Making a truckload of money is never a bad thing. Except when you get greedy, hoping that your decent idea will net you billions more than previously offered.
Snapchat has proven it has that greed. The decent idea (at best) caught the attention of Facebook so much that the social media juggernaut offered Snapchat $3 billion. Snapchat founders Evan Spiegel and Bobby Murphy rejected the $3 billion.
Billion. Not million.
Are these guys crazy?
In Wallstreet, Gordon Gekko said “Greed is good,” but not even that snakey son of a bitch would say no to $3 billion for an OK idea.
Snapchat is a photo app that can send pics and videos to people for a limited time. The receiver can view the message for however long the user sets the timer then the media is deleted.
The app is useful, but not revolutionary. It’s popular among young people. Of course it is, what better way to conceal selfies of one’s junk or jugs?
Saying no to Facebook is straight up boneheaded. The rejection reminds me of former NBA player Latrell Sprewell scoffing at the Minnesota Timberwolves in 2004 for not extending his contract. Sprewell’s final year of his deal paid him $14.7 million and he had this to say: “I’ve got a family to feed.”
Snapchat should have took the money. Get overpaid and start a new startup. Or eat cupcakes the rest of your life. Look at MySpace. Newscorp bought Tom’s company (he was your friend, right?) for $580 million in 2005. Facebook overshadowed it in subsequent years and soon enough, MySpace became irrelevant.
Years later, Justin Timberlake and Specific Media Group teamed up to buy it for $35 million in 2011. Had founders Tom Anderson and Chris DeWolfe not sold out (nothing wrong with getting paid, folks, nothing at all) they’d be left with a carcass of a website worth jack. Be like Gordon Gekko: buy low, sell high. Just don’t get caught and spend years in the slammer. Wait a second, was that a white collar prison, the kind in which inmates get conjugal visits? I sure hope so.
Few people do. It was Facebook before MySpace even existed. Social media hadn’t caught on in 2002 so Friendster stood firm in its quest for a big payday. Google recognized the potential for social networking and offered $30 million. Friendster said no. Had it said yes, Friendster stock would be worth $180 million.
I don’t even think Snapchat is worth billions. Facebook and Twitter rejected offers in the past, but those sites had overwhelming potential. Today they are the undisputed kings of social media. I have been fortunate enough to receive a racy pic on my phone that deleted after 10 seconds. Guess what? It wasn’t Snapchat, it was some other random app.
So Snapchat really isn’t that unique. If it gets a massive payday, good for the founders. If it falters, you’ll see where the mistake was made.