Snap has been under tremendous pressure over the past two years, since Instagram started launching features that were a direct rip off from the former. Instagram’s strategy seems to be paying off; just a year after launching Stories, its daily active users touched 250 million, surpassing Snap’s 173 million by a huge margin. Last September, Instagram’s daily active users shot up to 500 million. In the recently reported quarter Snap’s daily active user stood at 191 million, which is a far cry to Instagram.
The camera company’s first quarter results failed to impress the street, which saw its shares plunging 17% after market close. Snap seems to be learning a costly lesson of its redesign debacle with Spiegel promising design tweaks as demanded by its loyal “disgruntled” users. With today’s update, Snap wants to pacify its users by reverting old features like Chats and Snaps displayed in chronological order, stories from your buddies in the right, and subscription option to easily discover influencers content (Kylie Jenner might be happy!). If you’re using an Android app, you will need to wait for some more time, as Spiegel has announced an update in the third quarter.
Spiegel and his team have been in the line of fire since the company went public. Snap’s shares are down 54% since IPO and nearly 25% this year, raising serious questions about its profitability. Though analysts expect the firm to be cash flow positive only by 2021, there are doubts about how Snap can bring in sustainable revenue in the long term.
Snap has to fight multiple battles to bring back its mojo and restore investor confidence. Its CFO Drew Vollero stepped down this month, and the incoming Tim Stone will have to prove his mettle in multiple areas — tackling intense competition from Instagram, maintaining good relationship with publishers, keeping a tab on expenses, adding more users and of course be wary of any redesign.