, can tell you the full ASP.Net page lifecycle without missing a beat - despite (possibly sometimes in spite of) not being asked - and when it comes to actually coding show their utter incompetence in seconds flat. I'm not being elitist here; they'll do stuff that's just plain weird, like only using strings in C# - no other datatypes, only strings - or if they claim database expertise, create tables with only text columns, no indexes, and storing an integer primary key also as a text field. At any ability level above this, I'm kinda with you; just take into account there is a very real world of sheer utter incompetence out there, and I doubt it's limited to technical employees.
    - GordonS 10y ago
      I have to agree - it is possible to know if someone really just doesn't have a clue. Case in point, this morning I interviewed a 'senior' C# .NET developer with over 10 years' experience - and yet she didn't even know the syntax for using lambda expressions, was barely able to get started with linq, and was unable to tackle a basic string splitting problem. Oh, and she couldn't do fizz-buzz.
      - milesdyson_phd 10y ago
        How does that even happen? Those are things you use all the time in C#.. Maybe it's just working at a mediocre job(s) that never really stress skill?
- noobermin 10y ago
  As usual, I'm appreciative of TL;DR, but the article was rather short and digestible.
friedman23 10y ago
Do these documents ever get unredacted? Because I want to read this document so badly.
- rlanday 10y ago
  From the article: “Michaels said the information was withheld pending a determination on whether it is covered by a confidentiality agreement. It is possible that that portion of the complaint — which appears to contain a detailed account of Pompliano’s brief tenure at Snapchat — could become public.”
  - randycupertino 10y ago
    " It is possible that that portion of the complaint — which appears to contain a detailed account of Pompliano’s brief tenure at Snapchat — could become public.” Sounds like a thinly veiled threat to strongarm Snapchat into a quick $ettlement.
    - madgar 10y ago
      A threat by whom? The American legal system? The sentence before the one you quoted explained the straightforward legal process by which unredaction may be authorized. A judge decides if this is officially released. Not the plaintiff.
      - smileysteve 10y ago
        It doesn't make it to the judge if it settles quickly.
        madgar 10y ago
        I guess by that definition, literally all legal processes in US civil court are "thinly veiled threats". Which might be a fair perspective, but I think OP should point that perspective out ahead of time in the future. Maybe by instead writing something like this: "Like every engagement with the legal system, this sounds like a thinly veiled threat..." Being explicit makes clear that one thinks that it isn't anything specific to the case that makes it a threat - it's just the fact that the legal system has been invoked.
minimaxir 10y ago
Direct link to (redacted) complaint: https://www.scribd.com/document/335725243/Pompliano-v-Snapchat https://www.scribd.com/document/335725243/Pompliano-v-Snapch... The General Allegations reads like the synopsis of a Silicon Valley episode.
- NolF 10y ago
  It indeed does. Firing someone with that kind of track record for incompetence within 3 weeks and then bad mouthing to all four winds about it? Something more credible would be that visions did not align, clash of personalities, or that he did not fit the culture, but incompetence? Also, isn't standard practice for companies to only confirm employment rather than give a review exactly for this kind of lawsuits?
  - deleted 10y ago
    [deleted]
  - cmdrfred 10y ago
    >Also, isn't standard practice for companies to only confirm employment rather than give a review exactly for this kind of lawsuits? That would be the problem for me if I was an investor. What other types of liabilities does this firm have? They seem to have management that is unable to control themselves how can I be sure this is a isolated case and not standard operating procedure?
  - tw04 10y ago
    Well, if his claims are accurate and they are defrauding investors, I'm sure they want to trash him before he can suggest anyone else look into it. "Oh, THAT guy? Ya, he's just angry we fired him because he's an idiot and has no idea what the numbers we were showing him even meant." - quick guys, let's find a way to fix or bury those numbers we showed him!
gigatexal 10y ago
If true this could be really bad for their IPO plans. Yikes.
- bhouston 10y ago
  Even if it isn't true, it is something that Snapchat would like to to go away quickly.
  - randycupertino 10y ago
    The mere implication of that would bring on predatory suits from disgruntled ex-employees looking for an easy payday...
aliston 10y ago
The story just doesn't add up. "2X successful founder"... looking on Crunchbase, he founded Digiforce "acquired" by Strategic Link partners. digiforce.com directs to some random japanese site and the Strategic Link site looks like something made from a (bad) wordpress template. I almost wonder if he made up a company to acquire his company. Next, no way Facebook hires someone like that to lead "THE" growth team for pages. Maybe as an entry level PM or something. He was only at facebook for 1.5 years, which also makes me skeptical he was such a high priority hire for Snapchat. Sounds like a bunch of hot air and resume puffing to me. My guess is that Snapchat realized he had an overly active imagination and had taken liberties with his resume.
- bhouston 10y ago
  When he got hired it was covered in TechCrunch: https://techcrunch.com/2015/09/02/snapchat-hires-a-new-growth-lead/ https://techcrunch.com/2015/09/02/snapchat-hires-a-new-growt... Most people do not get that type of coverage. There is coverage of him pitching: http://upstart.bizjournals.com/companies/hatched/2013/03/25/mit-on-deck-events-helped-digaforce.html?page=all http://upstart.bizjournals.com/companies/hatched/2013/03/25/... And coverage of the acquisition: http://www.bizjournals.com/triangle/news/2014/01/02/apex-tech-firm-strategic-link-partners.html http://www.bizjournals.com/triangle/news/2014/01/02/apex-tec...
  - aliston 10y ago
