11 comments on “I wonder how many snarls I’ll get about this?

  1. The model that Snapchat is selling to investors requires a growth in customer base of X and a return per customer of Y.

    They could gain X by entering India but that would dilute Y.

    The Evan Spiegel spat is damaging the brand, Snapchat has moved on, so should he.

  2. I wonder if Spiegel is playing the short term game here, when looking a bit longer would be a better option.

    As an example of the long term play, Microsoft was always extremely relaxed about piracy in China. They didn’t have the money to pay for MS software, so let them pirate it, get used to it, then when it comes to the stage where China can afford to pay for it, you’ve already won.

    Getting back to Snapchat, What’s App is huge in India. The generation in their 50s, 60s, etc, tended to grow up, work and live in the same place. Not a lot of mobility.

    The generation in their 20s, 30s, are moving wherever the jobs are. In India, or outside India. Still being a very family oriented place ( you still know your Grandmonther’s brother’s cousin’s wife’s kids for example ), What’s App is very popular for staying in touch.

    As all these messaging apps converge to offer basically the same thing, What’s App might have an unassailable lead in the most populous country on Earth, that’s only getting richer and richer

  3. Darren,

    Microsoft sold actual products to users, Snapchat sells user profiles to advertisers.

    A user with an iPhone 7 and a degree is worth more to Snapchat than a working class user with a Xiaomi, you find more of the former in the US and more of the latter in India.

    They could discriminate by phone type (top iPhone/Samsung/Sony) but they require the network effect to gain traction so they discriminate based on location.

  4. @BonRocket

    I understand that. Perhaps you missed my point.

    By deciding India isn’t the worth the trouble at the moment, they are essentially ceding the country to What’s App / Facebook.

    Yes, your average hipster in SoCal is worth more than an office worker in Delhi, but having 5 times the ARPU isn’t so great if you’ve got 1/20th the number of customers – especially if your product relies on a network effect.

    What’s App is, I’m lead to believe, 50 times bigger in India than Snapchat.

    Yes, the money is in the US, rich European nations etc at the moment, but that’s changing – rapidly – and Snap are going to miss the boat and get hoist by their own network effect.

  5. @Darren
    I’ve found Whatsapp is a superb cunt-filter. Unlike Skype it tends to be used almost exclusively by people who can’t afford to make proper fone calls. So, I’m able to work on the basis – if they’re trying to Whatsapp me they probably aren’t worth talking to.

  6. @BiS

    I take your point, and I avoid Facebook and Twitter ( along with Snapchat, etc, etc ) for much the same reason.

    It seems, however, this is an increasingly Luddite world view, with even grown adults now often preferring – in a business context – a stream of abbreviated tweets rather than a single well thought out email

  7. Darren,

    WhatsApp is owned by FB and doesn’t use revenue per user as their primary business model (FB is not looking for a buyer).

    ‘By the end of 2016, the prospectus says, Snap made $1.05 for each of its users, up from 31 cents in the fourth quarter of 2015. The company made $2.15 per user in North America in the fourth quarter of 2016, compared with 67 cents the year before. In Europe, by comparison, the company made 28 cents per user at the end of last year.’

    SnapChat rents storage and server space from Google, essentially a fixed cost per user but geographic location heavily influences revenue per user.

    As long as revenues per user rise faster than costs per user they will make it to the next quarter, if that falls so will SnapChat.

    It is a short termist business model but most of the investors are gambling on a buyout by Google (or similar)

  8. Luddite? Whatsap has to be the most inefficient method of communication invented in the past century. It’s indistinguishable from semaphore & only just beats signal flags.

Leave a Reply

Name and email are required. Your email address will not be published.