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Snap’s IPO has major challenges, but they have a plan

(BUSINESS NEWS) Snap is losing a whole bunch of money based on their IPO, but don’t worry, they have a plan.

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Trouble ahead?

Uh oh, Snap is losing a bunch of money. Like, a lot a lot. Pro tip for those who also weren’t paying attention: Snap is the company that owns Snapchat. Despite being a compulsive user, I only just learned this. I feel like someone I’ve known as Robert their whole life is now insisting on going by Rob and it just isn’t sticking.

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Unfortunately, I’m kind of worried about them now. Snap’s recently released S-1 has many drawing comparisons to Twitter, but not in a nice way. Like Twitter, Snap is losing leverage and its growth rate is slowing. Chart lover Ben Thompson at Stratechery throws down some comparisons of Snapchat to Facebook and Twitter at the time of their IPOs.

Thompson looks at Daily Active Users in relation to the cost and revenue of each user at the time of each company’s IPO. Unsurprisingly, Facebook, Twitter, and Snapchat’s daily active users have all steadily grown since their onset.

IPO standings


At the time of their IPO, Facebook was winning at the not losing money game. Though the company wasn’t gaining much leverage, it wasn’t losing it either. While Facebook’s total cost per user has increased since their IPO, average revenue per user has has also gone up.

According to the graph, Facebook had to spend a bit more per user, but its profits would continue to grow so long as either average revenue per user or total users increased overall. Lucky for Facebook, both of those things happened.


Twitter also had a flat cost of revenue at the time of its IPO, but its total costs were higher than Facebook. However, Twitter wasn’t able to grow revenue per user or increase the total number of users in a meaningful way.

User growth slowed and costs never flattened. Thompson notes, “had the company simply kept its pre-IPO cost structure it would be in far better shape today.” At the time of their IPO, Twitter and Snap are losing money on users.


For Snapchat, costs per user have surpassed revenue per user. Snapchat now pays more per user than Facebook or Twitter at the time of their IPOs. Snap needs to grow users faster than costs or figure out how to grow revenue per users.

Snap’s S-1 states their strategy is investing in product innovation through their camera platform.

The game plan is to engage users who they can then monetize through advertising. Click To Tweet

Snap’s strategy

Snap points out that as their user base grows, they will incur additional costs.The more people join, the more content is consumed and shared.

Snapchat isn’t fun if there’s no one to send snaps to, so user growth is exponential as new adopters and veteran users convince friends to download the app.

This means additional employees are required, as well as increasing computing infrastructure and development costs.

However, they have a plan: television advertising money. According to the S-1, worldwide advertising is expected to increase by over $1 billion in the next three years. Mobile advertising is predicted to increase nearly three times. Snap notes that people’s focus has shifted from television to mobile screens, particularly in its core demographic of Daily Active Users.

Snap is confident that its concentration in the US and access to high quality ad units make it desirable for advertisers. If Snap captures the best customers by delivering innovative products, even if those innovations are costly, they will profit. That’s banking pretty hard on the idea that TV advertising money can successfully tap into mobile, but we’ll see.

Snapple

Thompson points out that Snap’s focus on innovation is essentially Apple’s go-to strategy. However, Thompson says the problem with this approach is that it didn’t work out for Apple initially. When Apple first took to the market with Mac computers, they didn’t stand a chance against Windows. Microsoft had leverage by playing on already established standards in computing, creating backwards compatible software and tapping into IBM as a sugar daddy.

Likewise, Facebook currently holds queen bee status over Snapchat for the simple fact of its market saturation. While both companies managed to digitize offline relationships, Facebook has a tighter stranglehold on marketing.

However, Snap’s camera company might be what can put them ahead.Snap said they envision the camera screen as a “starting point for most products on smartphones.” In fact, Apple introduced a quick swipe feature allowing users to access their cameras without having to unlock or open up the camera app.

Like Apple, Snap thinks beyond form and function, instead focusing on delivering what the user doesn’t even know they want.

Five years ago I had no idea that my favorite app would be something lets me send out disappearing messages, but here I am preaching to anyone who will listen about the glory of Snapchat.

