{"id":340503,"date":"2017-05-10T06:03:28","date_gmt":"2017-05-09T22:03:28","guid":{"rendered":"http:\/\/techcrunch.com\/?p=1487475"},"modified":"2017-05-10T06:03:28","modified_gmt":"2017-05-09T22:03:28","slug":"these-are-the-three-things-one-silicon-valley-vc-wants-to-hear-on-snaps-first-earnings-call-tomorrow","status":"publish","type":"post","link":"https:\/\/people.utm.my\/asmawisham\/these-are-the-three-things-one-silicon-valley-vc-wants-to-hear-on-snaps-first-earnings-call-tomorrow\/","title":{"rendered":"These are the three things one Silicon Valley VC wants to hear on Snap\u2019s first earnings call tomorrow"},"content":{"rendered":"

<\/p>\n

Goodwater Capital<\/a>, a two-year-old, San Mateo, Calif.-based early-stage venture firm, has been trying to stake out new territory for itself\u00a0by publishing a steady stream of research and tools that help inform both competing firms and startup founders. One of those pieces of research was a detailed snapshot of the tech company Snap<\/a>, which Goodwater\u00a0published in early February, shortly before the company went public. (We wrote about it here<\/a>.)<\/p>\n

Three months later, armed with\u00a0fresh survey data<\/a> of 3,000 Americans across the country who Goodwater recently polled using a third-party service, firm\u00a0co-founder Eric Kim \u2014 who isn\u2019t a shareholder \u2014 says he\u2019ll be listening for three things on Snap\u2019s very first earnings call tomorrow:<\/p>\n

1) Snapchat\u2019s competitive response to Facebook\u2019s steady stream of attacks on its core platform.<\/strong><\/p>\n

\u201cSnapchat\u2019s stories\u00a0platform has maintained market share over the last six months, but during that same period, Facebook has converted a whole lot of non users into users of its own [stories] platform,\u201d notes Kim. \u201cWhile Snapchat had and still has 12 percent market share of the story user base, Facebook has now grabbed 14 percent market share,\u201d with\u00a0Instagram Stories now claiming 200 million daily active users\u00a0versus Snapchat\u2019s 158 million\u00a0users.<\/p>\n

It matters how\u00a0Snap plans\u00a0to respond, of course, because Facebook\u2019s success and\u00a0Snapchat\u2019s future\u00a0are more directly correlated than Snap might like. Which raises the second issue that Kim will be focused on, and that is:<\/p>\n

2) Snap\u2019s daily active user outlook.\u00a0<\/strong><\/p>\n

\u201cThe expectation for this quarter is that Snap will add anywhere from seven to nine million users from the previous quarter,\u201d says Kim. What Goodwater sees\u00a0in its survey data might concern shareholders, however.<\/p>\n

\u201cFifty-nine percent of respondents under age 30 said they use Snapchat, and 81 percent said they use Facebook, so the\u00a0[two platforms] aren\u2019t mutually exclusive,\u201d he notes. That\u2019s the good news. Here comes the problem: \u201cFor survey respondents over age 30, 46 percent said they expected to increase their usage of Snapchat going forward; of those over age 30, just 10 percent said they expect to increase their usage of Snap.\u201d<\/p>\n

When it comes to users ages 30 and up, the numbers for\u00a0Facebook are far\u00a0more encouraging, notes Kim. To wit, 65 percent of people under age 30 Goodwater surveyed said they plan to increase their use of Snapchat going forward. But almost an identical percentage \u2014 64 percent \u2014 said they expect to increase their use of Facebook.<\/p>\n

Wait, you might wonder: How can\u00a0anyone draw conclusions based on\u00a0a\u00a0survey of 3,000 people when the\u00a0broader population of the U.S. is roughly 300 million? We asked Kim that very question. Noting that\u00a0Goodwater employs several data analysts, he insists\u00a0that it is \u201cdirectionally correct.\u201d<\/p>\n

Which leads us to the third thing to which Kim will be paying close attention tomorrow, and that is:<\/p>\n

3) What\u2019s happening on the monetization front.<\/strong><\/p>\n

You knew that one was coming. \u201cWhat we think is key, and we\u2019ll be looking for, is what Snapchat is working on that caters to advertisers,\u201d says Kim.<\/p>\n

For the most part, he observes, Snap\u2019s ad dollars are coming primarily through advertisers\u2019 experimental budgets. That\u2019s okay, of course, but it\u2019s not going to reassure shareholders. What might comfort them is knowing what\u2019s in the pipeline, along with learning\u00a0whether some of\u00a0Snap\u2019s newer products \u2014 including a new self-serve ad manager<\/a>\u00a0and an API technology<\/a> that it unveiled last fall\u00a0\u2014 are enjoying some traction. \u201cThat\u2019s a very important part of the story,\u201d Kim says.<\/p>\n

Kim adds that one last thing he\u2019ll be curious to see is who does the talking tomorrow. \u201cIf it\u2019s \u00a0[Snap CFO Drew Vollero] doing a lot of handwaving about financial and user growth, the market will be sorely disappointed,\u201d says Kim.<\/p>\n

\u201cIf Evan is on the call and he\u2019s talking about product strategy and Snap\u2019s \u2018anti-Facebook\u2019 strategy,\u201d he says, that\u2019s (yes) another story.<\/p>\n

Featured Image: BRYAN R. SMITH\/AFP\/Getty Images<\/small><\/p>\n","protected":false},"excerpt":{"rendered":"

\"\" Goodwater Capital has been trying to stake out new territory for itself by publishing a steady stream of research and tools that help inform both competing firms and startup founders. One of those pieces of research was a detailed snapshot of Snap. Armed with fresh survey data, firm co-founder Eric Kim says he’ll be listening for three things on Snap’s first earnings call. Read More<\/a><\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a> <\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n

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