Getting to Know Snapchat

This article was written by Phineas Upham

Snapchat is currently one of the hottest startups in the tech world, even if it does have a somewhat puzzling model for monetization. The idea grew out of a class project between two partners, Evan Spiegel and Reggie Brown. Spiegel was involved in a project management course at Stanford, and the app they created was called “Peekaboo.”

Snapchat had a slow launch. The developers focused most of their efforts on creating a program that was technically sound, and easy to use. They neglected branding for the most part, but they did brainstorm the mascot “Ghostface Chillah.”

By May of 2012, 25 images per second were sent with the application. This was on iPhone only. Android didn’t have a Snapchat application until November of 2012. Scaling the user base also presented the problem of delivering photos in real-time, so the company faced some small setbacks coming into 2013.

Snapchat also released a special application for users below 13 years of age called “SnapKidz.” Kids cannot send these pictures, but they can save them to their local device. Snapchat also has a story feature, which makes one short video or image publicly available for a period of 24 hours.

Snapchat is valued anywhere from $0 to $10 billion, and has vague plans to monetize its user base. It’s growing user base is something of value, but the fledgling company has yet to figure out the best way to turn a profit. Snapchat recently added location-based services to compliment its robust lineup of creative and drawing tools.

Phineas Upham

About the Author: Phineas Upham is an investor at a family office/hedgefund, where he focuses on special situation illiquid investing. Before this position, Phineas Upham was working at Morgan Stanley in the Media & Technology group. You may contact Phineas on his Twitter page.

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