Evan Spiegel

Snapchat fully rolls out reengineered Android app, boosting usage

Posted by | Apps, Earnings, Evan Spiegel, Mobile, snap inc, Snapchat, Snapchat Android, Snapchat earnings, Social, TC | No Comments

After a year of its user count shrinking or staying flat, Snapchat is finally growing again, and more growth is likely on the way. That’s because it’s finally completed the rollout of Project Mushroom, aka a backend overhaul of its Android app that’s 25 percent smaller and 20 percent faster. Designed for India and other emerging markets where iPhones are too expensive, Snapchat saw an immediate 6 percent increase in the number of people on low-end devices sending Snaps within the first week of upgrading to the new Android app.

Snapchat grew from 186 million daily active users in Q4 2018 to 190 million in Q1 2019, adding 1 million in North America, 1 million in Europe and 2 million in the Rest of World, where the Android app makes the biggest difference despite rolling out near the end of the quarter. It has been a long wait, as Snap first announced the Android reengineering project in November 2017.

“As of the end of Q1, our new Android application is available to everyone,” Snap CEO Evan Spiegel wrote in his prepared remarks for today’s estimate-beating earnings report. “While these early results are promising, improvements in performance and new user retention will take time to compound and meaningfully impact our top-line metrics. There are billions of Android devices in the world that now have access to an improved Snapchat experience, and we look forward to being able to grow our Snapchat community in new markets.”

Some of the growth stemmed from tweaks to Snapchat’s ruinous redesign, including better personalized ranking of Stories and Discover content, as well as new premium video Shows. Now with the Android app humming, though, we might see significant growth in the Rest of World region in Q2.

Unfortunately, since Snapchat uses bandwidth and storage-heavy video, more usage also means more Amazon AWS and Google Cloud expenditures. That’s partly why Snapchat is predicting a slight increase in adjusted EBITDA losses from $123 million in Q1 to between $125 million and $150 million in Q2. Rest of World users only earn Snap about one-third as much money as North American users, but cost nearly as much to support.

We first highlighted Snap’s neglect of the international teen Android market when Instagram Stories launched in August 2016. Spiegel and Snap were too focused on cool American teens, squandering this market that was snapped up by Facebook’s Instagram and WhatsApp. Now Snapchat will have a much harder time winning emerging markets as they’re not the first to bring Stories there. But if it can double-down on ephemeral messaging, premium video and its augmented reality platform that are leagues ahead of Facebook’s offerings, it could finally creep toward that 200 million DAU milestone.

 Come see Snap CEO Evan Spiegel speak at TechCrunch Disrupt SF on October 2nd-4th. Get your tickets here.

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To stop copycats, Snapchat shares itself

Posted by | ad networks, Advertising Tech, Apps, Bitmoji, bobby murphy, Evan Spiegel, Mobile, snap inc, Snap Kit, Snapchat, Snapchat Audience Network, Social, TC | No Comments

Evan Spiegel has finally found a way to fight back against Mark Zuckerberg’s army of clones. For 2.5 years, Snapchat foolishly tried to take the high road versus Facebook, with Spiegel claiming “Our values are hard to copy”. That inaction allowed Zuckerberg to accrue over 1 billion daily Stories users across Instagram, WhatsApp, and Facebook compared to Snapchat’s 186 million total daily users. Meanwhile, the whole tech industry scrambled to build knock-offs of Snap’s vision of an ephemeral, visual future.

But Snapchat’s new strategy is a rallying call for the rest of the social web that’s scared of being squashed beneath Facebook’s boot. It rearranges the adage of “if you can’t beat them, join them” into “to beat them, join us”. As a unified front, Snap’s partners get the infrastructure they need to focus on what differentiates them, while Snapchat gains the reach and entrenchment necessary to weather the war.

Tinder lets you use Snapchat Stories as profile photos

Snapchat’s plan is to let other apps embed the best parts of it rather than building their own half-rate copies.

Why reinvent the wheel of Stories, Bitmoji, and ads when you can reuse the original? A high-ranking Snap executive told me on background that this is indeed the strategy. If it’s going to invent these products, and others want something similar, it’s smarter to enable and partly control the Snapchatification than to try to ignore it. Otherwise, Facebook might be the one to platform-tize what Snap inspired everyone to want.

The “Camera company” corrected course and took back control of its destiny this week at its first ever Snap Partner Summit in its hometown of Los Angeles. Now it’s a camera platform thanks to Snap Kit. Its new Story Kit will implant Snapchat Stories into other apps later this year. They can display a more traditional carousel of your friends’ Stories, or lace them into their app in a custom format. Houseparty’s Stories carousel shares what your buddies are up to outside of the group video chat app. Tinder will let you show off your Snapchat Story alongside your photos to seduce potential matches. But the camera stays inside Snapchat, with new options to share out to these App Stories.

Snap CEO Evan Spiegel presents at the Snap Partner Summit

This is how Snapchat colonizes the native app ecosystem similarly to how Facebook invaded the web with the Like button. Snap’s strong privacy record makes these partners willing to host it where now they might fear that Facebook and its history with Cambridge Analytica could tarnish their brand.

Instead of watching these other apps spin up mini competitors that further fragment the Stories world, Snap saves developers the slow and costly hassle while instantly giving them best-in-class tools to boost their own engagement. Each outpost makes your Snapchat account a little more indispensable, grants its camera new utility, and reminds you to visit again. It’s another reason to stick with Snap rather than straying to other versions of Stories.

