What comes after smartphones, with Snap CEO Evan Spiegel

22:54That's a lot, yeah. But I think, like, people don't realize is the scale and the engagement in the Snapchat camera. Okay, so messaging servers are the competitor. And then how does the business work? I actually don't know that much about how the business works. So you're approaching a billion MAUs, and then monetization is mostly advertising for them, or how do your different revenue streams break down? We've got two major revenue streams. One is advertising, the other is direct revenue. The direct revenue business is relatively new for us, I think, over the last two or three years. We just announced we had 25 million Snapchat Plus subscribers, over a billion run rate on the direct revenue business.

23:30So that's been growing really nicely for us. And then advertising, of course, you know, whether that's on the map, we've got a product called Promoted Places, you know, and actually, you know, really powerful closed loop measurement around that. So we, you know, a lot of folks care right now about driving folks into their retail locations and Promoted Places, you know, plays a huge role in doing that. There's been a general trend, I think, of businesses directly monetizing, like having their equivalent of direct revenue be more relevant with AI because the inference costs are real. And so if you are like, you know, maybe the prior generation of companies were very heavily ad dominant, whereas if you look at, you know, ChatGPT or Claude or something like that, they have to have the various tiers of, you know, subscriptions,$20 a month and$200 a month, because you can just use a small amount of compute or a lot of compute.

24:23So do you see similarly direct revenue becoming a bigger deal for Snap in future because you're just going to have more computationally expensive products? You know, if you're using a lot of computationally expensive Lens Studio stuff, like you can potentially burn a lot of compute as a user of Snap. Yeah, I mean, that's one consideration for us. I think, and, you know, of course, we have a Lens Plus tier of our subscription service, which gives you access to more of our AI tools and editing tools. I mean, I don't think people realize that the Snapchat camera is one of the largest image and video generation platforms in the world, just given the frequency of engagement.

25:00And one of the ways we do monetize that is with the LensPlus product. But I think for us, if I look at our subscription business, it actually just really aligns with our company's ethos and also our core skill set. If you think about what Snapchat has been good at over the past decade, it's been making products that people really love. And so we would always get emails from customers asking for new features, different features, more bespoke features like app themes, for example. And we never had the resources to work on it. We were like, oh, gosh, we can't build something for a tiny subset of our community, even though they're so passionate about the product and about what we're creating.

25:37And so I think what's been so fun about Snapchat Plus is that we've been able to dedicate the resources to build this long list of features that our most passionate Snapchatters really want and are willing to pay for. And so it really aligns, I think, what we love to do and I think what we do best, which is making cool new products with our community and what they want, which are more bespoke features from us. And sorry, is there a difference between what your paid customers tend to want versus what your free customers tend to want? Not necessarily, but I think the most passionate Snapchatters always have requests for how we can make the product better.

26:13We can't always resource all those requests. But now with Snapchat Plus, we have an avenue where folks are really passionate about the service. They want a new feature. They let us know we can build that for our subscribers. And I think that's been really exciting. Do people have good ideas generally? People have great ideas, an endless number of great ideas. How do you expose yourself to product ideas from the community? Well, my email is evanetsnap.com. So I get my fair share of great... Especially if you say it on podcasts. Yeah, exactly. Of great customer emails. But, you know, online, on comments.

26:48I mean, every time I post a video, I'm getting comments with people, you know, telling me what we should do differently. So I think that's one of the great things about engaging with our community. People think of social networks and messaging apps as network effects businesses, where the bigger they are, the better they work as products and businesses, because your friends are there. Like they are the textbook example used in business school discussions of network effects. And that is somewhat true. But there's also an element where you have anti-network effects and diseconomies of scale as a social network.

27:21One is, as you get more popular, there's more kind of fraud and spam problems and things like that. But there's also a question of, you know, what is the id of the social network? And so, you know, maybe, you know, teens using a product don't necessarily want their like aunts and uncles on it because like the vibe is all wrong. Or, you know, maybe Silicon Valley insiders preferred Quora. You remember Quora was around when we were first starting out and it was originally like a very Silicon Valley insider product. And, you know, now it's a much broader product. And so as I think about Snap, one of the things you've done well is kind of you've kept it cool and you've avoided the ick of it feeling like it's too big which again sometimes social networks run into maybe you can comment on that phenomenon and how you think about the risk in general it's fascinating because you've you've tapped into two of the most important kind of ideas in social or at least two of the most important findings that we've had the first one which is i think maybe the most important was that when we were starting Snapchat, you're right, the belief was that the bigger the network was, the more valuable it was, sort of.

