Facebook was once the up and coming social network in 2004 when it was only available to college students. Now it is the juggernaut that crushes up and coming networks. Facebook’s game is data and user information so the more users it has the more power it holds on paid targeting options. With all the money and developers Facebook has, new or copied features are easily rolled out. Facebook rolled out the Stories feature which Snapchat introduced, and overtook usage in 6 months.
Facebook has rolled out the Stories feature When these 2 numbers intersected Snaptchat growth begin to slow down. Without additional innovation from Snapchat part I foresee growth slowing down considerably and stock price taking a considerable dip. Luckily Snapchat is introducing there paid advertiser options to the general public which should give them a revenue boost moving forward.
To be successful, a company needs to provide something customers want. It must be able to do so for less than they’re willing to pay. And there must be some reason why competitors can’t just copy it when it succeeds. In management terms, it needs a value proposition, a business model, and a strategy.
Snap is doing well on the first two. It has a product that lots of people like, and there’s at least the prospect of Snap eventually becoming very profitable, its first earnings report notwithstanding. But it’s struggling with the third (strategy) because Instagram has been copying its most popular features.
Spiegel Snapchat’s CEO needs to articulate a theory of why Facebook can’t copy Snap’s product innovations and then use them to capture even more value through its larger network. To date, his answer has been innovation. That puts him firmly on one side of the long-running strategy debate. Is it sufficient to develop capabilities that seem hard for competitors to imitate, like building camera-based social applications?
Zuckerberg said (emphasis mine):
“I think we were a little bit late to the trend initially around making cameras the center of how sharing works. But I do think at this point we’re pretty much ahead in terms of the technology that we’re building, and making an open platform I think is a big step forward. A lot of people are using these products across our family of apps. And I would expect us to continue leading the way forward on this from this point on.”
Snapchat’s pioneering approach to visual communication and its curated set of AR selfie filters gave it a big lead over Facebook. But with its massive headcount, steady profits and history with developers, Facebook has closed the gap. Now as the battle rages on to fill the vast physical world with augmented reality, Facebook’s heft and outside help could give it the advantage.
I love all things digital. Feel free to reach out to me on any social platform or via email. Until next time. Roman Prokopchuk the digital marketing savage is out.