If Spiegel knows what’s up, he’ll douse the Story Kit partnerships team with resources so they can sign up as many apps as possible before Facebook can copy this idea too. For now, Snap isn’t injecting ads into App Stories, but it could easily do so and split the cash with its host. This would attract partners, generate revenue, and give Snap’s advertisers more reach.

Houseparty embeds Snapchat Stories

Either way, Snap will score those benefits with its new Ad Kit. Later this year the Snapchat Audience Network will launch allowing partners to host Snap’s full-screen vertical video ads and earn an as-yet-undisclosed revenue share. They won’t have to build up an ad sales force or build an auction and delivery system, but just drop in an SDK to start displaying ads to both Snapchat users and non-users. The company’s message again is that it’s becoming easier to cooperate with Snapchat than copy it.

Snap’s new ad network

Giving its advertisers more reach and reusability for Snap’s somewhat proprietary ad unit format helps Snap address its core challenge: scale. Snap’s 186 million total users can look small in comparison to Instagram, Facebook, or YouTube, especially since that count sank in Q2 and Q3 before stabilzing in Q4 of last year. That makes it tougher for advertisers to justify the chore of spending on Snapchat. Ad Kit and potentially Story Kit give Snap more reach even without user growth.

Added size could tip the cards in Snap’s favor given it’s already popular with an extremely important demographic. Snapchat now reaches 75 percent of 13 to 34-year olds in the US, and 90 percent of 13 to 24-year olds there. It claims to now reach more of that younger age group than Facebook in the most lucrative countries: the US, Canada, UK, France, and Australia.

Facebook has massively neglected this segment. Case in point: Facebook Messenger’s Stickers feature that’s popular with kids has hardly improved since its launch in 2013, which I hear was a fight to get approved internally. Meanwhile, Snapchat keeps growing its lead on virtual identity with Bitmoji. Now Snap will let you put your personalized Bitmoji avatar on your FitBit smart watch face, use them to joke about Venmo purchases, and even represent yourself with one in Snap’s new multiplayer games platform.

Again, Snap wants partners to integrate the real thing rather than try to build some half-assed facsimile of Bitmoji. Surprisingly, Facebook’s Avatars have been mired in development for over a year and Apple’s Memoji can’t escape iMessage and FaceTime yet. That’s why Snapchat would be wise to double-down on trying to make Bitmoji the ubiquitous way to represent yourself without a photograph. Facebook’s lack of design cool and Bitmoji’s massive headstart with this differentiated product is a powerful way for Snap to wedge itself into partnerships.

Snap needs all the help it can get if the underdog is going to carve out a substantial and sustainable piece of social networking. Teaming up was the theme of the rest of the Snap Partner Summit. It’s built ways for Netflix, GoFundMe, VSCO, and Anchor to share stickers and for publishers like the Washington Post to share articles back to Snapchat. It’s got Zynga and ZeptoLab building real-time multiplayer Snap Games that live inside chat and are a clever way of slipping ads into messaging.

Snapchat’s new Scan augmented reality utility platform has signed up Giphy and Photomath as well as former partners Shazam and Amazon to let you squeeze extra interactivity out of your surroundings. And since the physical world is too vast for any one developer to fill with AR experiences, Snap beefed up its Lens Studio platform with new templates and creator profiles so developers add to its warchest of 400,000 special effects. Facebook may be able to clone Snap’s features, but not its developer army.

“If we can show the right Lens in the right moment, we can inspire a whole new world of creativity” says Snap co-founder Bobby Murphy . From partnerships to utilities to toys, all the new announcements drive attention back to Snapchat’s camera. That makes it ripe to become the augmented reality brower of the world.

It all feels like a coming of age moment for Snapchat, punctuated by the glitzy press event where media bigwigs gnoshed on Chinese steak buns and played with AR art installations in West Hollywood.

Spiegel has discovered a method of capitalizing on his penchant for inspiring mobile product design. With this strategy in place and Snap’s reengineered Android app and new languages rolling out now, I believe Snapchat will grow again, at least in terms of deeper engagement if not also total user count. Perhaps it will need a little bit more funding to get it over the hurdle, but I expect it will reach profitability before the end of 2020. 

During a pre-event press briefing with a dozen Snap executives including Spiegel and Murphy (that was on ‘background’ so we can’t quote or specify who said what), one Snap higher-up joked that Facebook has been copying it for seven years so it’s started to feel normal. Zuckerberg recently declared he wanted to reorient Facebook around privacy, ephemerality, and messaging — the core tenets of Snapchat. But a Snap leader used some colorful language to describe how they don’t care what Facebook says its philosophy is until it fixes the 2 billion-user product that keeps doing harm.

Subtly throwing shade from the stage, Spiegel concluded that “Our camera lets the natural light from our world penetrate the darkness of the Internet . . . as we use the Internet more and more in our daily lives, we need a way to make it a bit more human.” That apparently means making other apps a bit more Snapchat.

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Snap is channeling Asia’s messaging giants with its move into gaming

Posted by | alibaba, Apps, Asia, Australia, Bitmoji, Canada, China, computing, e-commerce, epic games, Evan Spiegel, Facebook, food, France, game developers, Gaming, instagram, Instant Messaging, Japan, josh constine, Kakao, Los Angeles, messaging apps, Messenger, nhn japan, Nintendo, operating systems, player, Snap, Snapchat, Social, social media, social network, Software, Southeast Asia, Startups, Tencent, United Kingdom, United States, WeChat, WhatsApp | No Comments

Snap is taking a leaf out of the Asian messaging app playbook as its social messaging service enters a new era.