Snap cares

And bless Snap, because they really do care about all of us selfie addicted kids out there. Their S-1 states, “We believe it’s always worth trying to build something that will empower people to express themselves, live in the moment, learn about the world, and have fun together — even when it’s not clear that what we build will be successful or make money.”

This is why I love Snapchat.

Even though there are bumps in the road–some of those sponsored filters are really obnoxious–at its core, Snapchat believes in communication innovation.

They know they’re working with something revolutionary and are willing to take risks to continue serving their loyal consumers. I’m rooting for Snapchat, and apparently so are investors. They’re valued at $18.5 BILLION dollars, so let’s all cross our fingers and hope for the best.

A special thanks to Ben Thompson for keen analysis and wicked awesome chart skills.

#vivasnap

Lindsay is an editor for The American Genius with a Communication Studies degree and English minor from Southwestern University. Lindsay is interested in social interactions across and through various media, particularly television, and will gladly hyper-analyze cartoons and comics with anyone, cats included.

Business News

How remote work has changed over the last decade

(BUSINESS NEWS) let’s reflect on how remote working and telecommuting has changed in recent years and look to how it will continue to change in the 2020s.

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As someone who often works remote, it’s interesting to see how much that means for work has evolved. The increase in commonality has been steady, and shows no signs of slowing down. Go Remotely has developed an insightful graphic showing the changes in trends regarding remote work over the years.

“For decades, the established economy dictated that you should pick one job, visit the same office for the next 40 years, and then retire,” reads the graphic’s intro. “However, recent remote working stats suggest the working world might be in for some revolutionary changes.”

From there, the graphic is broken down into five facets: Flexible Workspace Policy, Entrepreneurial Minds, Telecommuting is a Growing Trend, The Role of Companies in the Remote Working World, and The Future of Telecommuting.

With Flexible Workspace Policy, its suggested that telecommuting could be a solution for costly issues including lack of productivity caused by employee distractions, health problems, etc. It is said that employers lose $1.8 trillion annually due to these issues.

The end of 2018 found 35 percent of the US workforce working remotely. This is only expected to climb. Ten percent of employees don’t know if their company offers flexible work policies (this is something to check into!)

Bills and laws for virtual jobs passed by governments reflect the need for accessibility, economic stability, and emigration concerns. Companies with flexible work policies have reported seeing increases in productivity and profits. (Funny those both start with pro, no?)

With Entrepreneurial Minds, a few interesting things found include: remote workers are less likely to take off if they are sick, the majority reports better productivity when working alone, the majority reported lower stress levels. However, there is a problem with not being able to unplug after work which is an issue for some.

Telecommuting is a Growing Trend finds that there has been a seven percent increase between 2012 and 2016, with the majority (80-100 percent) reporting they work remotely. Industries seen embracing remote work include: transportation, computer/information systems/mathematical, arts/design/entertainment/sports/media, finance/insurance/real estate, law or public policy, community/social services, science/engineering/architecture, manufacturing or construction, healthcare, education/training/library, and retail.

The Role of Companies in the Remote Working World finds that the pros to hiring remote workers includes: finding talent outside of your geographic area, improves retention on work/life balance, increases productivity by decreasing commute time, and saves money by requiring less office space. The cons include lack of timeliness when it comes to receiving information from employers.

Finally, the Future of Telecommuting suggests that in 2020 the US mobile worker population will surpass 105 million (and will account for 72 percent of the US workforce). Hiring managers predict that telecommuting will increase tremendously, most skills will become even more niche over the next decade, and many think that 38 percent of their full-time workers will be working remotely in the next decade.

How do you feel about the increase in remote working and telecommuting?

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Business News

ClickUp team productivity app is gorgeous and wildly efficient

(BUSINESS NEWS) Seeking to improve your productivity and speed up your team, ClickUp is an inexpensive option for those obsessed with efficiency.

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Back again to obsess over productivity apps – ClickUp, is a project management tool seeking to knock the frustration out of PM. It’s getting some good reviews, so I gave it a try for a week by setting up my current job search as a project and getting a feel for the app. And as you’ve read in my other reviews, we will address features and design.

