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XFive Takeaways From Snap’s Poor Earnings Report
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Social media giant Snap’s tough year continues.
The Santa Monica-based company reported disappointing financial results on Thursday as the second quarter “proved more challenging” than it expected. The photo-sharing app now plans to “substantially” slow its hiring as it grapples with declining demand for its core advertising business, Snap said in a letter to shareholders.
Snap earned $1.11 billion in revenue from April through June, narrowly missing Wall Street’s expectations. But those estimates were already scaled back after Snap warned in May that this would be a rough quarter. The company also reported a net loss of $422 million, compared to $152 million during the same period last year.
“Our financial results for Q2 do not reflect the scale of our ambition,” the letter said. “We are not satisfied with the results we are delivering, regardless of the current headwinds.”
Here are a few takeaways from Snap’s poor earnings report:
Snap blames the economy and Apple (sort of)
Snap said economic headwinds like inflation are disrupting the digital ad market. Marketers have generally slashed their ad spending lately amid fears that the economy is headed toward a recession. Snap’s sales grew just 13% during the second quarter, a decline of 25 percentage points from the previous quarter.
Advertising spending “is among the very few line items in a company's cost structure that they can reduce immediately in response to pressure on their top line,” Snap CFO Derek Andersen said during the company’s earnings call. “We see this dynamic within our business as advertisers have lowered their budgets.”
On top of that, Snap is still grappling with Apple’s decision to restrict how users are tracked on mobile devices. Beginning in April, Apple allowed consumers to opt out of tracking by software apps, making it harder for them to effectively target users with ads. The social media firm is working to improve its ad measurement tools to show clients their campaigns are effective—without the availability of users’ personal information.
Although Snap didn’t call out Apple by name, its shareholder letter said recent “platform policy changes” have “upended more than a decade of advertising industry standards.”
The Rise of TikTok Doesn’t Help Either
Snap’s disappointing quarter can’t be blamed entirely on the economy or Apple’s privacy policies. The social media app noted it facing “increased competition,” too.
Snap is contending with the rise of TikTok, the Culver City-based video sharing app that was the most visited website in the world last year. TikTok is expected to generate more ad revenue than Snapchat and Twitter combined this year, Insider Intelligence researchers have predicted.
“Competition—whether it's with TikTok or any of the other very large, sophisticated players in the space—has only intensified,” Andersen said.
Snap has responded with a TikTok clone called Spotlight, which similarly lets users swipe through short-form videos. The company said users’ total time spent on Spotlight grew 59% year-over-year, and the number of monthly Spotlight users jumped 46% to reach more than 270 million.
Hunting For New Revenue
The vast majority of Snap’s revenue comes from advertising, leaving it particularly vulnerable to disruptions in digital marketing. Now, the company is trying to diversify its revenue streams to build a more resilient business.
Snap recently launched a paid subscription plan, called Snapchat Plus. The $3.99 per month service gives users “exclusive, experimental and pre-release features,” including early access to Snapchat’s new web browser version. If successful, that could bring in money directly from consumers instead of relying so much on advertisers.
The company wants to push further into augmented reality-driven e-commerce, too. Snap has already experimented with this, letting people virtually try on clothes with their smartphones. More than 250 million people have used AR shopping Lenses, the company reported Thursday. “We intend to focus on translating this AR engagement into AR revenue,” the shareholder letter said. Other revenue opportunities include Spotlight and monetizing its Map feature, the company said.
A Hiring Slowdown
With its revenue growth slowing, Snap announced Thursday that it will “substantially” lower its rate of hiring. In doing so, Snap joins other tech firms that have either slashed staff or paused hiring amid fears of a looming recession.
The company also announced Thursday that it signed long-term contracts with Snap’s co-founders, CTO Bobby Murphy and CEO Evan Spiegel, to serve in their respective roles through at least January 1, 2027.
Still Growing In Popularity
Snap’s outlook is considered gloomy for good reason. The company declined to provide a financial forecast for the current third quarter because “forward-looking visibility remains incredibly challenging.” The social media firm did reveal that revenue growth is “approximately flat” from a year earlier at the moment.
The bad news sent Snap’s stock sinking more than 26% in after-hours trading, where it sat at $12 per share as of 3:22 p.m. PT.
But it’s worth noting that the audience on the Snapchat app is still growing. Daily active users increased 18% year-over-year to 347 million. “The continued growth of our community increases the long-term opportunity for our business,” Spiegel said in a statement.
The problem, for now, is finding a way to monetize that community. (Disclosure: Snap is an investor in dot.LA)
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Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
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Genies Wants To Help Creators Build ‘Avatar Ecosystems’
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
When avatar startup Genies raised $150 million in April, the company released an unusual message to the public: “Farewell.”
The Marina del Rey-based unicorn, which makes cartoon-like avatars for celebrities and aims to “build an avatar for every single person on Earth,” didn’t go under. Rather, Genies announced it would stay quiet for a while to focus on building avatar-creation products.