The company unveiled a series of new strategies that are aimed at breathing fresh life into the service that has been ruthlessly cloned by Facebook across Instagram, WhatsApp and even its primary social network. The result? Snap has consistently lost users since going public in 2017. It managed to stop the rot with a flat Q4, but resting on its laurels isn’t going to bring back the good times.

Snap has taken a three-pronged approach: extending its stories feature (and ads) into third-party apps and building out its camera play with an AR platform, but it is the launch of social games that is the most intriguing. The other moves are logical, and they fall in line with existing Snap strategies, but games is an entirely new category for the company.

It isn’t hard to see where Snap found inspiration for social games — Asian messaging companies have long twinned games and chat — but the U.S. company is applying its own twist to the genre.

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Snap CEO’s sister Caroline Spiegel starts a no-visuals porn site

Posted by | Apps, Entertainment, erotica, Evan Spiegel, funding, Fundings & Exits, Media, Mobile, pornhub, pornography, Recent Funding, Social, stanford, Startups, TC | No Comments

If you took the photos and videos out of pornography, could it appeal to a new audience? Caroline Spiegel’s first startup Quinn aims to bring some imagination to adult entertainment. Her older brother, Snapchat CEO Evan Spiegel, spent years trying to convince people his app wasn’t just for sexy texting. Now Caroline is building a website dedicated to sexy text and audio. The 22-year-old college senior tells TechCrunch that on April 13th she’ll launch Quinn, which she describes as “a much less gross, more fun Pornhub for women.”

TechCrunch checked out Quinn’s private beta site, which is pretty bare bones right now. Caroline tells us she’s already raised less than a million dollars for the project. But given her brother’s success spotting the next generation’s behavior patterns and turning them into beloved products, Caroline might find investors are eager to throw cash at Quinn. That’s especially true given she’s taking a contrarian approach. There will be no imagery on Quinn.

Caroline explains that “There’s no visual content on the site — just audio and written stories. And the whole thing is open source, so people can submit content and fantasies, etc. Everything is vetted by us before it goes on the site.” The computer science major is building Quinn with a three-woman team of her best friends she met while at Stanford, including Greta Meyer, though they plan to relocate to LA after graduation.

“His dream girl was named ‘Quinn’ “

The idea for Quinn sprung from a deeply personal need. “I came up with it because I had to leave Stanford my junior year because I was struggling with anorexia and sexual dysfunction that came along with that,” Caroline tells me. “I started to do a lot of research into sexual dysfunction cures. There are about 30 FDA-approved drugs for sexual dysfunction for men but zero for women, and that’s a big bummer.”

She believes there’s still a stigma around women pleasuring themselves, leading to a lack of products offering assistance. Sure, there are plenty of porn sites, but few are explicitly designed for women, and fewer stray outside of visual content. Caroline says photos and videos can create body image pressure, but with text and audio, anyone can imagine themselves in a scene. “Most visual media perpetuates the male gaze … all mainstream porn tells one story … You don’t have to fit one idea of what a woman should look like.”

That concept fits with the startup’s name “Quinn,” which Caroline says one of her best guy friends thought up. “He said this girl he met — his dream girl — was named ‘Quinn.’ ”

Caroline took to Reddit and Tumblr to find Quinn’s first creators. Reddit stuck to text and links for much of its history, fostering the kinky literature and audio communities. And when Tumblr banned porn in December, it left a legion of adult content makers looking for a new home. “Our audio ranges from guided masturbation to overheard sex, and there’s also narrated stories. It’s literally everything. Different strokes for different for folks, know what I mean?” Caroline says with a cheeky laugh.

To establish its brand, Quinn is running social media influencer campaigns where “The basic idea is to make people feel like it’s okay to experience pleasure. It’s hard to make something like masturbation cool, so that’s a little bit of a lofty goal. We’re just trying to make it feel okay, and even more okay than it is for men.”

As for the business model, Caroline’s research found younger women were embarrassed to pay for porn. Instead, Quinn plans to run ads, though there could be commerce opportunities too. And because the site doesn’t bombard users with nude photos or hardcore videos, it might be able to attract sponsors that most porn sites can’t.

Evan is “very supportive”

Until monetization spins up, Quinn has the sub-$1 million in funding that Caroline won’t reveal the source of, though she confirms it’s not from her brother. “I wouldn’t say that he’s particularly involved other than he’s one of the most important people in my life and I talk to him all the time. He gives me the best advice I can imagine,” the younger sibling says. “He doesn’t have any qualms, he’s very supportive.”

Quinn will need all the morale it can get, as Caroline bluntly admits, “We have a lot of competitors.” There’s the traditional stuff like Pornhub, user-generated content sites like Make Love Not Porn and spontaneous communities like on Reddit. She calls $5 million-funded audio porn startup Dipsea “an exciting competitor,” though she notes that “we sway a little more erotic than they do, but we’re so supportive of their mission.” How friendly.

