hello everybody Tom Ellsworth here and
welcome back to case studies with the
biz doc today we’re going to be talking
about a war that is brewing between
Instagram and snapchat and it started
last fall when Instagram introduced
stories that competed directly with the
theme and the feel of snapchat but many
people said they did it better what I
want to look at this week is two core
points the first is unchecked imitation
can be deadly so you got to watch out
for your competitors and know what
they’re up to
and speaking of knowing what they’re up
to point to always be paranoid be
paranoid about who could enter your
space and who could compete with you
become paranoid about the people who
have the ability to do something not
just those companies that are actually
doing something right now and I’m going
to dig into both of those this week and
we’re going to take a look and you’ll
see what I mean so let’s dig in so once
upon a time you know we have Instagram
and they launched this defining new
photo service and they did it clear back
in 2010 2011 timeframe and they were off
and running doing very very well and
speed forward in the story in 2012 along
comes Facebook and buys them for a
billion dollars and they weren’t even a
hundred million users yet so this is a
pretty quick deal and people like wow
you know I guess Facebook was worried
about this no Facebook was surveying the
horizon and made a very shrewd decision
and we’re going to take a look at how
shrewd that decision was through the
lens of history because were five years
deeper now so you know snapchat was born
in 2011 you know just before that but
really things hadn’t been percolating it
hadn’t been seen it was it was emerging
and it was gaining traction but along
the way you know the big numbers didn’t
happen till well into 2012 and suddenly
in May 2012 they said you know here come
vanity stats and vanity stats are those
numbers that are meant to sound good and
impressive in everything
but traditional marketers and
traditional companies frequently go
where’s the money where is the revenue
well nonetheless snapchat like most
internet sensations and most messaging
apps and most social media apps came out
with the vanity stats and the first one
that we heard was we are sending 25
snaps a second I’m like wow that’s
pretty impressive 25 cents a second so
in the amount of time it takes you to
say snapchat 100 photos went around the
world interesting but by the end of the
year it was even more impressive so you
get down the fourth quarter of 2012 and
snapchat announces I think it was handed
2012 2012 yes it was they said we’re
doing a billion snaps year-to-date
pause just on iPhones just on iOS now
that’s pretty impressive it’s pretty
impressive to see it come out with those
kind of numbers and they back that up by
then with spring oh and we’re doing 20
million a day overall so nonetheless
we’re now looking at snapchat says okay
you’re here and you’ve got critical mass
especially with the younger demographic
and you know demographic was the one
that was always aligned with snapchat so
you know you’re looking around and
you’re thinking to yourself you know
it’s pictures right and how many
different ways are there to send a
picture I can send pictures on my phone
point the point I can send yeah it’s one
to one I can put a picture up on
Facebook that’s you know one too many
I can go to Instagram and people come
behind me on Instagram and decide
they’re going to follow me so it’s one
two month too many just on pictures on
Instagram
although on Facebook I can put videos
there but links like but other things
that matter to me the nonetheless you’re
sending us thinking how many different
ways can can we message well as we know
snapchat had that unique way of saying
the picture disappears which led the
parents everywhere going oh Lord my kids
you’re going to have partying pictures
and maybe even worse kind of stuff but
nonetheless you know these pictures
disappear so that was thought to be very
innovative and very interesting and when
you want to just three
your friends or shock each other just in
and out quick
suddenly snapchat had this advantage in
the way they were doing it so we all go
growing together and I think that we’re
here to talk about snapchat stories but
I’d like to dive in a little bit because
you’ve been sending me requests to
understand a little bit more about the
points of the story and how you could
apply them not just to take a historical
ride on the story itself so let me give
you an example about paranoia helping
you let’s go back in my history I was
with a company called jam dot we made
games for wireless phones and we did so
at a time when there wasn’t the Android
or the iPhone standard believe it or not
Wireless phones everywhere were so
different Nokia phones Samsung phones
and they weren’t identical when you made
a game for those phones you had to make
it work on those phones and the ability