28:27And folks had a whole model for that, for how they thought about it. What Snapchat proved was actually that it's not about the size of your network or the number of people you can contact on your network. It's about who you actually talk to. And that tends to be a much smaller group than the total size of the potential network or even your total number of friends, right? In fact, most of your conversations, I would guess, right, on a daily basis are like with your wife, right? Maybe with some of your close friends, maybe some of your closest coworkers, but it's actually a very small group of people that you talk to the most.

29:03And that broke the model of social media, right? Which was the more friends you have, the more engaged you have, the more value there is. And we actually said, that doesn't sound right. I think people spend most of their time talking to the folks who are most important to them. So if we design a service that's all about talking to people who are most important to you, your close friends, and we design a service that's really, really great at that, right? You may not send snaps all day to, you know, your 400th friend, but certainly for me, I love seeing what our two-year-old is up to throughout the day.

29:33And my wife sends me little snaps, and it makes my day. It's the best part of my day, you know, seeing what he's doing and what he's up to. And so we've really built a service that's great for your close friends. And that doesn't necessarily mean that you need the largest possible network. You just need the most important people in it. And so I think that was one of the reasons why Snapchat was able to grow. Because when we were first getting started, we just heard from everyone, you're never going to be able to compete with Meta. There's no way. Because they've got a bigger network. And then I think the second lesson is sort of a follow-on from that.

30:06because the other thing that we found is that, you know, as Facebook grew and Instagram grew, there was so much pressure to add more friends. Because if you remember back in the day, their entire business was based on the newsfeed, right? In order to have content in the newsfeed, you needed to have friends. So in order to have more content, you needed to, you know, add more and more and more friends to have a newsfeed that had, you know, more posts and therefore more advertising opportunities. That created a really precarious problem because I I think what folks found is after they added a certain number of friends, they got to a place where they actually didn't know who they were friends with on Facebook.

30:43They didn't know who was going to see their content. There's a straw that broke the camel's back type phenomenon where then it inhibits posting, which is very dangerous. And people felt really uncomfortable posting. That then accelerated, I think, this need to bring in public content, right? No longer friend content. And very, very quickly, the social network morphed into something that was much more about, you know, posts from BuzzFeed or something like that or other news providers than it was content about your friends. And so I think that's been another one of our sort of key learnings over time.

31:16And one of the reasons why Snapchat is a much more private service, right? You can't be embarrassed by your aunt on Snapchat because there are no public comments on your story, right? And you can share with your friends and feel comfortable doing that without, you know, the risk of being embarrassed. And because the service is oriented around close friends, we don't have many of those same challenges with a public news feed. So your view is that if you think of a payoff curve for how good the product is relative to the number of friends you have on it, again, the textbook view is that it just kind of goes up monotonically, whereas you're saying it starts off at zero because the product's no use if no one's on it.

31:52And then you're saying it goes up pretty quickly to 10 or 20 people, but maybe hits a plateau and starts decreasing it. So I don't know. What are the numbers here? Potentially even less. Yeah, yeah. So when does a social network start having anti-utility from the incremental user? And I think we have to be careful to differentiate a social network from a messaging service. Okay. So at its core, because Snapchat's a messaging service, you can get the vast majority of the value even by having like one friend, two friends, three friends. Yeah. Right? Those are the folks you talk to the most. And that connection is really, really important to you.

32:24I think, you know, as I mentioned, one of the big challenges of social networks was that in order to have enough content to, you know, drive enough engagement to grow the advertising business, there was a need to add more and more and more friends because the news feed was really reliant on new content. So I think one of the things that we did very, very early on, and we can argue about how well we executed on this, but one of the things we identified very early on was that we needed to open up to non-friend content, right, publisher content, content from creators very, very early on. So rather than driving people to add friends, right, they could watch content from publishers when they ran out of content from their close friends.

