But you don’t do the same things because the different apps were built in different orders for different audiences. If you compare Facebook and Snapchat right now, you can do the same things on Facebook and Instagram that you do on Snapchat: post photos, message friends, send money, read articles, watch celebrities’ videos.

They differ radically in their cultures and customs-what users value and how that plays out in their actions.

And Snapchat kept moving up and up, attracting more users and stealing more photos and videos that users formerly posted to Facebook or Instagram.īut that makes it sound like all the social media services are somehow converging or become indistinguishable from one another. For Zuckerberg, Snapchat became the one that got away. When Facebook tried to buy it in 2013, Snapchat founder and CEO Evan Spiegel turned down the offer-reportedly more than $3 billion. But that approach didn’t work with Snapchat. Zuckerberg is hyper-aware of this potentially lethal threat from startups he builds separate teams at Facebook to create new apps and snatches up the best new companies by making aggressive and successful offers for hot startups like Instagram, WhatsApp, and Oculus Rift. Then the entrant gets better (adding more features like video sharing and geofilters) and moves upmarket (adding Snapchat Stories and moving into the social networking), attracting a bigger share of the market (passing Twitter in daily active users) and better customers (older, more affluent users, and celebrities and media companies signing on as publishers). Which brings us to Snapchat, a company that perfectly embodies the business dynamics Christensen laid out in The Innovator’s Dilemma: a new player in a market makes a product or service that is so far beneath what the big players are offering that it at first seems silly-why would they waste their time down there? Who cares about a sexting app? But the entrant fills a need, as teenagers prefer using an app where the messages disappear after a time. Copyright © 2018 by William Gallagher and reprinted by permission of St. Excerpted from How to Turn Down a Billion Dollars: The Snapchat Story by Billy Gallagher.

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