Why Snapchat Is In Hot Trouble (With A Little Help From Facebook)

On May 10th of this month, SNAP Inc. will be hosting its first quarterly conference since its IPO.

Why does this matter?

See, Snapchat isn’t doing all that hot when it comes to profitability. In fact, Snap’s cost of revenue has been higher than its actual revenue. But where it has thrived is user acquisition and engagement. Snapchat users love snapchat - over 3 million snapchats have been sent since you started reading this article. So even though Snap couldn’t boast about its profitability, it could definitely tout the hoard of new users it attracts to its application and how much time users spend on the addictive app. These were two of the most powerful statistics that Snapchat had in its arsenal that helped attract advertisers and corporate partners.

Until recently, of course.

After beta testing in a few countries like Australia and Poland, Facebook launched messenger day worldwide in early March. "Messenger Day" was essentially Facebook's version of "Snapchat stories". The features were starkly similar to snapchat stories - users have the ability to take photos of their surroundings, decorate them with filters, and leave them on messenger for 24 hours. Let me be the first second tenth one of the many smartphone users of the world to say - it sucks. Messenger day isn’t as clean as snapchat stories. It isn't as intuitive as snapchat stories. It simply isn't as good as snapchat. But Facebook was never trying to convince you or me to switch from snapchat to messenger day.

Introducing Messenger Day was a beautifully crafted play by Coach Zuckerberg, that not many people have understood.

Facebook is trying to rid snapchat of the one metric they have going for them - active new users. Snapchat is hoping that millions of millennials around the globe ask themselves the following question: 

“How do I share an image of what I’m doing right now, with my friends who live all around the world”

Snap is answering that question tactfully in developed countries - almost 40% of its users come from the United States and Canada. The next step for Snap - answering that question in developing nations with deep internet penetration rates.

The only problem is Facebook is now providing a convenient solution that is already installed on the phones of Snapchat’s future target audience. As of last year, there were over 200M Facebook users in India… and only 4M snapchat users in the fast-growing nation. All along, Facebook was never trying to convince you or me to switch from Snapchat to Messenger Day. Facebook is successfully clawing away bit-by-bit at Snapchat’s future user base; And without future new users that consistently use the social media tool - there's little that Snap can offer.

So why does May 10th matter? It’s the first Snap conference since Facebook started directly attacking the social media company. Snap needs to instill confidence in its customers, investors, and partners that it is the application to use for sharing. Three days ago, Snap took a step in the right direction (one of three correct directions to avoid Facebook’s carnivorous attacks) when it released a new feature to its app - 3D filters (a sneaky introduction to augmented reality).

Snap needs to keep innovating at a pace fast enough to brush off attacks from Facebook and to keep adopting new users at a low cost - because Facebook is probably 30 days away from introducing 3D filters to messenger day and 30 days away from stopping more young millennials from downloading Snapchat.

Daksh Bhatia is a student at the University of California at Berkeley. He's currently studying Economics and Computer Science. He has a deep passion for social entrepreneurship and loves reading in his free time.

This article is part of a series from prophetsharing.co. To read more and find out about potential solutions that Snap can adopt to stand strong, read the blog, and let me know what you think. #StudentVoices