Genies representatives told dot.LA that the firm is now seeking more creators to try its creation tools for 3D avatars, digital fashion items and virtual experiences. On Thursday, the startup launched a three-week program called DIY Collective, which will mentor and financially support up-and-coming creatives.
Similar programs are common in the startup world and in the creator economy. For example, social media companies can use accelerator programs not only to support rising stars but to lure those creators—and their audiences—to the company’s platforms. Genies believes avatars will be a crucial part of the internet’s future and is similarly using its program to encourage creators to launch brands using Genies’ platform.
“I think us being able to work hands on with this next era—this next generation of designers and entrepreneurs—not only gets us a chance to understand how people want to use our platform and tools, but also allows us to nurture those types of creators that are going to exist and continue to build within our ecosystem,” said Allison Sturges, Genies’ head of strategic partnerships.
DIY Collective’s initial cohort will include roughly 15 people, Sturges said. They will spend three weeks at the Genies headquarters, participating in workshops and hearing from CEOs, fashion designers, tattoo artists and speakers from other industries, she added. Genies will provide creatives with funding to build brands and audiences, though Sturges declined to share how much. By the end of the program, participants will be able to sell digital goods through the company’s NFT marketplace, The Warehouse. There, people can buy, sell and trade avatar creations, such as wearable items.
Genies will accept applications for the debut program until Aug. 1. It will kick off on Aug. 8, and previous experience in digital fashion and 3D art development is not required.
Sturges said that the program will teach people “about the tools and capabilities that they will have” through Genies’ platform, as well as “how to think about building their own avatar ecosystem brands and even their own audience.”
Image courtesy of Genies
Founded in 2017, Genies established itself by making avatars for celebrities from Rihanna to Russell Westbrook, who have used the online lookalikes for social media and sponsorship opportunities. The 150-person company, which has raised at least $250 million to date, has secured partnerships with Universal Music Group and Warner Music Group to make avatars for each music label’s entire roster of artists. Former Disney boss Bob Iger joined the company’s board in March.
The company wants to extend avatars to everyone else. Avatars—digital figures that represent an individual—may be the way people interact with each other in the 3D virtual worlds of the metaverse, the much-hyped iteration of the internet where users may one day work, shop and socialize. A company spokesperson previously told dot.LA that Genies has been beta testing avatar creator tools with invite-only users and gives creators “full ownership and commercialization rights” over their creations collecting a 5% transaction fee each time an avatar NFT is sold.
“It's an opportunity for people to build their most expressive and authentic self within this digital era,” Sturges said of avatars.
The company’s call for creators could be a sign that Genies is close to rolling out the Warehouse and its tools publicly. Asked what these avatar tools might look like, the startup went somewhat quiet again.
Allison Sturges said, “I think that's probably something that I'll hold off on sharing. We will be rolling some of this out soon.”
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Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
Here's What To Expect At LA Tech Week
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
LA Tech Week—a weeklong showcase of the region’s growing startup ecosystem—is coming this August.
The seven-day series of events, from Aug. 15 through Aug. 21, is a chance for the Los Angeles startup community to network, share insights and pitch themselves to investors. It comes a year after hundreds of people gathered for a similar event that allowed the L.A. tech community—often in the shadow of Silicon Valley—to flex its muscles.
From fireside chats with prominent founders to a panel on aerospace, here are some highlights from the roughly 30 events happening during LA Tech Week, including one hosted by dot.LA.
DoorDash’s Founding Story: Stanley Tang, a cofounder and chief product officer of delivery giant DoorDash, speaks with Pear VC's founding managing partner, Pejman Nozad. They'll discuss how to grow a tech company from seed stage all the way to an initial public offering. Aug. 19 at 10 a.m. to 12 p.m. in Santa Monica.
The Founders Guide to LA: A presentation from dot.LA cofounder and executive chairman Spencer Rascoff, who co-founded Zillow and served as the real estate marketplace firm’s CEO. Aug. 16 from 6 p.m. to 9 p.m. in Brentwood.
Time To Build: Los Angeles: Venture capital firm Andreessen Horowitz (a16z) hosts a discussion on how L.A. can maintain its momentum as one of the fastest-growing tech hubs in the U.S. Featured speakers include a16z general partners Connie Chan and Andrew Chen, as well as Grant Lafontaine, the cofounder and CEO of shopping marketplace Whatnot. Aug. 19 from 2 p.m. to 8 p.m. in Santa Monica.
How to Build Successful Startups in Difficult Industries: Leaders from Southern California’s healthcare and aerospace startups gather for panels and networking opportunities. Hosted by TechStars, the event includes speakers from the U.S. Space Force, NASA Jet Propulsion Lab, Applied VR and University of California Irvine. Aug. 15 from 1 p.m. to 5 p.m. in Culver City.