to make it work on all those phones
what’s called porting anyway we did that
very very well in other words we could
make our great games because the games
had to be great work on a lot of phones
but we would maintained our paranoia
about competitors and there’d be little
game companies would be making phones
making get games for phones excuse me on
say Verizon but then we would look and
say wait they’re only on half the
Verizon phones and they’re not hardly on
any of the singular phones so see what I
mean
we’re making great games but we made
them work on a lot of phones but we were
paranoid about who could come into our
space one of the companies were paranoid
about believe it or not was Yahoo
because in being paranoid you want to
look at who’s got the money and the will
and the expertise and certainly Yahoo
had expertise because they were making
casual content and they had a lot of
online games like rollercoaster tycoon
accouting ticket damn I can’t even talk
so what necessary was roller coaster
tycoon and lemonade tycoon were casual
games that were doing very well on Yahoo
they also had a lot of money and they
were trying to bring Yahoo email and
other things to mobile so we put two and
two together and said hey if they take
some of these casual games online and
they bring them to mobile
they’ve got they got a lot of bucks they
could compete so we were paranoid about
them
we were paranoid about them in a good
way as a matter of fact we went to them
and said how about if you put our games
on your website so people could download
them with a text message and get the
game on their phone they said that’s a
pretty good idea so anyway we kind of
approached people we thought would
compete with our paranoia because we
just wanted to be sure that we wouldn’t
be overtaken you know there’s a funny
side note to all this stuff with Yahoo
believe it or not is once upon a time
Yahoo was they were offered forty four
point six billion dollars by Microsoft
to be purchased now if you’ve been
reading newspapers just a few weeks ago
they accepted four point eight billion
dollars from Verizon and yeah yeah
there’s you know eight nine years you
know a part in these decisions
but Yahoo has been basically like a
plane right flying tree to the tree line
plane trees get bigger trees get smaller
and you know Yahoo’s been flying on the
trees get bigger away and they sat and
basically myth thirty was a thirty six
billion dollars of value that they could
have been purchased by Microsoft and
they said no we think we’re worth more
and then over the next eight nine years
they come crashing down to four point
eight billion dollars yeah that’s a
great trick so basically they made a 90
percent mistake that cost them thirty
six billion dollars you know when I look
at that all I can say is that’s a lot of
money to lose
but anyway so much for Yahoo by the way
as a side note they also could have
bought jammed app but they would have
done that as well so Yahoo was whipping
but the point was going back to the
beginning we were paranoid about anybody
in the ecosystem but we processed it
who’s interested in mobile who had the
money to go into mobile and who had
enough competencies to go with their
interests and money put it all together
decide who could hurt you in who didn’t
and getting back here I think snapchat
could have been a little bit more
paranoid about Instagram because I don’t
know if they saw it coming
if they did I would have bet that the
product iterations of snapchat may have
worked a little bit faster you know so I
don’t know what they’re thinking inside
snapchat but Instagram you know sitting
out there owned by Facebook to me that’s
a pretty potent combination if they
decide they want your part of the social
media landscape and lo and behold guess
what last year right around third
quarter Instagram announces stories to
compete the snapchat now let’s take a
look at where Instagram was at the point
that they were bought by a billion I
mentioned that they weren’t even at a
hundred million users well they were at
a hundred million and thirteen two
hundred million and fourteen for two
million 15 and they were six hundred
million in 16 so Instagram even though
they were bought by Facebook they
weren’t sitting around this is running
like a freight train when they introduce
stories big things happened first of all
you had all the pundits on the internet
saying oh it’s just a just a copy of of
what snapchat is doing with their
stories well maybe it was but the point
was they didn’t have a patent on stories
from putting a list of posts and
individual pictures together nobody has
a patent on that you could do whatever
you want
an Instagram came out and they did a few
things that I think we’re much better
than what snapchat is doing now let’s
take a look first thing I think what’s
really interesting about this is that
snapchat seems to focus on helping you
