Many believe this “camera company” will inevitably fail and join the vast graveyard of once prominent and powerful social media platforms. They would be likely to be right if Snapchat was simply a social network but I am buying into the idea that is indeed much more, as it’s increasingly becoming a valuable tool.
Thanks to Eugene Wei we have a framework to view Snapchat in relation to competing social networks. His thesis hinges on two points; a successful social network does an adequate job of supplying users with both Social Capital and Utility. Social Capital being the dopamine hit and increased social status earned after a successful posting. Utility is primarily viewed as what value would the platform have without peer approval?
Facebook is valuable to those seeking a medium to gain positive feedback from peers on a posting (social capital) meanwhile it’s also a decent platform to follow your favorite celebrity (utility). It’s important to realize that every user has their own Job to Be Done. Some networks specialize serving Social Capital while others can do a better job of providing Utility. If one was forced to quantify how these various platforms handle their Job to Be Done they may find that Instagram delivers Social Capital 90% of the time while providing Utility the other 10% of the time. On the other hand Pinterest is a hub for Utility and is generally a barren wasteland for Social Capital. Ignoring how the combination of the two elements influence the product as a whole I have ranked the networks according to their ability to deliver either only Social Capital or Utility.
It’s interesting to note Snapchat’s role in the greater ecosystem- it’s not the primary source for those seeking Social Capital and it’s not particularly useful as a standalone tool. Snapchat’s Social Capital is by design much less tangible that what is gained via activity on Instagram, Facebook, and Twitter- these platforms function as a resume of your Social Capital. Snapchat doesn’t aim to compete with that value proposition, they focus on serving intimate conversations by offering superior privacy and intimacy.
End-to-end encryption is now standard across all messaging apps but most users don’t even know what that means. Snapchat certainly feels the most encrypted.
It’s great that users value Snapchat as a messaging app and can gain unique Social Capital from their activity but Snapchat wants to be recognized as a Camera Company. This is a key position for the company to hold as today the camera is the conduit between the virtual and physical worlds. This intersects with their Snap Map.
Historically speaking there have been few items with as much importance, debate, and power as a map. Maps date back thousands of years and continue to be relied upon and leveraged today. Since GPS has become commoditized Google has been searching for new ways to leverage their maps as evidenced by advertisements pinned onto the map. Their product is an item of pure Utility while Snap Map has primarily been a source of Social Capital for users to display when they’re at a popular event, a particular bar on a friday night, or even at that house party in your town that you didn’t get invited to- it’s almost FourSquare 2.0. This is the foundation of why people engage with Snap Map but now Snapchat can begin to monetize the map to provide unique Utility to users.
Aggregators are fighting a race to the bottom to satisfy user demand for food delivery meanwhile it’s possible they’re overlooking the segment of the population who would prefer to dine in or pickup. Office workers in the city don’t need delivery and covet the opportunity to take a stroll outside. Snapchat has an advantage that Google doesn’t; people aimsley scroll through theirs maps when bored. Snap Map can begin monetization by highlighting which local restaurants are offering promotions exclusive to pickup and dine in. Scrolling the Snap Map has potential to complete with SEO for how businesses choose to promote their offering. An interactive map can become the new hyperlink. Pressing on a golf course within Snap Map could redirect you to Golfnow. Users could pay to promote their yard sale on Snap Map.
At the end of the day Snapchat doesn’t differ much from other social media platforms as it is an advertising business. For the years ended December 31, 2018, 2017, and 2016, advertising revenue accounted for 99%, 97%, and 96% of total revenue, respectively. Snapchat has begun the monetization of Snap Map as the picture below illustrates how a user can obtain Social Capital by applying a location specific filter and then viewers can use this filter as a pathway to the business’s website.
Snapcash never gained traction but perhaps it can make a comeback if users are given a method of monetizing their behavior. Say I choose to book a tee time after seeing a friends post, should they receive a referral fee via Snapcash? This concept could morph into a form of user generated advertisements. Someone could try on an outfit at a retailer, take a picture in the dressing room, apply the store’s filter to the photo where this in turn produces a unique QR code for the viewer to receive a discount at the register, resulting with the user posting the photo receiving a Snapcash referral fee when the viewer makes a purchase. This Snapcash could then be used when interacting with promotions available on Snap Map.
Anecdotal evidence suggests that Snapchat won’t compete with Facebook, Instagram, or Twitter on the grounds of obtaining Social Capital. The average person scrolls 5.3 miles a year on their phone and these platforms will continue to benefit from this muscle memory. Snapchat is physically different. Snapchat succeeds by continuing to focus on being THE conduit between the physical and virtual worlds. We see this with their continued pursuit of Spectacles, development of Visual Search, monetization of Snap Map, AR lenses, filters, and video chat. Maybe the world is changing and Evan Spiegel isn’t crazy when he says that users need to “learn how to communicate visually”. Snapchat will continue to benefit from the global increase in QR code adoption, cell phone addiction, and improvements in mobile networks. It’s time to take on new perspective on Snapchat’s future.