Snapchat Business Model

Not that Snapchat is the beacon of the ‘New Internet’ but I think some of their momentum can be attributed to the fact that they understand that next-gen users expect both a different business model and user experience than what’s currently available on social media.

Interestingly, the founder (24) is averse to data collection “There’s a sort of weird obsession with the idea that data can solve anything” and accurately characterizes the current model “A lot of people look at Internet advertising as a tax on the system.”

Instead, he is catering to traditional editors who have to a feeling for what content the young user base wants because there is no crowd feedback (like YouTube) on the ads and no targeting tools (like Facebook), simply a measure of traffic.

Ultimately, I imagine Snapchat will become Corporatized like every other network that started off as fresh and cool before catering their product to Fortune 500 ads, but for the moment it seems like they have successfully tapped into a model that blends people’s desire for both privacy and social engagement.


The privacy features, marketing?

“the Federal Trade Commission announced that the smartphone app maker has agreed to settle charges alleging that the company had deceived consumers with assurances about the “disappearing nature” of messages sent through the service and other data collection and security practices.”

I get it. It’s not what users think … and I have never used Snapchat.

But perception is what’s at play here. They have 100 Million Users, mostly young, who like the fact that using Snapchat doesn’t leave a ‘visible’ footprint on the Internet ie. searchable on Google.

I think you have to operate on the assumption that any mainstream social-media company coming from the US has these ‘loopholes’ in the back-end, but I still think it’s relevant because of how high user engagement is.

Put something like this on a secure network with no backdoors and/or loopholes and you have a home run.