The day Snapchat became a unicorn...
Snapchat probably made the smartest business move in the history of the social media industry this past week. And just incase you haven't heard:
Snapchat turned down a $3 billion dollar offer made by Facebook.
But why would they do such a thing? Here are a couple things you need to know, in order, to understand why the photo-sharing mobile app turned down that $3B offer:
More than 2.5B people are now connected to the internet, and that number is still growing.
There are 1.5B smartphone subscribers, growing at 31% annually.
Mobile traffic is growing at 1.5x per year and may even accelerate.
Mobile ad revenue is exploding.
The amount of digital information captured and shared has grown 9x in the last 5 years and is still growing like crazy. Photo sharing is growing at 2x annually.
(Mary Meeker, KPCB Internet Trends 2013)
What this means is Snapchat entered the market during the most opportune time which has resulted in unparalleled success that is continuing to grow. Just look at the facts:
It took Facebook ten years (2003 - 2013) to reach 350 million photos shared per day. Snapchat did it in two (and will soon supersede Facebook and Instagram, combined.)
Instagram launched two years before Snapchat, yet Snapchat users share 7x as many photos per day as Instagram.
Essentially, Snapchat's timing was a full generation later than Facebook and Instagram - which means different social behaviors and habits. And Facebook wants to own a slice of that youth- who are becoming less and less impressed with Facebook itself.
Facebook wants Snapchat so bad that this offer is infact their second offer to Snapchat, and 3x the amount they offered Instagram.
Snapchat has garnered a lot of negative press for saying "thanks but no thanks" to the social media giant that is Facebook. But, like I said earlier, I believe this to be the smartest business move in the history of the social media industry.
Why? Because in a single decline of offer, Snapchat became the unicorn of social media.
Who says "no" to Facebook? Snapchat. Who won't sell out to the God of social media? Snapchat. Who's street cred shot up a billion points? Snapchat's. Who want's to buy Snapchat even more now? Facebook.
I'd say CEO Evan Spiegel know's what he is doing. And it's paying off - big time!
It kind of makes me wonder, what do you think it feels like to turn down $3B?