> According to the report, Instagram Stories has more than 200 million users per day, with that number being measured by people updating their story or watching a friend's.

I wonder what the number would be if those who only watched stories were excluded. Its also worth considering that Instagram delivers some of their announcements as stories and whether or not people viewing those also count towards the active user number.

This is very important. I watch Instagram and Snapchat stories every day. Instagram is 2 or 3 celebrity stories, then I scroll down to look at a few new pics. Snapchat is a constant stream of glimpses into the lives of my close friends.

edit: I'm curious if this is true only for my friend groups/demographic/principal component, poll here: http://www.strawpoll.me/12939274

Snap calls itself the friends and family network for a reason. Instagram is a mix of celebrities, influencers, businesses, friends and family.

Why? Their monetization strategy so far has been brand advertisement interspersed as vertical video ads between Stories. This doesn't require any particular kind of content, only that they can hold your attention for 10 seconds or so while they show you an advertisement.

And their monitization strategy so far has led to larger losses than expected, less revenue per user, and slower user growth.

It might make for a better user experience but that's not good for a free service

Good point but I think the solution is not to gut their good user experience, but to figure out better monetization strategies. Because better user experience is about the only thing keeping them in the Game.

Well yes, they would likely keep their current one while expanding into new areas.

I'd argue though the only thing keeping them in the game is network effects and fighting that fight vs IG is... going to be challenging.

This thread is very interesting for me. I've never used Snapchat before, and I deleted my Facebook years ago. However I do use Instagram daily. The caveat there is that I've never viewed or have taken a story. Video just feels very odd and antithetical to the reason I use the platform (which is to post outdoor photos). I guess if I could upload high quality video to a story I'd be more interested in it.

If you're worried about quality, you're missing the point. Stories as a concept work because they are informal glimpses into people.

A side note: I've seen an increasing number of friends on Whatsapp use the 'Status' feature to share pictures (which works like Stories).

It's a very tiny percentage so far - maybe 1-2% of my contacts list - but it is being used.

If this gets to about 10%, Snapchat should be worried. Whatsapp has a massive user base in developing countries.

Not to forget that for many, many users in emerging markets, the mobile carriers offer free data for WhatsApp. Traveling through Colombia, and I can use WhatsApp status for free over here. SnapChat kills my data.

Which is a really bad thing for net neutrality...

I was about to write the same thing. Here in Sweden you often see adverts for telcos where they offer free data for Facebook usage and stuff like that. We're not a developing country and you'll get a fair bit of data at a reasonable cost here, so it's perhaps not as obvious how this skews things in favour of the big players, but it's there alright, and it's sad.

I really really really hope this does not happen. I already don't like how much data WhatsApp eats after downloading shared images and such. I want WhatsApp to be text and group text and thats IT.

I suspect it'd be pretty different. Stories are right at the top when you open the app and are used by quite a few celebs - that must inflate the numbers a lot.

Registered lurkers still count as active users. As a matter of fact, social media follows the 80:20 rule when it comes to steady content creation

> Facebook's overt effort to clone their product

I'd be interested in hearing if anyone else absolutely hates this new stories thing Facebook is pinching from Snapchat.

Every damn time I pull down (Messenger on iOS) to reload the conversation list I end up at the damn camera. That's not how literally every other app works.

Now Facebook (iOS app) has updated and it feels like whenever I accidentally drag my thumb slightly in a non-specific direction across the screen the damn camera opens there too.

Bring on the next social network. This one's getting all gross and gooey.

YES! So much this! I want Instagram to be the social network of superb images/very short videos. I just HATE that now there's an extra tab at the top for stories and such. Why ruin an app that was doing its job so fucking well?

I don't think I've had a single friend use a Facebook story ever

I used it once then realised any responses I got were sent as a context-less Facebook message. If you click "Haha" in response to someone's story it sends the literal string "Haha" as a message to that user.

Agree completely, facebook "stories" feels cheap and forced. My anecdotal data point, is that most people I know (my age twenty somethings, younger, and even parent's age) enjoy using snapchat, partially due to the regular and fun updates to the computer vision / AR filters. And that very few people communicate with fb stories or use it aside from promotion (they run a business, or are a model, etc)

Just out of curiosity, what kinds of things can a startup do to avoid being copied and killed out of the gate by Facebook? Poison pill? Patent?

You make "it's not Facebook" a key part of your value proposition. This was the case for Snap early on, and I believe it's a big part of the reason why they got so far. Their users needed a social network separate from their parents, and they had been trained to fear long-term memory upon which Facebook had built their product and their business model. WhatsApp was also successful in warding off FB Messenger's efforts to clone it, in large part because it offered independence and a very un-Facebooklike product experience.

Facebook has shown an impressive flexibility and willingness to pay the costs of making big changes when they need to, e.g., acquiring WhatsApp or shifting their product toward Stories. Still, a startup go a really long way by building a product that carries "not Facebook" as a key value proposition.

Do you think even 1% of consumers would know what that means, let alone care?

Not if you want to make money.

I'll indulge. When Facebook seriously have you in their sights, financially, the smart move is what Snap did: rush for IPO before your numbers start getting affected. Product-wise it appears that if Facebook make a billion dollar offer, accepting it is a wise choice to maximise usage growth and interaction.

Isn't it better for everyone who's a part of Snapchat or a pre-IPO investor that they didn't allow FB to buy them for $3B? Even if Snapchat goes to a $10B valuation (which likely won't happen this year) and stays around there, that'll still be worth it for almost everyone. Since a lot of insiders will have already taken some money out before then as well.

