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What does $SNAP need to do to deliver on the hype? Is there anything that can make $SNAP a good investment for anyone other than the parties involved in trading

by beager 9y ago

What does $SNAP need to do to deliver on the hype? Is there anything that can make $SNAP a good investment for anyone other than the parties involved in trading the IPO? I tend to be bearish on $SNAP in general, but I'm interested in the discussion. How do they right the ship and boost back up to that $25-30 range? What's their play?

physcab 9y ago
- Positive user growth numbers, not flat or negative - Positive revenue growth numbers, not flat or negative - New features launched and positively accepted in the market
- skinnymuch 9y ago
  So they need to do almost everything right and have luck on their side with things like positive acceptance. A betting man prob doesn't like all those bullet points needed.
nikkwong 9y ago
+1 this. I've asked multiple people and ideas are mostly mixed on what Snap's strategy should be going forward. Being a social app will definitely be a difficult play. IMO they could try to leverage their AR expertise to do, well, something. But social definitely seems like it will be tough. Good luck to the team though. It must be a stressful time there.
- jayess 9y ago
  The fact that no one is responding with ideas tells you what you need to know.
- dingo_bat 9y ago
  > AR expertise to do, well, something Is it really a big expertise now? I think it was a big deal when they started those face filters but now even small players have that stuff. For example, hike: https://play.google.com/store/apps/details?id=com.bsb.hike https://play.google.com/store/apps/details?id=com.bsb.hike
mi100hael 9y ago
It's not really clear to me, anyway. Instagram has been unabashedly poaching their features and users, and it's working really well. Snap needs to find new ways to continue to differentiate themselves with new features and maybe hardware like Spectacles, but with so much overlap in user-base between Instagram and Snapchat, I have no idea how they'll be able to keep Instagram from continuing to challenge their offerings.
taysic 9y ago
Maybe they should try to copy facebook's social network but remove features a good subset of people don't like and stick to more of a private image?
skewart 9y ago
Given the product and strategic path they're on the only thing they can do to create value is restart user growth. Their business model depends on them becoming a powerful brand advertising platform (brand advertising is when companies want to spread general awareness of their brands and influence the public's overall impressions of what a company stands for, even if it is far removed from any actual moment of purchase; TV has traditionally been the dominant brand advertising platform, but as cable TV is beginning its decline into irrelevance the top spot is up for grabs). They're not into collecting super detailed info on users, so advertising can't be too targeted, and they're not pushing a shopping angle either. And in order to become a compelling brand advertising platform they need massive reach (i.e. at least a billion users). How can they restart user growth? Well, that's probably going to be pretty hard at this point. I suspect they'll need to broaden their appeal from their initial teens/college/just-out-of-college user base to an older and more diverse crowd (just like Facebook and Instagram did). That will probably require some UI redesign to make things a bit more intuitive to navigate, and perhaps other feature changes that make it a more attractive destination. However, I think it's basically all but impossible for them to restart the growth engine at this point. A lot of people have heard of Snapchat, tried it, and decided they don't like or just don't see the point when they already use Instagram. Making matters worse is the fact that their initial market is incredibly hard to hold on to. Things almost never stay super popular across multiple "generations" of high school and college kids (except for default utilities that everyone at every age uses). In other words, it's unlikely that Snapchat will be popular with high school and college kids in five years. So, I suspect that as their metrics stagnate and decline over the next few years they will increasingly focus on a series of moonshot new product ideas (like Specs) and hope that something sticks. But there's little reason to suspect that they'll be any better at building a random new product than any other start-up or big company out there (and, in fact, I'd argue there are some good reasons to think they'll be worse). As is probably pretty obvious, I'm quite bearish on Snap these days. I was extremely bullish a year and a half ago, but they've just been so slow to execute when it mattered. They lost their wave of growth. At this point, I'd be surprised if they can catch another.
- Inconel 9y ago
  Your comment seems very well thought out. Can you expand a bit on why you think Snap would actually be worse at building a random new product than any other startup or big company?
draw_down 9y ago
It seems to me like a lot of their "value" is in how much more engrossing their ads can be than other display ads. They also have a whole section of their app that shovels "content" from magazines and such, and that content is pretty much just more advertising. I'm sure those outlets pay to be there, or pay for prominent placing, etc. But those should be easy enough to copy. And I find the content thing weird, it feels bolted on to an app you use to talk to friends. I am bearish on them, I think it was smart to IPO when they did.
skinnymuch 9y ago
I was thinking Snap might try to buy Musically before their IPO or around IPO time. It would cost more than IG did to FB, making the purchase a much larger deal for Snap, but it would be a way to allow for the user growth and connectedness to the young crowd to continue. I'm not sure how big Musically is now, just seemed like it might be a decent gamble for Snap to try and prob provide the most [media] hype too.
_eht 9y ago
Found the CEO.
datamingle 9y ago
They do AR & Marketing amazingly and hardware quite well. I am not sure a social network is their best business model though. Hopefully they can pivot to something else using what they are great at.
- beager 9y ago
  I like to think I'm not totally underneath a rock, but I don't think I've ever seen their hardware in person. And if I have, I didn't know that it was their hardware. So they either don't do hardware well, or they don't market well. And even if they did all of that well, is that worth $25-30 per share?
- snapgod 9y ago
  Does "doing AR amazingly" go beyond overlaying bunny ears and whiskers on a person's face? I'm not sure how much longer they can ride that out, and besides, Instagram showed they can do that well too. Actually, anybody who can follow a basic OpenCV tutorial can do it. Another story on HN shows what developers are doing with Apple's ARkit, and it's more impressive than anything I've seen from Snapchat.
s0me0ne 9y ago
Anything they do FB will steal and put in their products
shinratdr 9y ago
They don't. Snapchat is a feature, not a product. They should have sold to Facebook when they had the chance. Now everything novel they had (expiring message, stories, filters) has been successfully aped by Facebook and incorporated into Instagram, and because Instagram offers a UX that isn't intentionally shitty, they've already shot past the Snap userbase. Sell your stock now, and don't be surprised if they're irrelevant/bankrupt by 2019.

