What's New: Snap wants to become a platform for creators
(from the latest issue of the Indie Hackers newsletter)
Snap is launching a futuristic e-commerce platform:
- Users will be able to use their phones to try on jewelry, clothes, and other products. The company has also unveiled its new AR glasses, Spectacles, available to creators by application only.
- Data-as-a-Service company Jungle Scout recently reported that its products impact $8 billion in Amazon revenue. Dru Riley asserts that data bridges the gap between perception and reality, and interested founders will find plenty of opportunities in this space.
- Gumroad Founder Sahil Lavingia set out to build a billion-dollar business, but found that making an impact on the lives of creators was more important than a monetary goal.
Want to share something with over 75,000 indie hackers? Submit a section for us to include in a future newsletter. —Channing
🛍 Snap Wants to Become a Platform for Creators
from the Indie Economy newsletter by Bobby Burch
Snap is launching a futuristic e-commerce platform that allows users to try on jewelry, clothes, and other products. The company has also unveiled its new augmented reality (AR) glasses, Spectacles, available to creators by application only.
AR shopping is coming
Snap e-commerce: A few days ago, Snap CEO Evan Spiegel unveiled a set of AR tools that will lay the groundwork for its e-commerce platform. The shopping tools will allow users to browse items and try them on, including clothing, jewelry, and bags. Users can also scan a photo of an outfit to receive clothing recommendations, and businesses will soon be able to list products for purchase in-app.
Apple effect: Snap hopes that its e-commerce platform will shield it from the impact of Apple’s new privacy policies, which allows iOS users to stop apps from targeting their phones for ad purposes.
A strong turnaround: Snap has had its share of ups and downs. After an unpopular redesign in 2018 that dropped the company’s valuation to $6B, Snap is now worth $86B. Snap posted revenue of $2.5B in 2020, up about 45% from $1.72B in 2019.
Unprofitable: Snap still isn't turning a profit, and posted a net loss of $287M in Q1 2021. However, some analysts predict that 2021 may be the year that Snap finally enters the black.
COVID-19 bump? Over the past year, users have flocked to the social video platform. Snap now has 280M daily users, which is a 22% increase from its 229M daily users in May 2020. Also, there are now more Snappers using Android devices than iPhones.
Fourth time’s the charm: Snap unveiled its latest generation of Spectacles, its first pair of shades to support AR. The boxy, black specs are reminiscent of a pair of 8-bit pixel sunglasses popularized in memes, but the hardware’s tech is a bit more impressive. Snap spent $500M to acquire AR-tech firm WaveOptics.
The specs: Spectacles feature displays that superimpose AR creations in outdoor or indoor environments. It has four microphones, two cameras, two speakers, and an integrated touchpad. Snap isn’t selling them yet, but is giving them to AR creators who apply for them. The Verge reports that the Spectacles’ battery lasts only 30 minutes.
Creator tools: Snap launched an updated version of Lens Studio that allows creators and developers to build AR experiences in gaming, education, shopping, and more. Snap is deploying a $3.5M fund for creators building AR experiences, and has launched a fellowship program that offers designers between $15-150K to build products.
Creator Marketplace: Snap is also making it easier for AR creators to connect with brands using the platform. You can learn more about the marketplace here:
For businesses, this is a new opportunity to leverage the creativity and expertise of Snap Creators (who know the Snapchat Generation best!) to drive ROI for Snapchat marketing activity. For Creators, it opens the door to greater partnership opportunities with all kinds of brands so that Creators can build their own business on Snapchat.
What do you think of Snap’s e-commerce strategy? Share your thoughts below.
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📰 In the News
from the Volv newsletter by Priyanka Vazirani
🎥 Amazon agrees to buy Hollywood studio MGM Holdings for $8.45B.
🎮 GameStop is building a team for its upcoming NFT portal.
🚫 Iran bans cryptocurrency mining to avoid power outages.
🏝 64% of workers prefer remote work over a $30K yearly raise.
🏛 WhatsApp sues the Indian government over controversial privacy law.
Check out Volv for more 9-second news digests.
📇 DaaS Bridges the Gap Between Perception and Reality
from the Trends.vc newsletter by Dru Riley
Jungle Scout is a Data-as-a-Service (DaaS) company that builds tools to help Amazon sellers improve their stores. Jungle Scout recently reported that its tools impact $8B in Amazon revenue, which is a testament to the power of building around data. Dru Riley predicts that DaaS will continue to grow, meaning new opportunities for founders in the space.
Problem
You need to make better decisions.
Solution
DaaS bridges the gap between perception and reality.
Players
DaaS companies:
DaaS marketplaces:
Predictions
- Powerful services will move downmarket. Acxiom now competes with self-serve models like Clearbit. Clearview faces consumer-side alternatives like PimEyes.
- High-fidelity shadow profiles will emerge. Lead enrichment services build profiles of prospective customers. Facial recognition takes this a step further.
- Real-time shadow profiles will emerge. Social media firehoses increase the recency of what's available.
Opportunities
- Help consumers and companies make better decisions:
- JungleScout: What should I sell on Amazon?
- CamelCamelCamel: When should I buy from Amazon?
- Hypetrace: Which influencers should I sponsor?
- Scott's Cheap Flights: Where should I go?
- Build a paid community on top of data. See Altan Insights. Users who share interests in data may have shared values and identities.
- Brand a metric to escape competition. See Zestimate, Walk Score and KBB.
Key lessons
- Data helps you bridge gaps between perception and reality. The lower your spread, the better your decisions.
- Data is a means to an end. Insights are closer to the "job to be done."
- The more data is shared, the less valuable it becomes:
- Shared lead lists have low close rates.
- Shared flight deals are sold out.
- Shared credit card transactions are priced into stocks.