Quinn’s biggest rival will likely be outdated but institutionalized site Literotica, which SimilarWeb ranks as the 60th most popular adult website, 631st most visited site overall, showing it gets 53 million hits per month. But the fact that Literotica looks like a web 1.0 forum yet has so much traffic signals a massive opportunity for Quinn. With rules prohibiting Quinn from launching native mobile apps, it will have to put all its effort into making its website stand out if it’s going to survive.

But more than competition, Caroline fears that Quinn will have to convince women to give its style of porn a try. “Basically, there’s this idea that for men, masturbation is an innate drive and for women it’s a ‘could do without it, could do with it.’ Quinn is going to have to make a market alongside a product and that terrifies me,” Caroline says, her voice building with enthusiasm. “But that’s what excites me the most about it, because what I’m banking on is if you’ve never had chocolate before, you don’t know. But once you have it, you start craving it. A lot of women haven’t experienced raw, visceral pleasure before, [but once we help them find it] we’ll have momentum.”

Most importantly, Quinn wants all women to feel they have rightful access to whatever they fancy. “It’s not about deserving to feel great. You don’t have to do Pilates to use this. You don’t have to always eat right. There’s no deserving with our product. Our mission is for women to be more in touch with themselves and feel fucking great. It’s all about pleasure and good vibes.”

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Jeffrey Katzenberg’s streaming service Quibi is doing a show about Snapchat’s founding

Posted by | Evan Spiegel, Jeffrey Katzenberg, Media, meg whitman, Mobile, Quibi, snap inc, Snapchat, streaming video, TC | No Comments

Jeffrey Katzenberg and Meg Whitman today announced a slate of new series and projects heading to their forthcoming video streaming service, Quibi. The list includes an origin story to complement Telemundo’s hit show “El Señor de los Cielos;” a music competition show produced by Justin Bieber manager and entertainment exec Scooter Braun; a show from Jennifer Lopez’s company about the power of giving and paying it forward; as well something called “Frat Boy Genius,” which will focus on the rise of Snapchat — and specifically its creator, Evan Spiegel.

“It is the story of how he built and created Snapchat, which is one of the great social platforms of our time,” touted Katzenberg. “And we want to tell a story that is as compelling and interesting about the creation of Snapchat and Evan’s story as “[The] Social Network” was for Facebook,” he added.

The project will be based on the screenplay by the same name, which had written Spiegel as a hard-partying Stanford student, according to Vulture’s review of the much-hyped script.

“He should be flattered,” remarked Katzenberg, of Quibi’s plans for the Spiegel-focused project.

And now to the featured scripts! First up: @Elissits‘ FRAT BOY GENIUS, illustrated by @boxbrown. pic.twitter.com/GW8KQclrrB

— The Black List (@theblcklst) December 17, 2018

Katzenberg and Quibi CEO Meg Whitman were at SXSW to speak about the upcoming streaming video service, which plans to offer short-form video designed for mobile. On Quibi, consumers watch “quality” video cut into smaller pieces, including both scripted and unscripted original content, exclusives from Quibi’s partners and other daily news and sports programming.

Already, some of Quibi’s content plans have been announced.

For example, Deadline reported last fall that filmmakers Sam Raimi, Guillermo del Toro and Antoine Fuqua and producer Jason Blum will all create series for the service. And a pitch deck had touted other examples of Quibi’s programming — like a show called “Inspired By” with Justin Timberlake and “Under the Gun” with Kobe Bryant. Plus, Katzenberg himself had revealed in a LinkedIn post that Quibi was working on a basketball-related series with Steph Curry’s production company.

However, the story about Snapchat’s founding highlights how Quibi could benefit from its combination of tech and entertainment industry roots, in terms of deciding what to greenlight.

Whitman, a former HP Enterprise president and CEO, also pointed to another example: her penchant for using data to make decisions.

“I am deeply analytical and Jeffrey will argue in stories and allegories,” Whitman said. “And I will say: ‘Jeffrey, do you have any data to suggest that what you have just said is true?’ And he’ll say, ‘no I don’t have any data — but it’s true,’ ” she explained.

“Then I will come with data, facts, total available market size, market segmentation, market research, and he will say, ‘you know, not everything yields to analysis.’ And I’ll say ‘no, not everything does, but most things do,’ ” she said.

For the most part, today’s onstage discussion was a pitch for why Quibi will work and why it needs to exist — with Katzenberg touting its promise as an app that will benefit from 5G mobile networks as well as the cord-cutting behavior among younger millennials, who are no longer interested in traditional pay TV.

Both execs also stressed that Quibi was not a Netflix or YouTube competitor — despite angling for the same share of consumers’ mobile minutes and a set amount of downtime not spent on social media and mobile gaming, for example. They instead believe Quibi will be additive, and other services — like Netflix and Disney+ — can still win, even as Quibi wins.

Katzenberg said that Quibi aims to grab 20 minutes of the 70 minutes per day people spend watching short-form video, but doesn’t believe it will necessarily come at the expense of YouTube or others.

“Six years ago it was six minutes. A year and a half ago, it was 40 minutes. And today it’s 70 minutes,” he said, illustrating mobile video’s rise. “People love being able to watch great short-form content on the go.”

“What we know is that our users are watching a lot of video on mobile. They’re excited about the opportunity to see something differentiated. But honestly, we’re using a lot of judgment, and we’ll know whether it works when it launches,” Whitman added. 

Quibi will publish more than 100 pieces of content every week, meaning it’s going to be making 5,300-5,400 pieces of content per year, Katzenberg said. He also mentioned a few others examples of programming, including a daily round-up of the best of late night TV, and spoke more vaguely of the potential for a show that delivered music news, the way that MTV’s Kurt Loder once did.