LA Tech Week Demo Day: Early stage startups from the L.A. area pitch a panel of judges including a16z’s Andrew Chen and Nikita Bier, who co-founded the Facebook-acquired social media app tbh. Inside a room of 100 tech leaders in a Beverly Hills mansion, the pitch contest is run by demo day events platform Stonks and live-in accelerator Launch House. Aug. 17 from 12:30 p.m. to 3 p.m. in Beverly Hills.
Registration information and a full list of LA Tech Week events can be found here.
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Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
Former Amazon and Lyft Execs Launch Incubator and Tech Talent Hybrid Startup
RYZ Labs wants to be a one-stop shop for startups looking to scale up and add new talent.
California natives Jordan Metzner and Sam Nadler created RYZ Labs, and their résumés make it clear they’ve got the knowledge and experience necessary to help others hit the ground running. In 2006, the pair launched California Burrito Co., a chain restaurant with international reach; in 2013, they founded the “Uber for Laundry,” Washio. Add in Metzner’s five years at Amazon and Nadler’s time at Lyft, and you have a potent combination of industry savvy and entrepreneurial flair.
Metzner and Nadler bring that collective knowledge to bear in RYZ Labs, which calls itself a “hybrid startup studio.” That means RYZ is ready to help with two of the more daunting challenges any growing venture faces: Refining a startup’s vision and building the kind of staff needed to execute that vision—on a budget, if necessary. RYZ Labs’ official announcement is succinct: They want to “help existing startups scale fast and spend less.”
In an interview, Jordan Metzner tells dot.LA his time with Amazon played a significant role in returning to entrepreneurship. “I was able to work on entrepreneurial projects pretty much like the whole time,” he says, “And I basically was able to come up and generate new ideas and turn them from ideas into little startups at Amazon….”
Metzner also says that in his position, he got to "see both sides and how projects are able to set their value within the organization, how impactful they must be.”
Metzner’s final Amazon project helped turn him back toward the startup world. He invented Amazon’s Ring Drone, and after that, Metzner says, “I just knew that… creating things from scratch is still really where my passion was.”
“So yeah,” he says, “I had dreamed of building a startup studio for years.” According to Metzner, that takes “not just the desire to do it, but probably a collection of career experiences that have brought me to this place.”
Digital mock up for OffsiteIO, a startup helped by RYZ Labs
Assets by Ryz Labs
Thanks partly to Metzner’s and Nadler’s connections in Latin America (California Burrito Co. started in Argentina before expanding to six other Central and South American countries), RYZ Labs has international ambitions. As Metzner says in the launch announcement, RYZ combines two of his passions: “Latin America and business creation. Having lived and worked in Latin America for many years, I love the people and truly believe in the region’s tech prowess and potential.”
As experts on the Latin American market, Metzner and Nadler have the advantage of being able to identify the region’s top engineers. However, there are many other reasons for RYZ Labs to encourage founders to look beyond North America, including pandemic-inspired normalization of remote work, economic instability in the U.S., an untapped reserve of talented engineers, and more practical, simple advantages such as time zones lining up.
Expanding on the COVID-19-inspired advantages of distributed teams, Metzner tells dot.LA "that probably leads to part of the human capital side of our business.”
He notes that it has “been easier and easier to add additional teammates that may not be sitting in the same room as you. And as long as you speak the same language and you're in the same time zones, you know, it can be a super easy way to communicate and to build.”
RYZ Labs was in “stealth mode” for a year and, in that time, launched startups like HipTrain, a wellness coaching marketplace, and Offsiteio, which handles planning corporate offsite meetings. Asked if the nature of the startups he and Nadler work with has changed, Metzner notes that HipTrain is a “business that probably only could have been built due to the pandemic” thanks to the videoconferencing boom.
Regarding Offsiteio, Metzner says, "of course, companies always used to get together,” but “the idea of getting together was maybe like a summer picnic or something.”
“And now that the teams are, you know, in different places,” he continues, “getting together as a team is more important, and it's a shift from spending it on properly planned equipment and office space and spending it on experiences to bring your team together and create bonds to create a culture within your organization.”
RYZ’s development and staffing process is relatively straightforward. After incubating ideas and creating a workable—and saleable—version of a product or service, they move on to hiring leaders, then setting the stage for outside investors. After that, the “Human Capital” part of the equation kicks in, focusing on finding Latin American talent.
Asked if he has general advice for anyone in the earliest stages of conceiving a startup, Metzner keeps it simple: “Best place to start is to buy a domain name and get started,” he says.
“I mean, there's been more and more online tools to help build everything from websites to web applications, to communication with your customers. There's a lot of no code tools that even we use sometimes that are great intermediaries as you're building product.”
One clear thing that comes across when speaking with Metzner is that he’s happy about launching RYZ Labs in his hometown. “I was born in Los Angeles,” he says, “My mother was born in Los Angeles. Her parents were born in Los Angeles. I've lived in LA my entire life. I've moved around but came back.”
“I love Los Angeles, and I think it's a great place to build,” Metzner concludes, “I think it has such an entrepreneurial spirit based off of Hollywood films and the fact that every Hollywood movie is almost like a new business. It's an awesome place to build a company.”
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