What Snap’s comeback means


October 26, 2020

PLUS: A Q&A with Liquid Death’s Mike Cessario
October 26, 2020
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The Big Idea
Snap logo

Snap’s long road back from the brink

Snap has been on a wild ride as a public company.

The first few years after its 2017 public debut, the company was mired in declining user growth due in part to the most egregious rip-off in recent corporate history: IG Stories.

This was followed by Snap’s short-lived Spectacles experiment.

Things got real weird in mid-2018: amid dismal stock performance, the company held a shareholder meeting that lasted 166 seconds (LOL).

The pandemic looked to worsen matters

Initially, advertisers cut spending, dimming the outlook for social media companies. But more time at home has meant more time for devices and — with big advertisers leaving Facebook — Snap was primed to benefit.

And it did.

Last Tuesday, Snap reported +52% YoY revenue growth, with a +18% YoY uptick in daily active users to ~250m.

$SNAP rose 50%+ last week on the news and the company — which was worth less than $7B in late 2018 — sports a market cap of $64B.

Snap was building a beast right before our eyes

Investor (and meme lord) Turner Novak’s review of the June 2020 Snap Partner Summit noted that Snap reaches 75% of the US population between ages 13-34, totaling 78m users — more than Instagram or Facebook.

Novak further highlighted Snap’s impressive engagement:

  • Snap Kit — which allows 3rd party apps to integrate Snap features (e.g., Bitmojis) — has 800 integration partners and 148m monthly users
  • Snapchat camera and its augmented reality (AR) tools are very popular, with 135m users creating AR with the camera daily
  • Snapchat Discover had 100m+ viewers over the past year, more than Netflix’s 70m+ subscribers

Despite the noise, CEO Evan Spiegel & Co. have been diligently working on these features for years and it clearly paid off.

Good news for other social media firms

Snap’s latest earnings suggest the beginning “of a recovery from brand advertisers,” per the company’s chief business officer.

This is great news for the smaller social networks: Pinterest (+20%) and Twitter (+10%) were both up last week on the Snap news.

What a ride.

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Snippets
  • FB paid $19B for WhatsApp in 2014 and it’s desperate to milk the proverbial teat of this cow…so, they just launched more biz tools (which could ruin the app experience).
  • Snitches get riches: The SEC just awarded its biggest whistleblower reward ever ($114m). Since 2012, it has paid out $676m to 108 whistleblowers.
  • Ocean Cleanup — an org that pulls plastic from the ocean — released its first recycled product: designer shades.
  • Chromebook sales have been en fuego as schools are desperate to keep kids connected for remote learning.
  • Amazon’s pricing advantage is eroding… which makes its logistics and infrastructure plays more important than ever.
 
Q&A
Travis Scott

‘Travis Scott is the mold of the type of brand that Liquid Death is building’

Liquid Death — a canned water startup with $34m in funding — is breathing new life into the sleepy water space with a hilarious heavy metal-influenced brand and irreverent marketing.

We caught up with the company’s co-founder and CEO Mike Cessario to learn about the inspirations behind Liquid Death:

Who are business leaders that have inspired you?

In addition to Richard Branson [who was able to build exciting brands in otherwise boring industries, like airlines], I also like:

  • Yvon Chouinard, the founder of Patagonia: He has this saying along the lines of “If you’re not pissing off 51% of the people, you’re not trying hard enough.”

    I liked that Chouinard wasn’t trying to create a brand that makes everyone happy. He knew if he made a brand that a majority of people loved (even if it pissed other people off), it would do well.

  • Michael Dubin, the founder of Dollar Shave Club: Mike is a creative-minded CEO and I like how he approached growing Dollar Shave Club with the personality that it had.

Are there any corporate brands that you look up to?

I would compare the brand that Liquid Death is building to more of a famous music artist than a traditional corporation.

Think of Travis Scott. He has a really strong brand that people identify with and he sells them so many things [from music to apparel].

The relationship Travis has with his fans is very different than the relationship customers have with a traditional packaged goods brand.

Travis Scott is the mold of the type of brand that Liquid Death is building.

What are the best commercials you’ve seen?

I really like some of the historical ones like Poo~Pourri and Squatty Potty.

More recently, I like what Purple mattress protector has done with this weird sasquatch.

(Read the full Q&A here)

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RIP
Lee Kun-hee

The man who made Samsung has died

Lee Kun-hee, the chairman of South Korea’s corporate giant Samsung, died yesterday at the age of 78, after dealing with health problems for the last 6 years.

With a net worth of $21B, he was South Korea’s richest man.

While he leaves behind a complicated legacy (no, not the folding screen phone), he is credited for turning the business his father founded from a noodle trading operation into one of the world’s biggest companies.

It’s hard to overstate how important Samsung is to South Korea

In 2019, Samsung Group pulled in revenue of $290B — an insane 17% of South Korea’s GDP per Reuters.

Lee’s big bet on the Galaxy phone line made Samsung the top smartphone competitor to Apple and boosted the crown jewel of the conglomerate, Samsung Electronics, to a $350B valuation.

He made similarly large bets on semiconductors and flat screen TVs while managing a sprawling business with massive insurance, construction, and shipbuilding arms.

Lee’s darker side includes convictions for bribery and tax evasion

In fact, his own son Lee Jae-yong — who’s effectively been running Samsung since 2014 — recently did a one-year stint in prison related to corrupt business dealings.

Under the younger Lee’s leadership, Samsung’s Galaxy phone line has fallen behind Apple, which built a thriving iPhone services ecosystem.

The elder Lee once coached his team to “change everything except for your wife and children” per the WSJ.

Samsung is sitting on $80B of cash. And for the son to match his father’s legacy, he’ll have to make huge bets with these resources… hopefully unrelated to folding screens.

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This is our kind of bucket list

Traveling the world and jumping off of bridges is cool and all. But The Hustle’s bucket list? 

It’s all about getting down to business — and we’ve got huge respect for Noah Kagan:

  • #30 employee at Facebook (which led him to losing $170M 🤯 ) and #4 employee at Mint
  • Founded AppSumo and the Sumo Group before turning 28
  • Scaled multiple YouTube channels to millions of pageviews and one of the most popular podcasts in entrepreneurship

… and the list goes on. 

That’s why we’re hosting a marketing Q&A with Noah.

Join us this Thursday at 12pm PT for “All Things Marketing” — it only costs a $1 to join.

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