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Snapchat’s ride to the IPO comes with a history of confusion

Image: mashable composite

Snap Inc. is the shiniest thing on Wall Street right now. But it wasn’t always like that.

As recently as a year ago, Snapchat was a roll-your-eyes startup. To the biggest names in tech, advertising, and media, Snapchat was “too confusing”just a “sexting” app and simply “overhyped.”

SEE ALSO: Our first look at Snapchat’s biggest risks and most powerful enemies

Chris Sacca, an early stage investor in Uber, Twitter, Instagram and Kickstarter, had been approached by the company in its younger days, but passed: I was like, The dick pics? he told CNNMoney last year. That probably cost me like a billion dollars.

Ashton Kutcher passed on investingtwiceciting the design: I looked at Snapchats product and I hated the product, Kutcher told Recode last year. I just thought it was like, a little crickety and a little rickety. It just wasnt beautiful or elegant.”

The dick pics haven’t disappeared, but Snapchat, led by CEO and cofounder Evan Spiegel, has been able to change the tune of some, including Sacca and Kutcher. The doubt, however, is very real, as the company exposes itself to more scrutiny with an initial public offering.

“Since the data has come out, I sense a stronger objective argument that Snap is not what people thought. That it isn’t a slam-dunk monster,” said Ophir Gottlieb, CEO of Capital Market Laboratories. “Evan needs to turn into a public company CEO. Zuckerberg did a great pivot from a snot to a leader, and Evan needs the same if the image is to improve.”

The skepticism, as the company’s all too familiar with, could be okay for Snap and Spiegel. It’s apparent throughout Snapchat’s history that it creates lovers and haters supported by a mix of secrecy and frankness from within.

Everything is ‘terrible’

Snap has had a long history of haters. The app got its first somewhat public criticism when Spiegel presented it in his class at Stanford.

Everyone said, That is a terrible idea.'”

Everyone said, That is a terrible idea,'” Spiegel told Forbes in November 2012, about a year after that presentation. Not only is nobody going to use it, they said, but the only people who do, will use it for sexting.

Yet, by that conversation with Forbes, Snapchat had millions of usersand they weren’t just sexting. As New York magazine wrote in October 2012, high school “students who use it know that its true purpose lies in a different clunky neologism: taking self-portraits, called selfies. More specifically, really ugly selfies.”

Spiegel himself was surprised by the sheer numbers: “I think the popularity of the service has been a surprise to everyone. We’ve found that once you try it with a couple friends it’s immediately clear why it’s fun to use,” he wrote to a question on Quora.

Someincluding this reporterjust weren’t willing to try. Others, like Kutcher, were turned off by the design.

Amid the scrutiny, Snapchat kept building. Functions on the app were streamlined while new products were launched. In 2013, Snapchat released Stories, but some of the most active users and app experts weren’t convinced. Gary Vaynerchuk, an early investor in Twitter and Tumblr, said:

“Not this bullshit update product they have that’s called Stories that’s such shit.”

“Not this bullshit update product they have that’s called Stories that’s such shit. The single reason I thought Snapchat should at least consider to sell their company for $3 billion was cause of how shitty their update was, the last time around, makes me question if there are any real product people there.”

Vaynerchuk, through the Vayner/RSE fund, invested in Snapchat a year later.

Snapchat highlighted that change in its own filing:

“We continued to invest in improving Stories even when it wasnt clear that it would be successful. Over time, Stories has grown into one of our most popular products.”

So came more updates and so came more hate. In 2014, there was Snapcash, a payment service that inspired disgust on Twitter:

Snapchat is trying too hard, like snapcash was stupid and this discover stuff is too. Forward isn’t always better.

Quade Joseph (@QuadeJoseph) January 27, 2015

Snap cash is bound to fail

Jared Fleming (@flimflam15) November 21, 2014

The haters weren’t wrong. Snapchat wrote in the filing that it has “not recognized revenue” and it is subject to many risks. Still, it caused some hate that perhaps moved the narrative in the right direction; Snapchat could build, and the idea made product managers, engineers and marketers at other tech companies quiver.

“Snapchat was trying all types of innovative things, such as Snapcash. It didnt really turn into a success, but I remember thinking, ‘Why wasn’t there a Vine integration with Square?'” said a former Twitter employee who worked with Vine.

Image: snap inc.

For employees at Facebook, building a lot, especially products people don’t like, is an all too familiar story.

Comparing Snap to Facebook is a question of the opportunity ahead. People are being too quick to call it game over for Facebook / Instagram

Josh Elman (@joshelman) February 3, 2017

The endorsers

The narrative started to shift in 2015, when Spiegel landed the cover of Adweek ahead of Cannes, the industry’s largest advertising festival. In 2016, Snapchat, via DJ Khaled, graced the cover of Bloomberg Businessweek in a story titled, “How Snapchat Built A Business By Confusing the Olds.”

“It’s all about connecting with his fans on a level who could never before and being able to inspire them in real time,” one of DJ Khaled’s reps saidabout his continued daily use of the app.

they don’t want you to know @djkhaled is on the cover of Bloomberg Businessweek http://pic.twitter.com/CPvlKWYGp8

ShamW0W (@TheShamW0W) March 21, 2016

Why is Snapchat going public now? It’s shiny. What was hate has flipped into love. The major key, as Khaled would say, has been moving fast and finding strong, rich advocates.

“Right now, the only thing I give a fuck about in the world is Snapchat. I only care about it because I haven’t seen this attention,” Vaynerchuk said at the Consumer Electronics Show in Las Vegas last year. “Literally six months ago, it wasn’t. It was still too peer-to-peer. It was still too young. Right now, it’s time.”

Some brands, for now those with a lot of money, just get it. “I think you have to be as they thrive on being different and taking risks. Theres an urge to compare Snapchat to other ‘social media channels’ yet they position themselves as a camera company,” said Ryan Rimsnider, senior manager of digital and social strategy at Taco Bell.

“They offer a really fun and engaging experience amongst your closest friends and fans, are further democratizing awe-inspiring content creation and, most importantly, they gave us the ability to turn ourselves into tacos,” he continued.

“Most importantly, they gave us the ability to turn ourselves into tacos.”

The media may love or hate Evan Spiegel, but this isn’t just the Spiegel show.

“The fascination with the founder is unprecedented other than with Zuck,” Gottlieb said. “I mean personal life, quirks, and age, and dating habits.”

Importance lies with advocates. That’s why early on Spiegel brought Sony CEO Michael Lynton, MTV co-founder and iHeartMedia CEO Bob Pittman and former Daily Mail executive Jon Steinberg into his court.

But some of the earliest consumers are getting a little weary. Snapchat, they say, could go the way of Vine if they don’t prioritize creators. Shaun McBride, better known as “Shonduras” from his Snapchat fame, has spoken out about the lack of reception and appreciation from the executive team.

Justin Rezvani, CEO of TheAmplify, once had frequent meetings with Snapchat about working with influencers. But no longer.

One competitor not mentioned in Snapchat’s risks is Musical.ly, which creators and millennials are gravitating toward.

“Influencers and creators build platforms and sustain audience,” said Justin Rezvani, CEO of TheAmplify. “I would just like to see more of that from Snapchat.”

These users provide attention. They also provided the value.

The sentiment around Snap’s IPO release averaged out to being neutral, as judged by tweets sent between 11 a.m. Thursday to 10 a.m. Friday.

Image: crimson hexagon

“If Evan shows Wall Street the money, hey, now the image is great,” Gottlieb said. “But if this tumbles or struggles financially, it will be a hate fest.”

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