    The media, especially the tech media, is not as difficult to manipulate as you think. I think its likely those stories were engineered and sensationalized, built up from less credible sources to more credible, each medium citing the previous.
    - nitrogen 10y ago
      I'm imagining the main sales character (Joe) from the show Halt and Catch Fire, who has an extreme talent for persuasion and manipulation.
  - mootothemax 10y ago
samnwa 10y ago
Snapchat makes no sense to me so I choose to believe this. Theranos 2: The Snappening coming to a theater near you!
michaelvillar 10y ago
Interestingly, the tweet (https://twitter.com/APompliano/status/639097166405853184 https://twitter.com/APompliano/status/639097166405853184) mentioned by Techcrunch (https://techcrunch.com/2015/09/02/snapchat-hires-a-new-growth-lead/ https://techcrunch.com/2015/09/02/snapchat-hires-a-new-growt...) doesn't exist anymore.
jpeg_hero 10y ago
Vanity Metrics = largest plausible number with a straight face
jzl 10y ago
Important to note from the filing: this all went down in September of 2015. I wouldn't be surprised if they had trouble with their growth numbers at that time, but in 2016 they seem to have exploded growth-wise. Not saying his lawsuit isn't legit, but I wouldn't take this as a sky-is-falling for a 2017 IPO.
- joopxiv 10y ago
  Well, the allegation is that they were faking their growth numbers, or planning to. If this is true, than I doubt this was aborted after firing the guy.
blubb-fish 10y ago
> organizations which design systems ... are constrained to produce designs which are copies of the communication structures of these organizations [Conway's law] So if Snapchat is what Snapchat Inc designs then I'm not at all surprised if the initial communication structures turn out to be of the alleged kind. I mean Snapchat is a shallow concept promoting short-term thinking and used for boasting :D It's like Facebook - just worse. Facebook is almost academic in comparison - you actually have to write things.
- dx034 10y ago
  But Facebook is very profitable with it. And that's what counts. The lawsuit is in connection to an IPO, so he probably states that user/revenue/profit numbers are somehow misstated. Not the quality of the content, that doesn't really matter here.
stevesun21 10y ago
no body care about how much growth is faked? The discussion here is kind of focus on wrong area.
- madgar 10y ago
  Nobody wants to speculate in an area where they might be vulnerable themselves. Maybe storytime won't always be sufficient to run a business.
grej 10y ago
The uptick...
ohstopitu 10y ago
If this is true (and if he wins), won't snapchat's customers - the advertisers sue it too? (because they lied about the numbers?) Also, it is well known now that Reddit's initial userbase was all fake - so does anyone know what the appropriate way to report this to customers is?
- dsacco 10y ago
  When WSJ reported that Facebook inflated its view count metric was inflated, there were no ensuing lawsuits. My significant other works directly in advertising for one of Facebook's advertising partners, and while she told me there was a lot of concern about it, there was almost no trickle down effect to the downstream customers. After a week or two, life went on as usual. This may not be a completely equitable comparison (Facebook has far better brand equity and a longer history of trustworthiness than Snap at this juncture), but I think it's illustrative that this may not have the "sky is falling" impact we would otherwise anticipate.
- sfifs 10y ago
  In the FB case, advertisers have gotten what they paid for as per contract. The metrics concerned stuff that's not in the sales contract but which FB used to suggest their ad inventory was superior vs. what it actually was. So you're unlikely to see any lawsuits - not worth anyone's while. You will very likely see FB being pressured to open up to more third party validation of what they claim about their ad inventory at least for big advertizers who put in 10s of millions of dollars into FB advertising.
raiyu 10y ago
There have been a few issues with how Facebook has calculated some of their views as well so it's not surprising that there maybe issues with Snapchat. But regardless of whether they are misquoting some of their growth numbers or not I think even without that they are going to have a difficult time with their valuation and IPO. They are already at $25B in the private market and with an IPO investors would be hoping for at least $40-50B. To justify that price just look at some of the companies in that range and the amount of revenue and growth they have in order to justify it. Snapchat is not a ubiquitous service like Facebook so ultimately it's going to be in a category somewhere between Twitter and Instagram. Instagram has one of the easiest on-boarding processes and with their static stream from friends that are now directly hooked into FB you are immediately immersed in what the experience is. Snapchat is a bit more complex. Regardless to justify a $50B valuation they are going to need a substantial revenue growth story with no hiccups. And they are ultimately going to have to prove out to about $2.5B of revenue in 2017 which is impossible. Comparatively speaking FB IPO'd for $100B in 2012 and had $5.2B in revenue for that fiscal year and also don't forget that it lost about 30% of it's value after IPO before rebounding substantially and their revenue growth and profitability has been world class. So I'm not looking at Snapchat with a commentary on it's product, but simply from a financial perspective and it's hard to create a story that validates their $40B-50B IPO target that they are most likely shooting for.
raleigh_user 10y ago
just as a little side note.....I don't believe anything Pompliano says. I created this account to further hide my identity since I live/run a company in Raleigh where he is now a "VC". He claims to "innovate VC" and was written about in the business insider (http://www.businessinsider.com/full-tilt-capital-22-deals-90-days-2016-11 http://www.businessinsider.com/full-tilt-capital-22-deals-90...). I work/live with the supposed 22 deals. Only 1 of these 22 deals has been paid (100k checks). The only one that was paid was paid after the founder threatened to go public with these numbers. Look into his firm and ask around in the raleigh area. 21 unpaid checks.

