Deal Highlight: SnapChat Raises $13.5 Million

SnapChat, the mobile photo messaging app, raised $13.5 million last week from some big name VCs. I personally consider $2 million as a good rule of thumb amount for how much is raised for a Series A, so this is a big investment.

My guess is the VCs got between 30-40% of the company for their investment, which values SnapChat at $47 to $58 million post-money. Looking at these numbers, its pretty easy to see the VCs are thinking SnapChat will be the Instagram of 2013. SnapChat is currently seeing 60 million pictures pass through its service every day. In comparison, Instagram has 40 million pictures passing through its service every day and was acquired by Facebook for a billion dollars in 2012. SnapChat founders have said they want to grow SnapChat into a long-term company that is focused on mobile. If SnapChat can truly figure out mobile and be the leader in that vertical, I think you start seeing Facebook as a comparison, which is currently sitting at a $66 billion market cap. Both of these scenarios are great for the VCs who invested in the Series A and is the reason SnapChat was able to raise such a large amount for a Series A.

Here is my take. I do not see the current SnapChat product being around in 5-10 years. I think it is a fad that will go the same way as social games-gets mainstream adoption, have pullback and right size to a still large, but niche market. I do believe SnapChat’s core strength is its ability to provide stream of conscious pictures without any consequences. This approach works perfectly with mobile devices, so if they can take this concept and build a product that fulfills a core need, then I have no doubt they could become a long-term company. Otherwise, I think they are a fantastic acquisition target that is putting up some BIG numbers right now.

Top Ten Experiences of 2012

Here is the second annual post where I highlight my top ten experiences over the past year. I started doing it after I have been noticing a shift in society where experiences are becoming more valued than material goods.

10. Twins Season Tickets

My roommate, his dad and me split a 40 game Twins season ticket package (2 seats). I ended up going to about 8 games. Despite the disappointing season from the Twins, I had a lot of fun going to the games.

9. 5 year reunion

I celebrated my 5 year reunion from high school in August with a boat ride around Lake Minnetonka.

8. Weddings

I went to three weddings this past year for my cousin, the girlfriend’s college friend and the girlfriend’s cousin. Two of them fell on Friday and Saturday of the same weekend in October.

7. Camping

The girlfriend and I went down to Whitewater State Park in southern Minnesota for three days in late May. Hiking and golf were the highlights.

6. Travelling for Work

Picture Source: Wikipedia

On June 1, I was put on a consulting project in California and flew out there about every week for the rest of the year. I flew roughly 78,000 miles in that time and received Platinum status from Delta.

5. Trip to Cragun’s Resort

My family along with the girlfriend went up to Cragun’s Resort in Brainerd, MN in late August/early September for a few days. Golf and water skiing were the highlights.

4. Trip to Mexico

I went down to Mazatlan, Mexico in March with the girlfriend and her family. I played golf, read the Steve Jobs biography and hung out on the beach.

3. Skiing at Lake Tahoe

Since I have been travelling to California every week for work, I was able to stay over for a weekend and have my sister come out and ski at Heavenly in Lake Tahoe for two days. We ended up getting snow in the afternoon of our first day, which continued into the morning of the second day to come to 6 inches.

2. San Francisco

The girlfriend and I flew out to San Francisco (another benefit of travelling out to California every week) over the 4th of July for 5 days. Watching fireworks over the Bay and exploring Alcatraz were our favorite experiences.

1. Seeing Friends and Family

I traveled a lot this year and as a result was away from home, friends and family. When I was able to connect with friends and family recently over the holidays as well as at other times over the year, I thoroughly enjoyed these moments.

iPhone 5

I checked out the iPhone 5 today. I had heard from a friend that it was a significant improvement over the iPhone 4, but I thought his inner fan boy was biasing his opinion. So going in I was determined to be resistant and see the phone for what it was.