33:00And so we moderated that content. We were one of the first companies to actually rank that content with AI, you know, with our service called Discover. And the fundamental thesis was like, let's not force people to add friends so they can watch more content. Let's just show them content from publishers or from creators. Oh, that's very interesting. Okay, so your view is that the mistake would be one should add more people. you should get more connections on LinkedIn so that there is content in your feed. And your view is that you should separate out the people you want to interact with and having stuff to do in the app.

33:33And those are actually pretty separate concerns and it's very dangerous to mix them. And I think back in, it may have been 2016, 2017, we said the most important thing you need to do is separate social from media. The biggest mistake was combining them and it creates a lot of perverse incentives. So instead, just add the friends that are important to you who are close to you. Use a service for messaging, share with them if you want to with stories or things like that. And then, you know, if you want to watch more content, great. We've got this whole world of content available to you from publishers and creators, et cetera.

33:59Yeah, yeah. Hmm, that's very interesting. Okay, the other thing that from a product point of view, I really associate with Snapchat is obviously persistence or lack thereof, the ephemeral nature. And the norms around this have shifted a lot, even over the course of my lifetime. I remember when I started using the internet, the norm, I don't know if you remember this, was that you do not use your real name on the internet. The internet's a scary place, and it would be dangerous for you to have your real name out there. And then we got okay with that. And then there was the era where everything got posted in perpetuity through social networks and everything else.

34:38And then we realized, huh, maybe everything being posted in perpetuity is not a great idea. And I feel like people are still trying to figure this stuff out. And so I'm curious, again, what you think the long-term equilibrium is of, do you want a central store of all the photos you've ever taken in your camera roll? Do you want everything to be ephemeral? If things are ephemeral, maybe you really wish you'd kind of kept that birthday snap from a while ago. And so what is the long-term equilibrium here just online in terms of how people reason about data? Do we need more fine-grained control between between a one-off disappearing message and, you know, kept forever?

35:18Maybe we need new product inventions? I think, like, my general thesis would be that it will probably mirror the way that we've been living for thousands of years, which is the vast majority of life is ephemeral. And then you save the things that are important, right? I mean, you don't write down every thought you have. You certainly don't record every conversation you have, although we're recording this one, right? And so I think for me, that's likely how things will evolve over time with technology, certainly what we've seen with Snapchat. I mean, when we said, hey, it doesn't make sense that everyone's recording everything forever in terms of our conversations.

35:51And in fact, that has an impact on the way people express themselves and share with one another. That sounded crazy at the time because literally everything was saved forever. And we were talking about things like the importance of privacy and the relationship between privacy and self-expression back in 2012. and people were like, what are you talking about? This was at the time when everyone was saying everything's going to be open and connected, right? You're going to share everything about yourself with everybody. And that's just not how humans have lived for thousands, thousands of years. So I think what's very likely looking forward is what's already happened, right?

36:25Which is the vast majority of communication products you use now have retention settings that delete your conversations unless you want to save them. I think that's true for Snapchat chat in terms of making snaps as well. You may just want to send something that's silly to your friend, but if it's an important memory or if it's our two-year-old running around doing something cute, I'll just save it. So I think people are going to interact with technology the same way they interact with the world, which is save the things that are important and discard the rest. Yes, yes. Interesting. Where do messaging apps go?

36:57To me, I mean, the big question that I think we need to solve is what is the best way to communicate on specs. I think that's what's really interesting to me right now. And I think like what's fascinating is that, you know, this, the social network of the future is actually hanging out together in person and using specs together. So that's what excites me about the future of digital communication. I think, you know, messaging is fine, but it's hard to compete with actually being together with your friends and your family. So if we can build technology that makes it that fun, that gets you, you know, all the benefits of technology, but with your friends and family, I think that's a huge positive.

37:34You don't let your kids use screens. What age do you think you'll start? Our 15-year-old is fully on the screen train. That ship sailed a long time ago. You know, in fact, probably in COVID for sure. You know, the baby, for example, the two-year-old, like we let him watch YouTube when he's getting his hair cut. He's big into construction, so he likes to watch, you know, construction. Through a two-year-old, construction is pretty dope. It's awesome. I mean, by the way, it's awesome at every age. But like, you know, to see it through a two-year-old's eyes is like so fun. You know what I mean? It's like mind-blowing.