and me make new snaps and put the funny
puppy ears and the tongue and all those
things on the snaps they seem to focus
on helping you and I create something
new like new content versus viewing it
Instagram on the other hand seems to
feel more like Facebook these days that
they want to help you view as much
content as possible and absorb it and
consume it and enjoy it so it’s like
make it enjoy it so from the enjoyment
standpoint they started adding a set of
features to it that would would work for
that the
the interesting thing I think is also is
you know on Instagram I can now see very
quickly who’s been looking at my
pictures if you want to do that on
snapchat you can do it but mg knows it’s
kind of hard to get a kind of dig around
and get in there and find who’s actually
been seeing what’s going on well it’s
just another way that that that I
believe Instagram made stories a little
bit smoother and the last thing I’ll
bring up is on Instagram you know you
can go through and you know when you’re
finished with your friends content or
maybe a celebrity you like you know when
it finishes you know and the next one
starts have you ever done what I do
Patrick that David is very big on
snapchat and sometimes I’ll be going
through to the end and I don’t realize
that I just reached the end of Patrick
and I stepped onto somebody else that
I’ve been following that’s interesting
to me and I go a little of wait a minute
I think I just finished Patrick and the
fact that that end isn’t so obvious
you know I’ve always I’ve never thought
about it until Instagram stories came
out but now I can clearly see oh wow you
know without me even really realizing it
Instagram did it one better so the
upshot of it is you’ve got the evil
empire of Facebook and Instagram are
very successfully driving stories and
they’re doing it better than snapchat is
now I think the proof also seems to be
in what’s happening because in the
celebrity and the brand world and let’s
face it that’s where the money is made
in social media you know where your
brand or your band or your your your
soda whatever it is has a larger
following most of times it’s sports and
celebrity and things like that but
people are now starting to come out and
say hey man since last September you
know I’ve noticed maybe twenty to forty
percent of my traffic is off on snapchat
stories well it’s because they’ve been
impacted by what Instagram did so
snapchat needs to decide now that it’s
growing up and it announced us this past
week that’s got an IPO that many people
think is gonna be a twenty five billion
dollar IPO and good for snapchat and
they’re going to have resources to do a
lot of things and I don’t want you to
think that I’m saying they’re dead
they’re not there
to go public they’re going to have a lot
of money to play with they have money
now and also um I have a friend and
colleague believe it or not from the jam
days who’s the head of monetization at
snapchat and I his name is Philippe
browning he’s a great guy and I don’t
bet against him but there is an
opportunity here for them to respond and
decide what they’re going to do and I
don’t know how paranoid they are but
Philippe coming from Jam that I think he
knows a little bit about being paranoia
and surveying the landscape so I’m
hoping they respond because it’s just
going to end up with better products for
you and me as they fight with each other
and make it better we win the brand’s
win the celebrities win because you have
a better product to communicate with
your audience and that’s a good thing so
but I do think they’ve got you got some
iteration to do so the two points that I
had for you today and I hope I’ve been
really clear about them is one imitation
can be deadly in the case of snapchat
doesn’t do anything and these trends
continue Instagram stories is going to
win snapchats going to have some
difficulty in the middle of going out
for their IPO and the second is whenever
you’re looking around at competitors
don’t just look at people that are doing
what you do look at people to have the
ability and the will and the pockets to
come after you the money and the will
and the competencies coming together
that’s what Instagram has to introduce
stories on top of snapchat and if you
want to know more about that go google
it you can find out more about the war
but that’s a case study for this week I
hope you enjoyed it and I hope you’ve
got the points out of it you can kind of
see what’s going on this is really a
clash of titans because neither one of
these guys are small companies and
neither one of them is going to
disappear tomorrow like Yahoo did so we
need the pillow
the famous pillow Paul can I have my
pillow where’s my pillow there we go all
right thank you very much please
subscribe to this channel here on
YouTube where you can see the best
content on the internet for
entrepreneurs at the attainment until
next time I’m
Elsworth and i hope i’ve left you better
