Ben Gilbert: preference

Transcript context

…So let’s start with Snap. You read the S-1, you watch the roadshow video and what immediately pops out and this got tons of press, but I think it was just a brilliant way of positioning that the company took. You read it and it says “we are a camera company.” They don’t say “we’re a mobile company.” They don’t say “we’re an app company.” They don’t say “we’re a social network.” Snap is a camera company. What do you think, Ben? The first thing that came to mind. I’m reading a lot of the S-1 cynically so the first thing that comes to mind is, “Oh, I see. They don’t want to be comped against Twitter.” That makes sense. But the interesting thing as you start to read more and more and more, and this is my biggest takeaway from this whole thing based on the unseen, like let me just give a quick snap at their $33 billion market cap is trading at about 80 times their sales. Facebook IPO did like 28 times their sales. Even Twitter was like 56. We’re just in like off-the-charts territory for what their market cap is relative to the revenue that they’re doing. And when you start to peel apart like why are they saying they’re a camera company, the big thing that stands out here is that they don’t want investors to buy this IPO based on the product right now, the social graph right now, the growth rates in the last six months. Like they don’t want to be priced on any of that. They want you to believe that they’ve done these incredible innovative things, transforming what we think of as a camera and what we use cameras for. And they want you to buy on the idea and hold on the idea that they’re going to continue to do that and reinvent the camera for the future and that in typical Evan Spiegel Snapchat fashion, they’re unique and they believe that they are indeed a different and new type of company. They’re going to do things their own way and like, who are you to say what kind of company this is? They’re a camera company and you don’t even know what a modern camera company looks like? Well, you know what, I say this is brilliant. It’s such an unexpected and audacious statement to put out there that it captivates you and then when you read through the S-1 and you watch the roadshow video, it’s very compelling how they present it, you know, that sort of famously at this point, the first user manual for how do you Snapchat is the S-1 and they go through in just really exquisite detail about all the product thinking that has gone into how they’ve created Snapchat. But what it does and this is what I said when I introduced this, what it does by positioning it as a camera company is it completely draws attention away from what hereto for and still is the narrative on the media, investor and tech side of the aisle here about Snapchat, which is that they are a social network which is competing with the social network which is Facebook, Instagram, and WhatsApp.…

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