🪵 Snap decisions

A peek at Snap’s product strategy

Snap CEO Evan Spiegel released his annual letter.

Grabbing our product-tinted glasses and divin’ straight in. Let’s see what we can learn.

The good

• Snap has had a profitable year after two back-to-back years in the red.

• Users spend more time on Snap. In Q2, time spent grew by 25%.

• Snap has $3 billion in the bank and no meaningful debt to repay until 2027.

In a quick trip down memory lane, Evan shared the following data points:

The bad

• Snap’s advertising business isn’t growing (or generating revenue) as quickly as expected. This is driving uncertainty in the market, as evidenced by a 48% drop in share price this year.

• Competitors are snapping at their ankles. Ephemeral posts are no longer unique. Vertical videos either. Snap need to innovate, stat.

The product strategy

Evan blesses us with three insights into Snap’s product strategy:

Repositioning their advertising products to target small- to medium-size advertisers. There are more of these businesses. They’re more consistent spenders. Their incentives are more frequently aligned to revenue (as opposed to brand plays). Snap is already executing this strategy with some success, seeing an increase in lower funnel brand spending of 16%.

Developing new advertising products. Snap have continued innovating in their core product with features like Snap Maps (350 million users) and Lenses. It’s time advertising reaps some of these benefits by introducing these features as new ad targeting opportunities.

Taking big ‘blue ocean strategy’ bets. Evan isn’t afraid to make big bets. This time, he plans on experimenting with two:

First, a simplified version of Snap designed for accessibility and usability. The aim? Unclear. It’s likely Evan is trying to capture the ‘older’ crowd that has been mostly eluding his app so far.

Second, continue to invest into their augmented reality (AR) glasses, Spectacles. Although a first version was released in 2016, Evan believes Snap could be the first to market in this still nascent technology.

X all over your TV

The app formerly known as Twitter is doubling down on video content, this time releasing a TV app.

Or re-releasing a TV app, I should say.

A history with video content. Here’s a brief recap:

• 2015. Twitter start supporting (up to 30sec) videos.

• 2016. Twitter launch a bunch of TV apps on Apple TV, Fire TV, and Xbox One.

• 2018. Twitter shut most of its TV apps down due to a lack of revenue.

Takin’ a breather…

• 2021. Twitter explore adding videos to a ‘For You’ feed to combat TikTok.

• 2022.

  • Twitter launch full-screen videos, perfect for doomscrolling.

  • Some guy buys Twitter for a penny or two.

  • That same guy (Elon, obviously) pushes for more video content, increasing their limits to up to 60mins.

• 2024. Twitter (now X) tease a new TV app.

Why videos? Why TV? Why? It’s clear X is struggling to generate cash. Advertising revenue dropped by half since Elon took over. X, once valued at $44 billion, is now underwritten to $12.5 billion.

Ouch.

This TV app is one spaghetto thrown at the wall of potentially lucrative ideas, along with a video conference app and video calls between users.

From the woodshed

• The State of the Product Jobs report is out for August 2024. Open positions are on the up worldwide, remote positions are losing ground, and more. Available here.

• Canva is facing backlash following its latest price hike. Some customers have reported seeing their yearly plan nearly quintuple (that’s 5X, btw).

• Product management & chill? Sounds like a plan. Grab some popcorn, sit back, and fire up PMFLIX.

• Zillow’s new LLM-driven search engine might make your life easier (or surface useless houses, unsure). Type a query like “London flat within 30min from Waterloo station” and get served (likely) unaffordable houses. Fun.

Get backlog’d

From the memelord himself.

Written by: Product nerds. What did you expect?

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