Snap is now hitting all-time lows on a quarterly basis. Was the writing on the wall? And, if so, who’s next?
Hindsight is always 20/20, but those who follow me on social media know I had a very strong “short” sentiment for Snap, prior to its IPO. It’s not that I hated Snap, I just didn’t see the “Facebook and Twitter” DNA in it. In fact, the writing was all over the wall.
- Start with the mission and vision. Facebook? “Bring the World Closer.” Twitter? “Give Everyone the Power to Create and Share Ideas.” Snap? “We’re a Camera Company.” Snap, in fact, is a messaging app with a mission to become something it’s not. It all begins there.
- The feed. Twitter and Facebook’s respective feeds are the backbone of social communications. Snap has no feed. Try sticking a sustainable and stable business model on a non existent feed. It’s tough.
- The content. Say what you want about Trump, he’s on Twitter. Say what you wish about Facebook, it impacts governments. Snap does not and most probably never well.
- Kids are cool. Yes. But, parents are not. More importantly, parents can never understand the ingredients that make their kids so cool. Here’s an advice from a parent: kids are not going to be loyal to your investments. Stick to something you actually know.
- Timing. The dire need to produce a successful IPO following a dry period at any cost. Good news, the pre-IPO investors made a lot of money. Bad news? They made their money from the regular shareholders. From you. From us.
Snap has hope. Or more accurately, it has shitloads of money. With proper brain power, hard work and time, this money can actually produce a new and promising direction. But who’s next?
Here are some candidates, or perhaps better put, food for thought.
Slack is a phenomenal success in terms of active and paying users. However, in the end, Slack is, well, yet another messaging app. And messaging apps have a nasty habit of expiring suddenly and quickly.
Slack claims to be “where work happens.” So did AIM, and MSN, and Skype. Oh, and Whatsapp.
The common thinking is “Hey, whoever wins the space travel market will be bigger than Boeing.” Maybe. But let me ask you this: how likely are you to take a SpaceX to space in the next, say, 20 years? And, what happens when Boeing and Airbus develop their own? Who would you trust more? Yes, I thought so. And, as long as these are your answers, hold the SpaceX stock and hesitate before agreeing to a $20B valuation.
So it was finally demoed. OK. Common wisdom? It’s a consumer product. If it takes so many years just to demo far less than magic, it can’t be worth $5B.
I could be wrong. Don’t trust me. Trust the combination of data, your thinking and your own judgment.