The streaming service is launching in April 2020, Katzenberg also confirmed today, putting a more definitive time stamp on the launch time frame beyond “early 2020” or “spring.”

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Snapchat’s Android usage keeps falling but rebuild tests well

Posted by | Apps, Earnings, Evan Spiegel, Mobile, snap inc, Snapchat, Snapchat earnings, Social, TC | No Comments

Snap has finally begun publicly testing the engineering overhaul of its slow and buggy Android app that for years has cost Snapchat users. Promising early results and reduction in app startup time could help Snapchat fix its growth problem after daily active users sank in Q2 and Q3 before staying put at 186 million in Q4, Snap announced in its earnings report today.

“We ended the year with user engagement stabilizing and have started rolling out the new version of our Android application to a small percentage of our community,” CEO Evan Spiegel wrote. “Early tests show promising results especially on less performant devices, including a 20 percent reduction in the average time it takes to open Snapchat.” The problem is that because “Our engineering team remains focused on rebuilding our Android application,” they haven’t been dedicated to fixing the existing version. That means that despite iOS daily active users and average time spent growing faster than last year, Android dragged Snapchat again to see no total daily user growth.

Interim Chief Financial Officer Lara Sweet noted that, “While we are not going to give specific guidance on daily active users, we are cautiously optimistic and we do not foresee a sequential decline in daily active users in Q1 2019.” It seems Snap believes the new year is going well and the Android rollout could stem losses so it might finally grow its user count again, or at least stop shrinking.

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WhatsApp could wreck Snapchat again by copying ephemeral messaging

Posted by | Apps, ephemeral messaging, Evan Spiegel, instagram, Instagram Direct, Mobile, Snapchat, Social, TC, WhatsApp | No Comments

WhatsApp already ruined Snapchat’s growth once. WhatsApp Status, its clone of Snapchat Stories, now has 450 million daily active users compared to Snapchat’s 188 million. That’s despite its 24-hour disappearing slideshows missing tons of features, including augmented reality selfie masks, animated GIFs, or personalized avatars like Bitmoji. A good-enough version of Stories conveniently baked into the messaging app beloved in the developing world where Snapchat hasn’t proved massively successful. Snapchat actually lost total daily users in Q2 and Q3 2018, and even lost Rest Of World daily users in Q2 despite that being where late-stage social networks rely on for growth.

That’s why it’s so surprising that WhatsApp hasn’t already copied the other big Snapchat feature, ephemeral messaging. When chats can disappear, people feel free to be themselves — more silly, more vulnerable, more expressive. For teens who’ve purposefully turned away from the permanence of the Facebook profile timeline, there’s a sense of freedom in ephemerality. You don’t have to worry about old stuff coming back to haunt or embarrass you. Snapchat rode this idea to become a cultural staple for the younger generation.

Yet right now WhatsApp only lets you send permanent photos, videos, and texts. There is an Unsend option, but it only works for an hour after a message is sent. That’s far from the default ephemerality of Snapchat where seen messages disappear once you close the chat window unless you purposefully tap to save them.

Instagram has arrived at a decent compromise. You can send both permanent and temporary photos and videos. Text messages are permanent by default, but you can unsend even old ones. The result is the flexibility to both chat through expiring photos and off-the-cuff messages knowing they will or can disappear, while also being able to have reliable, utilitarian chats and privately share photos for posterity without the fear that one wrong tap could erase them. When Instagram Direct added ephemeral messaging, it saw a growth spurt to over 375 million monthly users as of April 2017.

Snapchat lost daily active users the past two quarters

WhatsApp should be able to build this pretty easily. Add a timer option when people send media so photos or videos can disappear after 10 seconds, a minute, an hour, or a day. Let people add a similar timer to specific messages they send, or set a per chat thread default for how long your messages last similar to fellow encrypted messaging app Signal.

Snap CEO Evan Spiegel’s memo leaked by Cheddar’s Alex Heath indicates that he views chats with close friends as the linchpin of his app that was hampered by this year’s disastrous redesign. He constantly refers to Snapchat as the fastest way to communicate. That might be true for images but not necessarily text, as BTIG’s Rich Greenfield points out, citing how expiring text can cause conversations to break down. It’s likely that Snapchat will double down on messaging now that Stories has been copied to death.

Given its interest in onboarding older users, that might mean making texts easier to keep permanent or at least lengthening how long they last before they disappear. And with its upcoming Project Mushroom re-engineering of the Snapchat app so it works better in developing markets, Snap will increasingly try to become WhatsApp.

…Unless WhatsApp can become Snapchat first. Spiegel proved people want the flexibility of temporary messaging. Who cares who invented something if it can be brought to more people to deliver more joy? WhatsApp should swallow its pride and embrace the ephemeral.

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9 highlights from Snapchat CEO’s 6,000-word leaked memo on survival

Posted by | Apps, Evan Spiegel, Instagram Stories, Mobile, snap inc, Snapchat, Snapchat Ads, Snapchat Discover, snapchat stories, Social, TC, WhatsApp Status | No Comments

Adults, not teens. Messaging, not Stories. Developing markets, not the U.S. These are how Snapchat will make a comeback, according to CEO Evan Spiegel . In a 6,000-word internal memo from late September leaked to Cheddar’s Alex Heath, Spiegel attempts to revive employee morale with philosophy, tactics and contrition as Snap’s share price sinks to an all-time low of around $8 — half its IPO price and a third of its peak.

