Bad analysis of Snapchat in the Wall Street Journal

Here is the article: Click here

objection: straw man argument.

Snapchat IS valuable because of its youth demo, but not because they are a predictor of older people. It is because young people are valuable to advertisers in and of themselves. These days it is hard to reach them.

In addition “platform” companies like Snapchat (websites where you make friends and have a network, like facebook, twitter, etc.) are valued exponentially by the size of their network of users, which is why twitter is worth billions of $. Snapchat has a large and growing user base that threatens to draw people away from Instagram and Facebook. (I know this is a big claim and it would take a while to justify it, but quickly, think of the value of a dating site by number of users in your area, and think of trying to quit facebook)

Me and a few friends (in our 30’s) have installed snapchat and we all abandoned it, which is a good sign for the under-30 crowd. If you remember back in 2004, facebook was this avant-garde secret place for college students to post keg stands and bong hits. Now everyone’s parents and coworkers and bosses are on there and you have to act like a grown up. If that never happens with Snapchat then it will be a permanent home for this valuable demo. Allegedly Snapchat users are sending sexually explicit photos of themselves to each other, which is a pretty powerful selling point that other services just can’t offer. That’s the answer to his question, “why are young people using snapchat?” which he could have found out by doing, ya know, reporting. Snapchat sells young people pictures of each other doing drugs, drinking, and having sex, and by default it deletes the photos and keep them off of google. Your friend has to make a special effort to put them within view of your parents and coworkers.

Some people have made a big deal out of Snapchat’s ephemerality being circumvented. “You could take a picture of the screen with another camera. Checkmate!” Rest assured that most users already know that it is technically possible for their explicit photo to be saved forever when they send it. So user behavior isn’t going to change based on this fact.

Finally, in general I see a lot of commentary sneering about companies that “don’t make any money.” I really wonder why such people cover startups, which are by definition searching for a market and not yet focussed on profitability. Would they suggest that the founders get $120k/yr. salary jobs at other tech companies instead? That’s profitable.

I’m not impressed whatsoever by this writer. He has no vision or optimism and would make a terrible founder or investor.


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