38:04So he's big into his construction videos. And then, you know, the six and seven-year-olds will watch like a movie from time to time or something like that. And, you know, I got actually the TVPN guys gave me the Mod Retro like video game, the Game Boy remake thing. And so, yeah, they got those for awesome. Yeah, they got those for Christmas. So they play those a little bit. I guess what I'm sort of getting at is there's this big society-wide debate right now as to what you do with kids, teens, and, well, in the general view, as adults can kind of do what they want when it comes to phones and social media.

38:42What do you think is the right policy position there? I think the real danger is blanket policy when everybody is different. You know, kids are different developmentally, right? Each of our kids, you know, are different in, you know, where they are developmentally, what they're passionate about, you know, their interests. So I think no matter what, I think parents need to work to cultivate a healthy balance with their kids and do what's appropriate for each of their individual kids at different times. You know, Flynn, for example, our 15-year-old, he was going back and forth between his dad's house a lot when he, you know, in our house when he was younger.

39:17And so he needed a phone earlier, right? It was otherwise impossible to coordinate, right? And so, you know, that was something that was important. That was a decision that my wife and I made, you know, to give him a phone earlier than maybe we would have otherwise. I think earlier than I, you know, got a phone when I was growing up because it was important for where he was at. So I think, you know, being a parent, we know our kids, I would argue, best, you know. And so it's really important to think about what's developmentally appropriate for kids, your own kids. I think generally speaking, though, what concerns me the most is like the massive swings in public sentiment.

39:51If you remember during the pandemic, it was like technology is saving us all. Use screens all day long, all the time. And now we're in a moment where people are worried about screens and don't use them at all. And I think the healthy response to really anything in life is like achieve a balance. Our 15-year-old, he loves art. He's amazingly talented. He likes hanging out with his friends. And then, of course, he wants to unwind and watch something on Netflix or chat with his friends on Snapchat. No problem. I think it's all about that healthy balance. So I think for me, what I'm really watching with a lot of concern is that in this moment of such dramatic change with artificial intelligence, young people need to be learning how to use these tools.

40:30It is absolutely imperative that young people learn how to adopt these tools. And by the way, it's so inspiring for young people to take an idea in their head and see it made real so quickly. And all of these advancements are happening at a time when people are incredibly skeptical about technology, are concerned about technology, and are concerned about AI. And so, you know, I think the industry has a lot of work to do to build trust, to, you know, make sure that young people are adopting these tools, which are just so vitally important to their future. Relatedly, Australia just blanket banned under 16s from the top 10 or some number like that, social media apps.

41:06What have you seen post the ban in kind of the behavior of kids across Australia as opposed to, you know, presumably just a lot of zeros in the logs? Yeah, I think there are a lot of challenges with the way that the ban was implemented. As you mentioned, it only applies to a small number of apps. So, you know, if you're a young person, you want to, you know, continue to use services like Snapchat, you can just use a clone service. that doesn't fall under the... So you just have a bunch of direct clones popped up, basically? I haven't followed the exact number of clones, but there are plenty of alternatives.

41:34There are millions of apps in the App Store, right? And so I think to only apply the ban to a very small number of services, to not implement it at the operating system level just creates a lot of challenges, right? You can use facial ID scans. You can also use government IDs themselves, but a lot of young people don't have government IDs. So I think there's some real challenges in implementing a ban like this at the app level. I think what parents need to know, what's so important for parents to know is they can already configure this on their teen's phone using the operating system. So Apple's got a ton of great settings.

42:08We use them at home for our 15-year-old where we can decide exactly what apps he can use, how long he can use them. All of these settings are available to parents at the operating system level, which is a much more resilient way to implement this sort of policy. So I think a lot of the noise in the ecosystem today and a lot of the concern obfuscates the fact that these tools are already available for parents. They've been available for a very long time. And I wish the government would spend more time teaching parents or at least telling parents that these tools are available because the app-level implementation with a handful of apps just doesn't really make a lot of sense.

42:42Yeah, I agree. The list of named apps feels like quite a clumsy implementation where, as you say, there are lots of apps in the App Store. Especially with messaging apps and stuff, there's various substitutability between things. And so it seems like will obviously lead to people going to other apps, and it's not clear what you've accomplished. As you think about teen usage in general, there's, for example, there's lots of debates in lots of countries about teen mental health. And I'm never quite sure how to pick through the data, where a lot of it's reliant on self-reported mental health data, which is just kind of a hard index to use, because you get changed in reporting standards and everything like that.

