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X'A Multi-Billion Dollar Platform': How Snap Plans to Turn Its Map Feature Into a Cash Cow
Sam primarily covers entertainment and media for dot.LA. Previously he was Marjorie Deane Fellow at The Economist, where he wrote for the business and finance sections of the print edition. He has also worked at the XPRIZE Foundation, U.S. Government Accountability Office, KCRW, and MLB Advanced Media (now Disney Streaming Services). He holds an MBA from UCLA Anderson, an MPP from UCLA Luskin and a BA in History from University of Michigan. Email him at samblake@dot.LA and find him on Twitter @hisamblake

Libby Bideau, owner of Brentwood-based Libby Pilates, was surprised to hear that her small business appears on the Snapchat Map.
The feature is one of many products Snap is planning to use over the next few years to carve out a path to profitability and generate long-term returns. Since June last year, the Santa Monica company headed by Evan Spiegel has been populating its Map with small businesses like Bideau's, hoping to eventually convert them into paying advertisers.
Snap is betting that restaurants, boutiques and the millions of other small businesses across the world will purchase ads and help grow the company into a behemoth, much like they have other big tech companies such as Facebook and Google's parent Alphabet.
"[The Map is] a multi-billion dollar platform over the long term," CFO Derek Andersen told investors last month. "It represents a logical on-ramp to Snap's advertising platform for millions of small businesses around the world."
Maps and listings have attracted big advertising dollars for other tech firms. Morgan Stanley has projected that Google Maps will earn $11 billion by 2023. And Yelp, the publicly traded listing and reviews platform, brought in over $1 billion in 2019 before the pandemic reduced its 2020 income to about $873 million.
By comparison, Snap's 2020 revenue, the bulk of which derived from ads inserted in between user-uploaded videos and on the company's curated-content platform, was $2.5 billion.
Snapchat has its eye on using AR to upend retail shopping, and integrating that experience into its Maps function.
Until recently, Snap's Map was somewhat of a hidden feature that savvier Snapchatters used to track friends' locations and post place-based pictures. Last summer, Snap added the Map to its home screen toolbar as part of a substantial redesign. Founder and CEO Evan Spiegel and others inside the company see big potential for the Map, particularly in conjunction with tools like AR that could distinguish it from listings used by competitors like Google and Yelp.
But trying to get businesses to buy in this late in the game will be a challenge.
"I don't know anyone that uses it and I don't want to learn a new program," Bideau said, noting that she doesn't believe her clients, who range from "30-somethings to 70-somethings," fit Snap's demographic.
But Snap has hinted that it plans to use Maps differently than its competitors.
The self-styled camera company has its eye on using AR to upend retail shopping, and integrating that experience into Maps. With AR try-on technology, for example, consumers can use their phones to overlay a product like a pair of sneakers or lipstick on themselves to see how it looks without ever having to leave home.
This week, Snap acquired Berlin-based Fit Analytics, a firm that makes the so-called Fit Finder, to help online customers pick the right-sized clothing. That kind of function could make Snapchat an attractive marketing tool for businesses, who often see higher product-return rates from ecommerce sales.
Gucci and Champs Sports have forayed into Snap's advanced retail tools, letting consumers get a visual feel for footwear through Snapchat's AR lenses. But smaller businesses with less money to spend on advertising have been slower to hop in. And if Snap is to be truly successful, that's exactly who it will need to lure in.
Elton Graham is the general manager of LA Apparel, a clothing store in South L.A. that advertises on Snapchat's Stories section, where users share disappearing messages and watch curated content from Snap's Discover platform. Graham hasn't advertised on Snap's lenses or Map, but he's open to experimenting.
"As a small or medium-sized enterprise it's really important to have that discretionary budget to always be testing," he said. "Otherwise you'll get stuck in the past."
Others echoed Graham's cautious openness to advertising on Maps and said Snap's self-service advertising platform has improved over time, which the company has highlighted in its investor calls.
"I've definitely seen an improvement in terms of the ease of use," said Geoffrey Miles, head of marketing for direct-to-consumer brand Bev. "I think Facebook mastered that years ago in many ways, and Snap has taken some cues."
Snap executives have said it's still very early days for the Map as a utility feature. Already, though, Snap claims that over 250 million users engage with the Map every month and that it includes over 35 million listings. These are populated with data from user location check-ins and third-party sources like TripAdvisor, a company spokesperson said. Businesses can suggest edits to their listings or propose additions to the Map.
Resistance from small business owners like Bideau to embrace the new tool is not lost on Snap. Executives have emphasized the need to educate would-be advertisers. Andersen, Snap's CFO, has said Snap's operating expenses will grow in 2021, and that much of that cost-increase will come from expanding the company's sales team.
