9 highlights from Snapchat CEOs 6000-word leaked memo on survival

Adults, not teens. Messaging, not Stories. Developing markets, not the US. These are how Snapchat will make a comeback, according to CEO Evan Spiegel . In a 6,000-word internal memo from late September leaked to Cheddars Alex Heath, Spiegel attempts to revive employee morale with philosophy, tactics, and contrition as Snaps share price sinks to an all-time low of around $8 half its IPO price and a third of its peak.
The biggest mistake we made with our redesign was compromising our core product value of being the fastest way to communicate Spiegel stresses throughout the memo regarding Project Cheetah. Its the chat that made Snapchat special, and burying it within a combined feed with Stories and failing to build a quick-loading Android app have had disastrous consequences.
9 highlights from Snapchat CEOs 6000-word leaked memo on survival

Spiegel shows great maturity here, admitting to impatient strategic moves and outlining a cohesive path forward. Theres no talk of Snapchat ruling the social app world here. He seems to understand thats likely out of reach in the face of Instagrams competitive onslaught. Instead, Snapchat is satisfied if it can help us express ourselves while finally reaching even meager profitability.
Snapchat may be too perceived as a toy to win enough adults, too late to win back international markets from the Facebook empire, and too copyable by good-enough alternatives to grow truly massive. But if Snap can follow the Spiegel game-plan, it could carve out a sustainable market through a small but loyal audience who want to communicate through imagery.
Here are the most interesting takeaways from the memo and why theyre important:

1. Apologizing For Rushing The Redesign

There were, of course, some downsides to moving as quickly as a cheetah We rushed our redesign, solving one problem but creating many others . . .Unfortunately, we didnt give ourselves enough time to continue iterating and testing the redesign with a smaller percentage of our community. As a result, we had to continue our iterations after we launched, causing a lot of frustration for our community.

Spiegel always went on his gut rather than relying on user data like Facebook. Aging further and further away from his core audience, he misread what teens cared about. The appealing buzz phrase of separating social from media also meant merging messaging and Stories into a chaotic list that made both tougher to use. Spiegel seems to have learned a valuable lessen about the importance of A/B testing.
9 highlights from Snapchat CEOs 6000-word leaked memo on survival

2. Chat Is King

Our redesigned algorithmic Friend Feed made it harder to find the right people to talk to, and moving too quickly meant that we didnt have time to optimize the Friend Feed for fast performance. We slowed down our product and eroded our core product value. . . .Regrettably, we didnt understand at the time that the biggest problem with our redesign wasnt the frustration from influencers it was the frustration from members of our community who felt like it was harder to communicate . . .In our excitement to innovate and bring many new products into the world, we have lost the core of what made Snapchat the fastest way to communicate.
When Snap first revealed the changes, we predicted that Teen Snap addicts might complain that the redesign is confusing,jumbling all content from friends together. That made it too annoying to dig out your friends to send them messages, and Snaps growth rate imploded, with it losing 3 million users last quarter. Expect Snap to optimize its engineering to make messages quicker to send and receive, and it even sacrifice some of its bells and whistles to make chat faster in developing markets.

3. Snapchat Must Beat Facebook At Best Friends

Your top friend in a given week contributes 25% of Snap send volume. By the time you get to 18 friends, each incremental friend contributes less than 1% of total Snap send volume each.Finding best friends is a different problem than finding more friends, so we need to think about new ways to help people find the friends they care most about.

Facebooks biggest structural disadvantage is its broad friend graph thats bloated to include family, co-workers, bosses, and distant acquaintances. That might be fine in a feed app, but not for Stories and messaging where you only care about your closest friends. With friend lists and more, Facebook has tried and failed for a decade to find better ways to communicate with your besties. This is the wedge through which Snapchat can attack Facebook. If it develops special features for luring your best friends onto the app and staying in touch with them for better reasons than just maintaining a Snap Streak, it could hit Facebook where it cant defend itself.
9 highlights from Snapchat CEOs 6000-word leaked memo on survival

4. Discover Soars As Facebook Watch And IGTV Stumble

Our Shows continue to attract more and more viewers, with over 18 Shows reaching monthly audiences of over 10M unique viewers. 12 of which are Original productions. As a platform overall, weve grown the amount of total time spent engaging with our Shows product, almost tripling since the beginning of the year. Our audience for Publisher Stories has increased over 20% YoY, and we believe there is a significant opportunity to continue growing the number of people who engage with Discover content . . .We are also working to identify content that is performing well outside of Snapchat so that we can bring it into Discover.

Discover remains Snapchats biggest differentiator, scoring with premium video content purposefully made for mobile. What it really needs, though, are a few must-see tentpole shows to drag in a wider audience that can get hooked on the reimagined digital magazine experience.

Snapchat beyond Stories: Be the HBO of mobile
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