273 points by rlanday 10y ago

TL;DR According to the complaint from Anthony Pompliano: When they were trying to hire him Snapchat said they would hire 40 people under Pompliano for his growth team. Based on this promise he left FB to join Snapchat. He then found the numbers they were touting were not accurate and they were not committed to what they told him. When the complaint gets to what happened starting the day Pompliano was hired and more specifically what happened when working there, it is blacked out for the next 8 pages. After those pages it says he was fired after 3 weeks and Snapchat told employees, media contacts, and a company looking to hire Pompliano he was fired for being incompetent. This misrepresentation has cost him his reputation, money, etc.

bhouston 10y ago
It is common knowledge that you risk getting sued if you give negative references to ex-employees: Source: https://www.totaljobs.com/careers-advice/money-and-legal/references-faq https://www.totaljobs.com/careers-advice/money-and-legal/ref...
- rlanday 10y ago
  The guy was probably also super pissed that he was fired after only three weeks, after going through all the trouble of moving to LA.
  - ChuckMcM 10y ago
    I could certainly see that as being an issue. Can't go back, can't go forward, now sort of stuck.
- tehlike 10y ago
  it is probably a bit hard to prove competency/incompetency in just 3 weeks.
  - probablybroken 10y ago
    It can be in extreme cases, and in these situations it's better for both parties to resolve things quickly.
  - Shivetya 10y ago
    proving competency is more difficult in short order unless you end up an emergency situation and respond well, incompetency can be demonstrated in a day but at that level should be weeded up through a good interview process. still I have seen developers gone in a weeks time, some voluntarily
- nthcolumn 10y ago
  So the lovely people that hired him and went through that rigorous selection process are they being canned too? They too must be incompetent. Given a big part of Snapchat is trust - and they are clearly not trustworthy - it might be time to divest.
abraca 10y ago
I don't think that's an accurate summary of the complaint.
- poikniok 10y ago
  Seems pretty accurate to me, do you mind stating what exactly you think is inaccurate about the summary?
  - abraca 10y ago
    The summary misses the focus on false metrics that is the core of the complaint, and emphasizes the "hiring 40 people for growth team" part. It sounds like the summary is saying "he thought Snapchat would hire a team around him and they didn't" vs "he pointed out Snapchat's metrics were inaccurate and then they fired him." I would summarize the complaint as: Snapchat hired this guy from Facebook. He claims Snapchat falsely represented their growth during the process (two metrics which are redacted turned out to be false.) After he joined, he alerted the VP of finance that some of Snapchat's representations were false, who apparently agreed with some of it and told their VP of Comms to stop representing that to advertisers and some redacted group. He thinks that Snapchat fired him because of this, that they thought he would "blow the whistle" on upcoming IPO. Further, Snapchat continually pressured him to breach his confidentiality agreements with Facebook. After he was fired, Snapchat told people internally and externally that he was incompetent. In the details, a lot is redacted but it mentions there were specific metrics given to him in the hiring process - that were also given while raising capital in Asia - that were false.
    - xiphias 10y ago
      Wow, this means that Snapchat's valuation went down a lot just because of this one case.
      - dsacco 10y ago
        Well, no, this is still all alleged. It will have to stick. Even if it is all true as presented here, it may not have a significant impact. For reference, take a look at how Facebook publicly admitting it was misrepresenting certain advertising metrics has impacted the long term outlook of the company's stock (it hasn't). Also take a look at how long Theranos maintained its valuation despite widespread, grievous fraud.
