Leaked Snap memo reveals firm's plans for continued user growth

Tim Maytom
Snap CEO Evan Spiegel

Snap is planning to reposition its flagship Snapchat app to appeal more to older users, as the firm seeks to break through its user growth stagnation and reach new audiences, according to a leaked company memo.

The memo, which was obtained by news site Cheddar, features CEO Evan Spiegel calling for the company to refocus around a new set of strategic goals with the aim of achieving full-year profitability in 2019. Speaking to the firm's poorly-received redesign carried out earlier this year, Spiegel admits that the firm "rushed our redesign, solving one problem but creating many others.

"The biggest mistake we made with our redesign was compromsiing our core product value of being the fastest way to communicate. Our redesigned algorithm Friend Feed made it hard to find the right people to talk to, and moving too quickly meant that we didn't have time to optimise the Friend Feed for fast performance. We slowed down our product and eroded our core product value."

According to the memo, Snap is working on new designs for its Discover section, with the aim of capitalising on content produced by celebrities and professional media companies. In addition, Spiegel admitted that in  order to maintain growth and generate revenues, future incremental growth in the app's core markets "will have to come from older users who generate higher average revenue per user".

This new strategy has two main obstacles to overcome. One is that Snapchat's core audience of teen users may choose to abandon the platform if it becomes flooded with older users, in a similar way that Facebook has seen younger users leave its services. The other is the perception of Snapchat among older consumers, who Spiegel admits see the app "as frivolous or a waste of time because they  think Snapchat is social media rather than a faster way to communicate."

"Growing in older demographics will require us to mature our application and deliver our core product value of being the fastest way to communicate. Changing the design language of our product and improving our marketing and communications around Snapchat will help users understand our value...and aging-up our community in core markets will also help the media, advertisers, and Wall Street understand Snapchat. Today, it's harder for advertisers to understnad the value of Snapchat because many of them don't use the product."