SnapShat

Revue
 
Snap sure shat the bed on those first earnings as a public company, huh... A few folks asked me for m
 
May 12 - Issue #69 - View online
The Happy Hour
Snap sure shat the bed on those first earnings as a public company, huh… A few folks asked me for my thoughts on this since I made a good call on Facebook as a public stock (when it was in the gutter) five years ago. 
Of course, three grains of salt must be taken first:
1) While I was very right about Facebook – the stock went public at $38/share, then got killed, so I said I was absolutely buying if it went below $20, and I did at $19/share, and it’s now $150/share – I was very wrong about Twitter. I thought it wasn’t possible that we could live in a world where Twitter could be worth just 1/10th of what Facebook was worth. So far, I’ve been both right and very wrong there: Twitter is now worth less than 1/30th what Facebook is worth (in terms of valuation). 
Which is both sad and crazy.
2) I believe I technically have a small amount of Snap shares through various acquisitions throughout the years related to the funds I’m involved with. Honestly, the positions aren’t big enough to even know what exactly they are worth. My wife has a more defined position through her fund at Spark Capital, but I’m speaking for myself here and have no inside information.
3) I’m not a stock broker, this isn’t investment advice, these are just a few thoughts :)
So, my quick thoughts here would be along the lines of Warren Buffett: “Be fearful when others are greedy, and be greedy when others are fearful.” Look, Snap’s numbers are not good. Even when you remove the stock-based compensation and payouts around the IPO, they’re not good. And the user growth isn’t great. BUT.
I refuse to believe the company doesn’t have any “tricks” left up their sleeve. Without question, Snapchat has been the key driver of several social paradigm shifts that are now norms. Yes, Facebook copied several of them with varying degrees of success (Instagram Stories: huge success, Messenger Day: less so, to put it nicely). But why do we think Snapchat will stop being at the forefront here
Further, remember that Snapchat changed their name to “Snap” for a reason. While Snapchat will undoubtedly remain the key business for the foreseeable future (and possibly forever), all the best businesses in the world are able to constantly evolve, adapt, and extend into new businesses. Snap just revealed their broader ambitions earlier than most companies do. 
While Spectacles haven’t turned into a huge business, it’s still a fascinating maneuver by such a young company. And it cements their “wild card” and innovative status in my head: again, they will have other tricks up their sleeve – they will continue to surprise, would be my guess. 
Of course, none of that speaks to the ability to make money. But here too, I’m more optimistic than many others are, it seems. Everyone knows video is where all the advertising money is these days as the traditionally written content players trip over themselves to pivot operations to video to make a buck. Snapchat is a far more natural play in this environment. And if they can get all the big brand advertisers to buy into vertical video (which it seems like they are), they seem to be positioned well – in particular with the key demographics advertisers covet.
Traditional television is slowly but surely dying (fine, morphing). This doesn’t mean the end of advertising. It just means that it will continue to shift. As everyone knows, Google and Facebook are best positioned here right now, but it’s a massive, massive market. This is not game over, by any stretch. 
Having said all of that, I have absolutely no idea why Snap went public when it did. That sure seems like a mistake to me. But then again, I’m not an insider. I don’t know what they know. I just know what I see: the business clearly isn’t mature enough yet to support a traditional public company narrative of any sort. Then again, Snap is not a traditional company of any sort. So… I’m still cautiously optimistic. 👻

5ish Links
Data are the New Oil
Ex-Google Engineer Builds $1.5 Billion Startup in 21 Months
SpaceX plans to launch first internet-providing satellites in 2019 - The Verge
Pokémon Go’s Next Big Move
Quickish Hits
HBO's ‘Game of Thrones’ Spinoffs
Scientists Discovered A New Blue–And Now Its A Crayon
500ish Words
A Time to Kill iTunes – 500ish Words
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