The Problem With Snap's Attitude Towards User Experience

On Snap's (NYSE: SNAP) first public earnings call, CEO Evan Spiegel derided rivals that "growth hack" their user numbers, referring to various ways to prod users to remain engaged. In this segment from Industry Focus: Tech, Motley Fool analyst Dylan Lewis and senior tech specialist Evan Niu, CFA, discuss Snap's own methods to keep users on the platform.

A full transcript follows the video.

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This video was recorded on May 12, 2017.

Evan Niu:Speaking on user numbers,Evan Spiegel had this really weird comment on the call about how, "Ourrivals are doing what we call growth hacking," which is when yousend people notifications, and prod people into using the app andgetting their friends to use the app. He was kind ofsaying this in a bad way, like, "We'renot going to resort to thosetypes of methods to try and grow user numbers." But,it's like, why is that a bad thing? Everything these companies do, all of them, is meant toincrease engagement on the platform. Why is it a bad thing when acompany is experimenting in different ways totry to get their users engaged, get their users to grow their ownnetwork of friends on the platform? Those, to me, are justregular things that a company should be doing to increase engagement. Yet,Evan Spiegel is trying to downplay, and say, "We'renot going to do that." It was areally bizarre way to frame that, when you would think that a company like Snap that'strying very hard to grow userswould consider experimenting with some of those types of things. It wasjust a weird comment to make.

Dylan Lewis:And,also, to put the platform under a microscope for a minute,I don't know if you use the messaging sideof Snapchat at all, or if you're more on the story sidewith your posts, butif you wind up actually sending each other messages to friendsback and forth on the platform, you get anotification that your friend is typing a message. Are thereany other platforms whereyou get that notification? That is absolutely a pushto get people playing on the platform or, andto give people a heads up.

Niu:Yeah,exactly. I wasn't aware of that because I don't really use the platform. That'skind of crazy, because thatsounds exactly like what he's talking about, which issending you little notifications and prodding you to stay in the app, stay engaged.

Lewis:AndI see that and I don't need that. Just tell me whenI actually have the message.

Niu:[laughs] Yeah,that's a weird notification, thatsomeone is typing. Of course, a lot of time on messaging platforms, you see when people are typing. But anotification that someone is typing does seemkind of annoying.

Dylan Lewis has no position in any stocks mentioned. Evan Niu, CFA has the following options: long January 2019 $20 puts on Snap Inc. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.