“The biggest mistake we made with our redesign was compromising our core product value of being the fastest way to communicate,” Spiegel stresses throughout the memo regarding “Project Cheetah.” It’s the chat that made Snapchat special, and burying it within a combined feed with Stories and failing to build a quick-loading Android app have had disastrous consequences.

Spiegel shows great maturity here, admitting to impatient strategic moves and outlining a cohesive path forward. There’s no talk of Snapchat ruling the social app world here. He seems to understand that’s likely out of reach in the face of Instagram’s competitive onslaught. Instead, Snapchat is satisfied if it can help us express ourselves while finally reaching even meager profitability.

Snapchat may be too perceived as a toy to win enough adults, too late to win back international markets from the Facebook empire and too copyable by good-enough alternatives to grow truly massive. But if Snap can follow the Spiegel game plan, it could carve out a sustainable market through a small but loyal audience who want to communicate through imagery.

Here are the most interesting takeaways from the memo — and why they’re important:

1. Apologizing for rushing the redesign

There were, of course, some downsides to moving as quickly as a cheetah We rushed our redesign, solving one problem but creating many others . . . Unfortunately, we didn’t give ourselves enough time to continue iterating and testing the redesign with a smaller percentage of our community. As a result, we had to continue our iterations after we launched, causing a lot of frustration for our community.

Spiegel always went on his gut rather than relying on user data like Facebook. Aging further and further away from his core audience, he misread what teens cared about. The appealing buzz phrase of “separating social from media” also meant merging messaging and Stories into a chaotic list that made both tougher to use. Spiegel seems to have learned a valuable lesson about the importance of A/B testing.

2. Chat is king

Our redesigned algorithmic Friend Feed made it harder to find the right people to talk to, and moving too quickly meant that we didn’t have time to optimize the Friend Feed for fast performance. We slowed down our product and eroded our core product value. . . . Regrettably, we didn’t understand at the time that the biggest problem with our redesign wasn’t the frustration from influencers – it was the frustration from members of our community who felt like it was harder to communicate . . . In our excitement to innovate and bring many new products into the world, we have lost the core of what made Snapchat the fastest way to communicate.

When Snap first revealed the changes, we predicted that “Teen Snap addicts might complain that the redesign is confusing, jumbling all content from friends together.” That made it too annoying to dig out your friends to send them messages, and Snap’s growth rate imploded, with it losing 3 million users last quarter. Expect Snap to optimize its engineering to make messages quicker to send and receive, and even sacrifice some of its bells and whistles to make chat faster in developing markets.

3. Snapchat must beat Facebook at best friends

Your top friend in a given week contributes 25% of Snap send volume. By the time you get to 18 friends, each incremental friend contributes less than 1% of total Snap send volume each. Finding best friends is a different problem than finding more friends, so we need to think about new ways to help people find the friends they care most about.

Facebook’s biggest structural disadvantage is its broad friend graph that’s bloated to include family, co-workers, bosses and distant acquaintances. That might be fine in a feed app, but not for Stories and messaging where you only care about your closest friends. With friend lists and more, Facebook has tried and failed for a decade to find better ways to communicate with your besties. This is the wedge through which Snapchat can attack Facebook. If it develops special features for luring your best friends onto the app and staying in touch with them for better reasons than just maintaining a Snap “Streak,” it could hit Facebook where it can’t defend itself.

4. Discover soars as Facebook Watch and IGTV stumble

Our Shows continue to attract more and more viewers, with over 18 Shows reaching monthly audiences of over 10M unique viewers. 12 of which are Original productions. As a platform overall, we’ve grown the amount of total time spent engaging with our Shows product, almost tripling since the beginning of the year. Our audience for Publisher Stories has increased over 20% YoY, and we believe there is a significant opportunity to continue growing the number of people who engage with Discover content . . .We are also working to identify content that is performing well outside of Snapchat so that we can bring it into Discover.

Discover remains Snapchat’s biggest differentiator, scoring with premium video content purposefully made for mobile. What it really needs, though, are a few must-see tent-pole shows to drag in a wider audience that can get hooked on the reimagined digital magazine experience.

5. But Discover is a mess

Our content team is working hard to experiment with new layouts and content types in the wake of our redesign to drive increased engagement.

Snapchat Discover is an overcrowded pile of clickbait. News outlets, social media influencers, original video Shows and aggregated user content collections all battle for attention in a design that feels overwhelming to the point of exhaustion. Thankfully, Snapchat seems to recognize that more cohesive sorting with fewer images and headlines bombarding you might make Discover a more pleasant lean-back consumption experience.

6. Aging up to earn money

Most of the incremental growth in our core markets like the US, UK, and France will have to come from older users who generate higher average revenue per user . . . Growing in older demographics will require us to mature our application . . . Many older users today see Snapchat as frivolous or a waste of time because they think Snapchat is social media rather than a faster way to communicate. Changing the design language of our product and improving our marketing and communications around Snapchat will help users understand our value . . . aging-up our community in core markets will also help the media, advertisers, and Wall Street understand Snapchat.

