Snapchat’s Journey Unwinded : From an Idea to filing IPO worth $ 25 Bn
Wisdom –Doer –Customary Blog
When the world was busy exploring Internet socially, one of the communities which was getting prepared for the upcoming world, was left unheard. It was the age-group 13-20 yrs which was exposed to the world of unfathomable opportunities and rapidly changing world. This community in particular was looking for a platform of like-minded teens to interact and also don’t want to penalized to express thoughts and expressions which are triggered out of their momentary moods.
While the world awaits to understand the young community, some of the Students at Stanford identified a potential habit that Young Aged were struck. This was new, afresh but yet to be brought on Internet. It was the “Independent flow of emotions not guided or aided by the existing set of Societal Principles”
Early Days of Inception
Evan Spiegel, Bobby Murphy & Reggie Brown understood the widening gap and plunged to create an app that brings people to share ephemeral content as pictures via their classroom project called “Pict boo” in the Summer of 2011. It was based on the idea that whatever is shared will be perishable and will be Gone in 10 Seconds.
Spiegel became CEO, Murphy was CTO, and Reggie Brown held the position of CMO. Pict boo grew slowly and only had 127 users till Aug 2011.
With the growing involvement in building the app, the promoters got into a fight over the Technology Patents and Equity Splits. Reggie Brown wanted 30% but Evan Spiegel & Bobby Murphy were against it. Eventually Reggie was reportedly asked to leave which initiated him to take up the legal way.
Pict boo was now named as Snapchat and Evan Spiegel & Bobby Murphy started publicizing about it, in their friends and families. Later Pict boo was rebranded as Snapchat and was introduced to a School named Malibu High School which eventually started picking results and the userbase grew from 300 to 3000.
Seeding Funds to expand Operational Capabilities
In the months of April and May in the year 2012 Snapchat grew into manifolds. The userbase grew from 3000 to 100,000 Users and the duo and Evan & Bobby were finding it difficult to pay the bills of the server storage spaces and wanted to work on building scale to the Business. Jeremy View of LightSpeed Ventures stepped into with the growing popularity of the app and invested $ 485000 against the valuation of $4.25 million.
Rising popularity of the App and the Idea lured Media and Competition
It was receiving lightening response from the youth and the userbase was shooting up! Just then New York Times portrayed the app as a Sexting tool. This was supposed to work against the product however it worked for it and finally Snapchat was launched on Google Play Store with the video feature as well. With the rising popularity of the Snapchat, Facebook ventured with a similar product named as Facebook Poke but failed miserably!
The reason why Facebook Poke failed because people were accustomed to share their private pics and videos of 10 seconds on an app and Facebook wasn’t able to bring more value to a user but making a replica of what existed already.
And they started building from here
Snapchat worked on building better interface and robust app to share the load of increasing userbase. In the month of Feb, 2013 they raised Series A from Benchmark. In the amidst of their exponentially growing userbase and popularity Reggie Brown reappeared and filed a lawsuit against the Evan & Bobby. The App popularity wasn’t affected and it further grew and the count of snaps shared per day rose to 150 mn. They raised $80 million series B from Institutional Venture Partners (IVP) at a valuation of $800 million. It was when the Evan & Bobby took 10 million for themselves.
Later in the month of Nov, 2013 Facebook offered Snapchat $3 Billion which they refused and in turn raised Series C round from Cotue Management with a reported valuation of more than $ 2 Billion. While everything was growing into leaps and bounces and the App was gaining credibility, Snapchat suffered a malicious attack that exposed usernames and phone numbers of over 4.6 million users worldwide. Initially Snapchat didn’t take that up seriously but later when the internet community rebelled, it had to apologies for the exposed personal information of the users.
Up till April and May of 2014 Snapchat wasn’t thinking on the monetization however with the growing pressure of the investors it roped in Mike Randall as the VP Monetization. Company added some of the features like localization to seek revenue. Later it got Mac Donald’s as its first client and MacD ran ad campaigns with geofilters. By the end of August 2014, It was the third most popular social app according to ComScore. Also in the same year 2014 it settled the lawsuit with its initial promoter Reggie Brown.
Later in the year 2015 Snapchat seeks to raise up to $500 million in a new round that includes Alibaba and Saudi Arabian investor Prince Alwaleed Bin Talal. The final stroke of raising funds was released when a leaked deck revealed Series F raise of $1.8 bn. Source TechCrunch
As a part of the feature roadmap Snapchat introduced following feature during the tenure to keep evolving and creating value to users.
Square cash: Ability to send and receive money from friends Nov, 2014
Discover: an always-on, daily refreshed channel guide serving up disappearing content alongside brand advertisements. Media partners include National Geographic, Vice, Yahoo News, People, Daily Mail, Comedy Central, Cosmopolitan, CNN, Food Network, and ESPN.
Snap tags: It was a feature through which people can add friends by scanning the QR code. Earlier to this Snapchat acquired QR scanning and iBeacon startup called Scan.me for $14 million to make this possible.
Safety Center: Safety Center is primarily targeted at parents and teachers who are hesitant to board the platform due to social and security reasons that may worry them. Snapchat partnered with NGOs to guide and help them use their services.
Friend Emojis: Snapchat replaces best friends with friend emojis to bring in a quirky element for people to engage more.
Animated Selfies: With the growing popularity of the selfies. Snapchat acquires facial recognition app Loosely to fuel its feature of creating animated selfies to share.
3D Selfies: Snapchat further acquired Seene – a tech startup which let the mobile user make 3D Selfies.
Memories: A feature which enables you to create albums of the past so that you are able to showcase your memories when needed.
Spectacles: Snapchat launched Spectacles – Glasses that takes 10 secs video and post it on Snapchat. It went viral and people bought them for premium pricing. Read More how eBay encased this opportunity.
It was a great time and opportunity for a company like Snapchat to jump into the bandwagon and raise IPO which they did and filed an IPO worth $25 Bn which is one of the third largest Tech IPO after Facebook and Alibaba.https://techcrunch.com/gallery/a-brief-history-of-snapchat/
Pic Courtesy: BrandChannel.com
Let’s Grow Together!
Set up your Free Strategy Session
