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XSnap Revenue Soars Past Q2 Expectations on Earnings Call
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

Snap shares soared as high as nearly 17% in after-hours trading Thursday after reporting its highest rates of revenue and user growth in four years.
It's not surprising the company grew compared to the same time last year, when advertisers pulled back spending, but Snap's rosy projections for the upcoming quarter suggest the post-pandemic bump wasn't a quirk.
Snap told investors on Thursday it forecasts 58% to 60% year-over-year revenue growth in the third quarter. Share prices approached the record-highs that Snap saw in February following the company's announcement that it anticipates 50% revenue growth for the next several years.
Analysts had expected a big year-over-year jump this quarter as the pandemic subsided and advertisers spent more. Snap nevertheless exceeded expectations, hitting 293 million users and more than doubling revenue.
CEO Evan Spiegel said he expects growth to continue as Snap moves deeper into ecommerce with ongoing investments in features like AR shopping.
Analysts agree that Snap has plenty of room to further monetize that, along with other relatively new features like Maps and Spotlight, the TikTok-like, algorithmically-surfaced video feed that Snap launched in November. The company grew its Spotlight daily active users 49% quarter-over-quarter.
Spiegel told investors Snap is not ready to turn Spotlight into a revenue generator.
"We've done small testing with advertising in Spotlight but for now we're just really focused on the core experience," Spiegel said. "We've got a great roadmap of improvements and we just don't want the team to get distracted, frankly, with monetization at this point."
Snap pulled in $3.35 per user globally, beating Wall Street expectations. Still, that figure still lags behind competitors like Twitter (around $5) and Facebook (over $13). Analysts believe that, too, gives Snap room to grow.
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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 that 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. With over 1,500 developers that 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 accordingly, 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 set as 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.
After recently announcing Colleen DeCourcy as the company’s new Chief Creative Officer and a generous personal donation from CEO Evan Spiegel to recent graduates of Otis College of Art and Design, the news reflects a blow for Snap’s reputation. 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 pushing them to strengthen parental controls.
How to hold social media companies accountable remains up for debate as lawmakers continue to consider new policies, such as requiring companies to share data with independent researchers. As Snap continues to try and draw in a young user base with flashy augmented reality tech and influencer-led original content, it still struggles with keeping that audience safe.
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 US-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 percent 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.