Snapchat, How Quickly You Have Grown

NOVEMBER 15, 2013, 6:38 PM

Snapchat, How Quickly You Have Grown

By NICK BILTON

While some might have been shocked this week by the multi-billion dollar offers the start-up Snapchat turned down, I found something else entirely perplexing about the valuation of this little company: just how quickly it grew. When I first wrote about Snapchat in a column in May 2012, it was a largely unknown product and still being run by a few undergraduates at Stanford who had originally presented the app idea in a mechanical engineering class called “Design and Business Factors.”Over a year after I wrote the column, the company is now potentially worth more than $4 billion.

To put into perspective just how quickly Snapchat rose from obscurity to what it is today, when I first emailed Evan Spiegel, one of the Stanford students who built the application with a friend, for an interview, he replied that he was sorry, but he couldn’t comment because he was “completely absorbed with end-of-year projects at school.”

That was just last year. Now, Mr. Speigel cannot comment on multibillion dollar offers for his company.

My, how quickly start-ups can grow in a mobile- and app-based tech world. Google, Twitter, Facebook, even Yelp — they all became highly valued in a short time, but nothing like this.

Exactly which company will get on this trajectory is always hard to predict, but we know what usually drives it: teenagers.

As Mr. Spiegel told TechCrunch in an interview last year, Snapchat was relatively dormant, without many new users signing up, and then something strange started to happen. ”The app started going viral in high schools in the Los Angeles area, including at Spiegel’s cousin’s school. Students were using it to pass notes and communicate during the school day,” TechCrunch wrote.

Just as in the rest of pop culture, grab children’s attention, and you’ve got a chance. Snapchat now has more than 350 million photos sent each month, up from 200 million in June.

But the companies that are willing to pay $3 billion for a start-up with teenagers as the core of its audience might want to hit pause before signing that big check.

As a survey from Pew Research Center’s Internet and American Life Project  found this year, teenagers are very fickle when siding with a company.

The report said that teenagers once called Facebook the best social site on the Internet. Now they’re abandoning the service and flocking to Instagram and Twitter. Other reports have noted that in 2006, Pew Research found that 85 percent of teenagers online had a MySpace account. By 2013, only 7 percent maintained an account there.

Teenagers may be fickle, but big Internet companies still need to court them.

During Facebook’s latest earnings call, the company’s stock began dropping rapidly, losing almost 3 percent of its value, after Facebook’s chief financial officer, David Ebersman, said the number of daily users who are young teenagers had been slipping.

Just as Snapchat grew fast thanks to teenagers, it could just slide just as fast because of them. Somewhere in a dorm room, there may be another new app that makes Snapchat look like yet another social network ditched for the newest, coolest thing..