On the feature front, ClickUp offers a pretty standard set up of tools for a productivity app. What stands out first and foremost are the status options. In general, most productivity statuses are simple: not started, started, in progress, done, etc.

But ClickUp lets you set up custom statuses that match your workflow.

For example, if you’re doing instructional design projects, you may assign projects based on where they are flowing in an ADDIE model, or if you are a Realtor, you may have things cataloged by sold, in negotiation, etc.

Customization is king and custom status is the closest you get to building your own app. And if you like it simple, you don’t have to customize it. The assigned comments feature lets you follow up on specific comments that originate action items – which is useful in team collaborations.

You can also assign changes to multiple tasks at once, including changing statuses (I would bulk assign completion tasks when I finished applications that I did in batches). There a lot of features here, but the best feature is how the app allows you to toggle on and off features that you will or won’t use – once again, customization is front and center for this platform.

In terms of design and intuive use, ClickUp nailed it.

It’s super easy to use, and the concept of space is pretty standard in design thinking. If your organization uses Agile methodology, this app is ready for you.

In terms of view, you can declutter the features, but the three viewing modes (list, box, and board) can help you filter the information and make decisions quickly depending on what role you have on a board or project. There is also a “Me” board that removes all the clutter and focuses on your tasks – a great way to do focused productivity bursts. ClickUp describes itself as beautifully intuitive, and I can’t disagree – both the web app and mobile app are insanely easy to use.

No complaints here.

And the horizon looks good for ClickUp – with new features like image markup, Gannt charts (!!!!!! #nerdalert), and threaded comments for starts.

This application is great, and it’s got a lot of growth coming up to an already rich feature base. It’s free with 100MB of storage, but the $5 fee for team member per month that includes team onboarding and set up (say you’re switching from another platform) and Dropbox/Google Docs integration? That’s a bargain, Charlie.

ClickUp is on the way up and it’s got it all – features, a beautifully accessible UI, relentless customization, and lot of new and upcoming features. If you’re into the productivity platform and you’re looking for a new solution for your team, go check it out.

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Business News

Should you alter your business travel due to the Coronavirus?

(BUSINESS NEWS) Got a business trip coming up? Worried about the coronavirus spoiling those plans? Stay up to date and safe with this cool site!

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The Center for Systems Science and Engineering (CSSE) at John Hopkins University has created a website that tracks one of the biggest trends of 2020: the coronavirus. Also known as 2019-nCoV, this disease has already spread to over 40,000 confirmed cases worldwide, with over 900 deaths (as of when this article was published, anyway.)

Not to mention, the United States Center for Disease Control and Prevention (CDC) notes that we still don’t know exactly how the virus spreads from person-to-person. In fact, there’s quite a bit we don’t know about this disease and although some people are reported as recovered, it’s only a small fraction compared to how many are sick.

So, what’s so great about this tracker? Well, first of all, it updates in real time, making it easy to keep track of everything we know about confirmed cases of the coronavirus. It’s chock full of statistics and visuals, making the information easy to digest. Plus, with a map front and center, it lets you know exactly where there have been reported outbreaks – and how many people have been diagnosed.

Because the site sticks to cold hard facts like statistics and maps, it also means you can avoid the racism and general panic that’s accompanied news of this outbreak.

This is a great tool for staying informed, but it’s also extremely helpful if you’re going to be traveling for work. As the virus continues to progress, you’ll be able to see just how many cases of coronavirus there are in the areas you’re planning to visit, which will allow you to plan accordingly. Even if you don’t feel the effects, you can still risk passing it to other people.

(In fact, the CDC recommends those traveling from certain areas in China practice “social distancing” when they return to the US, avoiding public spaces like grocery stores, malls and movie theaters.)

Of course, if you have something planned several months from now, don’t cancel your conference plans just yet. A lot can happen in that amount of time, so avoid the urge to check the website every couple hours. It’s supposed to be a tool for staying informed, not staying stressed out.

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