At this point though, simply as a consumer, I would have appreciated Snap being acquired by FB so that FB wouldn't bastardize all the other social networks to try and emulate Snap. But looking long term, I think this might be a good thing... just in the short term it really sucks.

There's a reasonable concern in the air that it's getting more and more difficult due to network effects, but the short answer is the same way you always compete with big companies -- you can be more agile and engage with the user base in a way that big companies just can't because of bureaucracies and unwillingness to take risks.

This aspect is what makes me think Snap might be a canary in the coal mine.

In the temporary image space, virtually all of the innovation has come from that company, whether it's the initial concept, expanding scope with stories, adding visual effects, etc.

In the end, it might not matter. Facebook repeatedly cloned Snapchat's features, starting with the Poke app in 2012 that Zuck reportedly wrote code for himself.

The result? They jammed it into all of their products (Insta, Messenger, WhatsApp, etc.) and seem to be riding the network effect to success.

Not saying that smaller players can't win, but man, brute force and a big network were really effective this time.

https://techcrunch.com/2012/12/21/facebook-poke-app/

Sell out when they offer you $3bn.

Seriously, though. I never understood why Groupon, Snap, etc. turn down these multi-billion dollar acquisition offers. It's not like these products/services have a huge impact on the world (if they were to disappear, who would really care?), take the money and run.

Instagram selling to FB is a potential mistake in hindsight. Even without FB's direct backing, IG was poised to grow like crazy. Probably could've IPOed or sold to FB or someone else for 10x or 15x 2 years later.

From what I've heard (don't quote me on this), I think Instagram was having serious financial difficulties at the time of the acquisition. The costs to run the service (media transfer and storage are a massive infrastructure cost) were astronomical. The Facebook buyout was almost the only way they'd stay alive without giving up a massive piece of the company in a funding round.

Well, if Google had sold to Yahoo, or FB again to Yahoo....

Aren't they better off not selling for $3B? Insider stocks will be able to sell their shares soon. Snapchat is unlikely to be at a $10B or lower market cap for the next year. So people have plenty of time to take some money out.

Build a product not a feature.

When you put it like that, you have to wonder how they have any chance at all, save some crazy pivot.

From a consumer perspective, it's disappointing that Facebook controls itself and now this arena. It's gonna be hard to find innovation when purchasing and cloning are the way to do business.

In some circles, having an Instagram is as expected as having Facebook, which makes abstaining difficult.

> It's gonna be hard to find innovation when purchasing and cloning are the way to do business.

Welcome to Microsoft circa 1990. People forget how much oxygen Microsoft could suck out of a space simply by mentioning they were going to develop something.

Or, as I mentioned (and got downvoted for yesterday), Google can.

This is a very scary situation, where patents were originally developed to prevent exactly this.

I agree, but what can we do? Snap Inc. isn't exactly some teenager trying to make it out of their parent's garage. Patents obviously don't work, or at least not in their current form – troll litigation should suffice as proof of that – and besides, the big co's can just as well have departments doing nothing but patent all-the-things.

As so many like to say: they idea matters less than the speed and strength of execution. It's clear that the network effects of Facebook makes it very difficult to compete, but is the problem really that they are copying features from other products, or is that just the symptoms of a bigger issue?

Facebook effectively has a monopoly on the digital social network, no matter how many millennials say it's "not cool anymore" – they're still on it.

My personal hypothesis is that this is because we lack a decentralized identity feature on the internet. For better or worse, Facebook and Google solved that problem, and now everything you do is connected to either your Facebook account or gmail. It doesn't matter if you don't have those accounts, becasue everyone else does, more or less, and they're locked in. You can't bring your identity with you. Sure you can close your account and possibly download your data, but if you do that you sever the connections, which is the true valuable bit of the network – the nodes less so.

I really don't like the sheer dominance of Google and Facebook, but I have no idea how to get away from it either. Makes me small just thinking about it.

Focus on the positives: it's Google and Facebook, not Google and +

Maybe people will chase innovation somewhere more useful as a result. That'd be some nice silver lining.

Snapchat and Instagram definitely offer in somewhat similar spaces. All the semi-famous people I follow on instagram have their snapchat username right there in the profile.

People used to share Myspace and Facebook handle as well for a period of time...

Snap used to have an advantage in terms of age group. I'm curious if this is still the case.

Anecdotally I've heard from my partner that Instagram effectively duplicated a core feature of Snapchat to the point she no longer sees the point of Snapchat. But she always saw Snapchat as a side novelty, largely because she used Instagram well before Snapchat.

But I also see this as an age group thing, Snapchat had the image of being popular with high school kids while Instagram had penetrated the university-30yr old category most effectively. So it's hard to say merely as an outside spectator. As well as being geographically limited in my perspective.

I would argue that's a relic from the past. Most Instagram celebrities also had snapchat to post 'raw unedited' updates. Now that Instagram has stories, there probably isn't a strong reason to double post on snapchat as well.

I'm sure a lot of them use Buffer or something to multipost.

Instagram is resilient to multipost apps like Buffer on purpose. Snapchat obviously is as well.

From a different perspective you could point out that the innovative companies (in this context, Instagram and Snapchat) were indeed capable of significant (relative to the space, at lease) innovation (and getting extremely well paid). I don't see how the risk of "ending up" like Instagram or Snapchat would discourage anyone from making a play in the field.

Unseating Facebook is a very different play from merely innovating.