Evan and Bobby knew better. Evan had a bigger picture in mind for what Snapchat could become. And Evan and Bobby could see on Flurry that Snapchat was growing in popularity—climbing to a thousand daily active users by November 2011. Evan moved into a single studio room in an on-campus dorm called Ujamaa. With the frat kicked off campus for the year, he focused the energy he used to pour into planning parties into making Snapchat work (and attending the occasional class he enjoyed).
Evan and Bobby needed to make Snapchat stand out and be more useful—it wasn’t enough that the photos disappeared, it had to be more fun to send a photo via Snapchat than any other messaging app. They added photo captions to the app, so users could add a line of text over a photo, and let users draw on top of the photos they took.
Evan and Bobby knew Snapchat had value, because everyone who used the app used it all the time. They just needed to get it into more people’s hands and make it grow, even if they had to force this growth at first. So they started showing it to people one on one, giving tutorials, explaining why it was fun, even downloading the app for them.
Evan and Bobby figured if they could get ten thousand people to use Snapchat every day, that would be proof that the app had traction and venture capitalists would fund them. They were nowhere near that, but the app was inherently social. If they could get a thousand dedicated users who loved the app, those people would tell their friends, who would in turn tell their friends, and the app could spread very, very quickly.
Evan was willing to try anything to get users. When he was home in Pacific Palisades, he would go to the shopping mall and hand out flyers advertising Snapchat.
“I would walk up to people and say, ‘Hey would you like to send a disappearing picture?’ and they would say, ‘No,’” Evan later recalled.
Evan took a small seminar called “Silicon Valley Meets Wall Street” full of like-minded upperclassmen interested in working at startups and in venture capital. One day before the guest speaker arrived, he convinced the entire class to download Snapchat and try it out.
On campus, people talked about “Evan’s app,” as it was more commonly known, in a mostly mocking tone, wondering why anyone would admit to using a sexting app. Nonetheless, there was some buzz around it because of Evan’s force of personality. Even though he was no longer a member of Kappa Sig and was mostly focused on Snapchat rather than partying, Evan was still a large figure on campus.
In October, Evan opened up Flurry, the analytics dashboard he was using to monitor Snapchat’s users, and noticed that new users were signing up in Orange County, California, and their activity was spiking between 8 a.m. and 3 p.m. Evan’s mother had told his cousin, a high school student, about Snapchat. She and her friends downloaded the app on school-distributed iPads, which blocked Facebook. They started using the app as a way to pass notes in class. Snapchat fed the high schoolers’ desire for attention, as they could see when the recipient opened their snap.
Snapchat started catching on in small clusters at various high schools in Orange County and Los Angeles that fall. Then, these high school students went home for the holidays and many found iPhones with front-facing cameras in their stockings. Teenagers began taking selfies using the front-facing camera and sending them to each other via Snapchat, having entire conversations through images of their faces. From December to January, Snapchat’s user base grew by a factor of ten, growing from just over two thousand daily active users to over twenty thousand. Snapchat broke out from a note-passing gimmick to a full-fledged communication tool, replacing texting for many teens.
I should note that I don’t use the term “millennials” in this book to describe Snapchat users, as it’s too broad and often inaccurate. Many millennials born in the 1980s are too old for Snapchat’s core user demographic, especially the early demographic, and many Snapchat users are in fact too young to be considered millennials. Snapchat gained early popularity primarily among high school and college students. The demographic expanded as these early users grew up and their siblings and friends, both older and younger, joined the app.
As useful as texting and messaging had become, they had become boring for teenagers. You were now just as likely to get a text message from your parents as you were from your crush. There was no excitement to most messages. But with Snapchat, you could see what the other person was doing in a rich way, and you could capture funny moments—a friend asleep in class, your dog making a weird face—that didn’t seem worthy of interrupting someone with a text message.
Facebook, too, had become boring for teens, as they and their friends posted less content, less personal content, and often, no content once their parents joined the social network. Facebook notifications, once a thrilling red marker signifying that you had your friends’ attention, now came with a “mark all as read” button more reminiscent of an email inbox than a fun social app. Because people rarely deleted old posts and photos from Facebook and other, less popular social networks, their profiles became dusty collections of the mementos they had posted over the years. This wasn’t as big of a problem for people who signed up after a certain point in their life—when they arrived to the Facebook party, they came as their mostly formed selves. Snapchat did not resonate much with this older crowd.
But for college and high school students, they had signed up for social networks at a time in their lives of enormous change and growth. So these profiles came to represent weird versions of themselves that they no longer wanted to be associated with. Like outgrown sneakers or clothes that had gone out of style, these profiles needed to be tossed out and replaced with something fresh and new.
And, of course, for people of this age, there was always the fear that something dumb they posted on social media would get them in trouble with their parents, college admissions officers, or their employers. Perhaps Katy Perry summed it up six months earlier in her June 2011 song “Last Friday Night,” singing, “Pictures of last night ended up online, I’m screwed.”
