Facebook Inc - Ordinary Shares - Class A

NASDAQ:FB

315.84

+10.58 (+3.47%)

4:10:46 PM EDT: $315.86 +0.02 (+0.01%)

Facebook Inc. (NASDAQ:FB) Launches Genius Snapchat Competitor

Facebook Inc. Genius versus Snapchat Current Power

Written by Ophir Gottlieb; Date Published: 2016-09-08

Preface
Facebook Inc. (NASDAQ:FB) has launched a new application dedicated to people under 21 years of age as a direct competitor to Snapchat hearkening back to prior genius.

STORY
Andrés Cardenal wrote a great piece for the The Motley Fool where the author describes Facebook Inc.'s newest foray in to the Snapchat world of you social media users. tech Crunch did a great job as well with this one.

Lifestage is a stand-alone iOS app, on in English, it is its own app for the iPhone. The app is designed for people that are 21 or younger, but the age requirement isn't the only part that feels like a competitor to Snapchat.

"
It asks for your happy face, sad face, likes, dislikes, best friend, the way you dance and more, but instead of filling in this biography quiz with text, you shoot videos. Lifestage turns those clips you recorded into a video profile others can watch.

When you sign up, with no need for a Facebook account, you select your high school, and will then see the video profiles from people at your school or ones nearby. And for added virality, Lifestage only shows you other people once 20 people from your school are using it.

Source: Tech Crunch

That Tech Crunch article goes on to reveal that the app is designed for high schoolers to follow their classmates. If that sounds familiar, it should. Remember, Facebook Inc. (NASDAQ:FB) started as an exclusive college only app. The company went school by school where a specific email suffix was required, like the famed "harvard.edu" domain for Harvard students.

WHY THIS GENIUS AT ANOTHER LEVEL
It's so easy to miss the genius behind Facebook Inc.'s first growth spurt, but here's how it worked and how the company is doing the same thing with high school.

Building a social network is extremely hard in that you need users there to get more users to join, but people won't join unless people are there. It is the very definition of technology's chicken and the egg. But Facebook Inc. did a masterful job in its initial launch, and here’s how it worked:

The company opened up the service for one college at a time. Everyone joined to see everyone else. There was a direct impetus to join and a small population that would make it a success. Facebook inc. then continued this move school by school, often times one at a time, until it built up a rather large group of users.

The brilliance was in the self containment. Facebook never reached out to "the world at large," but rather a few thousand students at a time, with a naturally limited population. The result brought in heavy interest as each new college eagerly awaited the chance to join. It really is, beyond hyperbole and the such, pure genius.

I'm not sure of Facebook knew what they had when they took this approach, and early interviews with Mark Zuckerberg explicitly note that he had no idea Facebook Inc. (NASDAQ:FB) would be this big, but it doesn’t matter -- it worked like a charm. And by a charm we mean it worked better than anything any company has ever done... ever.

HIGHSCHOOL
Facebook is implementing the 2016 version of this genius to high school to attract the youth social media users and to attack Snapchat. While the app may be open to the entire world of highschoolers, rather than going one by one, it has the same premise. Kids will get on to see what their friends are doing in what starts out as a pretty small population of interest. Then it grows, as people meet users from other schools, onward and upward.

With Facebook Inc.'s family of other social media like Facebook proper, Instagram, Facebook Messenger and WhatsApp, these high school kids will "graduate" to the next level of Facebook inc. owned social media. Pretty sharp idea here.

BUT IT MIGHT NOT WORK
Unlike during the initial launch of Facebook Inc., this time it may not work as well. Snapchat now exists, so there isn't a born in demand for kids to join. They are already communicating with their friends on Snapchat (or Twitter), and the same hard pressed urgency to connect doesn't exist as it did with Facebook Inc. in the early days.

In any case, success or not, this is a great time to remember the genius moves made by Mark Zuckerberg and team when the original social media made its debut.

The author is long shares of Twitter Inc. (NYSE:TWTR) and has no position in Facebook Inc. (NASDAQ:FB)

WHY THIS MATTERS
Online video ads are a revolution that will change the way we consume advertising as much as the radio did in the 1920s and the television did in the 1950s. There is one small Silicon Valley company that is powering this ad format move that is already serving ads to Twitter, Facebook, Instagram and soon Snapchat. It's identifying trends and companies like this that allows us to find the 'next Apple' or the 'next Google.' This is what CML Pro does. Our research sits side-by-side with Goldman Sachs, Morgan Stanley and the rest on professional terminals, but we are the anti-institution and break the information advantage the top .1% have.

This is just this is just one of the fantastic reports CML Pro members get along our precious few thematic top picks for 2016, research dossiers and alerts. For a limited time we are offering CML Pro at a 90% discount for $10/mo. with a lifetime guaranteed rate. Join Us: Get the most advanced premium research delivered to your inbox along with access to visual tools and data that until now has only been made available to the top 1%.