Snapchat Logo “Ghostface Chillah”
So let me give you the run-down on the photo messaging app called Snapchat. Snapchat was developed by two Stanford University students, Evan Spiegel and Bobby Murphy. Snapchat started off as just a semester project for one of Spiegel’s product design classes. However, his classmates were impressed with the idea of messaging impermanent photos. From then, Spiegel and Murphy knew they were on the brink of something brilliant. Snapchat was launched from Spiegel’s father’s living-room in September 2011.
In February 2013, Snapchat received $13.5 million in Series A funding from Benchmark Capital to help build the company. They valued the company to be worth somewhere between $60 to $70 million. The app has expanded to allow users to send impermanent photos, videos, text, and drawings to selected recipients. The sender can also set a certain time frame that the recipient can view the messaged content. Currently the time frames can last between 1 to 10 seconds. The app has appealed highly to people between the ages of 13 and 23, although the app’s fan-base is growing to include much more mature users. As of mid-July a media report valued Snapchat at $860 million.
Let’s meet the infamous Evan Spiegel who recently stunned the world when he and the Snapchat team turned down two big offers. In November 2013, Facebook offered to buy out Snapchat for $3 billion cash. The Snapchat team turned down the offer. Then Google upped the ante and offered to buyout Snapchat for a whopping $4 billion. Guess what Mr. Spiegel did? He turned that offer down as well!
In October 2012, Evan Spiegel stated that the company was unwilling to be acquired. It looks like he is sticking to his guns. If that was me, and Google was waving that many zeroes in my face, this story would’ve been much shorter, because I would’ve cashed out!
His actions can be viewed as commendable or viewed as…..stupid. The company has barely any assets and no revenue. On top of that, Snapchat is facing a bunch of legal problems. A former classmate of Spiegel and Murphy has filed a lawsuit against the company’s founders. He claims that he came up with the idea of disappearing messages, the original name of “Picaboo”, and helped to start the company.
Then the Electronic Privacy Information Center filed a complaint with the Federal Trade Commission against Snapchat after a Forbes article reported that Snapchat photos don’t actually disappear. Users with little technological intelligence can allegedly retrieve the messages after the time limit elapses.The Electronic Privacy Information Center complains that Snapchat has deceived its users into thinking their messages disappear after seconds.
With all the mounting lawsuits and zero revenue, only the Snapchat team knows why they’ve decided not take cash in from Facebook or Google. This could all be a part of a well devised strategy that us non-entrepreneurs wouldn’t understand. Maybe that’s why they make the riveting stories that I write about, and you read. One thing is for sure, Evan Spiegel has a vision in which he is determined to achieve.