Snap is splitting and rebuilt from within. In the new Company letterCEO Evan Spiegel just announced that the company is reorganizing around a small “startup squad” of 10 to 15 people to better compete with its big competitors.
The move is due to the growing pressure on the 5,000-person company. Advertising revenue growth remained flat at 4% in the second quarter, with daily active users in North America down 2% to 98 million, an unsettling sign of Snap’s most important market.
Spiegel does highlight one highlight: Snapchat+ subscriptions now generate over $700 million in annual recurring revenue from over 15 million payment subscribers, making direct revenue “one of Snap’s fastest growing opportunities.”
Snap is also doubling down on specifications, building its own AR glasses, and Spiegel Envisions will completely replace smartphones. He calls them “a generational transformation of human-centered computing.” (Meta and Google will see the same future, Ray-Ban and Warby Parkerrespectively. )
Spiegel acknowledged that the current share price “reflects suspicion” but wrote that the “reward potential of startup style” was valued at about $12 billion. Not Said: This figure is down 90% from September 2021, when Snap’s market cap was $116 billion higher during the peak of social media fanaticism.
