How Stories Fueled Snapchat’s Growth
Snapchat has come a long way from when it was initially launched in 2011. Throughout the last decade, it has implemented strategic product features that have been directly responsible for its viral growth. The “stories” feature is arguably the most important growth hack fueling Snapchat’s unprecedented growth. Since its initial release, it has been blatantly copied by other social media platforms such as instagram and Facebook. In this article, we will dissect how Snapchat Stories changed the social media landscape as we know it.
Snapchat was created in 2011 by Evan Spiegel, Bobby Murphy, and Reggie Brown as a mobile-first social media platform. Its initial offering was simple: it was an app where you can send disappearing pictures to friends. Many people saw it as a facilitator for sending nude pictures without them being saved to the recipient’s phone, but later people saw that it was actually a fun way to communicate with friends. Being an exclusively mobile social media platform, it gained users very quickly by syncing with phone contacts. While Snapchat was highly successful in gaining new users through contacts, what really increased Snapchat usage was the “My Story” feature.
With social media platforms such as Facebook becoming the fastest growing companies of the 2000s, we saw a shift in how these entities were valued. Investors did not care about revenue as long as the user-base showed a strong growth trajectory. Users were a strong indicator of a social media platform’s future ability to monetize and that was the metric venture capital firms focused on. However, the number of users didn’t tell the whole story. Many platforms had a high number of users which were inactive, artificially inflating the platform’s future ability to monetize. This being said, VCs quickly pivoted to monthly active users (MAUs) as a key metric. Once again, MAUs did not tell the whole story, because not all monthly active users are equally active. At this point, VCs focused on daily active users (DAUs) as a key metric. Given that DAUs were identified as a main KPI, social media platforms scrambled to find ways to have their users return on a daily basis.
Snapchat brilliantly implemented the My Story feature to encourage their users to come back at least on a daily basis. The idea behind stories was simple: you could post a visual status on your snapchat profile, but it would only last for 24 hours before disappearing. People were already in the habit of sending a snap to multiple friends, so it made a lot of sense to include a feature where someone could share an image to everyone in a single click. Furthermore, this created a fear of missing out, because if you didn’t log into Snapchat and see your friend’s stories, you would miss them forever. For the first time, this gave users a reason to open the app without personally receiving a snap.
The Snapchat Stories feature came out in October of 2013 and Snapchat experienced its fastest growth in the year after the release of this feature. Eight months later in June of 2014, photo and video snaps viewed in Stories surpassed person-to-person private snaps as the most frequently used function in Snapchat. It was at this moment that Snapchat shifted from being a messaging app to being a social media platform.
Month over month growth in 2014 was some of the fastest that snapchat has ever experienced. This is especially significant when you consider that smartphones were not as common then as they are now. Snapchat is a unique social media platform in that it lives exclusively on smartphones since it is exclusively an app requiring the usage of cameras. Apps tend to grow as global smartphone users grow as long as they stay at the top of the charts in the app store. Snapchat experienced abnormally high rates of growth the year after releasing the Snapchat Stories feature.
Not only was the Stories feature a crucial growth hack for increasing the number of daily active users, it was absolutely necessary in generating revenue. Snapchat makes money by showing ads to its users but does not show advertisements between private snapchats sent from one user to another. Most of Snapchat’s revenue comes from showing ads while users are tapping through stories. Without the stories feature, Snapchat would be unable to generate nearly as much advertising revenue as it does today. Furthermore, this feature was key in being able to secure future rounds of funding from venture capital firms which fueled the development of future features such as augmented reality, hardware products, and a more robust self-serve advertising platform.
While the Stories feature was loved by its users, unfortunately, this competitive advantage did not last long. Following the incredible growth in daily active users, other social media platforms like Facebook and Instagram noticed its brilliancy and began to develop their own competing features. Instagram released their stories feature in 2016 which was nearly identical to snapchat’s stories feature. It had the same name and also lasted 24 hours. While this blatant clone received criticism, that did not stop people from using the feature and increasing instagram’s daily active users metrics. Instagram is different from Snapchat in the sense that accounts are much more public and it has a greater presence of celebrities and influencers. As a result, people follow more people on instagram than they do on Snapchat meaning they’re able to consume more content on Instagram. Users that were on both platforms now had to decide whether they should share what they’re experiencing on Snapchat or Instagram. Sure they could post it on both, but that becomes time-consuming and annoying.