Snapchat: Can It Survive?

Snapchat was founded in 2011 and its claim to fame, and likely fortune, is its ability to allow users to send images and short videos that quickly vanish. But will it be able to compete with other social media giants?

Snapchat went public recently and despite a turnover last year of $404m, a loss of $515m and never having made a profit it was valued at $24bn.

One reason for such a generous valuation is its appeal to young people aged 13 to 24, as it allows them to take photographs with their phones, add fun features and send to their friends with the comfort of knowing it will soon disappear.

For an advertiser, Snapchat captures an attractive and potentially lucrative audience although it has not yet figured out how to deliver the kind of access advertisers want.

It has, however, passed Facebook and Instagram (now owned by Facebook) in popularity amongst the teenage audience, which is a huge achievement given their respective reach and resources.

Snapchat is different from other social media companies as it provides an environment for (mainly) young people to talk to each other by sharing photographs: Facebook and Instagram are, however, now offering similar features.

It responds to the desire of most people who want to simply talk to their friends safe in the knowledge their thoughts and conversations will remain private.

Other social media platforms encourage users to show off their ideal selves, whereas, Snapchat allows users to chat via snaps while knowing what they share will soon be forgotten.

Its real value is the way in which it matches what we do in real life with what we do online, rather than feel peer pressure to present a perfect profile of ourselves.

It also provides a private space free from distraction and interruption, as it is not linked to external apps, websites or even the Internet.

Snapchat allows users to be relaxed and informal by not collecting or holding a history of the thoughts they express, unlike other forms of social media.

But this gain for users means the company has to figure out how to make money from advertisers in future years.

Snapchat has a tremendous opportunity, as there is a huge appetite for another player in an online advertising market so completely dominated by Facebook and Google.

Facebook too can learn from Snapchat as its success is based on the opposite of what Facebook does, which is to try to be all things to all people all of the time.

But the most important thing Snapchat does, and why it may just be worth its outrageous valuation, is to provide a way to share who we really are with close friends for a moment, rather than with a world of strangers for all time.

So, Snapchat provides a new way to talk to each other online that reflects how we talk offline, which gives it a real chance of success.