Share This
Over the last few weeks, the same discussion has recurred with almost everyone that I’ve started to discuss technology with, it has been painful to repeat my beliefs about the service but helpful for helping me to build a bigger picture of the future of the service. A couple of months ago, many people were laying into Snapchat CEO, Evan Spiegel in regards to failing to accept $3Bn from Facebook/$4Bn from Google in November 2013, they were complaining that the service should have accepted this large ticket out of the rat race with ever changing trends, meanwhile I was saying that there must have been a direct reason that this was rejected.
At the time of the offers, I was trying to get an interview with Evan or any of the team members through email with no success, I was shot down with similar responses from Snapchat’s Press team, “We are extremely busy at the moment” or “We are working very hard at the moment on the product”. Whilst many people were annoyed at this 23 year old turning down $4Bn I was looking at what they could potentially be building.
Firstly Snapchat knew that they were growing rapidly, They must have been working on the IM services and additionally were mind-mapping the video chat feature during the winter period whilst these buyouts were being thrown around. They knew they were in the process of vertically integrating their service, with the new update they take on new markets owned and dominated by big services like WhatsApp and Skype. Snapchat simply declined because they were working on something that put them in a bigger league with a more successful re-valuation.
The most important element of the Snapchat update was the reaction from target audience, initially the reaction from the users of Snapchat was powerful, social media light up, the idea of having a very interactive feature like IM and Video Chat built into something that everyone spends a lot of time inside. The actual idea of the features are fantastic, Personally I was very happy to see the update launch as I like to see the service progress however the delivery of the new update was not great at all.
As Mark Zuckerberg has projected to the world “Keep focused and keep shipping”, in this case Snapchat launched very complicated and buggy features to its users. I am still struggling to use the features, not in regards to the functionality, although that took a lot of my time to learn, the video chat is almost impossible to work, the application crashes virtually every time I try to use the service. The positive initial attitude towards the features has been masked by several thousand tweets over the few days regarding the functionality and stability.
In 16 years of teaching I can’t think of anything that has ever disrupted my classroom more than today’s @snapchat update.
— Tracie Schroeder (@bravesearth) May 1, 2026
Putting this aside and adding in the confidence that Snapchat will be fixing these issues in the next few weeks, Snapchat should be valued now at a much higher price because of these additional features as well as the rate of growth. Initially $4Bn was offered for the fast photo and video sharing service but now with a multitude of interactive features that connects people around the world to a new level I personally believe that it should be re estimated to abover $10Bn, this is based on the service’s reach, engagement, comparison to WhatsApp and others that have sold in the past few years and also the ability for the service to generate revenue (Snapchat has a lot of untouched potential with businesses).
I’d love to know what you think about its valuation? More or less than $4Bn.
Let me know in comments or on Twitter - @FrancescoD_Ales