Teenagers also felt pressure to post the most glamorous representations of their lives on Facebook, Twitter, Instagram, and other social media sites to rack up likes. Evan designed Snapchat as an antidote to this obsession with likes and retweets. Snapchat was not meant to be a social network—it was designed as a small, private network, to share with your closest friends. Snapchat had no likes, no permanence, no social anxiety. You could just send whatever you thought was funny or cool or interesting, even if that was an otherwise unflattering image of yourself.
Evan and Bobby carefully set up Snapchat to maintain and promote this intimacy. While most other apps at the time let you find and add your friends via a Facebook login or by uploading your email contacts, Snapchat only let you add people if you had their phone number (or knew their Snapchat username). Because of this, most people had a smaller group of closer friends on Snapchat than on other social networks—at least initially. They managed to make Snapchat feel like a small, cool club to belong to. It was a welcome escape from the Facebook empire. In the early days, if you sent a Snapchat to the “teamsnapchat” account, Evan or Bobby would occasionally reply with a selfie.
Additionally, they didn’t let users upload photos from the camera roll. Any photos sent via Snapchat had to be taken in the app and immediately shared, giving it an unparalleled sense of real-time interaction. When you received a Snapchat, for ten seconds you were transported to where your friend was at that exact moment.
I remember personally being told to download Snapchat because some of my friends were goofing around sending each other dumb photos. Like most people, I had to be told a few times before I actually downloaded it. Snapchat’s been on my phone’s home screen ever since. There was something undeniably cool about being able to hold your phone in your hand, open the app, and say, “My friend built this.”
I opened Snapchat for the first time and added friends from my contacts, all of whom were undergrads at Stanford with me. I quickly snapped a picture of myself making a goofy face and
sent it to a few friends. We would snap each other photos of ourselves bored in class and pictures from around campus that reminded us of inside jokes. There was an understanding that we weren’t sending each other National Geographic–quality photos of the campus scenery. We would send silly pictures and photos with funny captions meant to shock and provoke a reaction in our closest friends.
Because you could only reply with a photo, friends would send selfies of themselves reacting to photos. We talked through photos instead of posting them to garner likes. The cost of creating and sharing a photo dropped so much knowing that the photo would disappear. It wasn’t just that taking and sharing a photo was essentially free; sending a photo to a friend no longer had the importance it once did with texting. You were just exchanging lightweight photos that were meant to be discarded immediately.
We sent and received dozens of photos per day, more closely mirroring our text message frequency than our social media posts. The speed and frequency with which we took and shared pictures was unlike anything we had used before. Open the app, snap the photo, send, share, view, delete, on to the next.
In order to view a Snapchat from a friend, you had to hold your finger down on the screen. If you lifted your finger off the screen, the photo would disappear, a feature that initially started as a way to make it more difficult to screenshot Snapchats. But it also served to make users feel hyperconnected. When you posted on Facebook or Instagram, you weren’t sure who saw it unless they liked or commented, and you didn’t know if they were paying attention to you or aimlessly scrolling through a feed while multitasking. With Snapchat, you could see when the recipient had opened your snap, and you knew they had held their finger down, touching your photo as they absorbed what you had sent. It was an addicting combination.
A March 2004 article titled “All the Cool Kids Are Doing It” in The Stanford Daily described Facebook’s newfound popularity: “Classes are being skipped. Work is being ignored. Students are spending hours in front of their computers in utter fascination. Thefacebook.com craze has swept through campus.”
In 2012, classes were not being skipped in favor of Snapchat—students were simply Snapchatting from class rather than paying attention.
Students would sit around during free periods at Crossroads talking about the newest apps they were using and games they were playing. By early 2012, Snapchat was the hot new toy. At parties, people would send Snapchats to friends who weren’t there. If you didn’t download Snapchat, you were missing out. Snapchat had a confusing interface, so users in high school and college frequently showed each other how to use new features and navigate the app. It’s a very visual app that’s often difficult to explain but easy to show to someone. People who knew the hidden features felt cool showing them to friends. Users delighted in discovering Easter eggs and features they didn’t know existed. This in-person sharing helped Snapchat grow quickly among young people.
There were other apps at the time that erased your conversations, most notably TigerText. TigerText was founded in 2010 in Santa Monica. The company has done quite well, raising over $80 million in funding, as a secure messaging service for doctors and healthcare providers. But it has not done nearly as well as Snapchat. Two companies founded a year apart practically next door to each other in LA focusing on disappearing messages—how could their outcomes be so different? The difference is Evan. Evan was able to see this idea as much more than a messenger for secrets or naked photos. Snapchat wasn’t for secrets. It was for everything.
As thrilled as Evan and Bobby were that Snapchat was taking off so quickly, it posed a big problem for them. It cost a lot of money to pay for the servers that processed all these pictures teenagers were sending to each other. Evan was able to cover some of the costs with money he borrowed from his grandfather; Bobby picked up the rest of the tab out of his paycheck from Revel Systems. But the monthly costs were soaring to $5,000 and increasing every day.
In February, Evan went to speak with Peter Wendell, his professor from sophomore year, and Raymond Nasr, Google’s former director of executive communication who helped Wendell run the business school course Evan took. Evan explained that user growth was phenomenal, but they needed investment money badly. Wendell suggested going to a venture capital firm or angel investors.
