SnapChat; transient trend worth $3 billion?

A two-year-old social media company has turned down a $3 billion acquisition offer from Facebook, despite making no income from normal business. Snapchat, which has been dubbed a next generation messaging service, is just two years old and was started by 23-year-old Evan Spiegel and friends.Yes, you heard me correctly, a 2 year old company for $3 billion, and they turned it down. Many of us were gobsmacked by Facebook's $1 billion acquisition of Instagram, a company that was seen a revolutionary in the photo sharing world. So why is SnapChat worth three times Instagram?

The co-founder of the company has reportedly turned down the huge all-cash offer, which would have valued Snapchat $4 billion – but the firm is said to be being wooed by other investors and possible buyers. While California-based Snapchat has no sales or business model, its smartphone app delivers millions of messages that disappear in less than 10 seconds, making it a truly instant service, instead of a more permanent record collector like Twitter or Facebook.

A number like $3 billions grabs peoples attention, as it did mine. Facebook is unlikely to make such an offer on something that isn't materially brilliant, so there must be something that my naive eyes couldn't see from the surface. I decided it was worth en investigation.

Snapchat is a photo messaging application developed by Stanford University students. Using the app, users can take photos, record videos, add text and drawings, and send them to a controlled list of recipients. These sent photographs and videos are known as "Snaps". Users set a time limit for how long recipients can view their Snaps (as of November 2013, the range is from 1 to 10 seconds), after which they will be hidden from the recipient's device and deleted from Snapchat's servers.

Snapchat raised US$485,000 in its seed round and an undisclosed amount of bridge funding from Lightspeed Ventures. In June 2013, Snapchat raised US$60 million in a funding round led by venture-capital firm Institutional Venture Partners. The firm also appointed a new high-profile board member Michael Lynton of Sony’s American division. Also in June 2013, Snapchat introduced Snapkidz for users under 13 years of age. Snapkidz is part of the original Snapchat app and is activated when the user provides a date of birth to verify his/her age. Snapkidz allows children to take snaps and draw on them, but they cannot send snaps to other users and can only save snaps locally on the device being used.

The challenge here, very few Generation Y (like myself) understand the nature for why SnapChat even exists. On the surface it seems tough to grasp, added to the fact that for generation Y, very few of our friends are using SnapChat. (Am I getting old in digital already?) Yet it's the social app that's currently seeing more than 350m photos shared every day. It's the service that's rumoured to be pulling millions of teenagers away from that social network. Taking a younger generation into a world that many of us don't understand, but which is also giving parents headaches over sexting and cyberbullying. In August, analytics firm Onavo claimed that Snapchat was being used by 20.8% of iPhones in the US, making it the eighth most popular app on Apple's smartphone in that country, creeping up on Twitter's 27% share. And the reasons for SnapChat's relevance and value continue.

Controversy surrounds the rising popularity of Snapchat in the United States relating to a phenomenon known as sexting. This involves the sending and receiving of explicit images that often involve some degree of nudity. Because the application is commonly used by younger generations, often below the age of eighteen, the question has been raised whether or not certain users are technically distributing child pornography. For this reason, many adults disapprove of their children's use of the application. Let's face it, older generations tend to scrutinise what they don't understand. Snapchat's developers continue to insist that the application is not sexting-friendly and that they do not condone any kind of pornographic use.

My investigation pressed on, as I was certain there must be a reason why SnapChat was out accelerating Facebook in photo sharing. A mountain of articles grew, when back in June, SnapChat introduced SnapKidz, a non-social photo app for kids under 13 with Apple mobile devices. Amongst the coverage in FastCompany and Marketing Magazine is where I found a key point: some people are sexting using Snapchat, and some of those people are teenagers. But the main appeal of Snapchat is about ephemeral messaging, and the desire to leave less digital tracks, with teenagers having watched the social over-sharing of the generation that came before them, Generation Y. Was the internet's key strength, also its achilles heal in the shift of generations? Is there an entirely new breed of consumers, citizens and employees in generation Z that have a Darwinistic evolution in out digital society? I've already presed the idea many times before that generation Z's digital nativity is am advantage they will have on Gen Y. Is there key differentiator ephemerality?

