2

3
Over the years, many ideas have emerged from the dorm rooms at Stanford
University, but not all of them evolve into billion dollar companies.
Snapchat, however, has beaten the odds. The company’s stock has recently shot
up during the COVID-19 pandemic, a bright spot in a decade of highs and lows.
The graphic above is a high level look at Snapchat’s 10-year history, including user
growth and financials. Snapchat’s wild ride from start-up to massive success is well
documented, so we’ll focus on key elements of story—product design, the
Facebook rivalry—and look at how the company is doing today now that the hype
surrounding the app has died down.
But first, a quick history…

4
Snapchat originally began its life as a project called Picaboo in 2011.
Cofounders Evan Spiegel, Bobby Murphy, and Reggie Brown, who were attending
Stanford, began building an app that could send photos that disappear after a
certain amount of time.
Picaboo was renamed Snapchat in 2012, and by the end of that year, it was clear
that the start-up was onto something big. A $13.5 million Series A financing in early
2013 helped fuel the company’s explosive growth.

5
One of Snapchat’s biggest strengths over the years has been innovative product
design. Many of the features we now see baked into every social app originated from
Snapchat.
the concept of stories is perhaps the most significant contribution to the digital
landscape. Disappearing short-form videos started off as a messaging tool, but
ended up transforming the way people share their lives online.
As well, the forward-looking acquisition of Looksery in 2015, helped introduce
millions of people to augmented reality (AR). AR continues to be a major growth
driver for Snapchat today, as advertisers embrace the Lenses feature.

6
To Mark Zuckerberg’s credit, he realized the potential of Snapchat early.
When the company was only one year old, the Facebook CEO offered the Snapchat founders $60
million to buy the company. When they rejected the offer, Facebook almost immediately launched an
app called Poke which was extremely similar to Snapchat’s offering. You’d be forgiven for not knowing
what Poke is, as the app received a tepid reception and was quietly shut down in 2014
For Snapchat, Poke was a blessing in disguise as it brought even more attention to their growing app.
Mark Zuckerberg, however, was not done trying to steal the company’s thunder. After offering $3 billion
in cash to purchase Snapchat (the offer was once again rebuffed), Facebook copied a number of
features from Snapchat and integrated them into Instagram.
Stories were a massive hit for Instagram, and Snapchat, which could not yet match Instagram’s scale,
took a big hit. Growth began to slow noticeably after that Instagram update.

7
Snapchat hit rock bottom in 2018 after shares dropped below the $5 mark, and user growth had stalled out.
As well, underwhelming sales of Snapchat’s Spectacles product garnered negative press and hurt the
brand’s “cool factor”.
Today though, the situation looks much different. The app still has a strong market share with the younger
demographic, and close to 300 million daily active users. Snapchat was one of the many digital companies to
benefit from the COVID-19 pandemic (or, at least, the increase in digital content consumption), and the share
price has rocketed to new highs. One other promising indicator is the company’s rising average revenue per
user, or ARPU.
Snapchat hit rock bottom in 2018 after shares dropped below the $5 mark, and user growth had stalled out.
As well, underwhelming sales of Snapchat’s Spectacles product garnered negative press and hurt the
brand’s “cool factor”.
Today though, the situation looks much different. The app still has a strong market share with the younger
demographic, and close to 300 million daily active users. Snapchat was one of the many digital companies to
benefit from the COVID-19 pandemic (or, at least, the increase in digital content consumption), and the share
price has rocketed to new highs. One other promising indicator is the company’s rising average revenue per
user, or ARPU.