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I'll never understand the reasoning for social media platforms to get into the hardware business. SNAP getting into drones and phones - you might as well just

I'll never understand the reasoning for social media platforms to get into the hardware business. SNAP getting into drones and phones - you might as well just light stacks of money on fire, which is what happened here. Whatever happened to just doing what you are good at? Or is the end result for every startup global world domination?

afavour 4y ago
The answer is lock-in. Once someone has spent $100s on some hardware that only works with your network it’s less likely they’ll switch. Also control of the market. Some people said Google was insane to buy Android when they did but now they’re one of two players in the smartphone market. Meta would dearly, dearly like to have that kind of control (hence, IMO, the oversize focus on the metaverse)
adrr 4y ago
What is snap good at? What is their moat? Hardware is a logical step for companies looking to not put their eggs all in one basket. Amazon has Kindles, Echo, Ring etc. Google has Nest, Pixel Phone. Microsoft has their laptops
- asdajksah2123 4y ago
  Their moat is Apple/Google promotion while they are the only Meta alternative. TikTok eats into that but not much because of the geopolitical issues surrounding it.
junipertea 4y ago
I think hardware is not a reason for their current downfall. Going into hardware is away to diversify and avoid the problems they are facing right now: TikTok.
phone8675309 4y ago
Growth must be eternal, regardless of how unsustainable, or Wall Street will decapitate you. The bankers thirst for profit must be slaked. If this means burning giant piles of (other people's) money to maybe have a 2% better rate of return next year then you do it.
- umvi 4y ago
  > Growth must be eternal, regardless of how unsustainable, or Wall Street will decapitate you Note this is only for publicly traded companies. If you don't want your company to be like this, don't go public and you won't have to answer to shareholders and have to produce eternal growth.
  - aeyes 4y ago
    This would require that the company is owned by itself or its founders. Startup companies like Snapchat have raised capital from external sources and need to pay it back which is a bit hard with no meaningful profit. The founders probably don't even have a say in this, these companies usually have a board of investors which will force the IPO or sale of the company.
    - infamouscow 4y ago
      Choosing to give up control of your startup to investors is also a business decision.
- asdajksah2123 4y ago
  This is backwards. Companies that cannot survive without massive infusions of cash go to Wall Street asking for money while promising growth. So if there's anyone to blame, it's companies who are unable to sustain businesses without raising massive sums of other people's cash.
- songeater 4y ago
  Look there is a reason Wall Street focuses on growth: the thing (company, organism, population, whatever) that does not grow will (eventually) be overtaken by that which does, no matter how small the latter's growth rate is. So when the "market" is composed of 1000s of companies, one of the easiest ways to differentiate the good from the bad is to filter by PROFITABLE growth. Now here is the rub... "PROFITABLE" often becomes hard to define so we have long periods of time where just "growth" is used as a proxy... and at the ends of bubbles you typically have lots of companies with unsustainable growth trends being valued at assinine multiples. But again... there is a (good?) reason the heuristic exists.
linuxftw 4y ago