  1. lasting for a very short time.
    "fashions are ephemeral: new ones regularly drive out the old"

For younger members of society, the internet is increasingly becoming a place that you can’t share, that you can’t have fun, that you can’t socialize in the way you want to. A message that is continually either drilled into them by parents, or they witness first hand the failures of generation Y. For younger adolescent users who might be insecure of leaked information/the gossip grapevine, social media can be too social. Snapchat is a great alternative for sensitive info (it doesn't have to be sexting, it could even be a safe place to tell your friend about the boy you like...) because it’s materially the opposite of Instagram: it’s a closed circle (like Path, but that app is too small for this generation – who only has 12 friends!?) and there’s virtually no traditional share ability (no RT’s, likes, followers), so perfect for users’ “cautious curation”. I think that’s really the essence of Snapchat. It’s a platform where they can communicate and have fun without any anxiety about the permanence. You hear about kids not getting jobs because of what’s on their Facebook page. Social media has become a form of permanent record, one that could follow you anywhere. Where's it's your drunken photos at your mates 18th, or need for an instant opinion on the dresses you might wear out that night. People don't want these photos permanently recorded. These days, iOS, Android, Dropbox, Google Photos, G+, iCloud all actively work to archive every photo you take with your smartphone. Kind of scary for some, as they feed into various online services, or social sharing.

SnapChat responded to this idea by giving media a very short shelf life (just a few seconds, shared only with friends) to preserve your privacy. A new site called BlinkLink, has a slight tweek on the approach of sacristy or time-to-live content: It puts a limit on how many times an image can be viewed before it self-destructs. BlinkLink is like the antibody to a viral web. As the number of views remaining counts down--because that’s always in plain site for anyone who visits the page--the content has less potential to be shared, and it becomes inherently more precious.

Speaking to Sonya Pillay of, the comment was made "..a funny, unexpected thought - is digital forgetfulness worth more than digital sharing? is disappearing content MORE valuable because you'll never have it again? Which means it just got a little bit more exclusive for Gen Z."

It’s easy to underestimate the significance of injecting more ephemerality into social media. But to make social media more temporary fundamentally alters our relationships to online visibility, to data privacy, content ownership, the 'right to forget'. It alters the functioning of social stigma, shame, and identity itself.

So SnapChat's key principles are based on trust and fluidity:


Yes SnapChat is based on the idea of ephemerality, but even that is dependent on the network trusting the temporary nature of their engagement on the platform. SnapChat, even in the face of adversity has managed to build that trust amongst a world that is now sceptical of internet monitoring, snapchat hacks and  screen capture work arounds.


One brilliant thing Snapchat has done is make the experience seem almost fluid. Like a constant dialogue through images, SnapChat can create a seamless, with very few options, buttons or menus in the way to spoil the experience. The real brilliance of fluidity, is that even our digital memory becomes mutable (and therefore not really a 'true' record). And with so much of everyday life – digital or otherwise – being inescapably banal, apps that re-set, re-fresh or wholesale-delete unnecessary daily info are arguably helping users digitally declutter.

These two factors, while they may appear to be minor, are critical to a generation that doesn't won't to repeat the mistakes of the generation before. Making the idea of private sharing real again, something that Path, Facebook, G+ and LinkedIn have never gotten right. Going by the customer numbers and engagement that Snapchat has managed to create, the idea of true ephemerality will become a key characteristic of Generation Z. Something that is likely to spread across other industries as a desired behaviour norm, creating a new breed of consumer, the transient

plural noun: transients
  1. a person who is staying or working in a place for a short time only.
  2. a momentary variation in current, voltage, or frequency.

Ask yourself a question, how does ephemerality, trust and fluidity impact consumers behaviour in your industry? As is could be the key to the next generation of transient consumers, and worth a hell of a lot more than $3 billion.