The Pixy drone from Snap begins at $220. The limited release represents a small but significant … [+]
A very cute, tiny, flying camera. Honest-to-goodness user growth. A social media app capable of making users … happy?
Snap had a lot to say at its annual Partner Summit on Thursday, one of those carefully produced gatherings that have become de rigueur in Tech Land. CEO and cofounder Evan Spiegel spoke, as did cofounder/chief technology officer Bobby Murphy and slew of the top Snap brass. Here’s what they said that mattered.
(1) Snap now has more than 600 million monthly users and over 330 million daily ones, each up about 20% from a year ago. It’s a nice, big number, particularly when put into context around the concerns for growth at Snap’s largest rivals, Meta and Twitter. In the same time, Twitter’s have increased by only half that rate. While big, ole’ Facebook delighted investors a day ago by reporting a 4% increase in daily users. Snap, by contrast, looks like it has significantly more room to grow than either of those two.
Worth saying, the real growth challenger to Snap is TikTok. It’s private—owned by Beijing-based ByteDance—and, thus, harder to track. The company acknowledged it had over 1 billion users last September, representing annual growth likely between 50% to 60%. (A different time frame than the Snap user-growth figures, so not a perfect apples-to-apples comparison but a directionally true one.)
(2) Drones! Snap is now selling an itsy-bitsy, limited-release drone called Pixy, which is small (3.5 ounces) and built to operate simply. “A pocket-sized, free-flying sidekick” is how Spiegel referred to it at the conference. Pixy, which starts at $229, is programmed to take off from your hand, then follow several pre-set flight plans, orbiting, following and hovering around you. Its 16-gigabyte memory stores up to 100 videos or 1,000 photos.
As Snap and Meta (and Google and Amazon and…) have discovered the hard way over the years, hardware is, well, hard. The margins aren’t nearly as good as selling software—something like 50% to 75% less—and it takes years and many iterations to get close to a market-ready product.
Making Pixy a limited run—a drop!—saves Snap from hardware’s long-term headaches while it generates buzz for itself around a cutesy item. Buzz for Pixy carries an importance outsized to the dimensions around the Tinkerbell-ish gadget. Why? Snap wants to thoroughly convince us that it makes attractive products. For Snap’s augmented reality vision to pan out (more on that very shortly), it’ll need to convince a wary public that we really to buy AR headsets and wear them around. Even the best such headsets—and Snap’s $149.99 Spectacles aren’t bad—still have a lingering sense of “nerd goggles” around them. Make them cuter and less obtrusive, more like Pixy, and Snap probably has a better chance of mass adoption.
It’ll be interesting to see if other companies looking to establish a foothold in hardware take this same approach, one that sneaker and luxury-goods companies have used for years.
(3) Augmented reality sits at the center of Snap’s future plans. AR is the idea of integrating virtual images and experiences into our physical world, and Snap’s been hammering at this idea since around 2016/2017. As the new name suggests, Meta is now hugely interested in this same thing, though it has pinned substantial hopes on an even more dramatic vision around virtual reality—a vision for us to exist in an entirely new virtual realm completely separate from our current one.
Snap handed out some numbers to bolster the sense that it’s succeeding with this drive. The company’s core AR product, Lenses, the camera software that places animated sunglasses on your face or makes you appear as a cartoon character, has been used 5 trillion times since the company introduced them around seven years ago. Shopping is one of the business cases that make the most sense around Lenses, where you might be able to see how some clothing item looks on you without handling the physical good. Since January 2020, 250 million users have used a shopping-based Lens.
Carolina Arguelles Navas, Snap’s global product marketing lead, cited studies showing that “AR-guided purchases lead to a 25% decrease in returns.”
(4) Spotlight, a user-generated content feed, made a splash when Snap debuted in 2020. The company threw a ton of money behind it, paying out more than $300 million in the first year to creators based on a video’s views.
We didn’t get word on anything that expansive on Thursday, just a little perspective on Discover, a separate video feed from creators and established publishers. These are higher-touch productions than what’s in Spotlight, closer to tiny TV episodes. Snap says 25 independent creators have gotten syndicated shows now on Discover, which more than 155 million users watched from June to December 2021.
(5) Happiness. People on Snapchat are happy.
During Spiegel’s presentation, he briefly referenced a Snap-commissioned study from 2021 that showed more than 90% of users “feel comfortable, satisfied and connected when using Snapchat.” Moreover, Spiegel said, the research found that Snap ranks as the “happiest” platform when compared to other apps. (The study was done by a boutique research firm, Goodques.)
Look, there’s no denying the aurora of corporate spin around Spiegel’s words. (“People love our product. They’re happy—it makes them happy!” It’s what every CEO hopes to get a chance to say.) And Snap certainly has enough money to fill up Santa Monica boardwalk with consultants eager to tell it what it wants to hear, enabling it to pass that pseudo-science to us.
But so do Twitter and Meta. And it is absolutely impossible to imagine the CEOs from either company being able to walk on stage and talk about how their companies make 90% of their users happy. No one would buy it, not a soul. Not with all the research from Instagram leaked last year, including the survey of teen users in which 20% or so said Instagram made them feel worse about themselves. And not with Twitter’s presumptive new owner, Elon Musk, sparking online attacks against his own employees.
Spiegel’s ability to plausibly insist that people are happy while they use Snap underscores a quiet competitive advantage for his company right now. Twitter and Meta? That’s where you go and feel bad. Snap? Well, gosh, that’s a happy place. For as long as Snap can hang tight to this sentiment, it’ll be useful for keeping and growing users. And selling them unexpected things like a teeny-weeny selfie drone.