jondubois 10y ago
Snapchat did something strange here. You cannot possibly know if a technical employee (at this level) is incompetent after just 3 weeks. Not possible. It's the same as firing a CEO 3 weeks into the job... It doesn't make any sense unless that CEO did something blatantly illegal/dodgy during those 3 weeks. The reality is you won't know how good they are until at least 6 months in. As an engineer, 3 months is the absolute minimum amount of time I need to figure out if I'm a good match for a company.
- mootothemax 10y ago
  > You cannot possibly know if a technical employee (at this level) is incompetent after just 3 weeks. Not possible. You may be assuming a baseline competence, though. I've interviewed many alleged senior developers who talk a good talk, can tell you the full ASP.Net page lifecycle without missing a beat - despite (possibly sometimes in spite of) not being asked - and when it comes to actually coding show their utter incompetence in seconds flat. I'm not being elitist here; they'll do stuff that's just plain weird, like only using strings in C# - no other datatypes, only strings - or if they claim database expertise, create tables with only text columns, no indexes, and storing an integer primary key also as a text field. At any ability level above this, I'm kinda with you; just take into account there is a very real world of sheer utter incompetence out there, and I doubt it's limited to technical employees.
  - GordonS 10y ago
    I have to agree - it is possible to know if someone really just doesn't have a clue. Case in point, this morning I interviewed a 'senior' C# .NET developer with over 10 years' experience - and yet she didn't even know the syntax for using lambda expressions, was barely able to get started with linq, and was unable to tackle a basic string splitting problem. Oh, and she couldn't do fizz-buzz.
    - milesdyson_phd 10y ago
      How does that even happen? Those are things you use all the time in C#.. Maybe it's just working at a mediocre job(s) that never really stress skill?
noobermin 10y ago
As usual, I'm appreciative of TL;DR, but the article was rather short and digestible.

friedman23 10y ago

Do these documents ever get unredacted? Because I want to read this document so badly.

rlanday 10y ago
From the article: “Michaels said the information was withheld pending a determination on whether it is covered by a confidentiality agreement. It is possible that that portion of the complaint — which appears to contain a detailed account of Pompliano’s brief tenure at Snapchat — could become public.”
- randycupertino 10y ago
  " It is possible that that portion of the complaint — which appears to contain a detailed account of Pompliano’s brief tenure at Snapchat — could become public.” Sounds like a thinly veiled threat to strongarm Snapchat into a quick $ettlement.
  - madgar 10y ago
    A threat by whom? The American legal system? The sentence before the one you quoted explained the straightforward legal process by which unredaction may be authorized. A judge decides if this is officially released. Not the plaintiff.
    - smileysteve 10y ago
      It doesn't make it to the judge if it settles quickly.
      - madgar 10y ago
        I guess by that definition, literally all legal processes in US civil court are "thinly veiled threats". Which might be a fair perspective, but I think OP should point that perspective out ahead of time in the future. Maybe by instead writing something like this: "Like every engagement with the legal system, this sounds like a thinly veiled threat..." Being explicit makes clear that one thinks that it isn't anything specific to the case that makes it a threat - it's just the fact that the legal system has been invoked.

minimaxir 10y ago

Direct link to (redacted) complaint: https://www.scribd.com/document/335725243/Pompliano-v-Snapchat https://www.scribd.com/document/335725243/Pompliano-v-Snapch... The General Allegations reads like the synopsis of a Silicon Valley episode.