SNAP couldn't make any money just being snap chat, so they had to at least look like they were going to make money with some new avenue when they IPO'd. During that time period, it was 'spectacles' and everyone around here was shilling hard for them.
umvi 4y ago
> I'll never understand the reasoning for social media platforms to get into the hardware business. They probably felt like their primary revenue stream was built on a pretty flimsy, easily-copyable foundation that might crumble at any time due to social trends (i.e.: TikTok). Hence, they are desperately trying to diversify their business model using the cash they have before it's too late.
dixie_land 4y ago
They should've embraced Snapcash and there wouldn't be an OnlyFans.
chamanbuga 4y ago
Snap will continue having an existential crisis as long as their platform is dependent on companies like Apple and Google. They are a camera company, and they need to use their expertise to beat Apple at the camera game, which is no easy task.
- creaghpatr 4y ago
  Underrated comment in my opinion. Snap's long term potential lies in differentiating themselves with their hardware and UX like Apple did with the iPod /iPhone in the 2000s. An extremely hard task, but a more visible direction than a trench war with TikTok and Meta over generic social communications.
  - selimthegrim 4y ago
    How’s differentiating on cameras working out for Sony smartphones?
    - vineyardmike 4y ago
      Considering they sell that investment to the other big companies that put their cameras in their phones… probably good. Do you know otherwise about their financials?
      - selimthegrim 4y ago
        I meant market and mind share wise.
        sudosysgen 4y ago
        Sony camera hardware has massive marketshare on phones. Sony hasn't particularly invested much in the phone camera hardware space, instead they basically ported the software of their full cameras on it, targeting the professional and prosumer market with features beyond easy good looking pictures for more demanding applications, and seem to be fairly successful for the fairly small niche they're going for.
sleton38234234 4y ago
look social media and all that online stuff is waaayy too saturated. nobody needs another useless app. people need real things that do real stuff. it may be hard, really hard, nearly impossible even. but, it's infinitely better for companies to start getting in on real world products, even if success is difficult, rather than keep producing the same useless apps. Humanity needs innovation and progress in the primary areas of living: housing, transportation, water, food, and health insurance. am i asking for the impossible? yes. but, do take those moonshots, otherwise, the next 50 years will just be more of the same nonsense.
- fleddr 4y ago
  Happily surprised by your comment. It's not expressed often enough that the vast majority of what we call "tech" today is frivolous entertainment in the leisure domain. Almost none of it actually improves lives or addresses very pressing common needs.
rhacker 4y ago
Apps that are just database front-ends are eventually going to get less and less money. Even I would rather have more "things that are useful" than just another database schema surrounding my email address. Yes there can be room for some iteration of it, but increasingly investors want something more than database + react + app
hankchinaski 4y ago
Meta using the same playbook with their glasses and VR headsets and portal. Not owning the railways (the device) is a strategic risk and makes you always at the mercy of the device owners (eg. Apple cutting tracking for meta). So it’s just like every other business, vertical integration, reduce risks and improve the “moat”
- randoglando 4y ago
  That kind of device is very different from a drone camera though.
fairity 4y ago
Content is king, and one of the primary objectives of this hardware is to capture more & unique content.

