As a small business entrepreneurship consultant, I‘m often asked about how startups can achieve rapid growth and scale like Snapchat. So when exactly did Snapchat take off, and what fueled its rise to fame?
Let‘s take a data-driven walk through Snapchat‘s growth story.
The Origins: A Different Kind of Messaging
Snapchat was founded in 2011 by Stanford students Evan Spiegel, Bobby Murphy, and Reggie Brown. The app allowed users to send photos and videos called "snaps" that disappeared after being viewed.
This key ephemerality feature gave Snapchat a unique, privacy-focused value proposition compared to platforms like Facebook. People could share fun, authentic moments without worrying about digital footprints.
Snapchat took off quickly among young smartphone users. By the end of 2012, the app had 100,000 daily active users sending 2 million snaps per day.
Hockey Stick Growth: 2013 – 2016
Snapchat experienced explosive growth between 2013 and 2016. Several factors came together to drive this uptick:
- Teen adoption – By end of 2013, over 50% of 13-17 year olds in the U.S. were using Snapchat. It became “the” social app for teens.
- Stories launch – Snapchat Stories, launched in 2013, let users share photos/videos that disappeared in 24 hours. Stories made Snapchat more “sticky” and drove up usage.
- Unique messaging – Playful lenses, filters, and doodling gave Snapchat a fun, interactive edge over competitors.
- Network effects – As more friends and influencers joined Snapchat, strong network effects kicked in, fueling viral growth.
By 2016, Snapchat had 60 million daily active users sending over 2.5 billion snaps per day!
Monetizing the Experience
Initially laser-focused on growth, Snapchat began monetizing in 2014 with Snapchat Discovery and affiliate revenue from snap links. It rolled out its first ads in 2015.
Revenue hit $405 million in 2016, with Snapchat commanding premium ad prices due to its attractive young demographic.
Notably, Snapchat‘s monetization efforts were designed not to compromise the core messaging experience. Ads were designed to enhance self-expression and fun.
Going Public, Facing Challenges
After turning down a $3 billion acquisition offer from Facebook, Snapchat went public in March 2017. The IPO valued the company at around $33 billion.
However, soon after going public, Snapchat hit some bumps in the road:
- An app redesign in 2018 led to stagnation in user growth and some backlash
- Fierce competition from Instagram‘s copycat features like Stories impacted growth
- Pandemic-related business challenges hit revenue and stock price in 2020
Still, Snapchat has continued to innovate with features like augmented reality lenses and Spotlight short-form video sharing. It reported 306 million daily active users in 2022.
Key Takeaways from Snapchat‘s Growth Story
Reviewing Snapchat‘s incredible growth story, a few key takeaways emerge for startup founders and entrepreneurs:
- Solve a real problem – Snapchat addressed people‘s privacy concerns around impermanent sharing
- Prioritize growth – Snapchat focused aggressively on growth before monetization
- Nail the demographic – Winning over teens and millennials early was key to growth
- Innovate bravely – Ephemerality and Stories were bold innovations that paid off
- Monetize thoughtfully – Snapchat was careful not to disrupt the core user experience
- Persevere – Snapchat persisted despite post-IPO struggles and competitive pressure
Snapchat’s journey underscores how creating a truly innovative product that taps into user needs can enable rapid growth. With smart strategy execution, startups too can unlock hockey stick growth curves and scale new heights.