Snap also recently partnered with the nation's largest newspaper publishing chain, Gannett, to train the newspaper publisher's salesforce on selling ads and running marketing campaigns on Snapchat. In return, Snap will gain access to the owner of USA Today's network of over 100,000 small businesses across the U.S. and Canada.
Snap's need to evangelize itself to grow is common among tech businesses looking to bring on advertisers with relatively smaller budgets. "That takes some front-end time," said KeyBanc analyst Justin Patterson.
But the clock is ticking as the list of competitors angling for these same small business dollars is growing. TikTok recently announced an event later this month to help small and medium-sized businesses learn about advertising on its own app.
Snap's Map is also under legal attack.
New York-based social-media mapping firm YouMap filed suit last year against Snap, claiming that Zenly, a company Snap acquired in 2017, stole a number of YouMap's technologies and that Snap had violated trade secrets law by incorporating those technologies into Snapchat. A judge recommended in February that the case be dismissed because YouMap did not sufficiently specify the technologies it alleges were stolen, but the case remains open.
Editor's note: This story has been updated to add Snap's revenue figures.
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Sam primarily covers entertainment and media for dot.LA. Previously he was Marjorie Deane Fellow at The Economist, where he wrote for the business and finance sections of the print edition. He has also worked at the XPRIZE Foundation, U.S. Government Accountability Office, KCRW, and MLB Advanced Media (now Disney Streaming Services). He holds an MBA from UCLA Anderson, an MPP from UCLA Luskin and a BA in History from University of Michigan. Email him at samblake@dot.LA and find him on Twitter @hisamblake
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Snapchat’s Attempt to Protect Young Users From Third-Party Apps Falls Short
Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
Some Snap Kit platform developers have skirted guidelines meant to make the app safer for children.
A new report from TechCrunch released Tuesday found that some third-party apps that connect to users’ Snap accounts have not been updated according to new guidelines announced in March. The restrictions, which target anonymous messaging and friend-finding apps, are meant to increase child safety. However, the investigation found a number of apps either ignore the new regulations or falsely claim to be integrated with Snapchat.
The Santa Monica-based social media company announced the changes after facing two separate lawsuits related to teen suicide allegedly caused by the app. Over 1,500 developers integrate Snap features like the camera and Bitmojis. Snap originally claimed the update would not affect many apps.
Developers had 30 days to revise their software, but the investigation found that some apps, such as the anonymous Q&A app Sendit, were granted an extension. Others blatantly avoided the changes—the anonymous messaging app HMU, which is now meant for adult users, is still available to users "9+" in the App Store. Certain apps that have been banned from Snap, like Intext, still advertise Snapchat integration.
“First and foremost, we put the privacy and safety of our community first and expect the products built by our developer community to adhere to that standard in addition to bringing fun and positive experiences to people,” Director of Platform Partnerships Alston Cheek told TechCrunch.
The news is a blow to Snap’s recent efforts to cast itself as a responsible social media platform The company recently announced Colleen DeCourcy would take over as the company’s new chief creative officer and CEO Evan Spiegel to recently made a a generous personal donation to graduates of Otis College of Art and Design. The social media company currently faces a lawsuit from a teenager who claims it has not done enough to protect minors from sexual exploitation. In April, 44 attorney generals sent a letter to Snap and TikTok urging the companies to strengthen parental controls.
Lawmakers are considering new policies that would hold social media companies accountable for the content on their platforms. One such bill would require social media companies to share data with independent researchers.
Snapchat recently rolled out augmented reality shopping features and influencer-led original content to grow its younger base of users.
Snap Inc., Snapchat's parent company, is an investor in dot.LA.
Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
When we list the attributes most associated with successful founders, investors, billionaires, and industry leaders, we often think of things like determination, grit, fortitude, and even obsessiveness. The winners are the most relentless, the ones who work the hardest, know the most, start the earliest in the morning on 4 hours of sleep, and won’t accept no for an answer.
While discussing the venture capital world, and his upcoming technology conference in Santa Monica, The Montgomery Summit 2022, March Capital co-founder and managing partner Jamie Montgomery doesn’t necessarily contradict this formula for success, but adds a new attribute to the mix that’s sometimes left out: curiosity.
Montgomery’s a believer that there’s no one right way to go about things, and no surefire process for success. Sometimes, the best company emerges from not just the best data and team but the most creative approach. “If something isn’t clear, invert,” Montgomery explained. “Then invert again. Soon the subject becomes clear.”
The best investors and leaders have an innate inquisitiveness about the world around them, and seek out opportunities not just based on market trends but genuine observations about problems in desperate need of solutions.
“You sort of have to be a very heuristical thinker,” Montgomery said. “Sometimes I find some people I talk to are very smart and interesting, and I think, “That person’s very thoughtful. They’re going to be a good investor.’ Sometimes you meet people and you think ‘Well, they come across smart, but they’re always preparing what they’re going to say in response to what you have to say, they’re not really listening.’ Being a good investor, you’ve got to be a good listener. You’ve got to figure out, what’s the signal and what’s the noise? Filter out the noise and say ‘What’s real?’”
