Bobby Murphy and Evan Spiegel are 27 and 25 and are worth $1.8 billion and $2.1 billion, respectively. Murphy and Spiegel are both self-made members of the three comma club, having co-founded Snapchat; right now, the two are the only members on Forbes’ wealth list under the age of 30 – they are the richest twenty-somethings in the world.
Snapchat was founded just four years ago and has enjoyed a meteoric rise since – it’s currently valued in the region of $16 billion, with the two founders holding stakes of about 11% and 13%. This is how they did it.
Meeting at Stanford, the two decided to develop a photo sharing app that deleted pictures in ten seconds or less – it was called Picaboo. The concept sounds rather familiar right? Picaboo flopped spectacularly and never got off the ground; Spiegel’s product design classmates scoffing at the idea. The two rebranded, repackaged and relaunched the idea as Snapchat and it immediately captured the attention of the teenage market. What’s in a name? A lot apparently.
Lesson one: A failed idea isn’t a bad one, the climate has to be right and the details can make a real difference. Perseverance is crucial to any success.
In hindsight, Picaboo probably wasn’t the best name. For a company that’s perennially wrapped in sexting controversy, naming it after a children’s game isn’t the wisest of moves.
Snapchat began its early marketing by pure word of mouth. The founders spread the gospel among college students and, supposedly, Spiegel’s mother told their cousin about the app who in turn showed his friends at a local high school, which was when the traction really starting gaining momentum. The early adopters quickly caught the eye of the mainstream press, including the New York Times, although that early coverage was framed around the idea of sexting.
Lesson two: Any press can clearly be good press, certainly in this case. Marketing and exposure doesn’t have to cost you a fortune, word of mouth in the right demographic and location can be very effective.
Just having a winning idea isn’t enough on its own to make you the richest millennial in the world though, it takes a certain degree of business acumen to continually drive growth and keep investors on side. As CEO, Spiegel has been forthright with the culture within his company and how he gets results.
At a keynote in 2014, Spiegel revealed:
“People frequently ask me about the keys to success and I’ve always been a bit curious myself.
“But it wasn’t until recently that I found the answer. I was fortunate enough to have my palm read by a wise old man in a Hong Kong temple. In addition to learning that I will be married and have a son before I am 30 – he also gave me the three keys to success.
They are as follows:
1. Hard work
3. Human Relationships”
Hard work and ability are self-explanatory, you don’t have to be a pseudo-psychic to work that one out. Spiegel thus decided to focus on the latter for the remainder of his conference.
He openly talked about the strategy he has implemented to improve intra-company communication between employees, something he regards as a key factor to any success.
“Once a week, for about an hour, groups of 10 or so team members get together and talk about how they feel,” Spiegel said. “And just like there are three keys for success [hard work, ability and human relationships], there are three rules for council. The first is to always speak from the heart, the second is an obligation to listen, and the third is that everything that happens in council stays in council. We’ve found that this particular combination is incredibly useful for learning not only how to express what we feel, but for understanding and appreciating the feelings of others.”
Lesson three: Whilst the idea of “council” may sound a little new age. The importance of clear communication can’t be stressed enough. Spiegel evidently relies on his employees to be open, honest and thus happy to be at work and working efficiently.
In late 2013, with Snapchat cementing its place in the social media pantheon, Facebook made moves to buy Spiegel and Murphy out, a $3 billion offer of a move in fact. At the time, he told Forbes: “There are very few people in the world who get to build a business like this, I think trading that for some short-term gain isn’t very interesting.”
Lesson four: Success doesn’t come in an instant, it can take time and sometimes it’s worth backing yourself, rather than cashing out.
Snapchat knows it’s market, which is predominantly the teen demographic. They haven’t tried to “grow up” and target young professionals, or adults; the company has stuck to continually capturing the imaginations of the younger consumer.
Lesson five: Know your product, know your market and know your strengths. Being everything to everyone means you’ll likely lose a lot of people on the way. Learn and master the finer points before building an empire, getting too big too quick has resulted in many a fallen crown.