Pando

Messaging Wars: Facebook pulls off crazy user volume, while somehow Snapchat doesn’t have to

Messenger is gonna be bigger than social, and Snapchat is a far stronger adversary than Twitter

By Sarah Lacy , written on January 12, 2016

From The War Desk

Two interesting data points so far this year.

The first from Mark Zuckerberg’s Facebook page:

800 million people and the story of Messenger itself has been a thing to behold. At the time Mark Zuckerberg “acquihired” David Marcus out of PayPal, it seemed a strange deal for everyone. But if you thought Instagram was a bargain, “overpaying” for the internal team that has built something that rivals Whatsapp in size in record time has been one of the best investments Zuckerberg has made as a public company CEO. Not to mention, it’s one of the first times in a long time Facebook has built something that has resonated with users.

The fact that the company can both build something of this scale and make smart acquisitions at the right time like Instagram and Whatsapp are what make Facebook such an unstoppable juggernaut at social that has just waltzed right into owning the next -- and quite possible bigger-- wave, messaging.

…. Almost.

There has been one fly in the ointment: Snapchat. It’s the only major messaging platform Facebook doesn’t own. It’s not that Facebook didn’t see it, or didn’t fear it, or didn’t offer to “overpay” for it. It’s that Snapchat’s CEO Evan Spiegel was the only one to say no to a huge multi-billion dollar payout.

In that sense, Snapchat is analogous to Twitter’s position as the social wars were hitting mainstream audiences. It too said no to Facebook. And it too had something Facebook didn’t quite have: A unique resonance and utility for pop culture, celebrities, and breaking news.

Similarly, Snapchat is incredibly popular with fashion bloggers, celebrities, and the Gary Vaynerchuk-types for building, amassing and speaking to audiences in new and different, more personal ways. Snapchat stories has done Twitter’s other core use case-- bringing you immediate you-are-there citizen journalism moments for major happenings around the world-- better than Twitter. It’s done it via video and images, which Twitter has failed at despite purchases of properties like Vine and Periscope. And Jack Dorsey seems to have lost the plot that that’s where the medium is going with his latest “innovation” to include longer text in Tweets.

One more similarity between Twitter and Snapchat: Neither has the volume of users of Facebook. But how that impacts the two as businesses may be where the two diverge. (Or at least, Snapchat’s investors should hope that’s where they diverge…)

That brings us to the second important data point that’s come out this year about messaging. Yesterday, Bloomberg reported that Snapchat “is said” to have 7 billion mobile video views versus Facebook’s 8 billion. But here’s the kicker: Facebook has 15 times Snapchat’s users. And you should note that Snapchat users have to actually click on a video to watch it, where Facebook videos autoplay in a feed.

Will Snapchat be the company that builds something huge without having to build an audience of 1 billion users?

I don’t see how Snapchat ever rivals Facebook in users, in part because that’s not Snapchat’s game. For one thing, the nature of Snapchat means it isn’t widely broadcast. It’s one-to-a-few or one-to-many or one-to-one depending on how you use it versus, many-to-many. It has a sort of virality of people taking it out of their pocket and using it and others saying “Oh cool, what’s that?” But not the virality of “Holy shit, look at what Donald Trump just Tweeted!” or find every person you ever knew and every embarrassing photo of them like Facebook.

Those are of course also the keys to Snapchat’s appeal, and the “good” reasons the company hasn’t scaled its users beyond some 100 million, according to Bloomberg.

The less good reason is that the company has stubbornly stuck with a teens and millennials rule playbook, despite a product that has clear and powerful use cases with older people like me. This is a strange about face from the first time I interviewed Spiegel in 2012 and he emphasized how the app had spread between college kids and parents wanting to share in their world in a way kids could control-- a growth plan that made a lot of sense to me. Back then, he seemed to believe that -- like Facebook-- Snapchat was something anyone could use, it was simply starting in colleges.

Somehow, Snapchat got sidetracked trying to become a millenial media company like Vice, not a broad utility like Facebook. Which is strange because Snapchat has a huge advantage: Because of the selective quality of the app, control around who you share what with, and lack of a newsfeed, it avoids the “OMG my mom tried to friend me on Facebook” problem. You can friend your mom on Snapchat and never send her a thing and she doesn’t know if that’s because you just don’t use Snapchat anymore.

Early on I used Snapchat more than any other app on my phone, save Twitter. But my usage has waned as nearly all my contacts-- mostly older people working in the tech world-- have gotten the impression that Snapchat “isn’t for them” and have just abandoned it. I’ve written before: I believe this message that the service is only for the young is a mistake. Facebook’s strength was a continual expansion of its audience over time. The utter failure to do that is what’s destroying Twitter. If celebrities and real-time news junkies abandon Twitter for Snapchat, Twitter is done. A lesson Snapchat should heed. No one is invincible, particularly a company that hasn’t yet begun to really monetize at a level that backs up its valuation.

If you are one thing to one group of people, no matter how good you are at that, you always risk someone coming along and doing it better. This is why Facebook-- whose core was always around photos-- offered Instagram $1 billion even with the messy timing of the eve of its IPO. And why it fucked around even less when it saw the growth of Whatsapp.

Hopefully Snapchat reverses this. While Discover seems a vapid waste of time to “old” people like me, Stories is truly a mainstream and powerful app, as Justin Kan wrote in this recent piece.

I hesitate to stretch the Snapchat/ Twitter analogy too far. Part of what may kill Twitter was an utterly dysfunctional founding team that can’t decide whether it wants to commit to the company or not, or what it thinks Twitter should be. A beloved property has sadly become a chew toy of the egos of Chris Sacca, Jack Dorsey, and other insiders. Meanwhile, Snapchat and Facebook are controlled by single, strong-minded founders who are true product visionaries. And Snapchat has continually innovated on its product, unlike Twitter who mostly kept the product the same.

But as Facebook’s only independent rival in messaging, Snapchat would be wise to heed the lessons of Twitter, just as Facebook early on heeded the missteps made by Friendster and MySpace. Snapchat will likely never match Facebook’s volume of users and isn’t playing that game. That said, using the current heat around its app to expand its user base only buys it more options in the future.