The big news last week was the Snap IPO – the biggest since Alibaba – which raised $3.4 billion for Snap, a company which managed to lose $514.6M last year and has lost money every year since it began commercial operations in 2011,” according to CNBC and, forest through the trees, “has warned that it will never make a profit.”
Facebook tried to buy Snap nee, Snapchat, a few years back for some $3B – pass – so they bought Instagram instead, for the now seemingly bargain price of $1B. Of course, Instagram didn’t have the number of eyeballs that Snapchat did at the time, but since Facebook, um, appropriated features that Snap had innovated – Stories comes to mind – Instagram’s popularity and growth has far outdistanced Snap’s. And remember: eyeballs/exponential growth are the holy grail of Silicon Valley investors and the market. We do know that Twitter has come up more than once in articles covering the Snap IPO, as how long did Twitter skate after the IPO, promising continued user growth, which never materialized. Au contraire, but they did go a good long time with nary a sustainable revenue model in sight, and a falling user base, which does go far in explaining the lack of a buyer for the company.
For the record, ‘growth potential,’ ‘eyeballs,’ – this is the language of Web 1.0, when it was all potential, all the time. The potential was there; the timing was off: the bubble burst. That was then and this is now, and we’re at the Too Big to Fail Stage in the history of tech.