A brief look at Snapchat’s success story: The tale that started with risqué photos

In 2011, three friends Evan Spiegel, Reggie Brown and Bobby Murphy were casually chatting when the idea for one of the most popular social media apps – Snapchat, came up. It was based on sending intimate photos that could disappear after a few seconds. Reggie mentioned that he wished the photos he was sending to a girl would disappear, imagining how much easier it would be to get risqué pictures if they disappeared. This million-dollar idea, initially named Picaboo, later evolved into Snapchat, and now, there are many other similar apps like Wallpics available in the market.

History of Snapchat

Snapchat was founded in 2011 by Evan Spiegel, Reggie Brown, and Bobby Murphy, students at Stanford University. As soon as Brown approached Spiegel and Murphy with the idea, they became enthusiastic about working on it. Bobby Murphy was the one who built the app and did all its coding. The app first launched as ‘Picaboo’ in July 2011.

Unfortunately, the man behind the idea, Reggie, was forced out of the startup by his partners Spiegel and Murphy. They changed its name and relaunched the company as Snapchat in September 2011. By then, the app already had about 100,000 users. Reggie Brown settled with the two co-founders for US$ 157 million in September 2014. 

From ‘Picaboo’ to ‘Snapchat’

The idea behind Picaboo wasn’t welcomed with open arms. Many people criticized it. Evan’s professor even asked him if he had built a sexting app. Their first pitch rested on the idea that every photograph is not meant to last forever. He argued that people would have fun messaging via pictures. 

After changing the name from Picaboo to Snapchat, Evans and Bobby had to make a strong case for their app. They wanted to propagate a new and fresh perception among its users that deleting something was not bad. Evan had said in an interview, “Online, typically you delete something if it’s bad or if it’s really embarrassing. What Snapchat said was if we try to model conversations as they occur, they’re largely ephemeral. We may try to write down and save the really special moments, but by and large, we just try to let everything go. We remember it, but we don’t try to save it.”

In a first-ever blog post, Evans made his case for Snapchat: 

“And after hearing hilarious stories about emergency detagging of Facebook photos before job interviews and photoshopping blemishes out of candid shots before they hit the Internet (because your world would crumble if anyone found out you had a pimple on the 38th day of 9th grade), there had to be a better solution.

Snapchat isn’t about capturing the traditional Kodak moment. It’s about communicating with the full range of human emotion — not just what appears to be pretty or perfect. Like when I think I’m good at imitating the face of a star-nosed mole, or if I want to show my friend the girl I have a crush on (it would be awkward if that got around), and when I’m away at college and miss my Mom…er…my friends.

We’re building a photo app that doesn’t conform to unrealistic notions of beauty or perfection but rather creates a space to be funny, honest or whatever else you might feel like at the moment you take and share a Snap.”

Amazing features

By 2012, Snapchat launched on Android as well. It introduced video snaps that year to up the ante. Users could send 10 seconds long videos called “snaps”. It went up the success ladder by continuously evolving and giving its users a new feature that they couldn’t resist. Here is a list of some of the features of Snapchat: 

1. Stories: In 2014, the app introduced the “Stories” feature, which enables users to post snaps that could be viewed for 24 hours. Many influencers, actors etc use this feature to give their fans a sneak peek into their daily lives.

2. Chat: The Chatting feature was a game-changer for the company. This feature allowed users to text in the chat window, talk on live video chat, send money, share snaps and much more.

3. Our Story: This feature enables users worldwide to post photos and videos from concerts, games, rallies, protests and other public events.

4. Memories: It allows users to take screenshots or save snaps in “Memories”. It is a way to store snaps in Snapchat’s cloud and access media locally stored on your device. Memories are also protected by a pin. Yes, it is your secret hideout! 😉

5. Discover: The Discover sections allows influencers, brands and publishers to broadcast stories for all to see, such as Vice, Cosmopolitan, Daily Mail, Buzzfeed among many others. 

6. Snapchat Original: This is my personal favourite. Right after it was launched in 2018, I was instantly addicted to it. These are short shows made exclusively for Snapchat users, having a vertical and full-screen view. Snap Originals has created over 100 series so far. (Personal recommendations – Endless Summer, The Dead Girls Detective Agency).

7. Snap Map: It allows you to share your location with your friends or followers. You can check out the world map to locate your friends, provided their GPS is on. 

8. Filter: Filters were not very common until Snapchat introduced it. Want to jazz up your selfie by putting on some lipstick or blush (not literally, of course)? Filters can do it all. It allows you to make your snaps look more fun. On top of it, you can even add stickers, time, location and whatnot. It is a complete package.

9. Snapstreaks: When my friend broke a nearly 500 days streak with me, I was furious and wretched at the same time. That is the power social media has on your emotions, and Snapchat’s streak feature surely knows how to control it. It is a number that appears beside your friend’s name, indicating that you both have snapped each other (not including chat messaging) within 24 hours for a particular number of days. Suppose you don’t send snaps for more than 24 hours the streak breaks. It is so addictive that some people only open Snapchat to maintain their streaks. (My friend would send me a blank screen snap once in 24 hours just for the sake of the streak. What’s the point?)

The road to success

The features listed above and many more have played a significant role in the app’s success. In 2013, the founders even refused Facebook CEO Mark Zuckerberg’s offer of US$ 3 billion for the app, and apparently, it was the best decision. 

In 2014, Snapchat introduced the money transaction filter, allowing users to send and receive cash from other users. With ‘Community Geofilters’, Snapchatters were able to generate their own Geofilters or buy branded filters as well. Numerous factors have helped Snapchat grow into a billion-dollar company such as low censorship, high engagement, user privacy, originality of concept, and safety among others. 

Snapchat was experiencing more than 75 million users monthly by 2015. 99% of its total revenue came from advertising as it became extremely famous, especially among the youth. Snap Inc., the parent company of Snapchat is registered under the ticker NYSE:SNAP and it first listed its IPO on Mar 2, 2017. It has raised a total of US$4.9B in funding over 14 rounds and is currently valued at US$ 33B. Snap Inc. has also acquired 21 companies including Fit Analytics, Voisey, Voca.ai, Teleport, PlayCanvas and Zenly among others. 

What’s next for Snapchat?

Snapchat had 360 million active monthly users as of January 2020. Billions of snaps are generated every day on the app. This social media platform is not going to slow down anytime soon. Its immense popularity will continue to grow and so will the competition from other social media apps like Instagram and Facebook. 

Analysts surveyed by FactSet expect that Snap Inc.’s revenue will grow 48% in 2021 to US$ 3.72 billion. They also expect revenue of US$ 5.11 billion in 2022. The company has been doing well in the stock market this year. Having completed almost ten years, Snapchat, with a strong management team, low debt, and a young user base, is in a great place to go far ahead in its road to success. 

For more extensive analysis and Market Intelligence reports feel free to approach us or visit our website: Venture Capital Market Intelligence Reports | VCBay.

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