Snapchat founder admits struggles, defends company strategy
It's been a bumpy 2017 for Snap Inc. and 27-year-old CEO/founder Evan Spiegel, who made a rare public appearance at Vanity Fair's New Establishment Summit in Beverly Hills yesterday.
His IPO has missed market expectations, closing yesterday at $15 after opening March at $24. Spiegel has struggled mightily to tell the Snap story to Wall Street, bumbling the stock's narrative and investor expectations, and leaving even his advisers frustrated with comms skills. Meanwhile, Facebook/Instagram has ruthlessly copied his hottest product innovations and poached chunks of his ideas — and audience.
On stage yesterday, Spiegel admitted the market debut was harder than he thought, but insisted that he's got a great story to tell and will put a lot more effort into telling it:
- "[I]nvestors are fearful ... we can never be profitable, or they're fearful that ... competition will kill us," he told interviewer Walter Isaacson. "But I think those are kind of normal fears, really, for any startup. ... [T]he really successful companies just grow through that."
That's why investors who know him best remain very high on him as a CEO and Snap as an authentic, long-term Facebook threat:
- He confessed his comms skills — internally and externally — need work. One of his advisers told me it took months to get him to this realization and admission.
- He filled in his pitch as Snap as both tech and hardware company — with the camera, not the phone, as the central communications and creativity device.
- But his offerings still lack the simplicity and drama of a Steve Jobs product.
- It's becoming clear that Snap alone (with its closed publishing system) didn't get played by the Russians like Facebook/Google/Twitter did. Publishers are flocking to Spiegel's platform, and his team is racing to make the monetization opportunities more appealing.
Be smart: Evan is six years younger than Zuck; has 166 million daily users — with half of the new ones under 25 — most of them hyper-addicted to his product. Imagine if he could figure out the hardware part, perhaps a camera with a keyboard and phone attached, instead of the other way around.
Be smarter: Spiegel's biggest threat is Facebook and its Instagram Stories, which in April passed Snapchat in daily active users, now at 250 million. He needs a fierce response and strategy to combat Facebook's ability to leverage billions of user and billions of dollars to steal his best innovations.