As soon as I picked it up, I knew my friend was right. It was lightweight and fit perfectly into my hand. The screen was thinner and longer, which combined with the lighter frame made it feel more like an extension of my hand than a phone. I loved it and quickly pulled out my iPhone 4 to find myself blatantly aware that I was holding a phone.

I am excited to see the next generation of iPads that have the 5 design features incorporated.

Transition to Tablet Insight: Fantasy Football

Being its the first NFL Sunday, I wanted to share a few recent problems I have had related to Fantasy Football as I transition from PC to iPad for personal use:

1. The draft software for both ESPN and Yahoo runs with Flash, so I was unable to draft on my iPad.  As a result, I had to draft on my work computer, which is less than ideal. Another thing to note, ESPN worked perfectly in Chrome, but Yahoo would not load so I had to use Internet Explorer.

2. ‘Stat Tracker’ on Yahoo also runs on Flash, so I am not able to keep up real time with my fantasy guys, which cannot stand. The Yahoo Sportacular app on my iPhone would be an acceptable replacement, but it is not available as an iPad app. I will keep searching for a replacement.

Fantasy Football is a free service provided by ESPN and Yahoo. I haven’t seen any huge technical changes from year to year so ESPN and Yahoo are probably not making large investments in these services beyond maintenance/upkeep. I have to think that they could invest in a non-flash draft application and Stat Tracker that could replace the current offering or be available as apps in the app store.

Transition to iPad Insight: Hulu Plus Web Only Content

When I started my job out of college last June, I gave up my personal computer for two reasons:

1. My dad’s personal computer had finally quit after ten years

2. I had recently purchased an iPhone

It felt selfish for me to have a work computer, personal computer, and iPhone while my dad would have to go out and buy a new computer, so I gave him mine. My rational was I would hold out to buy an iPad and I finally did that in February.

I have found that being reliant solely on an iPad or iPhone in replacement of a PC has provided some perspective and insights into the growing trend of tablets replacing PCs. I plan to share these insights on this blog and discuss ways to not only make the transition seamless, but 10x better. Here is my first insight:

I watch all media except sports on my iPad. I subscribe to Netflix, Hulu Plus, and HBO to Go (through Comcast). I have found recently that new series on the cable networks are being set to “web only” on Hulu Plus, so I am unable to watch them on my iPad.

Hulu’s website says this is due to Hulu setting up licensing for PC-only when the site was first launched, so they have to “start from scratch” and obtain licenses to stream content on TVs, mobile, and tablets. Hulu was formed in 2008, so it was no secret media consumption was moving towards mobile and tablets. My best guess for why it was done PC-only is that the network consortium that started Hulu must have
agreed to provide licenses to Hulu because PC represented a new channel that did not cannibalize regularly scheduled programs.

Hulu lists “exceptions” as to why licenses for mobile, TV, and tablet have not been inked, which I do not understand because aren’t mobile and tablets, even gaming consoles, essentially the same thing as a PC? Don’t all of these devices have Internet connectivity, so even the statement “web only” doesn’t truly apply? I think what we are seeing is networks being concerned with cannibalization of their scheduled programs and as a result are hesitant to issue these licenses, which translates into me not being able to watch shows I am interested in. I see all of these devices as having the same functionality, so giving one license to one device makes zero sense and as a result costs the network one viewer.

Top Ten Experiences of 2011

I think experiences are going to become increasingly more valued in our culture over material goods, so I have highlighted my top ten experiences of 2011

10. Skiing in Colorado

Family went skiing in Colorado over Spring Break. Got some great powder and firmly believe the best skiing in Colorado is at Vail.

9. Graduating from the University of Minnesota

Four years of hard work finally came to fruition. Chris Sacca gave a phenomenal Commencement Speech at graduation. I highly recommend watching it and am planning on watching it every year to remind myself of his message.

8. Las Vegas

A few days after graduation, me and three of my college buddies took off for Las Vegas. It was my first time there and definitely will be going back.

7. Golf at Superior National. The girlfriend’s family has a cabin on Lake Superior and when we go up there playing at Superior National is a given. One of the most beautiful courses I have played.

