Snap’s Spiegel: Company Is on ‘Cusp’ of Computing Transformation
The Takeaway
• Spiegel hopeful AR glasses will be bigger than Apple Watch
• Spiegel says super-voting rights helped company stick to long-term bets
• Snap will allow Trump back on the platform
Snap CEO Evan Spiegel defended his company’s ability to stay independent despite competition from deep-pocketed rivals like Meta Platforms, predicting that the Snapchat parent was on “the cusp of a real transformation in the way that people think about and use computers.”
That transformation, Spiegel said, will involve his company’s augmented reality glasses, Spectacles. He said that he expected consumers to widely adopt AR glasses by the end of the decade and that he hoped they would be “a lot bigger than the Apple Watch,” a popular Apple product that he described as “a phone accessory.”
Spiegel reiterated his belief in AR in a wide-ranging conversation at The Information’s The Future of Influence event in Los Angeles on Tuesday. He also spoke about his attitude toward selling the company, Snap’s relationship with President Donald Trump, and his thoughts on the government’s attempts to force Facebook-owner Meta to sell Instagram and WhatsApp.
The government’s recent antitrust trial against Meta revealed that Snap turned down a $6 billion acquisition offer from Facebook in 2013. “It was really hard for us to imagine joining one of those companies and then really staying true to those values” of creating a platform different from other social media companies, Spiegel said, in rare public remarks about that period.
As to whether he would consider a sale in the future, he noted the company is focused on its vision “to help create the next computing platform.”
“As long as we can stay true to our values and stay true to our vision, that’s really what’s important to us as a business, and we’d consider anything in light of that,” he said.
Snap first introduced its AR glasses in 2016 and now is in the fifth generation of the device, which it currently sells only to developers. Spiegel acknowledged that he was able to pursue his long-term vision of creating a new platform for computing because he and his co-founder Bobby Murphy have super-voting shares that give them control of most matters presented to shareholders.
“If investors aren’t aligned with our long-term vision, then they can sell our stock and go buy another stock where they see more long-term opportunity,” he said.
He said Snap has gone through these periods before, when “people don’t see the long-term opportunity with glasses, or they don’t see that progress yet, and they wonder why we’re spending all this money”—only to see those bets, say on disappearing stories, pay off.
By 2018, Snap’s share price had fallen to about one-third of its $17 initial public offer price, dropping to less than $5 before surging to an all-time high of more than $83 in 2021. It’s now down nearly 90% from that peak, to just over $8.
“While folks may be disappointed that we’re not making more cash today, I think there’s a lot of investors who appreciate and understand our consistent ability to innovate and also actually really value our ability to invest over time.”
Snap’s free cash flow surged six times last year, to $219 million, though it’s never turned an annual profit on a net income basis.
Trump Welcome Back at Snap
A government break-up of Instagram and WhatsApp could upend Meta’s dominance in social networking. But Spiegel dismissed the notion that a forced breakup could help Snap.
“Our view has always been that by the time regulators get around to dealing with monopolies, oftentimes market forces have already prevailed,” Spiegel said, citing Microsoft’s antitrust woes in the late 1990s and subsequent missteps with mobile phones.
When asked whether Snap would be interested in joining a group of investors to buy WhatsApp or Instagram—if a forced breakup were to occur—Spiegel said he hadn’t considered the idea.
“If we can invest more incremental dollars, they’re going to be more focused on us winning the future of augmented reality and AI with our new glasses than a backwards-looking strategy around Instagram or WhatsApp,” he said.
Snapchat has differed from social media platforms including Meta and Google’s YouTube, which reinstated Trump’s accounts after suspending him in the wake of the Jan. 6, 2021, U.S. Capitol riots. The messaging app in 2021 permanently disabled the president’s personal account for violating its policies.
Spiegel said Trump could rejoin the app if he wanted. “The president does have access to the White House account, and if he wants to make a new account, he’s welcome to,” he said.
Snap has long taken a more private approach to engaging with governments and has found that yields “the most productive conversations,” Spiegel said. The company has met with the White House’s Office of Science and Technology Policy “to try to understand their priorities, their investment areas,” such as advanced manufacturing in the U.S., he added.