Snapchat

Pay attention to the tools teenagers use — they become big companies

Shaan's heuristic for spotting winners: he noticed Replit because his teenage nephew used it to learn coding. The products teenagers adopt (Snapchat, Minecraft, Roblox) tend to become big companies, so they're worth tracking early.

“Kind of like, that's interesting stuff teenagers use. You should probably like pay attention to stuff teenagers use because those tend to be big companies, you know, whether it's Snapchat or, you know, Minecraft or Roblox or things like that.”

Steal thisWatch what teenagers are adopting before anyone takes it seriously — those products disproportionately become the next big companies.

When the world moves one way, the opposite becomes the opportunity

Shaan's heuristic: the more everyone piles into a channel, the better its opposite becomes. Facebook's public permanence created demand for ephemeral Snapchat; as marketers flood digital ads, neglected channels like print and direct mail get a better ROI.

“which is that when, um, when, when, when the whole world moves one way, it actually creates the opportunity back for the other thing. And so like a great example of this is when Facebook got so popular and Facebook was like, everybody's on it.”

Steal thisLook at where everyone is piling in, then bet on the underused opposite channel for cheaper differentiated ROI.

Semil Shah's breakout-company-of-the-year track record

Investor Semil Shah picks one breakout company each year. His list: Stripe (2012), Snapchat (2013), Slack (2014), Coinbase (2017), Airtable (2018), Superhuman (2019), and Hopin (2020) — a near-perfect hit rate of generational companies.

“So 2012, he picked Stripe. 2013, he picked Snapchat. 2014, he picked Slack. Um, didn't do 2015, didn't do 2016. 2017, he did Coinbase. Um, 2018, Airtable. 2019 was Superhuman. And for 2020, he picked Hoppin.”

Steal thisTrack who the best investors publicly call as breakout each year, and study what those companies have in common.

Stories beat long text: a Wikipedia or recipe site in Stories format

Shaan argues the Stories format (Instagram, Snapchat) is a superior way to deliver information quickly, and that long-form text/video products like recipe sites or even Wikipedia could be rebuilt as Stories.

“And I also just have a theory that in general Stories have been shown to be like the superior communication format. Like, there's a reason that Instagram Stories, Snapchat Stories, these have taken off, and it's because it's a really quick way to get entertainment or information. It's a great way to communicate from one human to another. And I just think more, more things that are in long-form text or long-form video, you could just convert to story-based formats and do really well. So like Wikipedia today is all about an encyclopedia with long-form text. I wonder if you could create a modern-day Wikipedia using stories as your way of explaining what something is”

Steal thisTake a long-form text product (recipes, encyclopedia) and rebuild it in a quick Stories format.

Snap Minis: be the WeChat-style mini-app platform for the West

Shaan breaks down Snapchat's new Minis as mini-apps built inside the messenger, copying WeChat where you pay bills or buy movie tickets without leaving the app. He argues Snap must become a platform to survive Facebook copying its features, making early builders welcome.

“Minis is actually, I think, a bigger move by them. So Minis are basically mini applications built into Snapchat. What they're doing is they're copying WeChat, which is the big messaging app in China. WeChat has like a million little apps built in, like, oh, you need to pay your bills? You just do it through WeChat.”

Steal thisBuild a utility (rent splitting, payments, ticketing) natively inside a messaging app instead of forcing users out to your own app.

Suli quit, got bored, and rode the Facebook platform launch to millions of users

Shaan tells how Suli quit Microsoft, moved home, and the day he quit Facebook announced its developer platform. To knock off the rust he built a silly superlatives app ('which friend ends up in jail'), it went viral to tens of millions of users, and Naval flew him out to invest.

“And so he builds a Facebook app that was stupid. It was like a superlatives app, like which of your friends is most likely to end up in jail or whatever. Boom, goes viral. He ends up with tens of millions of users. And that changed the trajectory of his life where Silicon Valley starts calling him and Naval flies him out to San Francisco and wants to invest in him and shit like that. So he took a bet on the sort of day the platform launched.”

Steal thisWhen a major platform opens its developer API, build something on day one to ride the early distribution wave.

Evan Spiegel explains Snapchat: communication, not memories

Shaan recounts a famous video of Snapchat's Evan Spiegel using a paper notepad to distill the product into two insights: photos should be used for communication rather than memories, and Stories run beginning-middle-end while every other feed was reverse-chronological.

“Basically, photos today are thought of as memories. You take a photo and you're stashing it away for essentially your keepsake. He's like, but we use photos for communication. We just think if you send somebody a photo, it's a great way to communicate, you know, what you're doing, how you're feeling.”

Find the community first, then build the software

Greg's product order of operations: a common mistake is building software then hunting for a community. Instead, find a community with a burning need (Snapchat started in $50K/year LA prep schools) and build the software for them.

“a mistake a lot of people make is they create software and then they find the community versus like finding the community and then building the software.”

Steal thisIdentify a specific community with a burning need before writing any code, then build the software that ladders up to that need.