The long awaited IPO from popular app developer turned camera company Snap. has finally arrived. However, despite over 60 pages of legal jargon and documentation, we’re still left without much of any idea of what exactly Snap, Inc. has planned for the future.
In its regulatory SEC filing, Snap states:
“If our revenue does not grow at a greater rate than our expenses, we will not be able to achieve and maintain profitability.”
This is not typically considered good news from a company getting ready to go public. Despite being heralded as the next Facebook, Snapchat’s $514 million loss pre-IPO is wildly different than Facebook’s $205 million quarterly net profit before going public.
Then again, Snap never really has stuck to the conventional Silicon Valley startup mold. Based on the previous release of Spectacles, acquisition of Bitmoji, and introduction of filters, Snap continues to prove they are here to stay and lead the pack when it comes to innovation and revolutionizing mobile communication.
In a sense, Snapchat’s incredible success is marked by the innumerable tech giants copying features directly from the service (some even neglecting to change the name). Snapchat changed the game—no one is going to argue that. Evan Spiegel revolutionized the way photos and selfies taken on smartphones were to be used.
Through Snapchat, Spiegel turned photos into a method of communication as opposed to superficial competitions like on other networks. Innovating is Snapchat’s true specialty, and when it comes to changing the way we think about social media, nobody else comes close to Snapchat’s throne.
Unfortunately, this same marker of success will also be Snapchat’s biggest detriment and downfall. In order for Snapchat to remain afloat and continue growth as a public company, innovation must remain the core business for Spiegel and his team.
Changing the name and transitioning to the role of a “camera company,” albeit a little weird, was actually a really smart move for the long run. Snapchat’s ability to use photos as communication is always what separated it from services like Instagram and Facebook. In a quite saturated social media market where companies have no shame copying the flavor of the day, Snap’s success as a public company will largely be dependent on Spiegel’s ability to continue to push innovation in unexpected directions.
The most recent application update for Snapchat shows Snap’s key strength in mobile application development. Like many of today’s greats, Snapchat builds and rebuilds their core product based on the feedback of its loyal users. Snapchat is the epitome of agile development.
Heading into the company’s massive IPO, Snap set out to fix the one issue investors looking for the “next big thing” may have seen: its usability. What makes it so popular with younger tech generations may just be what makes it an unreliable pick amongst investors. The extremely light user interface was stunning, but somewhat unintuitive for anyone picking up the app for the first time.
However, with the addition of improved search capability and more visual cues surrounding friends and important information, Snap essentially fixed the majority of the potential issues surrounding the days to come. This is just one recent example of Snap doing exactly what they do best: analyzing what’s working and what needs to be changed and implementing it immediately and effectively.
Looking at the bigger picture, Snap has already repositioned itself as a camera company—moving on from just the “tiny” P2P photo/video sending category it created. This shift indicates that Snap is aware of its position at the top and is actively moving to innovate the next area before anyone has the chance to catch them.
According to the filing, Snap states:
“We plan to continue to make acquisitions, which could require significant management attention, disrupt our business, dilute our stockholders, and seriously harm our business.”
Investors aren’t putting their money behind a product or a service with Snap—they are primarily putting their money behind a belief. With its public filing, it’s clear the Snap is no longer limiting itself to mobile app development. For investors, it’s not about what Snap is now, but what it will become when given the resources to continue innovating.
It will be an interesting road for Snap—the company’s incredible ability to adapt to its surroundings and fill a niche for younger audiences remains unquestioned. But with the developers and strategists at Facebook closing in on Snap’s heels, will adaptation and innovation really be enough for Snapchat to continue to separate itself from the rest of the market? The answer to that question, for now, is still a mystery.