than i found [Music]
welcome back to case studies with the
biz doc today we’re going to be talking
about a war that is brewing between
Instagram and snapchat and it started
last fall when Instagram introduced
stories that competed directly with the
theme and the feel of snapchat but many
people said they did it better what I
want to look at this week is two core
points the first is unchecked imitation
can be deadly so you got to watch out
for your competitors and know what
they’re up to
and speaking of knowing what they’re up
to point to always be paranoid be
paranoid about who could enter your
space and who could compete with you
become paranoid about the people who
have the ability to do something not
just those companies that are actually
doing something right now and I’m going
to dig into both of those this week and
we’re going to take a look and you’ll
see what I mean so let’s dig in so once
upon a time you know we have Instagram
and they launched this defining new
photo service and they did it clear back
in 2010 2011 timeframe and they were off
and running doing very very well and
speed forward in the story in 2012 along
comes Facebook and buys them for a
billion dollars and they weren’t even a
hundred million users yet so this is a
pretty quick deal and people like wow
you know I guess Facebook was worried
about this no Facebook was surveying the
horizon and made a very shrewd decision
and we’re going to take a look at how
shrewd that decision was through the
lens of history because were five years
deeper now so you know snapchat was born
in 2011 you know just before that but
really things hadn’t been percolating it
hadn’t been seen it was it was emerging
and it was gaining traction but along
the way you know the big numbers didn’t
happen till well into 2012 and suddenly
in May 2012 they said you know here come
vanity stats and vanity stats are those
numbers that are meant to sound good and
impressive in everything
but traditional marketers and
traditional companies frequently go
where’s the money where is the revenue
well nonetheless snapchat like most
internet sensations and most messaging
apps and most social media apps came out
with the vanity stats and the first one
that we heard was we are sending 25
snaps a second I’m like wow that’s
pretty impressive 25 cents a second so
in the amount of time it takes you to
say snapchat 100 photos went around the
world interesting but by the end of the
year it was even more impressive so you
get down the fourth quarter of 2012 and
snapchat announces I think it was handed
2012 2012 yes it was they said we’re
doing a billion snaps year-to-date
pause just on iPhones just on iOS now
that’s pretty impressive it’s pretty
impressive to see it come out with those
kind of numbers and they back that up by
then with spring oh and we’re doing 20
million a day overall so nonetheless
we’re now looking at snapchat says okay
you’re here and you’ve got critical mass
especially with the younger demographic
and you know demographic was the one
that was always aligned with snapchat so
you know you’re looking around and
you’re thinking to yourself you know
it’s pictures right and how many
different ways are there to send a
picture I can send pictures on my phone
point the point I can send yeah it’s one
to one I can put a picture up on
Facebook that’s you know one too many
I can go to Instagram and people come
behind me on Instagram and decide
they’re going to follow me so it’s one
two month too many just on pictures on
although on Facebook I can put videos
there but links like but other things
that matter to me the nonetheless you’re
sending us thinking how many different
ways can can we message well as we know
snapchat had that unique way of saying
the picture disappears which led the
parents everywhere going oh Lord my kids
you’re going to have partying pictures
and maybe even worse kind of stuff but
nonetheless you know these pictures
disappear so that was thought to be very
innovative and very interesting and when
you want to just three
your friends or shock each other just in
and out quick
suddenly snapchat had this advantage in
the way they were doing it so we all go
growing together and I think that we’re
here to talk about snapchat stories but
I’d like to dive in a little bit because
you’ve been sending me requests to
understand a little bit more about the
points of the story and how you could
apply them not just to take a historical
ride on the story itself so let me give
you an example about paranoia helping
you let’s go back in my history I was
with a company called jam dot we made
games for wireless phones and we did so
at a time when there wasn’t the Android
or the iPhone standard believe it or not
Wireless phones everywhere were so
different Nokia phones Samsung phones
and they weren’t identical when you made
a game for those phones you had to make
it work on those phones and the ability
to make it work on all those phones
