The Value Of Something That Isn't There

We’ve known for a long time that a picture is worth a thousand words. Now we know what a disappearingpicture is worth: $3 billion.

That's how much Facebook put on the table to buy Snapchat. The two-year-old photo company that redefined “now-you-see-it-now-you-don’t” seems to think it’s worth even more: it turned down Facebook’s offer. This may be more shocking than all of the racy photos combined that people have sent using the app.

If you took a poll a week ago asking which Millennial-friendly brand was worth more, Snapchat or something like Abercrombie & Fitch, I imagine most responders, with little hesitation, would have said Abercrombie (which, in its current iteration, has been around for nearly 30 years and operates more than 1,000 locations). Its current market cap is $2.7 billion, with over $4.5 billion in sales.

Why is Snapchat one of the hottest appsof the moment? Millennials will tell you it is because Snapchat enables impulsivity without consequences. The snaps you send can be silly and flawed and there’s no judgment. Or at least, no judgment that lasts longer than the snaps themselves. Snapchat allows users to be daring and honest without having to fully leave their comfort zone. While Instagram turns average pics into keepers, Snapchat turns keepers into teases.



In an age in which we are routinely reminded/warned that what we post online may stay online longer than we’d like, it’s liberating to be able to privately communicate a personal moment knowing that its lifespan will make the mayfly’s seem downright biblical.

Thanks to technology, the behavior of the Always Connected Generation is so dramatically different than the gap between any two previous generations in modern history. Smart companies realize that they must quickly change or they will fade away… like a Snapchat photo.

If companies who have modified their course to appeal to Millennials are a secret society, Snapchat is one of the head council. Snapchat’s active user base is beyond the fantasies of other startups.Snapchats are going out at a rate of upwards of 350 million messages a day; that means 12,000 just since you began reading this sentence.

Once you “get it,” you profit it from it. Successful companies act fast on multiple levels. For example, in only four years, Angry Birds turned a relatively simple iOS game into a media empire extending to everything from an animated TV show to “Star Wars”-branded variations. At the time of this writing, the original game was still in the top 20 in paid games in the App Store. Their other titles were also in the top 50. In 2012, Angry Birds raked in $200 million in revenue and an astounding $71 million in profit.

That company, too, is in the upper echelon of the secret society, because it also knows when to say no: Angry Birds turned down a $2.2 billion offer from Zynga.

What would embolden Snapchat to walk away from $3 billion? Nothing published so far reveals its future plans, but the company is sending the message that it has ample faith in its ability to wring profit from its massive, active community. And what it has in mind is probably no more traditional than the app itself.

Though Snapchat may make it look easy, it is incredibly challenging to remain cool to Millennials. What works changes almost as fast as a Snapchat pic disappears. The old rules of brand loyalty don’t hold true in today’s social, mobile world.  Abercrombie’s stock and profits are down in large part because of the social media firestorm it experienced after its CEO made a controversial comment earlier this year.  And just like that, CNN Money deemed them “no longer cool.”

For Millennials, purpose is as valuable as prestige. Companies like Snapchat have little precedent and arrive with no validation. They simply provide Millennials with a solution for a want or need they didn’t know they had – and, in Snapchat’s case, the fact that the solution is fleeting is a good thing. Something to consider when crafting an offering for this evolving generation of consumers.

However, some things do last. Before Instagram and Snapchat, the biggest photo-related phenomenon of the interwebs was cute cats. Unfortunately, that obsession does not appear to be disappearing…

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