How Snapchat Became Part of Pop Culture and Paved the Way for Other Social Media & Investing Secrets Most Learnt Too Late
Jeremy Liew, Partner @ Lightspeed Venture Partners & Reid Hoffman, Partner @ Greylock
20VC: The Snapchat Memo: Lightspeed's Jeremy Liew on The 4 Key Elements To Consider When Evaluating A Consumer Social Product, What is Good/Great/World Class For Retention, Usage, and Downloads in Consumer Social Today & The Core Insight Development of Eva
(Feb 24, 2021 - 40 minutes)
Jeremy Liew is a Partner @ Lightspeed Venture Partners, one of the leading firms of the last decade with a portfolio including the likes of Affirm, Snapchat (Snap), Mulesoft, Epic Games, Carta, and more amazing companies. As for Jeremy, in the past, he has led deals and sat on the boards of Snap, Affirm, Blockchain.com, and The Honest Company to name a few. Before Lightspeed, Jeremy was with AOL, first as SVP of corporate development and chief of staff to the CEO, and then as general manager of Netscape. Due to his incredible investing success, Jeremy has been featured on the Forbes Midas List multiple times.
The Twenty Minutes VCÂ - Venture Capital, Startup Funding, The Pitch
By Harry Stebbings - Founding Partner @ Stride.vc & Founder of 20VCMicrofund
How did Jeremy get first dibs on Snapchat?
Jeremy first heard about Snapchat from his partner Barry Egger’s daughter and went through a lot to contact the Snapchat team, finally getting a hold of Evan Spiegel through Facebook’s Stanford network. The takeaway is that you have to find a way to stand out and keep persisting to get that first meeting everyone is after.
4 things to look out for
Can it become part of pop culture?
Does it create new habits?
Is there a scalable way to grow?
Does the founder have unique insight behind the success?
Who was Snapchat’s early market?
Since consumer tech is becoming a lot more about the consumer and less about tech, many social networking, message, e-commerce, and streaming apps are now part of pop culture, and early adopters of pop culture tend to be women because of the way they interact and build relationships with peers as compared to men — women find excuses to get together to talk and share information, whilst men find excuses to get together to avoid talking.Â
Snapchat caught Jeremy’s attention because 75% of the user base were young women in college, who are the ‘carriers’ and spreaders of both social and pop culture.
How did Snapchat capture its early market?
Snapchat spread mostly through word-of-mouth (WOM) because users could only add friends by using their phone camera to capture other people’s profiles. The user percentage was very geographically concentrated, a strong indicator of WOM, and it even managed to become the 3rd most popular app in Norway, transcending pop culture.
What was the benchmark for Snapchat’s statistics?
Snapchat had 90,000 daily users from 180,000 installs in March-April 2012, 50% month-on-month growth, 50% DAU to MAU ratio, and 50% retention after 90 days, which show very high engagement, retention, and growth rate.Â
Users opened Snapchat up to 6 times a day and at least once every 2 days, a number higher than the average for photography and social media apps. This means that Snapchat has become a habit for a majority of the users and it has a lot of upside volatility.
The rule of thumb for messaging and social networks: at least 50% DAU to MAU ratio and a D-30 of 30-40%.Â
What about Snapchat made Jeremy so drawn to it?
Jeremy said Evans talked about how Facebook and Instagram were creating performance anxiety because they only showed the ‘best points’ of someone’s life, so people didn’t necessarily post often. Evans wanted to make Snapchat an app for users to share their real-life experiences that would become the basis of strong, long-term relationships. By making the posts last only 24 hours, it allowed for more silliness, frivolity, and spontaneity, and users would post more often.
Evan’s insight was to use Snapchat to help users return to the original ways that people have historically built relationships with each other.
What is a leader’s greatest asset?
Evan had great product vision and was able to look at things with a fresh perspective instead of reiterating the product’s current state. He is also aware of what users actually need instead of just following the latest trends.
Snapchat’s biggest difference from other social media is their stories — since the Friendster era, posts had always been shown in reverse chronological order, but Evans wanted to create a feed of stories told in chronological order that expired after 24 hours.
What is the value of product vision?
There are features and functionality of social media apps and software, but user culture also plays an important part, eg. Instagram culture is still a highlight reel of someone’s life, despite having famously copied Snapchat’s story feature, their users still don’t use it the same way they use Snapchat.
Who are some of the people behind Snapchat’s success?
Bobby worked a lot on computer vision, including the lenses used for AR purposes and filters to interact with onscreen things. Imran Khan joined as Chief Strategy Officer, taking over sales and monetization ops, financing work to raise capital, and driving revenue growth, thus allowing Evan to focus on product engineering.
20VC: Reid Hoffman on Investing in Airbnb and Passing on Stripe, The Different Styles of Truly Great Leaders, How To Think Through Ownership and Price in Venture & How To Ensure Venture Partnerships Always Have Trust and a Learning Mindset
(Feb 24, 2021 - 40 minutes)
Reid Hoffman is a Silicon Valley stalwart in the modern technology world. On the investing side, he is a Partner @ Greylock, one of the leading venture firms of the last 2 decades with a portfolio including Facebook, Airbnb, Dropbox, Figma, Appdynamics, and Okta to name a few. Reid has led investments in Airbnb, Convoy, Coda, and Aurora to name a few. As an operator, Reid co-founded LinkedIn, the world’s largest professional network and before LinkedIn, Reid served as executive vice president at PayPal, where he was a founding board member. If that was not enough, Reid is the co-author of Blitzscaling and two New York Times best-selling books: The Start-up of You and The Alliance.Â
The Twenty Minutes VCÂ - Venture Capital, Startup Funding, The Pitch
By Harry Stebbings - Founding Partner @ Stride.vc & Founder of 20VCMicrofund
How did Reid make his way into the world of startups?
