Thursday, January 15, 2015

Snapchat Founder to Become Billionairs with new Investment

In early 2015, Snapchat announced that it had recently raised $485.6 million from 23 investors. The company, currently valued at $10 billion+, has grown in importance as concerns about security and the use of photos and other media sent over the Internet loom larger. The founders of this growing company, Evan Spiegel and Bobby Murphy, can expect to be the next billionaire giants in the tech community.

The Rise of Snapchat

Launched in 2011, Snapchat quickly became one of the most popular photo-sharing applications in the marketplace. The app allows the user to send images and video via the Internet to other users. Many applications do the same thing, but Snapchat also makes the images disappear in a few seconds. By 2014, Snapchat had 200 million users implementing the application. In 2013, Snapchat’s founders turned down a $3 billion offer from Facebook and a $4 billion offer from Google, preferring to keep the business in their own hands for the time being.

Snapchat Founders

Evan Spiegel and Reggie Brown were the developers of the concept, which was originally called “Picaboo.” They brought in Bobby Murphy to do the coding on the project. Brown left the group in the early days, but filed suit to protect his financial stake in the company when he learned that Facebook made an offer for it. The legal wrangling was eventually settled, and CEO Spiegel publicly acknowledged Brown’s contribution to the founding of the company.

The Snapchat Business Model

Some experts have been doubtful about Snapchat’s ability to make money when its most valuable asset, information on its users, disappears in seconds. In late 2014, Spiegel explained that ad money will be generated from untargeted advertising, essentially spam. He will have to overcome users general reluctance to view spam in some way that is, as yet, undisclosed. Making spam cool and appealing will be a significant challenge for these young entrepreneurs.

After Snapchat

The future will be bright for founders Spiegel and Murphy. If they follow the pattern of PayPal founder, Elon Musk, they could get involved in developing a new alternative fuel automobile like the Tesla. Or they could found a company that runs supplies to the International Space Station, like Musk’s SpaceX company. Ebay founder, Pierre Omidyar, who became a billionaire at the age of 31, went on to found online investigative journalism sites and a philanthropic organization. Whatever Spiegel and Murphy decide to do with their billions, the public is sure to hear more about their endeavors in coming years.

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