- Shared travel destinations are busy and expensive.
- Shared marketplace listings are expensive or unavailable.
Haters
"'Data are,' not 'Data is.'"
That sounds weird to say. And write.
"All data doesn't become less valuable the more it's shared."
In cooperative environments like public health, sure. In competitive environments, the model holds.
"DaaS companies don't have a moat."
First-party data sources have an obvious moat. Third-party DaaS competes on distribution, design, and infrastructure.
"The problem is bigger than bridging gaps between perception and reality."
Some DaaS companies give you data that you can pull yourself, but faster.
"DaaS isn't always about making better decisions."
Cleaning The Glass customers may pay for the joy of knowing. This is an exception.
"This is scary. What about data privacy?"
When's the last time you read terms and conditions? We're trading privacy for convenience.
"Some companies will want data, not insights."
Sure. Commoditized answers don't lead to competitive edges.
"Data privacy and ownership will prevail."
When it becomes convenient. Plausible and DuckDuckGo have users. So does the DVORAK keyboard. Whether these cross the chasm isn't a matter of right or wrong, but human nature.
Links
- Meet Clearview AI: Clearview scrapes billions of images to find "anyone."
- Crowdsourcing: Tactics to crowdsource and collect first-party data.
- Reducing Bias in AI-Based Financial Services: A look at whether machine learning will perpetuate existing bias.
More reports
Go here to get the Trends Pro report. It contains 200% more insights. You also get access to the entire back catalog and the next 52 Pro Reports.
Discuss this story, or subscribe to Trends.vc for more.
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🛣 Gumroad Founder Sahil Lavingia Believes in Making an Impact
from the Listen Up! IH newsletter by Ayush Chaturvedi
Sahil Lavingia is the founder of Gumroad, a marketplace for digital products. Over the years, Sahil has shifted his focus from building a billion-dollar company to making an impact on the lives of creators.
Gumroad's beginnings
On April 2nd, 2011, Sahil tweeted:
Just had an idea for my first billion-dollar company. Tomorrow, I start building it.
He was learning photorealistic icon design, and had just designed a pencil icon that he hoped to sell to someone on Twitter. But there was no platform that could help him do that. There wasn't a seamless way to share a link of the product with someone and accept payment for the sale.
That weekend, Sahil built the first version of Gumroad. On April 4th, 2011, he posted on Hacker News that he had built a link abbreviator with a payment system built in.
The post was entitled "Show HN : my weekend project, Gumroad."
It went viral, and made it to the top of Hacker News. More than 50K people saw it. People raved about its utility, questioned him on the security of the payment system, and even suggested that Gumroad would be perfect for Bitcoin.
Sahil realized that he had tapped into an underserved market. By May 2012, he had secured funding, left his job at Pinterest, and started hiring a team. He was 19 years old with $8M in the bank, and he felt like he was on top of the world.
But the road ahead would not be smooth.
The slow growth
The next few years saw the company grow slowly. Acquiring new customers was tough. Most of Gumroad's sales were direct, either through cold email or talking to people on the phone.
Although a lot of revenue was from "whale" customers like Eminem, Sahil could also see the impact the company was having on small creators. Someone making a $7 sale may not be great for the company's revenue, but it's awesome for the individual who can now make money from her digital creations.
But, of course, that's not what most high growth venture-funded startups look for. An investor told Sahil that funders look for startups that grow 20-30% YoY. Only then does the investment make sense. At that point, Gumroad was growing at 7-8% YoY.
Soon, Gumroad's employees found other opportunities, and the company was down to one employee: Sahil himself. Living in San Francisco became suffocating for Sahil since everyone knew him as the founder of this failed startup. No one knew what to say to him, or what advice to give. In 2016, Sahil left San Francisco for good.
The big move
Sahil packed his bags and moved to Provo, Utah. His living expenses reduced considerably, and more importantly, one of his investors offered to sell his stake in the company for $1. With time, Sahil gained a few more investors, built a small team again, and began to grow.
His focus had shifted from finding new customers to catering to the creators already on the platform. He wanted to make Gumroad the best experience for them, and doubled down on this idea with new features and product development:
Instead of pretending to be some sort of product visionary, trying to build a billion-dollar company, I’m just focused on making Gumroad better and better for our existing creators. Because they are the ones that have kept us alive.
Sahil also committed to a policy of transparency, publicly sharing the company's earnings and allowing users to take part in Gumroad's journey. From hosting Clubhouse rooms to lay out Gumroad's roadmap, to allowing users to invest in the company, Sahil has created an environment in which users have a personal interest in Gumroad's success.
Why Gumroad works
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It's a tool that does what it says: It's not a visionary product like the iPhone or the Tesla. It's a SaaS product that helps creators make money online. And it does that job well.
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Creators can relate to it: Gumroad's customers can see the company failing, trying, and succeeding.
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It plays fair: Gumroad doesn't take a major cut like other companies. It knows its customers well, and charges them appropriately.
Redefining success
Sahil has spoken openly about his failures in the journey of growing Gumroad. In 2018, he penned a widely-shared blog post entitled "Reflecting on my failure to build a billion dollar business." In the post, he discussed his changing definition of success:
For years, my only metric of success was building a billion-dollar company. Now, I realize that was a terrible goal. It’s completely arbitrary and doesn’t accurately reflect impact.
You can check out Sahil's full episode on the Indie Hackers Podcast here.
What are your thoughts on Gumroad's journey? Please share in the comments!
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Special thanks to Jay Avery for editing this issue, to Nathalie Zwimpfer for the illustrations, and to Bobby Burch, Priyanka Vazirani, Dru Riley, Ivan Romanovich, and Ayush Chaturvedi for contributing posts. —Channing