what’s called porting anyway we did that
very very well in other words we could
make our great games because the games
had to be great work on a lot of phones
but we would maintained our paranoia
about competitors and there’d be little
game companies would be making phones
making get games for phones excuse me on
say Verizon but then we would look and
say wait they’re only on half the
Verizon phones and they’re not hardly on
any of the singular phones so see what I
mean
we’re making great games but we made
them work on a lot of phones but we were
paranoid about who could come into our
space one of the companies were paranoid
about believe it or not was Yahoo
because in being paranoid you want to
look at who’s got the money and the will
and the expertise and certainly Yahoo
had expertise because they were making
casual content and they had a lot of
online games like rollercoaster tycoon
accouting ticket damn I can’t even talk
so what necessary was roller coaster
tycoon and lemonade tycoon were casual
games that were doing very well on Yahoo
they also had a lot of money and they
were trying to bring Yahoo email and
other things to mobile so we put two and
two together and said hey if they take
some of these casual games online and
they bring them to mobile
they’ve got they got a lot of bucks they
could compete so we were paranoid about
them
we were paranoid about them in a good
way as a matter of fact we went to them
and said how about if you put our games
on your website so people could download
them with a text message and get the
game on their phone they said that’s a
pretty good idea so anyway we kind of
approached people we thought would
compete with our paranoia because we
just wanted to be sure that we wouldn’t
be overtaken you know there’s a funny
side note to all this stuff with Yahoo
believe it or not is once upon a time
Yahoo was they were offered forty four
point six billion dollars by Microsoft
to be purchased now if you’ve been
reading newspapers just a few weeks ago
they accepted four point eight billion
dollars from Verizon and yeah yeah
there’s you know eight nine years you
know a part in these decisions
but Yahoo has been basically like a
plane right flying tree to the tree line
plane trees get bigger trees get smaller
and you know Yahoo’s been flying on the
trees get bigger away and they sat and
basically myth thirty was a thirty six
billion dollars of value that they could
have been purchased by Microsoft and
they said no we think we’re worth more
and then over the next eight nine years
they come crashing down to four point
eight billion dollars yeah that’s a
great trick so basically they made a 90
percent mistake that cost them thirty
six billion dollars you know when I look
at that all I can say is that’s a lot of
money to lose
but anyway so much for Yahoo by the way
as a side note they also could have
bought jammed app but they would have
done that as well so Yahoo was whipping
but the point was going back to the
beginning we were paranoid about anybody
in the ecosystem but we processed it
who’s interested in mobile who had the
money to go into mobile and who had
enough competencies to go with their
interests and money put it all together
decide who could hurt you in who didn’t
and getting back here I think snapchat
could have been a little bit more
paranoid about Instagram because I don’t
know if they saw it coming
if they did I would have bet that the
product iterations of snapchat may have
worked a little bit faster you know so I
don’t know what they’re thinking inside
snapchat but Instagram you know sitting
out there owned by Facebook to me that’s
a pretty potent combination if they
decide they want your part of the social
media landscape and lo and behold guess
what last year right around third
quarter Instagram announces stories to
compete the snapchat now let’s take a
look at where Instagram was at the point
that they were bought by a billion I
mentioned that they weren’t even at a
hundred million users well they were at
a hundred million and thirteen two
hundred million and fourteen for two
million 15 and they were six hundred
million in 16 so Instagram even though
they were bought by Facebook they
weren’t sitting around this is running
like a freight train when they introduce
stories big things happened first of all
you had all the pundits on the internet
saying oh it’s just a just a copy of of
what snapchat is doing with their
stories well maybe it was but the point
was they didn’t have a patent on stories
from putting a list of posts and
individual pictures together nobody has
a patent on that you could do whatever
you want
an Instagram came out and they did a few
things that I think we’re much better
than what snapchat is doing now let’s
take a look first thing I think what’s
really interesting about this is that
snapchat seems to focus on helping you
and me make new snaps and put the funny
