Snap: Exclusive: One large platform is the problem, not all of Big Tech, says Snap CEO
reaches 100 million people in the country, its second largest market after the US.
He also spoke about the reasons behind the
company’s dramatic turnaround since 2017, the ubiquitous Stories format that Snapchat pioneered, the ongoing controversy around Facebook, and Apple’s recent privacy changes, which caused Snap’s shares to plummet 25% last Thursday.
Edited excerpts from the interview:
Snap has been doing really well in India over the past six to eight months. But not too long ago, India wasn’t a priority market for the company. What changed?
We have been building a team on the ground for the past two or three years. One of the things we found out very early on was that our community in India really loves to use augmented reality and also build augmented reality.
Our team started creating classes for young people. I think we’ve now taught over 5,000 youngsters how to build augmented reality experiences and share them through Snapchat. All of that helps create a much more locally relevant Snapchat experience when the content is locally relevant. I think the application itself resonates a lot more.
And this has helped you gain users?
Over the past few years, we’ve definitely seen some strong growth. We now reach over 100 million people in India. It is fun to see the momentum. It is a result of having a strong team on the ground, and supporting our partners locally, whether they’re building AR experiences or content.
Why did it take you this long to focus on India?
When we started in 2019, we had just one person. It was one of the first real offices outside the United States. The company was still small and just a startup and it was hard to focus on many countries. But as we started expanding around the world, we built an office in India.
India is now the second largest user base for Snap outside of the US, right? How did things change?
Yeah, correct. And I think the thing that made a big difference for us was rebuilding our Android application. So if you go back to 2017, we hadn’t done enough work to make sure that the client application really worked well, no matter what smartphone you had. India’s always invested way ahead of the curve on telecommunications infrastructure. But our application at the time was not keeping up with the actual development of the infrastructure. So we had to rebuild our Android application, which was a huge project for the business. After we did that, then we started to see a lot more traction in India.
Snap has had a turnaround in the last year or so. Tell us about that.
I think if we go back to the 2017-2018 timeframe that I was just talking about, we made a couple of really big long-term bets at the time that put a lot of short-term negative pressure on the company.
What were those?
One of the things that we did was transition to a self-serve advertising platform, one where people could programmatically buy our advertising. That took the CPMs in our advertising auction down by something like 98%. So imagine, the price at which you’re selling something is declining by 98%. That negatively impacted our revenue. And that really concerned people.
Around the same time, we had a lot of challenges with Android. And so we had to spend two years rebuilding our Android application. It was a perfect storm at the time… revenue headwinds, user growth had challenges, the Android platform, and changes to our leadership team.
And even though all of those decisions were the right decisions for Snap in the long term, there was short-term pressure, which concerned people, investors. Also there’s always the backdrop of the very intense competition in the technology business. But I think now several years later, those have proven to be the right long-term decisions.
This is the time when Facebook launched its own version of Stories… now every platform has that feature.
As a designer, it’s really exciting to see products that we make used all over the world, because not only do we influence the world through Snapchat, but also through people who copy what we make.
And would you say that now players are trying to replicate the success of TikTok? Even you’ve launched Spotlight, which is similar.
TikTok helps people who maybe don’t have a following, get distribution if they make a really great piece of content. And that makes it really different from others. Because in social media, more people see your stuff if you have a big following. So it makes sense for influencers and famous celebrities and things like that.
But if you’re someone who’s never made a video before, and you make something really creative, it’s hard for people to get distribution. So one of the things that we noticed on Instagram, TikTok and other social media platforms was that people were taking the really funny Snaps that they made and sharing them with a large audience elsewhere. Since we were always worried about the negative implications of that sort of virality, people would take those videos and put them on other platforms. It took us a long time to get to a place where we were comfortable with our machine learning systems and could invest in a big enough team of human moderators. They would make sure anything that’s reaching any meaningful audience is actually reviewed by a human.
Your user base comprises mostly young people, who other social media sites like Facebook are struggling to attract.
Snap resonates with 13- to 34-year-olds, partly because it offers something that’s really different from other social media platforms. We’ve always found that young people are more open-minded about new technology. And so in the beginning, when we were trying to show people that you could communicate visually through photos and videos, you know, older people would sometimes say, ‘Why would I do that? I can just send a text message or an email.’ But young people said ‘Yes, I want to try it’. Now in the United States, more than 80% of our community is actually above the age of 18. So I think over time, Snapchat has really grown up to be relevant to all sorts of people, no matter what their age, but we see that when Snapchat first starts growing anywhere, it’s usually young people 13 to 34 who really gravitate to our products.