Snapchat can’t just be for cool kids anymore. Their lower buying power and life stage make them less appealing to brands. The problem is that Snapchat risks turning off younger users by courting their older siblings or adults. If, like Facebook, users start to feel like Snapchat is a place for parents, they may defect in search of the next purposefully built app to confuse adults to stay hip.

7. Finally prioritizing developing markets

We already have many projects underway to unlock our core product value in new markets. Mushroom allows our community to use Snapchat on lower-end devices. Arroyo, our new gateway architecture, will speed up messaging and many other services . . . It might require us to change our products for different markets where some of our value-add features detract from our core product value.

Sources tell me Snapchat’s future depends on the engineering overhaul of its Android app, a project codenamed “Mushroom.” Slow video load times and bugs have made Snapchat practically unusable on low-bandwidth connections and old Android phones in the developing world. The company concentrated on the U.S. and other first-world markets, leaving the door open for copycats of Stories built by Instagram (400 million daily users) and WhatsApp (450 million daily users) to invade the developing world and dwarf Snap’s 188 million total daily users. In hopes of a smooth rollout, Snapchat is already testing Mushroom, but it will have to do a ton of marketing outreach to convince frustrated users who ditched the app to give it another try.

8. Fresh ideas, separate apps

We’re currently building software that takes the millions of Snaps submitted to Our Story and reconstructs parts of the world in 3D. We can then build augmented reality experiences on top of those models and distribute them as Lenses . . . If our innovation compromises our core product of being the fastest way to communicate, we should consider create [sic] separate applications or other ways of delivering our innovation.

Snapchat has big plans for augmented reality. It doesn’t just want to stick animations over the top of anywhere, or create AR art installations in a few big cities. It wants to build site-specific AR experiences across the globe. And while everything the company has built to date has lived inside of Snapchat, it’s willing to spawn standalone apps if necessary so that it doesn’t bog down its messaging service. That could give Snapchat a lot more leeway to experiment.

9. The freedom of profitability

Our 2019 stretch output goal will be an acceleration in revenue growth and full year free cash flow and profitability. With profitability comes increased autonomy and freedom to operate our business in the long term best interest of our community without the pressure of needing to raise additional capital.

Snapchat is still bleeding money, losing $353 million last quarter. Snapchat ended up selling 2.3 percent of its equity to a Saudi Arabian prince in exchange for $250 million to lengthen its rapidly shortening runway. And last year it took $2 billion from Chinese gaming giant Tencent. [Update: These purchases were both made on the public markets for non-voting Class A Stock, and were not primary equity, so they will not have direct influence on Snapchat’s product decisions.]

Once profitable, Snapchat won’t have to worry so much about struggling with short-term user growth and can instead focus on retention, societal impact and its true purpose — creativity.

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Snapchat adds new styles as Spectacles V2s get used 40% more than V1

Posted by | Apps, eCommerce, Evan Spiegel, Gadgets, hardware, Mobile, Opinion, Snap, snap inc, Snapchat, snapchat spectacles, Social, TC, Wearables | No Comments

Snapchat isn’t revealing sales numbers of version 2 of its Spectacles camera sunglasses, but at least they’re not getting left in a drawer as much as the V1s. The company tells me V2 owners are capturing 40 percent more Snaps than people with V1s.

And today, Snapchat is launching two new black-rimmed hipster styles of Spectacles V2 — a Wayfarer-esque Nico model and a glamorous big-lensed Veronica model. Both come with a slimmer semi-soft black carrying case instead of the chunky old triangular yellow one, and are polarized for the first time. They look a lot more like normal sunglasses, compared to the jokey, bubbly V1s, so they could appeal to a more mature and fashionable audience. They go on sale today for $199 in the US and Europe and will be sold in Neiman Marcus and Nordstrom later this year, while the old styles remain $149.

 

The new Spectacles styles (from left): Veronica and Nico

Spectacles V2 original style (left) and V1 (right)

Snap is also trying to get users to actually post what they capture, so it’s planning an automatically curated Highlight Story feature that will help you turn your best Specs content into great things to share. That could address the problem common amongst GoPro users of shooting a ton of cool footage but never editing it for display.

The problem is that V1 were pretty exceedingly unpopular, and those that did buy them. Snap only shipped 220,000 pairs and reportedly had hundreds of thousands more gathering dust in a warehouse. It took a $40 million write-off and its hardware “camera company” strategy was called into question. Business Insider reported that less than 50 percent of buyers kept using them after a month and a “sizeable” percentage stopped after just a week.

The new styles come with a slimmer semi-soft carry case

That means the bar was pretty low from which to score a 40 percent increase in usage, especially given the V2s take photos, work underwater, come in a slimmer charging case, and lack the V1s’ bright yellow ring around the camera lens that announces you’re wearing a mini computer on your face. Snap was smart to finally let you export in non-circular formats which are useful for sharing beyond Snapchat, and let you automatically save Snaps to your camera roll and not just its app’s Memories feature.

I’ve certainly been using my V2s much more than the V1s since they’re more discrete and versatile. And I haven’t encountered as much fear or anxiety from people worried about being filmed as privacy norms around technology continue to relax.

But even with the improved hardware, new styles, and upcoming features, Spectacles V2 don’t look like they’re moving the needle for Snapchat. After shrinking in user count last quarter, Snap’s share price has fallen to just a few cents above its all-time low. Given most of its users are cash-strapped teens who aren’t going to buy Spectacles even if they’re cool, the company needs to focus on how to make its app for everyone more useful and differentiated after the invasion of Instagram’s copy-cats of its Stories and ephemeral messaging.

