Why Snap Inc's IPO will show you can't clone success

Snapchat is at a crossroads: ready go to IPO (going, gone!), about to see if Spectacles can be a mainstream success, and having to rebound against the copying of Facebook, Instagram and WhatsApp.

Instagram stories was the biggest cut into Snapchat's unique value proposition, we've ever seen. Instagram has breathed new life into its global user base, who are older than Snapchat's average population and now offer a service that's more accessible to both younger and older users.

Snapchat growth slowed 82% after Instagram Stories launched

While engagement might be higher on Instagram stories in terms of vanity impressions, you can't however, steal coolness. Snap Inc.'s Spectacles are not only hands-free (post-mobile) but affordable and in sync with the rise of video content as the preferred storytelling medium.

Sharing experiences ubiquitously is after all, part of what social sharing means in today's mobile-centric world. Snapchat taps into peer relationships and teamwork better than the personal brand glorification and egocentricity that Instagram encourages, ever did. But has Snap Inc. hit a user growth plateau?

Venture capital's emphasis on growth and vanity metrics is one thing, profitability is another when competing head-on with Facebook, but I expect Snap Inc. to out innovate the slower Facebook in the end. Calling Snapchat the new slowly dying app like Twitter, in 2017, is greatly exaggerated.

Already five years old, Snapchat feels different and more intimate, and nothing Instagram can do will change that.

That fact that Facebook had to clone Snapchat features and call it innovation, says more about how good Snapchat is, and about how desperate Facebook is, than anything else.

Nay, IPO is only going to give new wind to Snap Inc's sails. There's always a silver lining. Snap, the parent company of Snapchat, priced its initial public offering at $17 a share on Wednesday March 1st, 2017. This tops its previously proposed a range of $14 to $16 a share.

Snap Inc raised $3.4 Billion in IPO. This is arguably the most anticipated IPO in a long time. It’s going to be listed on the NYSE as “SNAP.” Snap is generational, it's a video and visual storytelling distributor of how Millennials and GenZ actually use social and do social sharing now. Do young people use it less? Sure. Are more older folk joining it still? Yup.

While stories on Snapchat have seen declining views in the area of 20 to 30 percent from August until mid-January; Instagram stories are new and still a novelty. Facebook Messenger filters pale in comparison to Snapchat, or even Snow or Meitu for that matter. And, let's not get ahead of ourselves, Snap Inc. has a market valuation of roughly $24 billion, to put this into context, that's:

 More than double the size of rival Twitter and the richest valuation in a U.S. tech IPO since Facebook in 2012.

That's not to say that Evan Spiegal and company should not be concerned, revenue is down:

Snapchat Spectacles have a decent chance of going mainstream in a way that Google glasses or even the Apple Watch never could. If Snap Inc. is a culture, Facebook is just a platform. If Snapchat is a way to communicate with friends, Instagram is a glamorous time sink, a virtual scrapbook that's chalked full of too much touched up beauty and bots to even count as genuine anymore.

Since the company had originally targeted a valuation of between $19.5 billion and $22.3 billion. Yet again, Snap has exceeded expectations. The new wave is only five years old, let us not forget, and it's a charming app that's enigmatic of a youth-culture that defined a cohort, of a generation if you will.

Snap Inc. is going mainstream, and in spite of every trick in the book, there's nothing Facebook can do about it. That Snapchat is able to attract older users, is a good thing, not a bad sign.

Still Has Room to Grow

Snapchat has yet to hit high gear with how it works with advertizers, though once it finds the right middle ground, it's going to be huge. Even hitting a plateau is not necessarily a bad thing, it forces Snap Inc. to innovate, as Spectacles showed it can do in a way that anticipates the future better than Facebook (VR failed badly in 2016 to take off!).

• Snap has seen a 7-fold increase in revenue putting Los Angeles on the map for tech startups.
• Net losses jumped 38 percent last year.
• Decelerating user growth will push it to innovate even more.

I think we sometimes forget Facebook's rate of adding new features while impressive, should not be confused with real innovation.

There's no cool factor in a Facebook Live, hardly even in the vanity of Instagram, but if I can take a micro video on Spectacles and post it on Snapchat with ease, that's a convenience I'm not going to get anywhere else.

The Most Actionable & Intimate Video Content

Snap Inc's secrets are out; it's better than some of us imagined:

• 158 million daily average users
• 301 million monthly active users
• That means, 52.5% of Snapchat's users are daily users!
• $404.5 million (￡324 million) in revenues (with significant net losses)

The Snap Inc culture is transformative, here are not "I'll buy you if you are smart" Millennials of the Facebook variety, but younger Millennials (and GenZ!) who appear more profoundly team orientated.

Snapchat has a touchy-feely internal culture based on 'kindness'

Snap already has 1,859 employees and with this likely to grow, they might have to head out of houses and into real office buildings. Used to being the underdog, Snap Inc. still has a chip on its shoulder, you can copy our features but you can't mimic our spirit.

Enjoyed this article? Share it with your network.

How do you use Snapchat and Instagram differently? Do you think Snap Inc still has a bright future?