43:22But at the same time, you can imagine maybe bad engagement wells in which to draw people. And you can conceive of bad product directions to go in. And so I'm curious how you think of this, where do you think it's teens are figuring out a lot and they have complex lives with lots going on and it's easy to pick on social media apps or messaging apps as a scapegoat? Or do you think, look, there's like a right way or a wrong way to design these products, and we spend a lot of time thinking about, no, that actually wouldn't be a great product affordance to have because it would lead to some bad outcomes.

44:05Like, do you think there's stuff to do at the app level, or do you think it's just a convenience gate to it? I think first and foremost, we have an enormous responsibility to make a product that we think can have a positive impact on the world. I think what's really interesting, you know, you mentioned sort of social media more broadly. And there are a lot of studies that look at social media broadly, right, and include Snapchat together with Instagram or TikTok or whatever. There are a small number of independent studies, you know, that we have not funded or otherwise been involved with that have tried to understand actually the impacts of different apps and tried to differentiate between different apps.

44:37And I think what's so fascinating, I think now there's been maybe three or more of them, one out of Australia, I think one out of the Netherlands or something, one in the U.S. that show that Snapchat actually has a positive impact on people's well-being and relationships. And that's different than TikTok or Instagram, which is actually negatively associated with people's well-being. And so I think because Snapchat is built around communication with your friends and family, because relationships are the number one predictor of positive mental health outcomes, right, of your ability to recover from a negative depressive event, it doesn't surprise me that because Snapchat's oriented around your real friends and connecting with your real friends, that it has positive outcomes when it's studied by researchers.

45:16So I think one of the challenges for us, obviously, is to make sure that people are understanding Snapchat's role and not just lumping us in with social media because people use Snapchat very differently and primarily as a communications service. And so we really want to have a positive impact in the world. That's really important to us. We are proud of the fact that independent research continues to show that. You know, concerns about overuse of technology are warranted. And that's why I think that healthy balance is so important. I mean, there were plenty of studies back in the day with television, right?

45:45If you watch too much television, that's associated with negative health outcomes. So I think too much of a good thing can be. So do you think there's like a loneliness connectedness spectrum with apps? And you're saying if you go too far into the loneliness direction where you're kind of going through the endless feed and you're in hour four, that's maybe not a great place to end up. whereas what you guys are trying to encourage is more in the connectedness direction, and you think that will lead to pretty good outcomes for teens or anyone else. Just in terms of what we've seen with the independent research, I think the reason that Snapchat shows up as being associated with positive well-being and positive relationships is because it's connecting friends, right?

46:25And doing so in an environment where people feel like they can express themselves, be their true selves, send a silly photo, right? Not feel the pressure to look perfect on social media or not save something forever, you know, and receive public likes and comments and that kind of thing. So I do think that's a difference with Snapchat. And I think it's so important for us to just continue to make clear, like we built our service differently. In fact, a lot of what inspired Snapchat in the early days was that we didn't like Facebook. We didn't like social media. We didn't like that you had this huge public friends list and all this pressure around posting things that would be cool and popular or pretty or whatever.

46:59We grew up with social media and we built something different, in many ways in response to have something fun that we could use with our friends. Yeah, yeah. Do you think there's an issue, because as you think then about the content side of the business, there's a criticism that if you start down a rabbit hole, you get pulled further down the rabbit hole, right? If you start interested in sovereign citizen conspiracy theories, you'll get pulled further into that. If you start with anorexia content, you'll get pulled further into that. Is that something you think about, that you have to balance people not getting pulled too far into rabbit holes on the content side?

47:35What I think is so fascinating about what you said is that people have focused far too much on the algorithms and not enough on the content itself, right? And I think part of the reason why that folks focus on the algorithm is because they're wary of tripping the First Amendment protections, right, around what content you can display on your service. But since we launched Discover. Since we ever offered a content product on Snapchat, we have moderated that content. Now, in the early days, it was really hard because human beings had to moderate all the content before the days of artificial intelligence.

