The Rise Of Snapchat – Strategy With RS

Snapchat is a platform for users to enjoy fast and fun mobile conversation! A user can ‘snap’ a photo or a video, add a caption, and send it to a friend. They’ll view it, laugh, and then the Snap disappears. The concept has gained traction among users. So much so that FB had made an offer to buy it out for $3 billion.

What makes a company valuable?

There could be several reasons. One among them could be ‘differentiation’ – how unique & different is it in the minds of the customers in comparisons to the other options. But the differentiation cannot be for the sake of differentiation – it has to be on ‘determinant’ benefits – benefits which customers like, competition is not giving & your brand/company gives.

Let me share with you the dimensions on which Snapchat has differentiated itself:

1.Non-permanent: On FB & Twitter you have to think & post because what goes on it stays there forever. Therefore you have to craft your text & looks. Not so on Snapchat. Here you can be your self … a bit irreverent knowing well that it will disappear after seconds / hours.

2.Only accessible via Smartphones: Snapchat has placed its bet that the young people are ‘mobile’ & are armed with a smartphone. And therefore Snapchat is not available on conventional web but only through smartphones because it wants the photos / video to fill up the entire screen of the smartphone.

3.Content: FB & others depends upon software to serve to its users content ranked as popular; or based on the surfing habit of the user; or upon searches, shares & clicks. Snapchats eschews this strategy. It has resorted to the old fashioned way of getting editors to decide what is good for its users & then serving it. Snapchat has tied up with 11 media brand like ESPN, People magazine, CNN, Comedy Central to contribute daily articles & videos. Of course the recommended content disappears at midnight!

Has the strategy to differentiate itself paid off for Snapchat? Take a look at these stats. – ‘Months taken to reach 100 million active monthly users:
• Twitter: 65
• Facebook: 54
• Snapchat: 44
Snapchat with its user base of 100 million + has a Valuation nudging $ 15 billion.

Business lesson for us:

1.It is difficult to achieve mega success by coping somebody’s successful formula, blindly.

2.You have to identify the determinant benefits – benefits that customers want, competition is not giving & you give.

3. Draw up a strategy to build a business around it.

4. Once you identify the determinant benefit then make sure to put competitors to shame on your chosen dimensions.





In this series, Rajesh Srivastava, Business Strategist and Visiting Faculty at IIM Indore gives you a regular dose of strategy case studies to help you think and keep you one step ahead as a professional as compared to your peers. Rajesh is an alumnus of IIM Bangalore and IIT Kanpur and has over 2 decades of experience in the FMCG industry. All previous Strategy with RS posts can be found here