by beager 9y ago

physcab 9y ago

- Positive user growth numbers, not flat or negative - Positive revenue growth numbers, not flat or negative - New features launched and positively accepted in the market

skinnymuch 9y ago
So they need to do almost everything right and have luck on their side with things like positive acceptance. A betting man prob doesn't like all those bullet points needed.

nikkwong 9y ago

+1 this. I've asked multiple people and ideas are mostly mixed on what Snap's strategy should be going forward. Being a social app will definitely be a difficult play. IMO they could try to leverage their AR expertise to do, well, something. But social definitely seems like it will be tough. Good luck to the team though. It must be a stressful time there.

jayess 9y ago
The fact that no one is responding with ideas tells you what you need to know.
dingo_bat 9y ago
> AR expertise to do, well, something Is it really a big expertise now? I think it was a big deal when they started those face filters but now even small players have that stuff. For example, hike: https://play.google.com/store/apps/details?id=com.bsb.hike https://play.google.com/store/apps/details?id=com.bsb.hike

mi100hael 9y ago

It's not really clear to me, anyway. Instagram has been unabashedly poaching their features and users, and it's working really well. Snap needs to find new ways to continue to differentiate themselves with new features and maybe hardware like Spectacles, but with so much overlap in user-base between Instagram and Snapchat, I have no idea how they'll be able to keep Instagram from continuing to challenge their offerings.

taysic 9y ago

Maybe they should try to copy facebook's social network but remove features a good subset of people don't like and stick to more of a private image?

skewart 9y ago

Given the product and strategic path they're on the only thing they can do to create value is restart user growth. Their business model depends on them becoming a powerful brand advertising platform (brand advertising is when companies want to spread general awareness of their brands and influence the public's overall impressions of what a company stands for, even if it is far removed from any actual moment of purchase; TV has traditionally been the dominant brand advertising platform, but as cable TV is beginning its decline into irrelevance the top spot is up for grabs). They're not into collecting super detailed info on users, so advertising can't be too targeted, and they're not pushing a shopping angle either. And in order to become a compelling brand advertising platform they need massive reach (i.e. at least a billion users). How can they restart user growth? Well, that's probably going to be pretty hard at this point. I suspect they'll need to broaden their appeal from their initial teens/college/just-out-of-college user base to an older and more diverse crowd (just like Facebook and Instagram did). That will probably require some UI redesign to make things a bit more intuitive to navigate, and perhaps other feature changes that make it a more attractive destination. However, I think it's basically all but impossible for them to restart the growth engine at this point. A lot of people have heard of Snapchat, tried it, and decided they don't like or just don't see the point when they already use Instagram. Making matters worse is the fact that their initial market is incredibly hard to hold on to. Things almost never stay super popular across multiple "generations" of high school and college kids (except for default utilities that everyone at every age uses). In other words, it's unlikely that Snapchat will be popular with high school and college kids in five years. So, I suspect that as their metrics stagnate and decline over the next few years they will increasingly focus on a series of moonshot new product ideas (like Specs) and hope that something sticks. But there's little reason to suspect that they'll be any better at building a random new product than any other start-up or big company out there (and, in fact, I'd argue there are some good reasons to think they'll be worse). As is probably pretty obvious, I'm quite bearish on Snap these days. I was extremely bullish a year and a half ago, but they've just been so slow to execute when it mattered. They lost their wave of growth. At this point, I'd be surprised if they can catch another.

Inconel 9y ago
Your comment seems very well thought out. Can you expand a bit on why you think Snap would actually be worse at building a random new product than any other startup or big company?

draw_down 9y ago

It seems to me like a lot of their "value" is in how much more engrossing their ads can be than other display ads. They also have a whole section of their app that shovels "content" from magazines and such, and that content is pretty much just more advertising. I'm sure those outlets pay to be there, or pay for prominent placing, etc. But those should be easy enough to copy. And I find the content thing weird, it feels bolted on to an app you use to talk to friends. I am bearish on them, I think it was smart to IPO when they did.

skinnymuch 9y ago

I was thinking Snap might try to buy Musically before their IPO or around IPO time. It would cost more than IG did to FB, making the purchase a much larger deal for Snap, but it would be a way to allow for the user growth and connectedness to the young crowd to continue. I'm not sure how big Musically is now, just seemed like it might be a decent gamble for Snap to try and prob provide the most [media] hype too.

_eht 9y ago

Found the CEO.

datamingle 9y ago

They do AR & Marketing amazingly and hardware quite well. I am not sure a social network is their best business model though. Hopefully they can pivot to something else using what they are great at.

beager 9y ago
I like to think I'm not totally underneath a rock, but I don't think I've ever seen their hardware in person. And if I have, I didn't know that it was their hardware. So they either don't do hardware well, or they don't market well. And even if they did all of that well, is that worth $25-30 per share?
snapgod 9y ago
Does "doing AR amazingly" go beyond overlaying bunny ears and whiskers on a person's face? I'm not sure how much longer they can ride that out, and besides, Instagram showed they can do that well too. Actually, anybody who can follow a basic OpenCV tutorial can do it. Another story on HN shows what developers are doing with Apple's ARkit, and it's more impressive than anything I've seen from Snapchat.

s0me0ne 9y ago

Anything they do FB will steal and put in their products

shinratdr 9y ago

They don't. Snapchat is a feature, not a product. They should have sold to Facebook when they had the chance. Now everything novel they had (expiring message, stories, filters) has been successfully aped by Facebook and incorporated into Instagram, and because Instagram offers a UX that isn't intentionally shitty, they've already shot past the Snap userbase. Sell your stock now, and don't be surprised if they're irrelevant/bankrupt by 2019.