03/17/2017

Are You Ready for the Snapchat Generation?

Perhaps you're still unclear what all the fuss is about

Snapchat's parent company, Snap, has made headlines for the better part of the past two weeks since its IPO on March 2. Snap's market value increased by nearly $9 billion on its first day of trading; it's first day pop being bigger than even Facebook's or Google's. 

Perhaps you're still not sure what all the fuss is about. Here's the skinny: Snapchat launched in 2011 as a platform to quickly send selfies. Its key advantage was that the 'snaps' disappeared after they were sent. Snap has added more features since then, including lenses that superimpose over the user's snap and geofilters that overlay brand advertising or the user's location. So, Snapchat is making billions from people posting selfies, but the IPO has drawn attention for several reasons. For example:

• It's only been in existence for five years. Evan Spiegel, a 26-year-old Stanford University dropout, co-founded the app in 2011.
• One of Snapchat's trademarks is its confusing design. There's swiping and tapping and no explicit directions on how to do things. The company knows that (and is rumored to have done it on purpose). The user interface is listed as a risk factor in the prospectus.
• Snap has never turned a profit. As of Dec. 31, it had an accumulated deficit of $1.2 billion. 
• 98 percent of Snapchat's revenue comes from advertising. However, there's not a single advertiser that accounts for more than 10 percent of Snap's revenue.

Please click here to read the post in its entirety on Sarah Sladek's blog - XYZ University.