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Hello Aluxers, welcome to another exciting video.
We know you guys love social media and some of you might even be big fans of instant photo-sharing apps like Snapchat.
But with so many Social media apps to choose from along with the ever-increasing popularity of Facebook and Instagram,
one might think does Snapchat hold any relevance and have any future as a company?
So let's dive in and find out...
Snapchat was founded in 2011 as a messaging app with a feature of sharing images called snaps that would vanish after they were viewed.
This feature of the app along with its ability to add filters and share stories that would last for 24 hours
had made it very popular among the younger generation in the age group of 13-24 back then.
But in the last few years, the app has seen a consistent decline in users and has also been criticized by the existing users for its recent redesign.
Apart from the features of the app, Snapchat has also been criticized for its management headed by CEO- Evan Spiegel
who is only 29 years old and had turned down Facebook’s $3 billion offer to buy the app in 2013.
Considering the billion-dollar ballpark figure just imagine how popular the app must be at that point in time,
so before we get into the details of Snapchat’s decline let us first understand why it became so popular worldwide within just 2 years of its launch.
Evan Spiegel and Bobby Murphy founded Picaboo a photo sharing app in July 2011 while studying at Stanford University,
which transformed into what we know as Snapchat today.
Back in 2011 every other form of social media was permanent and archivable
while snapchat was designed in such a way that the teens enjoyed the freedom of sharing snaps
that vanish from the internet as soon as they were viewed by the recipient.
This had also made the app difficult for parents or adults to understand and to keep a track of its usage by their younger ones.
Thus Snapchat soon became a popular platform worldwide to share those snaps or stories amongst one's group of friends
which were otherwise considered to be socially inappropriate or private.
Snapchat was also being used as a sexting app by some of its users at that point in time,
and interestingly it also gave notifications if a recipient tried to screenshot a snap.
Well apart from the shady stuff, teenagers were also making most of the various features of the app like using geofilters
which were accessible only at specific locations, sharing their location with their snapchat friends,
viewing their friends location and playing around with the various augmented reality (AR) filters that the app offered to modify their snaps.
During the initial years of the app many celebrities were sharing playful snaps using the dog and cat filters that went viral on social media.
And thus while adults were clueless about the exact utility of the app the youngsters were addicted to the impermanence that Snapchat offered.
Now that we know what made snapchat successful in its launch phase, let us understand the causes behind its recent decline.
Ever since it was founded Snapchat was considered to be the most likely challenger to Instagram
which has always been the number one photo-based social media platform.
Currently, Instagram has 500 million daily active users worldwide while Snapchat has only 190 million.
Now that clearly shows that Instagram has managed to stay atop even after 8 years of Snapchat.
Now if you are someone who have used both of these apps you might have noticed that Instagram has actually copied many of the Snapchat features
like adding stories or editing them using AR (Augmented Reality) filters, and Snapchat should have seen this coming when they rejected Facebook’s $3 billion deal.
Yes, you heard us right, Instagram is owned by Facebook and ever since the Snapchat deal went off the table,
Facebook has managed to beat its competitor by copying its number one point of differentiation “the stories Feature”. Shrewd right?
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ow if you are thinking that it's just massive competition from Facebook that has made things difficult for Snapchat, that's not the complete picture.
Snapchat has its own flaws which have slowed down its growth over the years.
The app was iOS based only in its founding years and even today it is considered to be more compatible with iOS rather than Android.
Now even though the app was initially targeted at American teens
it should have focussed on expanding its user base in the developing countries which are mainly Android-based.
Snapchat introduced its first android version in October 2012, one year plus after its launch on the app store,
but till date is being criticized for not being Android Friendly.
Instagram on the other hand, which was also initially an iOS based app
made a smooth entry in the Android ecosystem and has never faced such resentment for its android version.
Snapchat’s design flaws are not just limited to its android version either
but its recent redesign in February 2018 triggered a backlash from the majority of active users including celebrities like Kylie Jenner and Chrissy Teigen.
The redesign which launched overhaul resulted in a petition being filed by 1.2 million users requesting Snapchat to move back to the original design.
The redesign separated branded content from the content shared by one’s friends and did not help the company in making any money.
The number of active daily users fell from 191 million to 186 million during the redesign phase, and this decline is expected to continue, threatening Snapchats existence.
Post the failure of redesign introduced in 2018, Snapchat launched another redesign to undo what was done,
this initiative of the app helped it to regain its loyal users who had paused the usage of the app during the redesign stage.
Although this rework resulted in a monetary loss for the company it definitely helped to regain its inactive user base.
Snapchat also ventured into selling physical products with the launch of smart glasses in 2016 that recorded footage using AR.
In 2019, the company also launched the third version of smart glasses called Spectacles 3, that feature 3D capturing technology.
So it will be interesting to see if the app can make up for its stagnant user base by venturing into the sale of hardware products.
When we think of any app, it's not just the popularity and number of active users that matters but its ability to monetize itself also plays a key role in its success.
Currently, Snapchat has a market value of $15 billion, while the company made a loss of $325 million during the redesign controversy.
The first IPO of snapchat under the name of SNAP INc debuted in March 2017 on NYSE,
and the company this year finally managed to cross its debut price of $17 a share in July 2019.
But recently the share value has again taken a hit and is at just over $15.
The smart glasses project also did not hit any impressive sales figures, making it difficult for the app to outgrow in the tangible products segment.
The app has never hit the bottom line ever since the inception and is seen as a risky investment even today.
In fact, in 2017, CEO Evan Spiegel himself admitted that the app may never become profitable.
These factors have also affected the recruitment and employment satisfaction within the company,
40% of the staff at Snapchat had no plans of continuing working for it in the first quarter of 2018,
while some of the key personnel like Mark Randall who led the smart glasses project has already called it quits.
Snapchat’s story of becoming quickly popular to reaching a point of stagnancy mirrors many of the app-based startups,
but it definitely inspires us to believe and try to monetize our unique ideas however crazy they might be without fearing the competitors.
Ok Aluxers, since we have such a large international audience, we'd love to know:
Or do you think Snapchat should have taken the $3 billion deal offered by Facebook and called it good?
Let us know in the comments.
And, of course, as a thank you for sticking with us all the way to the end, here's your...
After snapchat’s infamous redesign one of the most influential snapchat users Kylie Jenner had temporarily paused her account
and tweeted about how unhappy she was with the new overhaul feature.
Her tweet quoting “Sooo does anyone else not open Snapchat anymore? Or is it just me... ugh this is so sad”
This tweet was allegedly rumoured to have resulted in a crash of $1.3 billion in Snapchat’s market value.
Now that’s some major influence, right?
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