The $20 Billion Reason Why Snapchat Has Come of Age

Some shook their head in disbelief while others gained respect for Snapchat CEO Evan Spiegel when he famously turned down Mark Zuckerberg’s offer of $3 billion for the mobile messaging and video-sharing social network. Well, standing up to the behemoth known as Facebook when they were attempting to crush them by releasing a near identical app turned out to be a masterstroke. 

The teen app of choice has now overtaken Instagram with nearly 150 million daily users. The company’s value is expected to hit $20 billion, around $4 billion more than they estimated from the first quarter of the year. Fears of a tech bubble were in the air for a time, and Fortune asked the question on everyone’s lips: How can a company with $59 million in revenue be worth $20 billion?

When comparing the success of Snapchat to the current plight of Twitter, who all notoriously have a growth problem, you could be forgiven for being confused. Twitter’s revenue was $2.2 billion last year—more than 35 times what Snapchat made. The truth is that the figures are based on future growth, or, guesswork.

The Digital Retirement Home

Now that parents and grandparents are frequenting Facebook, it’s easy to see why teenagers migrated to a platform they could call their own. It’s also interesting how the so-called Generation Z, who scarcely remember a time before the iPhone, are shirking the pressures of social media.

Unlike millennials, they are not obsessed with likes and comments. We could all learn from teenagers and their digital actions. Living in the moment, they share photos and videos with each other of the last 24 hours of their life via stories featured on the app before disappearing forever, cleaning up their digital footprint automatically.

Rethink Social Media

It seems that we are finally progressing beyond the numbers game and no longer treating social media as a huge popularity contest. However, there is a big wake-up call for businesses that will need to be much more creative and also embrace innovation if they want to be noticed and meaningfully engage with consumers.

Fashion and retail brands have been quick to jump on board to experiment with how they can utilize the platform. Delivering unique and compelling content or providing access to live events on Snapchat could give any brand a significant boost. With 10 billion video views each day, it’s time to sit up and take notice.

Media companies and politicians are already realizing the opportunities with Snapchat. This incredible growth means that brands are now forced to take the platform seriously. In many ways, it’s starting to feel that Snapchat has grown up, and stories of users landing their dream job through the platform have begun to surface. 

Mark Zuckerberg famously invested in the future when he purchased Oculus Rift VR for $2 billion, Instagram for $1 billion and WhatsApp for $19 billion, all to protect themselves from disruption. For Zuckerberg, Snapchat is the proverbial one that got away.

Ironically, businesses and advertisers seeking nuance became obsessed with Facebook and ignored the up and coming platform that they didn’t understand. They could soon find themselves unable to connect with their audience who hang out elsewhere. This change in attitudes could also affect Facebook’s ability to reach young audiences, especially as Instagram begins to feel old hat.

Tech Is Ever-Changing

Every aspect of our digital life is locked into a continuously evolving loop. Every app is now required to update based on the changing habits of its users. The days of standing still or having all our eggs in one basket are over, and business models need to evolve and adapt more quickly too.

It’s true there are an increasing number of tech start-ups built on hype and promises of user growth rather than hard facts. Only time will tell if these lofty valuations have any substance and if they will deliver the ambitious profits predicted.

Whatever your opinion, it appears that Snapchat has finally come of age and its time to shine is now; much to the chagrin of Mark Zuckerberg. Meanwhile, Evan Spiegel will be remembered for turning down an offer of $3 billion and proving to the whole world that he wasn’t crazy after all.

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