Thoughtfulness, attentiveness and curiosity are typically the sort of attributes that we think of as innate, as opposed to skills you can improve via on-the-job training. Montgomery noted, “I always ask entrepreneurs why rather than what. You get a more interesting answer.” Reading and research and investigation can help, but innate curiosity remains an essential ingredient in business success.
“I think, to be an investor, not just a VC but an overall investor, one benefits from an incredible amount of reading and knowledge,” Montgomery explained. “You have to have a voracious appetite, so it’s really a high-level curiosity. Some people have it, some don’t.”
March Capital Founder Jamie Montgomery.
Illustration by Dilara Mundy
One subject that’s on Montgomery’s mind these days is quantum computing, and its potential impact on cybersecurity, a major area of focus for March. His process starts by asking core questions about the next 5-10 years and what they’ll look like, before even considering potential solutions.
“If you’re investing, you have to look at something that’s inevitable,” Montgomery explained. “Is it gonna happen or not. If it’s inevitable, then the question is, is it imminent? And is it investible? Start with inevitable. Eventually you’re going to have quantum computing, and that’s gonna create an existential threat to cybersecurity. Is that imminent?... What is the post-quantum cyber world like, with all this information that’s been siphoned out of America by China… what do they have and how do we prepare for a post-quantum cybersecurity? It’s almost existential.”
This holistic question-based approach also drives Montgomery as he plans and organizes the annual Montgomery Summit, the largest such event of the LA tech calendar year (Montgomery refers to it as the “Rose Bowl of Conferences.”)
He expects around 1,200 people to attend this year – the event’s big return post-pandemic – for panels and sessions that don’t just cover areas in which March Capital specializes, but a vast and diverse variety of subjects and topics, designed to intrigue and inspire curious minds.
Over 175 speakers in total have signed on for the 19th annual Montgomery Summit, to be held on May 24 and 25, from the worlds of technology, economics, geopolitics, public policy, the sciences, and beyond. Montgomery gets animated as he tells me about the voluminous range of topics being covered, from the Federal Reserve’s response to inflation to the war in Ukraine to the stories behind companies like Bill.com and CrowdStrike. One session will feature Chapman University Presidential Fellow Jack Horner, one of the world’s leading paleontologists and a key inspiration for the “Jurassic Park” character Dr. Alan Grant.
“It’s the interaction, the entrepreneurs with the investors and the executives,” Montgomery told me. “It’s fantastic, it’s enjoyable, it’s fun, and it’s candid. There are no big egos. The speakers will actually come and talk to you, they don’t come in the back door and leave through the back door. You actually can go to any one of seven sessions, and it’s going to be interesting, and they’re all short. 25-45 minutes each.”
The shorter 25-45 minute sessions help to stave off boredom and mean that attendees can sample a wider range of subjects and sessions than they might at other conferences. It helps keep things moving and makes them fun, a theme Montgomery returned to a few times in our discussion.
“There’s a lot of conferences that are very professionally run or research-driven or they’re very commercial. People come here and they’re gonna have a blast, right?”
The Montgomery Summit runs May 24th-25th at Santa Monica's Fairmont Miramar Hotel & Bungalows. Find out more information on their website.
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Netflix Lays Off 150 Employees
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.
Netflix is laying off roughly 150 people after the streaming giant lost subscribers last quarter.
In a statement to dot.LA, a Netflix spokesperson said the company’s slowing revenue growth means it must rein in its costs.
“So sadly, we are letting around 150 employees go today, mostly U.S.-based,” the spokesperson said. “These changes are primarily driven by business needs rather than individual performance, which makes them especially tough as none of us want to say goodbye to such great colleagues. We're working hard to support them through this very difficult transition."
The job cuts amount to 2% of the company’s workforce, according to the Hollywood Reporter. The streaming giant is eliminating 70 roles in its animation division, and cutting contractor jobs in social media and publishing channels, THR reported, citing a company memo. Affected employees are expected to receive severance packages starting at four months.
The layoffs come just a few weeks after Netflix laid off about 25 people in its marketing division, including at its editorial website Tudum.
Netflix shares have cratered since the streaming platform reported that it lost 200,000 subscribers during the first quarter—the first time the company shed customers in more than a decade. The company also expects to lose 2 million more in the current second quarter. The streamer blamed increased competition, password sharing and the war in Ukraine, among other issues.
During the earnings call in April, Netflix CFO warned that over the next two years, “we're kind of operating to roughly that operating margin, which does mean that we're pulling back on some of our spend growth across both content and noncontent spend.”
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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.