Initially geared towards being an academic, Reid discovered that there were other means to help society, namely through software entrepreneurship. While learning how to build software, he also learned to build products that could make a difference. In doing so, he started companies, which then led to investing and eventually venture with Greylock.
Does Reid consider himself an innate and natural leader today?
Compared to when he was younger, Reid believes himself to be more of a leader now. He affirms this by sharing that his style of leadership revolves around contemplating and solving outstanding problems.
What leadership elements did Reid struggle with and overcome?
When starting out at LinkedIn, Reid struggled to come to terms with the ‘entrepreneur’ label even though he did not set out to be one. However, he came to accept that he shares traits with the said label by confirming that he effortlessly thinks about how to better contribute to the betterment of society.
What does Reid believe are the different strands of leadership?
Reid believes that most people make the mistake of assuming that the ‘CEO’ archetype is the only form of leadership that is relevant when there are different types of leadership styles. Some people would be similar to the ‘Druid’ archetype that predominantly guides critical thinking and sharing a solution through.Â
How does Reid think about the weight of his words today?
Reid reminds aspiring board members that they do not have any operational authority within the organization. As helpful as one tries to be, the best course of action when asked for an opinion would be to be honest but to remind the asker to coordinate received suggestions with their company afterward.
What is the biggest danger for board members today?
One of the biggest dangers for board members today is continuously being reinforced with the idea that they know everything. As such, it is wise, to be honest with what one does not know, cultivate self-knowledge and speak on what one knows instead. Doing so will be more impactful in the decision-making and or learning processes.
How should founders think about improving themselves?
Founders should carefully reflect on their weaknesses and assess if they were important to work around in pursuit of the goals that needed to be accomplished, as most weaknesses are typically the opposite of strength. Therefore, adjust working circumstances to circumvent weaknesses by hiring people who excel in those areas.
What are Reid’s notes on building trust?
Reid believes that building trust in the business world could be likened to brand management wherein every interaction is an opportunity to improve the relationship. It would also be rewarding to be conscientious of trust and spend extra time in doing so especially within the startup stage.
How can partners develop true trust within venture partnerships?
In the venture landscape, true trust is developed when involved parties are transparent with their commitments, upholding accountability and maintaining a drive towards the objective regardless of time and challenging moments. Going the extra mile in communicating and initiating projects could also improve trust in the long run as the collective interest has been genuinely upheld.
What was the story behind Greylock investing in Airbnb?
Reid initially heard about the pitch for Airbnb from a third party who greatly misconstrued the concept. It was only through speaking with the founders directly that Reid gained a better understanding of the idea and eventually got behind the investment.
Why did Reid turn Stripe down?
Reid admitted that the payment industry was a challenge to navigate then and was wrong with his pre-money valuation. Furthermore, he was uncertain about the risk-reward percentage, as he believed them to be unclear which led to him regretting calling off the investment to this day.
How does Reid think about the importance of ownership?
Ownership is immensely important and should be carefully considered when a business starts growing too big. In order to have the fund work correctly, there should be an average of 20% target ownership for it to sustain over time. This is because once it scales too largely the numbers will also be compounded largely.
How does Reid think about ensuring a learning mindset in venture partnerships?
Reid believes that a learning mindset is imperative in venture partnerships. He personally ensures that he could share his principles and teach those around him to collectively improve morale and performance. Another means to instill that mindset would be to reflect on old patterns.
What could be done deliberately to ensure learning mindsets?
Firstly, one has to personally adopt the belief that one is always learning. From there, understand that things are constantly changing in the surroundings and realize that one does not know everything. Reid personally advocated that he now finds himself to be a better investor and board member by incorporating these ideas into his life.Â
How to build references despite ongoing commitments?
Reid emphasizes that the starting point for expansion should always be a solid and transparent relationship. Be frank about current commitments and draw a clear line while being as helpful as possible. Eventually, the partnership will find its operating rhythm and it becomes easier to navigate while building rapport with others.
What about blitz-scaling in a COVID world?
Blitz-scaling is the future of how tech, if not, most companies will be built. With speed being different in a COVID world whereby the entire world has slowed down, it then becomes important to apply speed differently by contemplating on additional risks on certainty, capital allocation, and learning agility in relation to the competition.
What would Reid like to change about Silicon Valley?
Reid would add to the existing culture by advocating peers within the Valley to not only think about the success of individual products and the overall business but broadly about how they fit within society and the impacts they are contributing.
What would Reid do differently with Greylock?
Reid would have spent more time setting up a solid network infrastructure during its infancy.
What would the next 5 years look like for Reid?
Reid hopes to dabble into more tech investments and hope to arrive at some conclusions on a technologically forward strategy for society. He also hopes to better understand the form and function of the board of directors in the venture landscape.
Thanks for reading. Reach us @Twitter/ @Facebook with tips and feedback or by leaving a comment on our post here. Remember to share if you like what you read.
If you are hungry for more of Podtakes, do check out our Archive here for more.