48:08And so we only had a very small number of publishers, and that actually impacted our ability to grow because we didn't have a huge corpus of content. But now today, we continue to moderate the content, all the content that is appearing publicly on Snapchat. And so I think that really needs to continue to be the focus for delivering a safe and responsible content experience. But don't people focus on the algorithm because for an individual user, the algorithm is the content. Like there'll be several orders of magnitude difference in the views between an uninteresting piece of content and a really interesting piece of content.

48:42And so my lived experience of any of these apps is that the algorithm defines my personal TV channel. But I think in the example that you use, a rabbit hole of anorexic content, my view would be that anorexic content or content promoting anorexia runs afoul of our guidelines, therefore should not appear on our platform. Okay, so you want to stop it at the moderation level. At the content level. And I think that's really where the conversation needs to be. And again, it's hard in the United States of America because that's a First Amendment issue. So that's much harder to regulate. Yeah, yeah, yeah.

49:15Interesting. Is there anything interesting to say on moderation? I mean, I presume that's just been a multi-decade journey of getting that right. I guess what I would say is it's important. I think the content experience that our community has is really important. We've always had fair, consistent content guidelines that we share with everybody so that they understand the rules of the road. And our concept has been there should be rules of the road. And I think five, ten years ago, that was different. I think now more people are appreciating that there should be more guidelines around the types of content displayed on services online.

49:47People talk a lot about distribution dynamics in this space and the fact that you guys, now that you're soon passing a billion MAUs, there's a lot of advantages you have where you can promote the discover content in the existing app that first became popular with messaging, but also your competitors can do that with your functionality and functionality, and they can distribute it to their user bases. I'm just curious how they distribute, You're on both sides of that, right? You have your own distribution, but you also compete with others who have even more distribution. Just how is the distribution battle playing out at the moment?

50:24I guess perhaps the most important thing in all of this is distribution is getting more and more and more important in this day and age. And I think as it becomes easier to build companies, to build software, to innovate using AI tools, I do think there's a real premium on distribution. And I think people are going to reallocate more resources away from things like software engineering, for example, to distribution in order to grow faster. So I think distribution is at a real premium. It's hard as a brand today to get visibility, to get traction. And so places like Snapchat, I think, are a really important part of growing any business.

51:00And that's only becoming more valuable at this moment in time. So you end up having distribution defensibility, especially as other things get easier. I think it's just critically important. And I think even for us, as we think about the future of our business, we've always had a ton of great ideas, right? Many more great ideas than resources to actually execute on those ideas. And so every time we've kicked around, oh, we got an idea for a new app, it's like, oh, gosh, I don't think we can spare 15 people to spin up a new app. No way. Now, with, you know, half a person's time, half a team member's time, we can build a totally new service and distribute it through Snapchat.

51:32And so that, I think, for us, as we think about the future of the business, being able to build out a multi-app strategy or more services, that distribution coupled with these advancements in artificial intelligence are a really big deal for us. We talked earlier about Snap managing to remain cool, which is hard for a messaging app or a social network. How do you run product? Like, just what's the day-to-day? Are you having designers come present to stuff? Are you coming up with the ideas? Are people pitching ideas to you? What's the review process? Are you reviewing working features? Are you reviewing wireframes?

52:05I would just love to hear what the creative process looks like at Snap. Well, first of all, it's cool to be uncool. So we're never trying to focus on cool. We're trying to focus on making things that are useful that our community will really get value from. And I think that's so important that like the North Star is durable value. I love design. That's really my happy place. I spend a couple hours a week with our design team and all we do is look at stuff. And it can be really in any form, right? It can be a sketch. It can be something on the whiteboard. It can be a fully functioning prototype.

52:32It can be, you know, on a slide or whatever. But the important thing is just that we're looking at a huge volume of ideas. So, I mean, I think, you know, on a weekly basis, probably looking at hundreds of ideas, you know, ways to evolve the service or new products. These are at the concept level. These are sketches. A lot of them are drawings, yeah, or prototypes or whatever. You know, now increasingly our designers are shipping code, which is really wild. Okay, so post-AI you're seeing many more working demos just because it's easy to make them. Yeah, or more importantly, designers are like, you know what, I've been so frustrated about this feature.