puppy ears and the tongue and all those
things on the snaps they seem to focus
on helping you and I create something
new like new content versus viewing it
Instagram on the other hand seems to
feel more like Facebook these days that
they want to help you view as much
content as possible and absorb it and
consume it and enjoy it so it’s like
make it enjoy it so from the enjoyment
standpoint they started adding a set of
features to it that would would work for
that the
the interesting thing I think is also is
you know on Instagram I can now see very
quickly who’s been looking at my
pictures if you want to do that on
snapchat you can do it but mg knows it’s
kind of hard to get a kind of dig around
and get in there and find who’s actually
been seeing what’s going on well it’s
just another way that that that I
believe Instagram made stories a little
bit smoother and the last thing I’ll
bring up is on Instagram you know you
can go through and you know when you’re
finished with your friends content or
maybe a celebrity you like you know when
it finishes you know and the next one
starts have you ever done what I do
Patrick that David is very big on
snapchat and sometimes I’ll be going
through to the end and I don’t realize
that I just reached the end of Patrick
and I stepped onto somebody else that
I’ve been following that’s interesting
to me and I go a little of wait a minute
I think I just finished Patrick and the
fact that that end isn’t so obvious
you know I’ve always I’ve never thought
about it until Instagram stories came
out but now I can clearly see oh wow you
know without me even really realizing it
Instagram did it one better so the
upshot of it is you’ve got the evil
empire of Facebook and Instagram are
very successfully driving stories and
they’re doing it better than snapchat is
now I think the proof also seems to be
in what’s happening because in the
celebrity and the brand world and let’s
face it that’s where the money is made
in social media you know where your
brand or your band or your your your
soda whatever it is has a larger
following most of times it’s sports and
celebrity and things like that but
people are now starting to come out and
say hey man since last September you
know I’ve noticed maybe twenty to forty
percent of my traffic is off on snapchat
stories well it’s because they’ve been
impacted by what Instagram did so
snapchat needs to decide now that it’s
growing up and it announced us this past
week that’s got an IPO that many people
think is gonna be a twenty five billion
dollar IPO and good for snapchat and
they’re going to have resources to do a
lot of things and I don’t want you to
think that I’m saying they’re dead
they’re not there
to go public they’re going to have a lot
of money to play with they have money
now and also um I have a friend and
colleague believe it or not from the jam
days who’s the head of monetization at
snapchat and I his name is Philippe
browning he’s a great guy and I don’t
bet against him but there is an
opportunity here for them to respond and
decide what they’re going to do and I
don’t know how paranoid they are but
Philippe coming from Jam that I think he
knows a little bit about being paranoia
and surveying the landscape so I’m
hoping they respond because it’s just
going to end up with better products for
you and me as they fight with each other
and make it better we win the brand’s
win the celebrities win because you have
a better product to communicate with
your audience and that’s a good thing so
but I do think they’ve got you got some
iteration to do so the two points that I
had for you today and I hope I’ve been
really clear about them is one imitation
can be deadly in the case of snapchat
doesn’t do anything and these trends
continue Instagram stories is going to
win snapchats going to have some
difficulty in the middle of going out
for their IPO and the second is whenever
you’re looking around at competitors
don’t just look at people that are doing
what you do look at people to have the
ability and the will and the pockets to
come after you the money and the will
and the competencies coming together
that’s what Instagram has to introduce
stories on top of snapchat and if you
want to know more about that go google
it you can find out more about the war
but that’s a case study for this week I
hope you enjoyed it and I hope you’ve
got the points out of it you can kind of
see what’s going on this is really a
clash of titans because neither one of
these guys are small companies and
neither one of them is going to
disappear tomorrow like Yahoo did so we
need the pillow
the famous pillow Paul can I have my
pillow where’s my pillow there we go all
right thank you very much please
subscribe to this channel here on
YouTube where you can see the best
content on the internet for
entrepreneurs at the attainment until
next time I’m
Elsworth and i hope i’ve left you better
than i found [Music]
Please follow and like us: