Ben Gilbert: prediction

Transcript context

…Yes. Very true but this is where the rubber really hits the road. Since Instagram launched Instagram Stories to compete much more directly with Snapchat product-wise in August 2016, from the quarter before then until now, Instagram has added 100 million daily active users. They went from 300 million to 400 million in seven months which is an acceleration of their growth, a huge acceleration. In that same time, Snapchat has flatlined. They added 15 million DAU in the same period, which is much lower growth than they had earlier than that. So like this is not a good narrative for Snap. So then the question is if you start to think about sort of what each of these companies has going for them, Facebook and Instagram have a structural advantage where they can by their time and weight and know that they have great teams that can implement these features in an appropriate way for those platforms and then get those insane 100 million DAU spikes like that by figuring out the right way to incorporate that mechanic into their product. What Snapchat has going for them is they fundamentally believe that – or I guess to invest in Snapchat right now and we can revisit this later in the conclusion – you have to believe that Snapchat can do things that are more innovative and more interesting in a product sense for new users, then Facebook will be able to leverage their structural advantage in the industry and copy. So what that sort of comes down to is because I don’t think there’s necessarily like a time window advantage. Let’s say Facebook copies everything 3 months or 6 months after Snapchat. I don’t think that Snapchat is going to have this advantage of like they’re going to get out ahead and they’re going to get enough users in that short window. I don’t think that’s going to happen. I think the thing that you have to believe is that Snapchat can figure out a thing to do that gets a whole bunch of new daily active users, that Facebook is not in the position to copy, that having that existing network and those existing products doesn’t give them the leverage to keep building these roadblocks for Snapchat. This for me is really in our episode that actually is going to come out after this but that we recorded earlier this week, our crossover episode with the Internet History Podcast coming out next week. Thank you, Brian. That was a blast. But I talked about how in the Uber-Didi episode we did with Brad Stone, this episode and that one that’s coming out next week really has made me think about competition and moats. And man, does Facebook and the Facebook App Universe including Instagram, they have this enormous moat. If you think about this as a competition between social networks, Facebook is the social network. They have it, it exists. Then you look at where is Snapchat’s core user base. It’s in pre-teens and then teens who were building their social graph online for the first time and they could build that on Snap. But Facebook has literally the entire existing world. So Snap can go after the young folks and they have certainly made inroads and Facebook is definitely paying attention. But Facebook and Instagram have everybody that they can bring. They can bring a gun to a knife fight.…

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