apology? these are two kids from Stanford who made a fun project and it just so happen to take off. Give them a break, their team of less than 5 people could careless what the public thinks!
Lawsuits don't care what you are, but they tend to happen to startups and business which have cash on the balance sheet. This is no joke. Investors have a fiduciary duty to their LPs, and even if its the wrong move, a managerial "change" transmits investor diligence to the LPs.
I'm still unimpressed by all three of those things (technically speaking). Perhaps they've got some cool stuff going on underneath somewhere, but as technologies, as whole, they just seem sort of lackluster to me for much the reasoning that you've mocked above. Perhaps I'm simply an outlier.
Assuming that a startup's early state is little indication of what it eventually turns into, why would somebody invest in any one over another? I cannot imagine a whole lot of people saying "well, this Snapchat thing looks really stupid now, but hey, who knows, it may be big one day!"
>Perhaps they've got some cool stuff going on underneath somewhere
They definitely do.
>they just seem sort of lackluster to me for much the reasoning that you've mocked above.
Not everyone is capable of being Elon Musk and creating SpaceX and Tesla. These types of products are low-hanging fruit for people with 0 initial capital.
>Assuming that a startup's early state is little indication of what it eventually turns into, why would somebody invest in any one over another?
I don't know if the offer was reasonable or not, so I am not going there. But the "value" of such start-ups are often their user-base, not the product or the technology itself. Can someone else implement a similar idea? Absolutely. Would they be able to get all these users? Probably not.
I use to not get why people value them so high but if you look at the age group of pre-teens - early twenties, most of the younger users almost use it exclusively while the older ones use it along with Facebook/Instagram.
What I dont understand is how they make money beside getting people to invest in them.
This is what makes me despair about ever possibly being some sort of inventor/entrepreneur. While I was under the impression that cool new things are what people are after, what they're really interested in, apparently it's just... things like this.
You just never know what will catch on. I don't see what the big deal is with Angry birds, Candy Crush or that awful-looking mindcraft game... but here I sit, very wrong about my predictions and not having tens of thousands flowing into my bank account every month.
I think what the public wants is something that's easy to pick up, addictive and naturally fits into their daily routine.
He gave a plausible and coherent explanation of Snapchat's strategy (spoiler: Tencent of the West). I think that Tencent's valuation is stretched and I think Snapchat is unlikely to succeed even if that is actually their goal... but it was interesting, anyway.
edit: hey, w1ntermute, thank you for that interesting response. Cognitively I think my brain wants a tidy explanation for them turning down the $3B, otherwise I can't make any sense of it whatsoever.
> He gave a plausible and coherent explanation of Snapchat's strategy
No, he doesn't. All he did was demonstrate his utter lack of understanding of East Asia.
East Asian cultures are high-context, meaning that when Tencent released non-messenger services (that could actually turn a profit), users were much more likely to use them because they were already familiar with the company and its existing messaging service. But this strategy does not work well in the low-context cultures of the West, where people are more comfortable with giving new companies and products a chance. Snapchat cannot expand into other verticals with the ease that Tencent did.
That's what people said about Asia-style free-to-play games, too: that they would never work in the West due to cultural differences. Turns out that was totally wrong.
No, you're actually making the mistake of conflating China with the rest of Asia. Japan, which also has a high-context culture, has paid upfront for games for decades. And it wasn't just that free-to-play games were popular in China first, it's that paid games could never turn a profit because people would pirate them. There's a huge difference between people not using a product and people using it without paying for it.
The primary reason why free-to-play games became popular in the West is because the $0.99 floor that Apple set for the App Store drove consumer psychology regarding app purchases, which made it difficult to turn a profit in any other way. Just take a look at Steam to see how much money is being made from non-freemium games.
The important aspect is that the "project" has millions of dollars in investment and employees. Thus, they are accountable to investors and employees who may care about what the public thinks.
