When Snap was young: the early years

Steven Loeb · March 8, 2016 · Short URL: https://vator.tv/n/4379

Over 110M images sent in its first year; by the end of its second year over 150M were sent a day

As our readers know, Vator has started a series called: When they were young.

It's a look back at the modest days of startups, how they evolved in their first few years, and what traction they had at the time. In the end, we hope to have a good glimpse into what great startups looked like in their first three years.

Stories like these are always well received, because it reminds us that anyone, regardless of pedigree and environment, can rise above the noise and have great influence. They show us the value of being resilient, persistent and committed. If we can follow their footsteps, maybe we too can have similar success.

We have already looked at Facebook and Airbnb. Today's segment is on Snapchat.

Snapchat's First Year ------

Launched: July 2011 as Picaboo

Founded by: Evan Spiegel, Reggie Brown and Bobby Murphy.

The company was started by Brown and Spiegel as a project for one of Spiegel's classes at Stanford University.  

Initial Company Description: "Snapchat isn’t about capturing the traditional Kodak moment. It’s about communicating with the full range of human emotion — not just what appears to be pretty or perfect," the company wrote in its first blog post"We’re building a photo app that doesn’t conform to unrealistic notions of beauty or perfection but rather creates a space to be funny, honest or whatever else you might feel like at the moment you take and share a Snap."

Initial Release - at two months: September 2011. First version of app, called Snapchat released.

Traction - at five months: December 2011. Snapchat reaches 40,000 active users. 

First acquisition offer - at roughly 6 months: At some point in early 2012, Facebook came knocking and offered to buy Snapchat for $1 billion. When Snapchat, not surprisingly, declined the offer, Facebook decided to go after it by creating its own version of Snapchat, called Poke, which debuted in December of 2012. 

First funding - at 10 months: May 2012. The company took $485,000 in seed funding from Lightspeed Venture Partners in May of 2012, valuing it at $4.25 million. Interest from the firm came when managing director Barry Eggers, saw his teenage daughter using Snapchat, and found out that it was among the three most popular apps among their friends, along with Angry Birds and Instagram. That got the interest of Partner Jeremy Liew, who set up a meeting with Spiegel.

At Vator's annual Splash LA event in October,  Liew sat down with Vator CEO Bambi Francisco and talked about making that investment in Snapchat and his interest in the company's vision to be the anti-Facebook.

"One of the things that Evan talked about, even back then, and this I think is common knowledge now, is the performance anxiety of being on Facebook. How it's sort of a highlight reel of your life. If something doesn't make you look the way you want to look, then you don't put it on Facebook. He was talking about that concept years ago, it was a very interesting conversation," Liew said.

"And he talked about how if you want to bring relationships with people, you have to see 360 degrees of them. It can't be just their top 10 percent moments. It can't be just when they're feeling happ or proud or excited. It can't be their highlight reel because real relationships get built around seeing people not just when they're happy or excited but also when they're silly or goofy or sad or nervous, and that whole set of emotions is how people build relationships. And he said that wasn't happening on Facebook. And the reason it wasn't happening was because it was the journal of record for your real life, so everything you put up there stayed there."

Snapchat used the funding to hire a community manager, as well as two new engineers. At the time users were sending 25 images every second. 

Spiegel later called Poke, "The best Christmas present I've ever gotten," since it gave the young app even more publicity. 

Traction - at 12 months: June 2012. On the eve of its first anniversary of its founding, Snapchat had sent over 110 million images, according to a blog post from Evan Spiegel at the time. 


Snapchat's second year ------

Media coverage - at one year and three months: October 2012. In an early interview with AllThingsD's Liz Gannes, Spiegel revealed that over one billion photos had been shared on the Snapchat iOS app, with 20 million photos being shared every single day, up from around 15 million only a week before.

"I think the thing that makes Snapchat unique is that every single image you take actually has to be taken and shared within the application. So we're not talking about people taking photos and then, a week later, uploading them. Whenever you take a Snap, it's taken in the moment, and you get that guarantee when you're receiving it," he said.

"So, what's really cool about Snapchat is that there are 20 million unique moments being shared every day."

He also talked about what set Snapchat apart, and stopped it from being a fad, which he believes  is the "ephemeral experience," which allows people to be "more expressive in the things they share."

The content is more interesting, and, thanks to no self editing, comes more frequently. 


Traction - at one year and five months: December 2012. There were over 50 million Snaps viewed a day by the end of 2012, a year and a half after it first launched, according to a pitch deck from the company in 2014. 

Second funding - at one year and seven months: February 2013. Snapchat raised a $13.5 million Series A led by Benchmark Capital's Mitch Lasky, at a valuation between $60 million and $70 million.

At the time Snapchat users were sending over 60 million snaps a day, or about 700 snaps every second.

Acquisition offer part 2 - At some point in 2013, Facebook came back with another offer to buy up Snapchat, this time for a whopping $3 billion. Snapchat, once again, declined, and Facebook again tried to take Snapchat down by copying it. 

Whil Poke only lasted until May of 2014, Facebook's second Snapchat-like app, called Slingshot also had a very shorter lifespan. Released in June of 2014, it also failed to take off and was shut down in December of 2015.

Traction - at one year and nine months: April 2013. At the Dive into Mobile conference in April 2013, Spiegel revealed that users were sharing 150 million images per day, or about 1,700 of them per second.

Third funding - at one year and eleven months: June 2013. Snapchat, in just under two years after launching, picked up $80 million in Series B funding, $60 million of which is an investment from IVP, with the other $20 million sold in a secondary offering. The company was valued at $800 million.

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Lightspeed Venture Partners

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Lightspeed Venture Partners is a technology-focused venture capital firm that manages $1.3 billion of capital commitments. We closed Lightspeed VII, a $480 million fund, at the end of 2005. Over the past two decades, our partners have invested in more than 120 companies, many of which have gone on to become leaders in their respective industries. Our team invests in the U.S. and internationally from offices in Menlo Park, China, India, and Israel.

We are proud to have partnered with many exceptional management teams. Our investment professionals have contributed domain expertise and operational experience to help build high-growth, market-leading companies such as Blue Nile (NILE), Brocade (BRCD), Ciena (CIEN), DoubleClick (DCLK), Informatica (INFA), Kiva Software (acquired by AOL), Openwave (OPWV), Quantum Effect Devices (acquired by PMCS), Sirocco (acquired by SCMR), and Waveset (acquired by SUNW). Some of our recent exits include the top-performing tech IPO of 2006, Riverbed Technology (RVBD), and the top enterprise software acquisition of 2006, Virsa Systems (acquired by SAP).

Visit our website at www.lightspeedvp.com


Jeremy Liew

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