Just ten days after meeting Evan, Liew convinced his partners, and Lightspeed invested $485,000 in Snapchat, valuing the young company at $4.25 million. “Snapchat had jumped from one thousand daily active users in late 2011 to one hundred thousand daily active users in April 2012. Disappearing photos? It sounded like a sexting app at best, or a fad at worst.“ “But the first venture capitalist who met with Evan, including blue chip firms like Sequoia Capital and Benchmark Partners, passed on the investment. You were just exchanging lightweight photos that were meant to be discarded immediately.“Īll the VC passed initially. It wasn’t just that taking and sharing a photo was essentially free sending a photo to a friend no longer had the importance it once did with testing. The cost of creating and sharing a photo dropped so much knowing that the photo would disappear. We talked through photos instead of posting them to garner likes. “Because you could only reply with a photo, friends would send selfies of themselves reacting to photos. Snapchat removed the pressure of the perfect photo. Snapchat had no lies, no permanence, no social anxiety.” Snapchat was not meant to be a social network - it was designed as a small, private network, to share with your closest friends. Even designed Snapchat as an antidote to this obsession with likes and retweets. “Teenagers also felt pressure to post the most glamourous representations of their lives on Facebook, Twitter, Instagram, and other social media sites to rack up likes. They needed to get it into more people’s hands and make it grow, even if they had to force this growth at first.” Evan and Bobby knew Snapchat had value, because everyone who used the app used it all the time. “Although it had less than a hundred users, most of whom were Evan and Bobby’s friends, the people who did use the app were using it all day, every day. To make Picaboo stand out, he put the Ghostface Chillah logo on a bright yellow background.”Ĭater to the power users. “Evan studied the hundred most popular apps in the app store and noticed that none had yellow logos. “There was a shift at some point, from smart kids saying, “I want to solve X problem” to students going, “I want to start a startup. Stanford kids wanted to start any startup. This long runway, combined with their insistence on perfection, became toxic as they spun their wheels, creating many products that never saw the light of day.” “Clinkle never came close to feeling this sort of pressure. Too much cash killed Clinkle it made them lazy. And so, there was no one with sole responsibility, let alone a board seat, when things started to go to hell for Clinkle.” But none of the sixty-odd investors had a significant amount of money on the line. “Had any venture capital firm or person invested $30 million on their own, they would have gone through a rigorous due diligence process, vetting Clinkle’s team and technology inside and out. Staying in the game round after round, as the world changes and targets are met or not met, is extraordinarily difficult.” Raising some money for an idea is not that difficult. “But the descent from seed-funded startups to Series A and B is often much steeper than people expect. “He wouldn’t have to worry about sending a hookup a picture of his junk! And girls would be way more likely to send him racy photos if they disappeared.” Snapchat really started as a sexting app.
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