- REUTERS/Mike Blake
- Snap reported terrible earnings Tuesday and announced it would redesign the Snapchat app. It also announced a $40 million write-down related to unsold Spectacles. Snap has always been written about as an innovative product company, but it has failed to prove that now that it’s public.
Heading into Snap’s initial public offering this spring, the common theme around the company was that it was focused on innovative products that would set it apart from other social networks like Facebook, Instagram, and Twitter.
The company reimagined how people communicate with smartphones, emphasizing text, video, and augmented-reality tricks. More important, its success was tied to the 27-year-old CEO Evan Spiegel, who has been billed as a product visionary in the model of Steve Jobs.
A Recode profile of Spiegel from 2016 cited several sources close to the young CEO who compared him to Mark Zuckerberg, Jobs, and even Picasso. And that perception permeated just about everything written about Spiegel since.
In the Wall Street Journal story tied to the debut of Snap’s wearable Spectacles, Spiegel even stole a move right out of Jobs’ playbook, unveiling a new gizmo with the fanfare of stage magician, something Jobs was famous for doing in private briefings with the tech press. He even borrowed one of Jobs’ best-known quips during a product demo. “Boom!“
From the Journal profile:
“‘You wanna see it?’ he asks, grinning widely. There’s drama in this reveal: I’m about to join an exceedingly small circle of people whom Spiegel has shown the object to. As he lifts the towel, he breaks into a delighted laugh. “Boom!'”
In my experience, if someone’s being compared to Steve Jobs – or worse, mimicking Steve Jobs – he or she is most definitely not another Steve Jobs.
We got proof of that Tuesday after Snap reported dismal earnings and Spiegel said the company’s core product, the Snapchat app, was too hard for people to use and would go through a major redesign. At the same time, the company announced a $40 million write-down for unsold Spectacles – after firing members of its hardware team in September – and its long-serving senior vice president of engineering stepped down.
These are not the moves of a company with a strong product vision.
Even after the initial hype of the Spectacles launch last year, an insider told my colleague Alex Heath that retention among those who bought the glasses was “shockingly low.” It turns out the artificial scarcity of Spectacles during the first weeks it went on sale was the only real innovation.
The myth Snap is full of product geniuses led by Spiegel has been busted, disappearing faster than a sext sent over its app.
Now Snap appears to be rushing toward a major pivot to fix its product, just months after its IPO and in full public view where every change will be scrutinized by analysts, investors, and the media. It’s a risky move from a product team that hasn’t yet proved it can break out beyond its core group of young users in a significant way.
Yes, Spiegel and company should be credited for coming up with an innovative paradigm for communicating with photos and video on mobile devices. But that paradigm was easily copied by Facebook and Instagram and leveraged by those larger social networks.
Snap’s products have failed to resonate outside a niche group, and it turns out that translates to weak overall performance.