Whether that means securing tentpole premium video content for Discover, redesigning Stories to ditch the interstitials for better lean-back viewing, or developing augmented reality games, Snap can’t stay the course. Despite its hardware ambitions, it’s fundamentally a software company. It has to figure out what makes that software special.

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Why Snapchat’s re-redesign will fail and how to fix it

Posted by | Apps, Evan Spiegel, Mobile, Opinion, snap inc, Snapchat, Snapchat Redesign, Social, TC | No Comments

Snap screwed it all up jumbling messages and Stories, banishing creators to Discover and wrecking auto-advance. Prideful of his gut instincts, Snap CEO Evan Spiegel refused to listen to the awful user reviews and declining usage. Now a YouGov study shows a 73 percent drop in user sentiment toward Snapchat, the app’s user count shrank in March and its share price is way down.

Yet the re-redesign Snapchat is finally rolling out today in response won’t fix the problems. The company still fails to understand that people want a predictable app that’s convenient to lay back and watch, and social media stars are more similar to you and me than they are to news outlets producing mobile magazine-style Discover content.

There’s a much better path for Snapchat, but it will require an ego adjustment and a bigger reversal of the changes — philosophy be damned.

Snapchat’s impression amongst US users fell off a cliff when the redesign was rolled out early this year

Here’s what Snapchat was, is becoming and should be.

The old Snapchat

Snapchat’s best design was in September 2016. It lacked sensible Stories sorting, and got some questionable changes before the big January 2018 redesign, but the fundamentals were there:

  • Left: Messages in reverse chronological order
  • Right: Stories from everyone in reverse chronological order with a carousel of ranked preview tiles in a carousel above or below Stories
  • Auto-Advance: Automatic and instant

 

The broken Snapchat

Snapchat’s big January 2018 redesign did two smart things. It added more obvious navigation buttons to ease in new and adult users. And it made the Stories list algorithmically sorted so you’d see your best friends first rather than just who posts most often, as TechCrunch recommended last April.

But it introduced a bunch of other problems, like pulling creators out of the Stories list, turning the inbox into chaos with ad-laden Stories and breaking auto-advance so you have to watch an annoying interstitial between each friend. Spiegel stubbornly refused to listen to the poor feedback, saying in February, “Even the complaints we’re seeing reinforce the philosophy. Even the frustrations we’re seeing really validate those changes. It’ll take time for people to adjust.” That quickly proved short-sighted.

  • Left: Messages and Stories from friends mixed together, sorted algorithmically
  • Right: Discover, sorted algorithmically, with influencers and people who don’t follow you back mixed in
  • Auto-Advance: Interstitial preview screens

The re-redesigned Snapchat

Users hated the redesign, initial reviews were mostly negative and Snapchat’s growth fell to its lowest rate ever. After some tests, today Snapchat tells us it’s rolling out the re-redesign to the majority of iOS users that’s a little less confusing. Yet it doesn’t address the core problems, plus makes the Discover screen more overwhelming:

  • Left: Messages sorted reverse chronologically
  • Right: Friends’ Stories at the top sorted algorithmically [Correction: Not chronologically], then subscriptions to creators sorted algorithmically, then Discover channels sorted algorithmically
  • Auto-Advance: Interstitial preview screens in Stories but not Subscriptions or For You

The right Snapchat

While the re-redesign makes Snapchat’s messaging inbox work like it used to, it overloads the Discover screen and leaves auto-advance broken out of a misguided hope of ensuring you never watch a frenemy or ex’s Story by accident and show up in their view counts. But that’s not worth ruining the laid-back viewing experience we’ve grown to love on Instagram Stories, and could be better solved with a mute button or just getting people to unfriend those they can’t be seen watching.

That’s why I recommend Snapchat move to a hybrid of all its designs:

  • Left: Messages sorted reverse chronologically
  • Right: Stories from all friends and creators, displayed as preview tiles, sorted algorithmically to preference close friends
  • Further Right: Discover, with preview tile sections for subscriptions, publishers and Our Stories/Maps/Events [This whole screen could be crammed into the Stories page if Snap insisted on just one screen on the right]
  • Auto-Advance: Traditional instant auto-advance without interstitials, plus a mute button to hide people

This design would make the inbox natural and uncluttered, ensure you see all your closest friends’ Stories, keep influencers from being buried in Discover, give publishers and Snapchat’s own content recommendations, including new creators, room to breathe and let you easily relax and watch a ton of Stories in a row.

Snapchat could have slowly iterated its way to this conclusion. It could have done extensive beta testing of each change to ensure it didn’t misstep. And perhaps facing an existential crisis from the exceedingly viable alternatives Instagram and WhatsApp, it should never have attempted a sweeping overhaul of its app’s identity. Twitter’s conservative approach to product updates looks wiser in retrospect. Instead, Snap is in decline.

Facebook’s family of apps have survived over the years by changing so gradually that they never shocked users into rebellion, or executing major redesigns when users had no comparable app to switch to. Snapchat calls itself a camera company, but it’s really a “cool” company — powered by the perception of its trendiness with American kids. But as ephemeral content proliferates and Stories become a ubiquitous standard soon to surpass feeds as the preferred way to share, they’ve gone from hip to utility. So if its features aren’t cool any more and are offered in a slicker way to a larger audience elsewhere, what is Snapchat anymore?

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