Snapchat: From 0 to $3B in 2 years

2 years after launching this app, 2 founders were offered $3 billion in cash for selling it.

What is the name of this app and how did they manage to achieve this?

Here’s their story in short:

  1. In 2011, Reggie Brown offered an idea to his college mate Evan Spiegel to create an app called Picaboo that would allow you to share self-destructing photos.

  2. They hired Bobby Murphy as a developer to turn this idea into reality. In 18 hours the iOS app was up and running.

  3. Evan pitched a panel of venture capitalists with their app and … nobody gave a $#it.

  4. They were telling about the app to all their friends and family. In a month they had only 127 users.

  5. In September 2011, the app was relaunched as Snapchat.

  6. When the number of users slowly achieved 1000 they noticed something interesting – activity consistently peaked between 9am-3pm. School hours.

Turned out Spiegel’s mother told her niece about the app, who then spread the word through her Orange County high school. Since Facebook had been banned at the school, students began embracing the app on the high school iPads.

  1. That was the turning point. The founders focused 100% on the needs of children aged 8-12: new design (easy and fun), new mission, new purpose, new positioning, new tech. The modified concept included 3 main points:

7.1. Snapchat is more intimate and exclusive (you won’t find here outdated inappropriate content you’d wish nobody knew about).
7.2. Snapchat is perceived as young and cool (you won’t find your grandma here).
7.3. Snapchat allows to not worry about self-censorship (self-destructing photos).

  1. The owners shared the iPhone app with educational institutions and schools across California.

  2. By January 2011, they had 20,000 users. By April, 100,000.

  3. In April 2012, Lightspeed invested $485,000 at a valuation of $4.25 million.

  4. Word-of-mouth got Snapchat featured in large industry publications including the New York Times and TechCrunch, generating a ton of free publicity that quickly spread the app across the country.

  5. In June 2012, they had 5 million users, in November – 14 million users.

  6. In December 2012, Zuckerberg launched Poke – that was going to kill Snapchat. But that didn’t happen. Poke fell off the iPhone app store charts.

  7. In 2013, Zuckerberg offered $3 billion in cash for a two-year-old Snapchat app with no revenue and no timetable for revenue (the founders declined the offer).

 

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