Feb 3, 2016 · 8 minutes

Snapchat CEO Evan Spiegel is a smart guy backed by incredibly smart investors.

I’m sure there’s a great answer to this question that isn’t obvious from the outside. Perhaps there will come a point when I suddenly “get it.”

In the meantime, serious question: Spiegel gets that his platform-- which rivals Facebook in video views despite having just 100 million users-- is the only thing standing between us and total Facebook social and mobile messaging domination right? He gets that for the -- what? billions?-- invested by most of Silicon Valley for the last decade trying and failing to challenge Facebook, and the billions more Facebook has spent taking every other would be competitor out of the market, he’s the only one left right? That we’re talking about a potential $20 billion, $50 billion, or even $100 billion opportunity if he executes right?

So why the hell does he keep wasting time, marketing power, and his brand position trying to be the next mobile VICE? Whenever a content company struggles it tries to rebrand as a platform. Snapchat has to be the only potentially insanely lucrative platform that for some insane reason is sitting around dreaming of being a millenials only content company.

I mean no disrespect to VICE. As the owner of a content company, I worship at the altar of VICE. They are the undisputed gods when it comes to content creation that we all wish we could be. In content, we’re all the “VICE of X.” But VICE is worth some $4 billion. Facebook is worth $330 billion. Hell, even a wounded Twitter is worth $11 billion. If you’ve got the choice-- and Snapchat does-- there’s no question which opportunity you go after.

Platforms outperform, resist fads and have far more impact in the universe than content creators, by a factor of nearly 3x even if you look at the best (VICE) and the weakest (Twitter.)

LA has spent years saying all it needs is a “Facebook” to draw and retain talent, to create dozens of angel investors, and convince everyone that a big multi-billion consumer Internet company can be built in LA.

But is LA ruining Snapchat? Is it so surrounded by media and Hollywood that somehow Spiegel thinks that’s the be-all, end-all? That’s at least the narrative the PR team is pushing.

Witness the recent press out of the company:

Joanna Coles of Cosmopolitan is joining the board. Coles won mainstream fame as a guest judge and mentor of various Project Runway seasons and spin-offs. She’s a genius fashion media personality, with a far less caustic exterior than the more famous Anna Wintour. And props for naming a powerful woman to the board. But a magazine personality is a better fit with a modern content company than a communications utility.

Spiegel is boasting-- of all the things he could be boasting-- the exclusive un-boxing of Vanity Fair’s annual Hollywood issue. There’s nothing wrong with this being on Snapchat before anywhere else. But a sliver of the population cares. What’s more, powerful platforms of the past have achieved milestones like these-- remember the Ellen Twitter selfie?-- because they were dominant platforms and content companies needed to be on them. Not as some boast-worthy biz dev deal. It sounds like the kind of deal Yahoo would have negotiated and bragged about. See! We are still relevant! If Spiegel were focused on the bigger opportunity, this would just happen.

From Variety’s write up:

The deal with Vanity Fair is “an example of how we’re trying to accommodate publishers who can’t produce 20 videos a day but still want to reach our audience,” said Spiegel, speaking Monday at the MPA’s American Magazine Media Conference in New York. He described Snapchat Discover, the startup’s dedicated section for media partners, as a “video magazine.” 

“Accommodate publishers?” That’s the goal of this company?

Spiegel seems to believes he’s there as the concierge to old media. The power position should be reversed. Snapchat has an amazing video platform to reach young people. It’s the content companies that should be bending over backwards trying to accommodate Snapchat, while Snapchat focuses all its energies on building an unstoppable platform. Charge for it if you want. But don’t waste resources catering to them. Focus on your users.

Facebook has done the exact opposite. Built an indispensable tool first, and then set rules by which content creators can use it. But Facebook -- despite its rhetoric-- is never acting in service to content creators.

And now Snapchat is producing 15 second TV shows. It’s hired away talent from CNN to produce a show about the election. That is worth $16 billion?

Worse: Snapchat has Live Stories, the most killer app for everyday people expressing what they are doing and seeing and feeling in this singular election in American history. That should be where all of the press, focus, and attention is going when it comes to Snapchat and the election. That’s what could decimate Twitter and it’s what Instagram is trying to copy, and it’s the one thing Facebook doesn’t have that Mark Zuckerberg telegraphed in his last earnings call they were going after. That is the opportunity. Not a bullshit 15 second show a few million millennials might watch.

Now, to be fair to Snapchat, yes, Instagram is also developing 15 second shows and is also very celebrity heavy. But Instagram still doesn’t court celebrities, as much as it built an amazing platform they gravitated to. And -- we should note-- Instagram, while powerful, is the smallest of Facebook’s platforms. It’s essentially become Facebook’s sandbox for taking on Twitter, Snapchat and other real time, conversational mediums.

Investors I’ve spoken to haven’t necessarily disagreed with these points, pointing to Live Stories as the real killer app of the company. But this bizarre string of content vanity projects pose a real threat to Snapchat’s potential. For one thing, they are distracting. Taking on Facebook is nothing to be sniffed at. Twitter had a unique killer product, but a lack of management execution and innovation and focus most of its life has lead it to total stagnation. That should be a cautionary tale for Snapchat.

There’s also the issue of Snapchat’s brand among users. The longer it touts these projects in the media, the more it sends a message that Snapchat is a content company only for young people. Don’t want that? Then don’t download it. It’s not for you.

Look at the way Snapchat is described by the press. From Fortune:

When it comes to short-form video, Snapchat is one of the stars of the genre. A service that was initially dismissed by many as a “sexting” app—because its video clips disappeared automatically after 10 seconds—has become a bona fide new-media superstar, with a valuation in the $15-billion range and a host of mainstream media partners. 

“A host of media partners.” Not, say, a platform for user expression that celebrities and platforms also use.

And this isn’t Fortune being tone deaf. Let’s look at a recent blog post called “7 Things Snapchat CEO Evan Spiegel Wants Magazines to Know about His Users” cribbed from an on stage interview.

He was in full submissive mode, according to the write up, even saying his little itty bitty ad business wouldn’t be a threat to aging legacy magazines. "I don't think we hold a candle to any of our publishing partners,” he reportedly said.

He essentially described Snapchat as a nice little video adjunct to help them reach a new audience. And throughout the interview, he continues to limit Snapchat’s appeal to just millennials. Again, lucrative audience. That’s why VICE is one of only three content companies valued at north of $1 billion. But Facebook and Google are two of the largest companies in the world because they are used by more than 1 billion people.

If Spiegel believes a mobile VICE is all Snapchat is, he’s thrown away the best opportunity to build a large consumer mobile brand anyone has right now. It’s also wildly over valued at $16 billion.

Sure TV and movies and celebrities are all tremendous levers to build a brand, they are also faddish. Remember when AOL keywords were on every movie? Remember MySpace couldn’t be beat by Facebook because it had all that cool indie music cred? And who nailed TV, the Oscars, sports, every live event and celebrity better than Facebook? Twitter. How’d that work out?

Jeremy Liew-- an investor in Snapchat and one of the first real evangelists of the LA ecosystem post-MySpace-- has argued LA plays so well in a mobile, teen-driven market because they get how to tell stories. I fear the story of Snapchat will be a company that topped out at $3 billion or so when it could have been one of the great communication utilities of the era.

I was so bullish early on about Snapchat’s elegance and uniqueness. I think Spiegel has one of the best innate product senses we’ve seen in the mobile era. It’s painful to watch him squander such a golden opportunity.