The pundits are already sounding the death knell for Snap after it’s poor performance last week. It doesn’t help that at every step Facebook has copied Snaps’ coolest features to Instagram or its own platform. Snap is, unfortunately, perfectly primed to fail. There are three primary reasons why.
- The Easy Stuff is Done: Snap, then SnapChat, entered the market with a value proposition to hit the youth market. They did that well. The app isn’t that easy to use but most of all, unlike Facebook the parents weren’t there. But the problem is, the easy stuff is done. MySpace died for lack of innovation. Facebook has everyones address book. People are lazy. They don’t like to re-establish all their connections and followers unless porting them is easy. And if their friends come over. This is why LinkedIn has cornered the professional social network segment, Reddit the forums sector and Twitter the microblogging segment. Any new disruptor is going to have to find a very strong value proposition.
- Lack of Unique Technology or IP: While Snap does have some cool tech, like its glasses, it doesn’t have anything patentable (although a patent has its dangers too) or unique enough to be acquired or be highly differentiated. Competitor platforms like Instagram and Facebook have significantly more market share. They can easily copy and port over the features of Snap and reach a broader audience, thus further reducing consumer desire to switch.
- A Fickle Demographic: Snap, like Twitter, is struggling to find revenue opportunities. Its primary demographic is under 25 and that’s a fickle market for brand loyalty at the best of times. Given that its prime segment is 11-18, well that’s even worse and they have little disposable income and are very anti-advertising. Even though some major, older demographic brands set up Snap accounts, they haven’t gained much traction and many brands and marketers have abandoned Snap as too difficult a platform and little to no return on campaigns.
Can Snap survive? Possibly. It isn’t dead yet. They could come out with some really cool feature that Facebook or someone else can’t copy. They might become a sort of underdog like Apple was for years and secure a small, but loyalty and potentially profitable market. This is though, highly unlikely. They are now prime for acquisition by Facebook, Google, Amazon or Apple (GAFA as they’re sometimes known.)
Any startup considering entering the social media space and trying to knock down Facebook, Twitter, LinkedIn etc., may want to second-think that. They were the easy things to do in the tech space and social media. Where opportunity lies is in building tools and services that integrate into these existing channels with a good monetization strategy. These won’t be easy, but they’ll likely be more financially lucrative.
What do you think?