(1) Be prepared to fight
The site started life as a place to exchange photos which quickly disappear. This proved particularly popular with teenagers who have learnt from their elders. They know that photos can hang around haunting you forever, so the fact that these pictures disappear forever has helped them attract a fan base of 18 year olds. This is a particularly hard to reach audience, and what we can learn from Snapchat is that it males for immediate attention from advertisers. Facebook tried to get a slice of this market in 2012 when it launched Poke in order to attract the same valuable users. When Spiegel found out about Facebook’s plans, he immediately ordered copies of Sun Tzu’s “The Art of War” for all his employees.(2) One thing to learn from Snapchat is that competition isn’t always a bad thing
(3) Know what you’re worth
Poke soon fell out of the top 30 on the app store, and Facebook admitted defeat. It abandoned Poke and switched strategy, making an offer to buy Snapchat for $3billion in cash at a time when the Company had neither revenues or a timetable for revenues. They turned down the offer, in a decision that came in for a lot scrutiny at the time.(4) Get the right support
It was able to do this because it had the support of investors that shared its long-term vision. One such early investor was Jeremy Liew of Lightspeed Venture Partners, who first met Snapchat nine months before Facebook launched Poke. At this time Snapchat had fewer than 100,000 users; but Liew liked its appeal amongst teenagers. Speigel and Liew met despite Spiegel making it clear he wasn’t looking for investment at that time. During the meeting Spiegel was able to lay out his vision for the company. He described a platform where people could express intimate feelings over fleeting messages, and tell their friends they were, for example, feeling sad, without that message being stored for all to see. Getting to know investors, even when you don’t need their money can help you a build a fan base for when you do need the money.(5) Customer stickiness is worth a lot
(6) Innovate in areas where the big guns daren’t follow
The reason Liew invested was because he could see that Snapchat was doing something different in a market that had already been established by someone else. Facebook had become the default site for recording your life. But the average Facebook user is 40 years old, and it is designed to keep all your information tied to your identity forever. This creates opportunities for challengers that appeal to people who don’t want what the market leader is offering. Investors will continue to look for the next generation of innovators. They want companies with staying power, a clear long term vision, customer loyalty, and above all, a fresh approach. Entrepreneurs can learn a lot of lessons from Snapchat, perhaps the greatest being to look for opportunities to flip the status quo on its head, and offer something different. Grant Bergman is corporate finance director at finnVentures. Image: ShutterstockShare this story