4 ms·

It's not about the size of the userbase; it's about business models. They burned cash to acquire users, but once they wanted income they too have gone the adver

It's not about the size of the userbase; it's about business models. They burned cash to acquire users, but once they wanted income they too have gone the advertising route. This leads to the dilution of the core experience as you've pointed out: fudged timelines [1], denser advertising, backporting of missing social networking features, leading to networks that are largely interchangeable [2]. Snapchat can't really afford to be interchangeable with Instagram, because Facebook actually knows how to persuade advertisers to keep selling ads, while Snapchat just relies on its perceived clout among a coveted demographic, providing very few mechanisms for advertisers to gauge their ROI [3]. Sooner or later, advertisers will wisen up and pull out of Snapchat, making their business model crisis all the more acute. Snapchat is one of the best-positioned companies to actually trial different business models for their app: they have a respectable install base, their platform is still sticky and desirable enough to maintain a sizeable userbase for some time, and their preexisting userbase is aging into being able to spend some money. Defection to Instagram isn't nearly as much of a threat as many make it seem: most Snapchat users are already on Instagram as well, so as long as they continue to engage with Snapchat, all is not lost. Their map purchase was an effort to pivot the product's monetization back to hyperlocal factors, and solidify the idea that your Snapchat friends are part of your close-knit circle. Snapchat could be a better Foursquare, but it's not quite there yet. [1] https://news.ycombinator.com/item?id=12191435 https://news.ycombinator.com/item?id=12191435 [2] https://news.ycombinator.com/item?id=13168804 https://news.ycombinator.com/item?id=13168804 [3] https://news.ycombinator.com/item?id=15050410 https://news.ycombinator.com/item?id=15050410

chuckdries 9y ago
As a heavy snapchat user, I'm a big fan of the idea of snapchat as a better foursquare/find my friends because honestly neither application ever made enough sense to keep installed longer than a week at a time. I don't know if I'd pay for it, but if they wanted to use location to sell ads to local businesses or whatever they could probably tap an otherwise relatively untapped ad market.
dpandya 9y ago
What kind of other models could potentially work for Snapchat other than advertising? I don't see any candidates from the list of other companies that serve young consumers.
- timthelion 9y ago
  I would create an extension to the snap ecosystem, which would be called "snap graffiti". Snap graffiti would allow you to attach a geographic location to a picture. These pictures could be anything, and anyone could see the pictures by being near the location. They would only hang on to the location for a certain amount of time. This in and of itself is not a business plan. But I would then allow these pictures to be connected to economic activity. For example, I have a bunch of iron pipes in my garden which could be taken to the waste disposal arena. Any teenager could do this for me just by carying away the metal. I would be able to "snap graffiti" the pile of metal in my garden, and tag it with $5. A bored teen could then knock on my door and carry away the metal. They would get $4.50 and snap-chat would take a small service fee.
  - dboreham 9y ago
    Bored teen cuts finger on metal. Parent sues you and Snapchat.
    - timthelion 9y ago
      Doing meaningful things is risky. But the riskiest thing of all is to do nothing meaningful. Death comes either way. You can be an advertiser or a passive middle man. You can lie, cheat, steal, and sell your way through life. You can watch yourself die, and civilization pass away into a spiraling clusterfuck of anxiety and broken dreams. Or you can buy State Farm business insurance. The insurance that will set you free. Call a representative today.
  - timthelion 9y ago
    For an idea what kind of income you're looking at from such a business. Imagine 4 million of their nearly 200 million users, do a $5 task every day. After credit card fees of 25.05 cents per transaction [1] that would leave 24.95 cents to snapchat for every transaction. That would be around a million dollars a day in income. Not terrible. And on valentines day, they could allow users to exchange a $5 task for a $10 coupon to Olive garden. Olive garden would, presumably give them coupons like that for free. If a million users chose that exchange, that would be an additional $4.5 million in income. [1] https://bandcamp.com/help/selling#fee https://bandcamp.com/help/selling#fee

chuckdries 9y ago

As a heavy snapchat user, I'm a big fan of the idea of snapchat as a better foursquare/find my friends because honestly neither application ever made enough sense to keep installed longer than a week at a time. I don't know if I'd pay for it, but if they wanted to use location to sell ads to local businesses or whatever they could probably tap an otherwise relatively untapped ad market.

dpandya 9y ago

What kind of other models could potentially work for Snapchat other than advertising? I don't see any candidates from the list of other companies that serve young consumers.

timthelion 9y ago
I would create an extension to the snap ecosystem, which would be called "snap graffiti". Snap graffiti would allow you to attach a geographic location to a picture. These pictures could be anything, and anyone could see the pictures by being near the location. They would only hang on to the location for a certain amount of time. This in and of itself is not a business plan. But I would then allow these pictures to be connected to economic activity. For example, I have a bunch of iron pipes in my garden which could be taken to the waste disposal arena. Any teenager could do this for me just by carying away the metal. I would be able to "snap graffiti" the pile of metal in my garden, and tag it with $5. A bored teen could then knock on my door and carry away the metal. They would get $4.50 and snap-chat would take a small service fee.
- dboreham 9y ago
  Bored teen cuts finger on metal. Parent sues you and Snapchat.
  - timthelion 9y ago
    Doing meaningful things is risky. But the riskiest thing of all is to do nothing meaningful. Death comes either way. You can be an advertiser or a passive middle man. You can lie, cheat, steal, and sell your way through life. You can watch yourself die, and civilization pass away into a spiraling clusterfuck of anxiety and broken dreams. Or you can buy State Farm business insurance. The insurance that will set you free. Call a representative today.
- timthelion 9y ago
  For an idea what kind of income you're looking at from such a business. Imagine 4 million of their nearly 200 million users, do a $5 task every day. After credit card fees of 25.05 cents per transaction [1] that would leave 24.95 cents to snapchat for every transaction. That would be around a million dollars a day in income. Not terrible. And on valentines day, they could allow users to exchange a $5 task for a $10 coupon to Olive garden. Olive garden would, presumably give them coupons like that for free. If a million users chose that exchange, that would be an additional $4.5 million in income. [1] https://bandcamp.com/help/selling#fee https://bandcamp.com/help/selling#fee