NolF 10y ago
It indeed does. Firing someone with that kind of track record for incompetence within 3 weeks and then bad mouthing to all four winds about it? Something more credible would be that visions did not align, clash of personalities, or that he did not fit the culture, but incompetence? Also, isn't standard practice for companies to only confirm employment rather than give a review exactly for this kind of lawsuits?
- deleted 10y ago
  [deleted]
- cmdrfred 10y ago
  >Also, isn't standard practice for companies to only confirm employment rather than give a review exactly for this kind of lawsuits? That would be the problem for me if I was an investor. What other types of liabilities does this firm have? They seem to have management that is unable to control themselves how can I be sure this is a isolated case and not standard operating procedure?
- tw04 10y ago
  Well, if his claims are accurate and they are defrauding investors, I'm sure they want to trash him before he can suggest anyone else look into it. "Oh, THAT guy? Ya, he's just angry we fired him because he's an idiot and has no idea what the numbers we were showing him even meant." - quick guys, let's find a way to fix or bury those numbers we showed him!

gigatexal 10y ago

If true this could be really bad for their IPO plans. Yikes.

bhouston 10y ago
Even if it isn't true, it is something that Snapchat would like to to go away quickly.
- randycupertino 10y ago
  The mere implication of that would bring on predatory suits from disgruntled ex-employees looking for an easy payday...

aliston 10y ago

The story just doesn't add up. "2X successful founder"... looking on Crunchbase, he founded Digiforce "acquired" by Strategic Link partners. digiforce.com directs to some random japanese site and the Strategic Link site looks like something made from a (bad) wordpress template. I almost wonder if he made up a company to acquire his company. Next, no way Facebook hires someone like that to lead "THE" growth team for pages. Maybe as an entry level PM or something. He was only at facebook for 1.5 years, which also makes me skeptical he was such a high priority hire for Snapchat. Sounds like a bunch of hot air and resume puffing to me. My guess is that Snapchat realized he had an overly active imagination and had taken liberties with his resume.

bhouston 10y ago
When he got hired it was covered in TechCrunch: https://techcrunch.com/2015/09/02/snapchat-hires-a-new-growth-lead/ https://techcrunch.com/2015/09/02/snapchat-hires-a-new-growt... Most people do not get that type of coverage. There is coverage of him pitching: http://upstart.bizjournals.com/companies/hatched/2013/03/25/mit-on-deck-events-helped-digaforce.html?page=all http://upstart.bizjournals.com/companies/hatched/2013/03/25/... And coverage of the acquisition: http://www.bizjournals.com/triangle/news/2014/01/02/apex-tech-firm-strategic-link-partners.html http://www.bizjournals.com/triangle/news/2014/01/02/apex-tec...
- aliston 10y ago
  The media, especially the tech media, is not as difficult to manipulate as you think. I think its likely those stories were engineered and sensationalized, built up from less credible sources to more credible, each medium citing the previous.
  - nitrogen 10y ago
    I'm imagining the main sales character (Joe) from the show Halt and Catch Fire, who has an extreme talent for persuasion and manipulation.
- mootothemax 10y ago

samnwa 10y ago

Snapchat makes no sense to me so I choose to believe this. Theranos 2: The Snappening coming to a theater near you!

michaelvillar 10y ago

Interestingly, the tweet (https://twitter.com/APompliano/status/639097166405853184 https://twitter.com/APompliano/status/639097166405853184) mentioned by Techcrunch (https://techcrunch.com/2015/09/02/snapchat-hires-a-new-growth-lead/ https://techcrunch.com/2015/09/02/snapchat-hires-a-new-growt...) doesn't exist anymore.

jpeg_hero 10y ago

Vanity Metrics = largest plausible number with a straight face

jzl 10y ago

Important to note from the filing: this all went down in September of 2015. I wouldn't be surprised if they had trouble with their growth numbers at that time, but in 2016 they seem to have exploded growth-wise. Not saying his lawsuit isn't legit, but I wouldn't take this as a sky-is-falling for a 2017 IPO.