So will that be the same in India as well?
In the early days, certainly in India too we saw young people as the first set of users but now it’s broadening.
Could you talk a bit about content moderation on Snap, especially in light of government regulations?
We’ve had very positive interactions with the Indian government and their digital-first agenda. And so I think we’ll continue to work together with them there. But the way that Snapchat is designed with our close content platform, I think is consistent with that perspective.
Philosophically, we’ve always believed that broadcast content that’s being shared with a big audience needs to meet a higher standard. It also needs to meet our content guidelines, which is why we actually have a closed content platform, and we decide who’s allowed to distribute content on Snapchat. We work with many local partners in India to produce locally relevant news and entertainment content. This is consistent with the way that many countries and not just India are thinking about higher standards when it comes to distributing content to a big audience.
On the communication side, we believe people should be able to have a private conversation between friends. That’s something that resonates with the way many governments around the world are thinking about technology.
Even with platforms like WhatsApp, which is also end-to-end encrypted, we’ve seen government intervention.
Our general framework is that a private conversation with friends on our platform gives you a right to privacy. If the government wants to access that conversation, they need to do so through legal due process. We have a mechanism where law enforcement can work with our law enforcement operations team, if they believe criminal activity is occurring.
Our platform is designed to protect private conversations between individuals. And I think this is a core foundational element of democracy. Democracies have always tried to balance privacy and safety. And we do that as well.
You say you’re different from all the other social media platforms. Have you then benefited from the fact that there are a lot of users who moved out of Facebook, and some of its other sister platforms? Has anti-Big Tech sentiment benefited Snap?
I don’t think it’s the anti-Big Tech sentiment that’s benefiting Snap… Bobby (Murphy) and I were among the first generation to actually grow up with social media and understand its impact.
Our first blog post talked about this specific problem. The reason why Snapchat has been really successful in this environment is because it offers something different. And we offered that long before there was any sentiment about privacy, about Big Tech, about any of these big societal issues that we have today. We identified a lot of these challenges before they became popular to talk about.. And that’s why we were able to grow even though these other social media platforms were so big already.
Come to think of it, you rebuffed Mark Zuckerberg’s acquisition offer in 2013. What do you think of it in hindsight?
Bobby and I feel really blessed to be able to work on this business. Obviously, we have a very different vision for the future than these other businesses. And we’re just very fortunate to work with such a great team, to try to continue to serve our community in India and around the world.
What do you think is wrong with Big Tech, especially in the social space right now? What do you make of the Facebook whistleblower’s account that the company puts profits over the good of its users?
I think the challenges that we’re seeing today are not necessarily problems faced by all of Big Tech. It is in particular, one large platform that has found out time and again that it has a negative impact on society that well-intentioned people inside their business have tried to make changes. That’s the problem that we’re really dealing with today. That business has really large influence and operates multiple very large platforms that reach billions of people.
So what’s likely to happen as a result of this?
Clearly the government is going to get involved. The difficult and most frustrating thing is that in the technology industry, things move so quickly and have such a large impact that unless you take a moral responsibility from the beginning, when you’re developing it, the regulation is usually far too late. So I’m not sure what this means for the future.
But I think what will be vitally important going forward is that all technology companies, anyone working on new technology products, think from the beginning about the impact on society and making sure they’re doing the right thing to serve not only the community of people using their products, but the broader world.
More than 80% of your revenues come from the US… what’s the outlook for India?
It’s very early for us when it comes to generating revenue in India. We have been far more focused on making sure that the app experience is relevant for our community. Our focus is to drive the growth of our community overall. And slowly as we learn more about it we can best serve advertisers in India.
The new Apple privacy rules on iOS devices are hitting companies like you.
We really believe those changes are critically important over the long term, because for people to have trust in online platforms, they need to understand that their privacy is being protected. They are consistent with our values and our long-term perspective on the industry.
But to transition is very challenging, because you have advertisers who have been used to using a very sophisticated set of tools for a decade or more. And they have to transition to a totally new set of tools.
As an advertiser, especially performance advertisers who are used to having that control on their advertising campaigns, this is a big change in their toolset and the way that they measure advertising. So it’ll be bumpy while the transition is happening, but ultimately, we think it’s certainly in the best interest of our community.