“We don’t want to lose control of the company,” Evan replied.
Wendell offered to introduce Evan to executives at Twitter, but Evan worried they would steal his idea. Finally, Evan agreed to get advice from a mutual contact at Google Ventures, the company’s venture capital firm, and eventually decided to raise seed funding.
But the first venture capitalists who met with Evan, including blue-chip firms like Sequoia Capital and Benchmark Partners, passed on the investment. Disappearing photos? It sounded like a sexting app at best, or a fad at worst. Or was it the other way around? Some, like Chris Sacca, who put the first checks into Uber and Twitter, declined even meeting Evan.
In March, Barry Eggers, a partner at Lightspeed Venture Partners, came home from work to find his daughter Natalie and her high school sophomore friends sitting around the table in his kitchen. They were all staring at their phones and laughing. Eggers asked Natalie what they were doing.
“It’s called Snapchat,” she said. “It’s like funny and goofy stuff between friends. It’s one of the most popular apps at school, along with Angry Birds and Instagram.”
Eggers had obviously heard of Angry Birds and Instagram, but not Snapchat.
“How often do you use it?” he asked.
“I used to send five or six a day. Now I get thirty a day!” Natalie said.
Eggers relayed this story to his fellow partners at the firm. One of the partners, Jeremy Liew, decided to track down the Snapchat team.
Evan and Bobby hadn’t included any contact information on the Snapchat website, and no one was listed as an owner or even employee on the Snapchat LinkedIn page. Liew had to track down the owner of the web domain for Snapchat.com to find Evan, who he finally emailed. No response. Growing impatient, Liew sent Evan a message on Facebook. Evan responded within minutes, agreeing to meet Liew and pitch him on Snapchat.
On March 22, senior quarterback Andrew Luck threw fifty passes to Stanford wide receivers in front of a throng of NFL scouts, media members, and even Stanford faculty members like former secretary of state Condoleezza Rice. This “pro day” was part of the evaluation process that NFL teams put prospects through, as they try to evaluate young college players’ natural talent, as well as their motivation and drive to improve, to project how they will perform years down the road.
Across campus, Jeremy Liew was trying to perform a similar forward-looking analysis on Evan. Liew needed to evaluate three main things: product, market, and team. Most importantly, he needed to see how these could grow over the coming years. Could this photo-sharing app popular with teens blow up into the next Instagram and be worth a billion dollars in a few years? And were Evan and his partner Bobby the team to drive the company down that road?
Evan launched into his pitch, explaining to Liew that he wanted to be the camera for the world. If Instagram is the prettiest 1 percent of photographs, Snapchat would happily host the rest of the 99 percent. Evan seemed like the kind of relentless entrepreneur who would walk through walls to make his idea become reality. Then Evan pulled up Flurry and showed Liew Snapchat’s numbers. One jumped off the page: daily active users. Snapchat had jumped from one thousand daily active users in late 2011 to one hundred thousand daily active users in April 2012. The number of people who had downloaded Snapchat once to try it out and were now using it daily was an order of magnitude larger than anything Liew had seen before. Just half an hour into the meeting, Liew knew he had to invest.
“There was no way that I could’ve organically understood what that engagement process looked like,” Liew later said about that initial meeting with Evan. “What I could do was open up the Flurry analytics dashboard with Evan and look at the numbers and see 50 per
cent month-on-month growth and see engagement and retention metrics. There were multiples of what we might expect from other companies. Something was working. It didn’t matter that I didn’t understand it right away. It didn’t matter that my intuition was bad.
“What mattered was the data,” Liew continued. “The next question is, this is clearly working, why is it working? Evan could explain it, he had some really unique insights that said why Snapchat was taking off at the time and we listened. We said, ‘That makes a lot of sense. You seem to have unique insight,’ which is gonna lead not just to one good idea, but to many good ideas in the future and that’s proven to be that case.”
The engagement and retention showed an uncommon excitement around Snapchat. Uncommon excitement precludes uncommon growth. Snapchat had struck a chord. Just ten days after meeting Evan, Liew convinced his partners, and Lightspeed invested $485,000 in Snapchat, valuing the young company at $4.25 million.
Barry Eggers also sat on the board of his daughter’s high school’s investment fund. He convinced the fund, as well as Evan and Lightspeed, in which he is a partner, to invest $15,000 in Snapchat’s round of funding. If the company did well, Saint Francis High school would make over $40 million off that investment.
Evan was thrilled. Snapchat had a fast-growing, dedicated user base. He and Bobby had the funding they needed to take the company to the next level. And now they had a wise advisor and investor in Jeremy Liew and Lightspeed.
Little did Evan know, it would be years before he and Bobby spoke to Liew amicably again.
CHAPTER EIGHT
SEXTING
APRIL 2012
STANFORD, CA
In the spring of 2012, I was a sophomore at Stanford and had just started writing for TechCrunch. I had been emailing with my new editor about two of the hot startups on campus—Snapchat and Clinkle. She urged me to get an interview with the Snapchat founders for my first story.
How to Turn Down a Billion Dollars Page 7