afavour 4y ago

The answer is lock-in. Once someone has spent $100s on some hardware that only works with your network it’s less likely they’ll switch. Also control of the market. Some people said Google was insane to buy Android when they did but now they’re one of two players in the smartphone market. Meta would dearly, dearly like to have that kind of control (hence, IMO, the oversize focus on the metaverse)

adrr 4y ago

What is snap good at? What is their moat? Hardware is a logical step for companies looking to not put their eggs all in one basket. Amazon has Kindles, Echo, Ring etc. Google has Nest, Pixel Phone. Microsoft has their laptops

asdajksah2123 4y ago
Their moat is Apple/Google promotion while they are the only Meta alternative. TikTok eats into that but not much because of the geopolitical issues surrounding it.

junipertea 4y ago

I think hardware is not a reason for their current downfall. Going into hardware is away to diversify and avoid the problems they are facing right now: TikTok.

phone8675309 4y ago

Growth must be eternal, regardless of how unsustainable, or Wall Street will decapitate you. The bankers thirst for profit must be slaked. If this means burning giant piles of (other people's) money to maybe have a 2% better rate of return next year then you do it.

umvi 4y ago
> Growth must be eternal, regardless of how unsustainable, or Wall Street will decapitate you Note this is only for publicly traded companies. If you don't want your company to be like this, don't go public and you won't have to answer to shareholders and have to produce eternal growth.
- aeyes 4y ago
  This would require that the company is owned by itself or its founders. Startup companies like Snapchat have raised capital from external sources and need to pay it back which is a bit hard with no meaningful profit. The founders probably don't even have a say in this, these companies usually have a board of investors which will force the IPO or sale of the company.
  - infamouscow 4y ago
    Choosing to give up control of your startup to investors is also a business decision.
asdajksah2123 4y ago
This is backwards. Companies that cannot survive without massive infusions of cash go to Wall Street asking for money while promising growth. So if there's anyone to blame, it's companies who are unable to sustain businesses without raising massive sums of other people's cash.
songeater 4y ago
Look there is a reason Wall Street focuses on growth: the thing (company, organism, population, whatever) that does not grow will (eventually) be overtaken by that which does, no matter how small the latter's growth rate is. So when the "market" is composed of 1000s of companies, one of the easiest ways to differentiate the good from the bad is to filter by PROFITABLE growth. Now here is the rub... "PROFITABLE" often becomes hard to define so we have long periods of time where just "growth" is used as a proxy... and at the ends of bubbles you typically have lots of companies with unsustainable growth trends being valued at assinine multiples. But again... there is a (good?) reason the heuristic exists.

linuxftw 4y ago

SNAP couldn't make any money just being snap chat, so they had to at least look like they were going to make money with some new avenue when they IPO'd. During that time period, it was 'spectacles' and everyone around here was shilling hard for them.

umvi 4y ago

> I'll never understand the reasoning for social media platforms to get into the hardware business. They probably felt like their primary revenue stream was built on a pretty flimsy, easily-copyable foundation that might crumble at any time due to social trends (i.e.: TikTok). Hence, they are desperately trying to diversify their business model using the cash they have before it's too late.

dixie_land 4y ago

They should've embraced Snapcash and there wouldn't be an OnlyFans.

chamanbuga 4y ago

Snap will continue having an existential crisis as long as their platform is dependent on companies like Apple and Google. They are a camera company, and they need to use their expertise to beat Apple at the camera game, which is no easy task.

creaghpatr 4y ago
Underrated comment in my opinion. Snap's long term potential lies in differentiating themselves with their hardware and UX like Apple did with the iPod /iPhone in the 2000s. An extremely hard task, but a more visible direction than a trench war with TikTok and Meta over generic social communications.
- selimthegrim 4y ago
  How’s differentiating on cameras working out for Sony smartphones?
  - vineyardmike 4y ago
    Considering they sell that investment to the other big companies that put their cameras in their phones… probably good. Do you know otherwise about their financials?
    - selimthegrim 4y ago
      I meant market and mind share wise.
      - sudosysgen 4y ago
        Sony camera hardware has massive marketshare on phones. Sony hasn't particularly invested much in the phone camera hardware space, instead they basically ported the software of their full cameras on it, targeting the professional and prosumer market with features beyond easy good looking pictures for more demanding applications, and seem to be fairly successful for the fairly small niche they're going for.

sleton38234234 4y ago

look social media and all that online stuff is waaayy too saturated. nobody needs another useless app. people need real things that do real stuff. it may be hard, really hard, nearly impossible even. but, it's infinitely better for companies to start getting in on real world products, even if success is difficult, rather than keep producing the same useless apps. Humanity needs innovation and progress in the primary areas of living: housing, transportation, water, food, and health insurance. am i asking for the impossible? yes. but, do take those moonshots, otherwise, the next 50 years will just be more of the same nonsense.

fleddr 4y ago
Happily surprised by your comment. It's not expressed often enough that the vast majority of what we call "tech" today is frivolous entertainment in the leisure domain. Almost none of it actually improves lives or addresses very pressing common needs.

rhacker 4y ago

Apps that are just database front-ends are eventually going to get less and less money. Even I would rather have more "things that are useful" than just another database schema surrounding my email address. Yes there can be room for some iteration of it, but increasingly investors want something more than database + react + app

hankchinaski 4y ago

Meta using the same playbook with their glasses and VR headsets and portal. Not owning the railways (the device) is a strategic risk and makes you always at the mercy of the device owners (eg. Apple cutting tracking for meta). So it’s just like every other business, vertical integration, reduce risks and improve the “moat”

randoglando 4y ago
That kind of device is very different from a drone camera though.

fairity 4y ago

Content is king, and one of the primary objectives of this hardware is to capture more & unique content.