• by Sean Zepps , Op-Ed Contributor, April 6, 2017

It’s undeniable that Snapchat (and parent company, Snap Inc.) has made a massive impact on the world of social and digital media in the last few years. Thrust into the cultural zeitgeist, Snapchat has singlehandedly helped shape content consumption and creation behaviors, forcing its biggest competitors, Facebook and Instagram, to copy nearly every major update it has released. 

As a result, Snap Inc.’s popularity helped it go public earlier this month with an impressive valuation of $34 billion after its first full day of trading. This made it the biggest tech IPO in the United States since Alibaba in September 2014.

But as the stock begins to fall, many of you might be wondering, will this fad fade? 

The reality is, Snap Inc. hasn’t completely convinced Wall Street that it’s worth all this hype. Industry analysts and editors alike have flagged the company’s slowing growth rate as a major issue, while highlighting its lack of voting rights for outside investors and its risky spending habits as additional red flags. To break down the numbers, Snap Inc. lost more than $500 billion in 2016, brought in $405 million in revenue and spent $925 million. This has left most investors concerned that the buzz will fade and they’ll be left with another Twitter on their hands (which traded below its $26 a share IPO price for more than a year). 

All that aside, Snap Inc. is far from mediocre. Snapchat, for example, grew from 0 to 150 million daily active users in just five years. It now reaches 41% of all 18 to 34 year-olds in the United States, and have captured the attention of nearly every other age bracket. On top of that, it introduces new features so frequently that users have to check back in daily just to make sure they haven’t missed something. Additionally, Snap Inc. launched Spectacles in November of last year, which impressed the toughest of critics and succeeded where Google Glass could not.

Suffice to say, Snap Inc. shouldn’t be underestimated.

Snapchat’s rapid trajectory makes me think it’s worth asking, as an optimistic marketer, what Snapchat will need to do to see a similar trajectory at Facebook or Google.

Investors will only be concerned with the ability to make a maximum profit, which means Snap Inc. will need to grow users at an aggressive and consistent pace. They can do this in a few different ways, but investors will want to start by seeing a Facebook-like innovation pipeline, with the release of new products and features that both delight consumers and help shape the tech and camera industries.

Snapchat will also need to move further down the path of becoming a true media and content distribution company, as Twitter did. That means it will need to release new and innovative ad formats in direct response to industry demands and provide more and more data-driven targeting capabilities for publishers and brands alike. Snapchat’s publishing partners are already producing original content in exchange for sharing revenue from ads placed within its content, but its ad business is still made up entirely of mobile display, making it impossible to compete with the likes of Facebook, which should control 25% of the market by 2019. Either way, we should expect a device expansion in the coming year.

The moral of this story is, Snap Inc. shouldn’t be counted out yet just. Investors’ fears are justifiable, but they are just that — fears. Snap Inc. is well aware of the industries concerns and is undoubtedly working to put them to rest. If their short history speaks for itself, then they have a couple of tricks up their sleeves to keep all eyes on them.