53:03It's been the backlog forever. I'm really passionate about it. Like, here's my PR, you know, and I think that's pretty awesome. Okay, and so then how do you down-select between people probably come pitch you tons of good ideas in a week, more than you have bandwidth to implement? And also, I presume you're limited a little bit by users have familiarity with functionality. And even if you could build it all, you can't just throw all this functionality into the app because it'll overwhelm users. So you have two limiting factors. It's like, can you build good versions of all this stuff? And also, what rate can users absorb?

53:34And sometimes a great idea is actually we should get rid of this thing. Yeah. Right? Which is also a really important part of the creative process. So what does the selection process look like? It involves a lot of debate, which I think is really fun. I mean, our meetings, like, I mean, everyone's laughing the whole time. And I think that's one of the most important things to the creative process. It has to be fun, right? Otherwise, like, what are we doing anyways? You know, I think we just, we try to debate and explore ideas and build on each other's ideas. And, you know, there's no filter process.

53:59Like, if you've got something you want to bring to design meeting, like, have at it. And we'll talk about it and play around with it. And, you know, sometimes, you know, we also are like, oh, that's interesting. But like, you know, maybe another time and it comes up another, you know, two years later or three years later, we're like, oh, man, remember that thing we were kicking around? Like, maybe we should build on that now. So I think it's really just an iterative process of exploring new ideas. Brian Armstrong talked here about how when the USDC idea was pitched to him, he was like, ah, I'm not sure.

54:29Sounds kind of silly, but sure, if you guys want to do it, then go for it. And obviously that's become one of the biggest things out of Coinbase. Do you have a similar story where there was an idea that you initially weren't so hot on, but ended up being success? Oh gosh, there's so many. You know, I mean, streaks are one. Like, I did not like the idea of streaks, did not want to do it. I actually fought very hard to kill streaks over the years. We've always been anti-metric at Snap. Like, no metrics. No thank you. Metrics or gamification? You mean like user-facing? Just metrics. There's almost no metrics in Snapchat.

55:03It's hard to find a metric. Internally or externally? For user-facing metric. Most social services, how many friends do you have? How many followers do you have? How many likes do you have? Comment. Everything has a metric. You don't want their experience to be one of numbers. Look at a bunch of numbers. We want to get out of the way and help you communicate with your friends. I've been on over the years just trying to get rid of streaks. And what really changed for me was learning how much people love streaks as an opportunity to connect with one another. And so over time, like, I would just hear these stories.

55:34Like, people, again, Evan at Snap.com, people would send these emails of, like, you wouldn't believe it. Like, you know, I moved halfway across the world. I was separated from my best friend. I got a divorce. I got a new job. And every single day, I stayed in touch, you know, with my best friend. And, like, that changed my life and, like, was so powerful for me. And I was like, wow. Like, okay. But just sometimes having an invitation to communicate or an invitation to connect is so important. And so I think over time, I've come around to really seeing the value there. Streaks is the digital equivalent of getting out of the house.

56:06It's just, it's important to get out of the house. Sometimes you've got to get out of the house. And you've got to do that online as well. Okay, that's interesting. And then when we talk about the product design process, are designers kind of in the driver's seat of this similar? I don't know if you've compared notes with Brian at Airbnb, where they have like a very design forward culture. Is that how the culture at Snap is? You know, I'd say the culture at Snap is like a thoughtfully managed dialogue between design and engineering and product management as well, data science, you name it. Because for us, like the business was always built like initially on the dialogue between myself and Bobby, right?

56:42I mean, he is more heavy engineering background. I was more of a design background. but he really loved design and I actually loved engineering. And so we were able to really debate things and see things from different angles. And that was always, I think, something that really helped the business grow. And so we tried to model that as a team where it's not necessarily design-led or product-led or engineering-led. It's a healthy dialogue and relationship between all these really important functions in our business. When you talk about data science, one thing I'm reminded of is often in social networks, because of the network effects, you get these very strong country network effects where like Orca was very, you know, Google's social network that no one really used for a long time, except all of Brazil, you know, who were really into it.

