Snapchat Vs Facebook (Part 2): The Real Advantage Of Being A Startup

4 minute read

 

In Part 1 of the “Snapchat Vs Facebook” feature, I briefly described the scene of battle between the two companies, and how Evan Spiegel and his Snapchat team won the war.

 

But Part 1 didn’t tell the whole story. Although Snapchat’s decision to focus on a core feature set was instrumental to its success, there is another equally important strategic insight that put Snapchat on the course to grabbing market share from Facebook (and Instagram). Simply put, Evan Spiegel understood that customer perception is the only thing that mattered when it came to why a customer favored one product over another identical product that preformed the same function. The key word there is “perception”; that customer might not be right, and the company might refute any customer claims, and make a substantial effort to alter that perception. Ultimately, however, customer perception is hard to influence.

The story of another well-known startup can shed more light on the importance of customer perception. Chatroulette, a website that randomly paired people in a video chat, experienced the good and bad of customer perception.

When Chatroulette became a hit in 2009, most experts doubted that the website would take off because users would fear that the website would store the video chats, and as such there was a trust issue between users and the company (person) running the platform. However, despite what experts predicted, the site continued to grow to the point where it had thousands of daily users logging in and video chatting endlessly.

How did Chatroulette gain the trust of users so quickly? It didn’t. Chatroulette had poor design, shady exterior, and a primitive interface. As such, users thought the website’s runner lacked the technical ability and prowess to store user information or videos. The customer perception was that this website is so basic that there is no way it was set up to source videos, hack their cameras, or infringe on their cyber privacy.

Ultimately, however, user perception changed. People started to perceive Chatroulette as a dangerous and unregulated outlet for perverted individuals. That perception lived on for too long, and by the time Chatroulette installed methods and regulations (banning explicit material and so on), it was already too late. Chatroulette user engagement dropped dramatically, and the website eventually faded into oblivion.

In Facebook’s case, Evan Spiegel understood that after seven years of global popularity, the social network was no longer a small startup operating out of a living room. Facebook has become a multi-billion dollar cooperation, with powerful means and capabilities. In that light, customers now perceived Facebook as a “big-brother” type of website that stored and leveraged user data for advertisement, and, perhaps, more. It is not uncommon to hear people talk about Facebook as a sort of “intelligence” operation with strong ties to the CIA and FBI (mainly, that Facebook was providing governments with private information disclosed by users).

While there is no evidence of such ties or any “spying” activities, Facebook continuously refutes these claims and unremittingly publicizes a thorough privacy policy. However, these efforts could not overcome the stronghold of customer perception.

Spiegel understood that Facebook Poke (Facebook’s answer to Snapchat) would not succeed because customers could not trust that Facebook wouldn’t “steal” ephemeral pictures and messages. Unsurprisingly, Snapchat came out with a strong, clear, and simple policy: “We do not store pictures, videos, or messages anywhere”.

Snapchat was new; there was no prior customer perception to fight and overcome. It could create and shape the way users viewed the company and the app, and it did that successfully.

As mentioned in the conclusion of part 1, Evan Spiegel understood that he had won the war with Facebook before it had even started. A more accurate analysis is that Facebook had entered a war it simply could not win.

 

Slice of Advice

As a startup, the biggest advantage you have is that you are completely new to customers. Understand how your customers perceive the competition (both negatively and positively), and assess any advantages to be gained from that perception.

 

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