3 ms·

What makes you say that?

• edblarney 10y ago
  It's not an unreasonable comment. Snapchat is mostly a texting app. Yes - their value prop is around 'sharing moments' and they do it well. Also - they have other ancilliary offers. And yes - they are the kings of college aged-students, and the 'cool thing' for now. But - texting is to some extent a commodity, and 'cool brands' fade. Facebook used to be cool - then they turned into a utility. Twitter was cool, and now it's at utility stage as well. And - do they really have the capacity to grow to 1.5 billion people? Facebook eventually had 'your parents'. Snapchat will not. Twitter has tons of regular folk. Snapchat probably will not. So there's a limit to their growth. The question is - can Snapchat exist as a utility when the buzz dies down? Will they anchor themselves as 'the' texting platform, do they have that kind of incumbency? Snapchat is going nowhere anytime soon, and it's entirely feasible they stay relevant for a long time. But - the valuation is pretty dam high. In order to justify a 17B valuation it means you have to produce 17B in profits at todays dollar value. That's a lot of money. It means 1 B in profits in the bank or back to shareholders for 17 years :). So it's a pretty big valuation to live up to, even if they are fairly successful. But they are definitely cashing in at exactly the right moment. They hype is at a nadir. They can't get any cooler, though they could break through to other demographics/countries/markets etc which would keep investors happy.
  • bookmarkacc 10y ago
    I don't think nadir is the right word here. Perhaps zenith
• praneshp 10y ago
  He hates Snap, and would love for it to go the Twitter way