6. Purchased my first car

5. Started my first full time job

4. Rutgers Resort

The family took a trip to Rutgers Resort. Played golf and went water skiing, which I have not done in 10 years.

3. First business trip to Miami

2. Trip to Chicago

Me and the girlfriend went down to Chicago for a weekend to check out graduate schools.

1. Skiing Trip to Wisconsin

Me and the girlfriend went on a trip to Wasau, Wisconsin over the Holidays. If you remember, there was ZERO snow this winter. Wasau, Wisconsin had a good base layer, so we took off and skied for a few days.

Also wanted to give a shout out to the college roommates. Fantastic experiences (wouldn’t know it from the pictures below) over the last two years that came to a close, in terms of the memories that come from living together, in 2011.

Start-up Analysis: Blip.Me

I recently downloaded the Blip.Me app and want to share my thoughts on the product and the start-up. I would like to start off by saying that I have explored a few of the other walkie-talkie apps out there (Hey Tell, Voxer), but none of them come close to the simple and functional design of Blip. It really is a beautiful app and one that I enjoy using. In addition, I was talking with a friend of mine who was saying that with the advent of walkie-talkie apps, what do we need a phone for? Perhaps this is the first step in making the phone (dialing, ringing, hanging up) obsolete? Here are my thoughts:

What I Like
-The biggest benefit I have seen from this and other walkie-talkie apps (Blip is easier to use) is being able to display emotion and inflection. This makes a much more lively conversation than with text.
-Very easy and compelling app to send to your friends. I have found adoption is fast and the app remains sticky after one use.
-Clearly Blip is an app made for the iPhone. The other walkie-talkie apps appear to not be made to harness all of the iPhone capabilities, the guys at Blip have done this.

Feature Wish List
-Link to Twitter
-Translation from text to voice. There are times when I cannot listen to a Blip, which means I have to wait until I can listen before responding.
-No time limit.

Business Model
As I have stated, this is a beautiful app that has been built by an experienced team. I can see why the investors have backed it, but the big question for me is, how do you monetize? After using the app for weeks, I still have not unconvered revenue generation mechanisms. This is not concerning as the team has good funding and is probably focusing on distribution and scale, but at some point Blip must bring in dollars. Maybe Blip will offer a subscription fee for premium features (like no time limit)?

I am sold on the app and look forward to watching the monetization strategies unfold.

Sold My Apple Shares Today

I sold my Apple shares today. I bought those shares in July 2010 in the middle of the iPhone 4 antenna issue that sent the stock down. Apple was selling a record number of the devices at the time and it did not make sense to me why the stock was going down due to the antenna problem when they had a solution for devices sold and had already fixed the phones in production (I have since bought one of these), so I pulled the trigger at $254.

Flash forward to today, Apple hit its all time high of around $430, which combined with the death of the visionary Steve Jobs was reason enough for me to sell. I will continue to watch Apple very closely and hope the company continues Jobs’ legacy of innovation, technology, and stunning design.

Things that Don’t Work: Cart Return Placements

I have a fairly detailed analysis for this Things that Don’t Work segment. As you can see in the photo, Target shoppers have left their abandoned carts at the end of the parking lot because the cart returns are located in the parking area closest to the store.

Now, the driving factor for ultimately why these carts ended up in their current place is something I witness every day driving to work. As I drive by every morning, I see the Target employees park in the best spots near the store entrance before the store opens. This causes customers to park at the end of the parking lot where there is clearly no access to cart returns. Poor design of cart returns and poor planning for employee parking cause this Things that Don’t Work.

Things that Don’t Work: Airport Bathrooms

I was recently travelling for work and as the picture shows, I went into the bathroom and had no place to put my luggage. For security purposes, I wanted to keep my luggage near me, so my only choice was to place my bag next to me, which is not sanitary. Throughout my trip, I continued to see this scenario play out for myself and those using the restroom. I think if an airport started offering a solution to this problem that would be a huge value-add to travelers.