57:26And so you get these kind of funny regional effects. Are there any countries that are just like really disproportionately wildly into Snap? Well, Norway was the first place that Snapchat got traction. I mean, we had no traction anywhere. Not the U.S. We had no traction anywhere except Norway. In fact, in the very early days. I did not know this. Oh, it was a blast. In the early days, I think this was like after we had gotten Venture, maybe after we had gotten Venture Funding. I think in the early days of getting our first round, you know, we'd raised$400 ,000 or something like that. And we were really growing in Norway, like big time growing in Norway.

57:59Kind of like a Canadian girlfriend, you know. My app is big in Norway, trust me. So we literally got on an airplane, flew to Norway, and like we were famous. I mean, it was unbelievable. You were in a 7-Eleven. People are like, what? What? You guys work at Snapchat? That's crazy. And I remember just being like, oh, gosh, I hope this happens in more places. It was an amazing feeling. So how did that happen? Well, I think one of our hypotheses is that Norway had both very high-end devices and great internet connectivity that was affordable for the population. If you think about Snapchat back in the day, you really needed an iPhone to be able to use the service.

58:33I mean, it was iPhone only in a lot of cases in the early days. and it required very, very heavy network use because you're sending photos and videos all the time, which was really unusual back in 2012 or whatever it was. So the kindling was dry enough for the Snapfire to... To really take hold, yeah. And then over time, obviously, it grew in the US, but the US didn't necessarily have the same network capability or even iPhone distribution at that time. Yes, yes. Well, that's so interesting. How about today? Are there any countries that are... Norway is still a Snapchat leader. It's unbelievable.

59:05Yeah, yeah, yeah. That's really wild. And, you know, the other thing that's interesting about Norway, and I think this is true about Snapchat in general, it's a culture that really prioritizes close family and friend relationships. That's something that's really important to them. Yeah. My Norway impression was the infrastructure is so good. It's like this country is so rich. I think they build infrastructure beyond what's sensible. You'll be driving to a village that has a population of 200 people, and you'll pass through seven kilometers of underground tunnels, you know, to get there. Anything else will be a ferry.

59:33And the person pouring you a Guinness has a graduate degree. Exactly. Yeah, yeah, yeah. No, it's a funny country. How has your leadership style changed over the years? In so many profound, profound ways. I mean, I think everything about leadership is about people. I love our people, but I didn't start learning how to lead people. I started building products. And so I think the transition from trying to make stuff that people really love to, you know, trying to lead in a way that can inspire people, you know, it's really hard to do what we're doing. You know, competing against the largest companies in the world in the messaging space, building hardware, again, competing with the largest companies in the world, working on foundational models, right?

1:00:19When I look at our video models and everything we're doing, we're trying to do some of the hardest things in the world. And so that requires inspiring people to take on enormous challenges, recruiting some of the best folks in the world to work together with us, and then building a culture where those people can do the absolute best work of their lives. And that's different in many ways than just trying to build a product that people love. But it's the same in that it requires a lot of empathy and understanding people and understanding that people are very different, understanding how to bring out the best in each of them.

1:00:48And that's one of the challenges I love most about the job today. In the context of building hardware, one thing I hear from people who do it is that it's harder in the U.S. because of the supply chain dynamics. And in particular, if you're making stuff in Shenzhen, there's a company just down the road that can give you the V1 overnight. And then you say, oh, we want to change this component. And they'll swap out the production line of the components again overnight. Have you found that supply chain speed dynamic in the US a factor where, in particular, as we talk about re-onshoring so much manufacturing, the limiting factor with US production is often how fast you can iterate, essentially?

1:01:28I think people are always stunned to hear. We build some of the most important components for specs in the US and in the UK. So we've really thought about building some of the most IP-sensitive components, some of the most sophisticated components in the US and the UK where we can sit them directly next to R &D and engineering. so we can have those really, really fast cycle times and iterations. In-house or in the U.S. at contract manufacturers? In-house. And that's really allowed us to lead on the display technology. I mean, we have, you know, even if you look at specs today, the resolution, you know, the performance of our waveguides far exceeds our competitors.

1:02:01And again, we have a lot of foundational IP and, you know, patents in this area. And that is one thing I love about hardware. It's way easier to protect our innovations and our ideas compared to software, especially today in the age of AI. Yeah, yeah. I think that is a huge factor these days as well. This is awesome. Thank you. Yeah, it was fun. See you soon. See you soon.