Snap’s investors forgive, but they won’t forget
Shares rose after CEO’s remarks, but while its pictures are forgotten, user losses aren’t
Evan Spiegel hired a management coach and is learning how to say some of the right things. Delivering on them is another matter entirely.
At an investment conference on Monday, the chief executive officer of Snap Inc. offered some fresh perspective on the social network’s turbulent past two years as a public company. He also tried to counter the narrative of Snapchat as a one-man show—a story supported by a revolving door for high-level executives over the past several months and Mr. Spiegel’s 50.8% voting stake. Most importantly, he finally attached a firm deadline to the company’s plan to complete its rollout of a new Android app—by the end of this year. Snap’s shares rose 4% Monday following his remarks, but they have shed 57% since the company’s initial public offering in March 2017. The Android development should widen Snapchat’s addressable market, considering that the system runs about 85% of the world’s smartphones. In 2018, Snap reported two sequential quarters of user declines after, Mr. Spiegel said, a rushed redesign solved one problem but created many others. User numbers finally stabilized in the fourth quarter. Mr. Spiegel said on Monday that the Android rollout has been slow in order to apply lessons learned rather than “ripping the Band-Aid” all at once.
As for the company’s internal culture, Mr. Spiegel finally seems to have recognized his image problem.
He described a big push toward “distributed decision making” and noted that the company will continue to make big bets, even if they aren’t always his own.
He also defended Snap’s business model, subtly painting it as the antithesis of other socialmedia peers that harvest user data.
The company has continued to grow revenue per user based on new ad capabilities, such as adding premium content and nonskippable ads, though Snap has yet to achieve profitability seven years after its founding.
Mr. Spiegel said he created Snapchat on the premise that the Internet’s “right to be forgotten” should extend to social media.
Until Snap can consistently generate user growth through an improved redesign, though, no one will forget its initial flop.