joopxiv 10y ago
Well, the allegation is that they were faking their growth numbers, or planning to. If this is true, than I doubt this was aborted after firing the guy.

blubb-fish 10y ago

> organizations which design systems ... are constrained to produce designs which are copies of the communication structures of these organizations [Conway's law] So if Snapchat is what Snapchat Inc designs then I'm not at all surprised if the initial communication structures turn out to be of the alleged kind. I mean Snapchat is a shallow concept promoting short-term thinking and used for boasting :D It's like Facebook - just worse. Facebook is almost academic in comparison - you actually have to write things.

dx034 10y ago
But Facebook is very profitable with it. And that's what counts. The lawsuit is in connection to an IPO, so he probably states that user/revenue/profit numbers are somehow misstated. Not the quality of the content, that doesn't really matter here.

stevesun21 10y ago

no body care about how much growth is faked? The discussion here is kind of focus on wrong area.

madgar 10y ago
Nobody wants to speculate in an area where they might be vulnerable themselves. Maybe storytime won't always be sufficient to run a business.

grej 10y ago

The uptick...

ohstopitu 10y ago

If this is true (and if he wins), won't snapchat's customers - the advertisers sue it too? (because they lied about the numbers?) Also, it is well known now that Reddit's initial userbase was all fake - so does anyone know what the appropriate way to report this to customers is?

dsacco 10y ago
When WSJ reported that Facebook inflated its view count metric was inflated, there were no ensuing lawsuits. My significant other works directly in advertising for one of Facebook's advertising partners, and while she told me there was a lot of concern about it, there was almost no trickle down effect to the downstream customers. After a week or two, life went on as usual. This may not be a completely equitable comparison (Facebook has far better brand equity and a longer history of trustworthiness than Snap at this juncture), but I think it's illustrative that this may not have the "sky is falling" impact we would otherwise anticipate.
sfifs 10y ago
In the FB case, advertisers have gotten what they paid for as per contract. The metrics concerned stuff that's not in the sales contract but which FB used to suggest their ad inventory was superior vs. what it actually was. So you're unlikely to see any lawsuits - not worth anyone's while. You will very likely see FB being pressured to open up to more third party validation of what they claim about their ad inventory at least for big advertizers who put in 10s of millions of dollars into FB advertising.

raiyu 10y ago

There have been a few issues with how Facebook has calculated some of their views as well so it's not surprising that there maybe issues with Snapchat. But regardless of whether they are misquoting some of their growth numbers or not I think even without that they are going to have a difficult time with their valuation and IPO. They are already at $25B in the private market and with an IPO investors would be hoping for at least $40-50B. To justify that price just look at some of the companies in that range and the amount of revenue and growth they have in order to justify it. Snapchat is not a ubiquitous service like Facebook so ultimately it's going to be in a category somewhere between Twitter and Instagram. Instagram has one of the easiest on-boarding processes and with their static stream from friends that are now directly hooked into FB you are immediately immersed in what the experience is. Snapchat is a bit more complex. Regardless to justify a $50B valuation they are going to need a substantial revenue growth story with no hiccups. And they are ultimately going to have to prove out to about $2.5B of revenue in 2017 which is impossible. Comparatively speaking FB IPO'd for $100B in 2012 and had $5.2B in revenue for that fiscal year and also don't forget that it lost about 30% of it's value after IPO before rebounding substantially and their revenue growth and profitability has been world class. So I'm not looking at Snapchat with a commentary on it's product, but simply from a financial perspective and it's hard to create a story that validates their $40B-50B IPO target that they are most likely shooting for.

raleigh_user 10y ago

just as a little side note.....I don't believe anything Pompliano says. I created this account to further hide my identity since I live/run a company in Raleigh where he is now a "VC". He claims to "innovate VC" and was written about in the business insider (http://www.businessinsider.com/full-tilt-capital-22-deals-90-days-2016-11 http://www.businessinsider.com/full-tilt-capital-22-deals-90...). I work/live with the supposed 22 deals. Only 1 of these 22 deals has been paid (100k checks). The only one that was paid was paid after the founder threatened to go public with these numbers. Look into his firm and ask around in the raleigh area. 21 unpaid checks.