Snap Inc.'s Evan Spiegel at Code 2022

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Hi, I'm Scott Galloway.

Today we've got a bonus episode from Code.

It's a conversation between Kara, Scott, yours truly, and Evan Spiegel, the CEO of Snap.

We spoke in Los Angeles on September the 7th.

Snap has had a rocky 2022.

That's an understatement.

Evan took the stage this week after the company announced layoffs.

He was open about the challenges his company faces, but also struck an optimistic tone and also was emotional in certain parts.

Let's listen.

Thank you for coming.

Oh,

how's it going?

Oh, it's gone.

All right.

You've had a hard week, but thank you for the news.

Talk a little bit about what's been going on this week and how you look at stuff.

You and I, I saw you this morning.

You were talking about the macroeconomic environment.

Talk a little bit about what's happened and how you look at it.

Oh, goodness.

Well, there certainly have been a lot of changes very quickly in the macroeconomic environment.

When we entered the year at the beginning of the year,

prior to the invasion of Ukraine, we were growing revenue about 44%

year over year.

And we were really excited about how the year was going to unfold.

And then, of course, you know, we had this terrible invasion of Ukraine.

We actually had quite a sizable team there,

which was really challenging to work through.

And then of course, after that, rippling through the economy has been shocks to energy prices, of course, food, et cetera.

And inflation has run a lot higher and hotter than people expected.

And so

of course in response to that, the Fed and

the ECB are responding with rate increases.

And that's really changed the cost of capital, which has required businesses to focus a lot more on generating cash.

And in order to generate cash, you have to obviously either grow your revenue a lot faster or reduce your cost structure.

And because revenue is growing slower, actually, for a lot of businesses, they have to reduce their cost structure.

And

when they do that, one of the easiest and fastest ways to do that is actually to turn off digital advertising.

That's one of the benefits of digital advertising.

It's so flexible, you can turn it on and off.

And so we saw that impact in our business.

And

that means that now,

quarter to date, we've grown about 8% year over year, down from 44%.

And looking forward at the macro economy, we don't see a lot of things that make us optimistic.

And so, what we've had to do is really restructure our business, focus on our three strategic priorities of continuing to grow our community, which grew 18% to almost 350 million daily active users in the last quarter, re-accelerate our revenue growth, of course, and then really invest in this long-term future of augmented reality.

So, as part of that, you know, we had to lay off about 20%

of our team, which is obviously really difficult, shut Shut down a lot of projects that we're talking about.

Right, I brought one out, the Pixie, right here.

This one here.

This was one of the things.

I'm not going to bust your chops about it.

It's a very lovely looking drone.

It's really well done, as most things you make are.

So this was one of them that wasn't, it was beautiful, cool, not making money.

It's a wonderful, low-margin product.

Okay, all right, which sounds great for a business that's struggling.

So where do you see the company going forward then?

You've done this cut,

which is difficult for anyone.

Again, you were going like gangbusters.

Now you've had to pull in.

And I remember Brian Chesky talking about having to do it during the pandemic.

You guys did really well during the pandemic.

Where do you see the company going forward?

Well, our community engagement is really strong.

So, you know, in the immediate term, we're really focused on re-accelerating revenue growth.

And the way that we think we can do that is really with a focus on low-funnel direct response advertising.

So, advertising that's really easy to measure, that helps people clearly drive business results, because those are the dollars that, even in uncertain macroeconomic times, businesses will still spend because they're very important for generating incremental revenue.

And so, what we've done is actually reorganize our team.

We've promoted Jerry Hunter, a long-time leader at SNAP, to chief operating officer.

He's taking responsibility for really bringing together our product, sales, and engineering teams to help us do a much better job of solving the technical and operational challenges of running a large-scale direct resource.

So you're keeping augmented.

It was that business, the other business, what was the second one?

I'm sorry.

We're definitely, oh, our priorities, you mean?

Community growth, revenue growth, and then investing in augmented reality.

So talk about augmented.

Why keep that?

You love them, spectacles, don't you?

Well, spectacles is a part of the long-term future of augmented reality, but what's really cool about augmented reality is that over 250 million people are engaging with AR today, every day, on Snapchat through our camera.

And even more than that, many people are now using our augmented reality tools in other people's applications because businesses embed something called CameraKit, which is a suite of our AR tools into their own applications to drive business results.

And so what we've been doing over time is slowly building this augmented reality platform on mobile that over time, of course, will transition to things like wearables.

But that's kind of the long-distant future.

But you think it's critically important to continue to, because I've looked at lots of very cool things that you're making.

AR is an enormous driver of our business today, of engagement today, of course, revenue, and will continue to be in the future because it's really at the core of what computing is going to look like over the long term.

Scott?

So, Evan, I don't know if you've been following the conference, but there's been two major themes so far.

The first is tick, and the second is talk.

And we had a nice.

People running for president, but go ahead.

By the way, I think this is the only dude who's not running for president who's been on this stage.

Yeah, they're all just interested in tech.

Anyways,

a little cynical, a little cynical.

We had a nice conversation.

I have 12 and 15 year old boys.

Their primary platforms are Snap and TikTok.

And

the more I've gotten to know them, the more I like Snap.

It strikes me as joyous and communication, and the less or the more I'm worried about TikTok.

The business world or consumers are not listening to me.

It feels like everyone but TikTok, their business is declining dramatically.

And

it just feels like they are kicking the shit out of everybody.

So my question is, how do you plan to compete with TikTok?

And two, and just as a follow-up, do you think TikTok should be banned?

Good, we're starting with the easy questions.

So in terms of our strategy, I think one of the things that we've learned over time is that by focusing on visual messaging between friends and family, we're able to drive long-term retention and engagement.

So, when people start using Snapchat, you know, to send photos and videos to their friends, they love it and they keep coming back because it's a much better way to communicate than text message, right?

And my sons are still using it.

That's all they use.

And over time, we built a business around that messaging by, you know, of course, building out stories and spotlight, which is our TikTok competitor, our map, you know, and the augmented reality platform.

So, we're gonna stick to that strategy of really helping friends and family communicate with visual messaging because we've seen how effective that's been through lots of ups and downs and tons of competition and a botched redesign.

That for us has really been core to our success.

So I think we'll compete by continuing to focus on the reason why our community gets value from Snap and just drive towards that North Star of over time delivering more and more value to the people who use our service.

I think, you know, on your second question, that's probably

best determined by Cypheus.

I mean, TikTok is going through a CPIS review process right now to determine whether or not it it should stay in our country.

I think a couple things probably inform that from my perspective.

One is that we've had laws for a really long time about foreign ownership of radio or television or whatever.

You have to get approval to do that.

So that sort of, I think, is the context

here.

And then secondarily, over the last couple of years, obviously, there have been a lot of other products that have been created that are very similar to TikTok, like shorts and reels

and spotlight.

And so I think a lot of the concerns concerns maybe that the administration had in the past of like, you know, oh my gosh, if TikTok goes away, what are people going to do?

Where are they going to watch short videos?

I think that's sort of been answered by the competitive environment.

So I don't know how these trade-offs are being made.

The interesting thing about the CIPIS process is that it involves so many different stakeholders, even the Treasury and of course the national security folks.

So I don't quite know how that process works, but we'll just kind of have to see what happens.

So let's say just the product itself.

Why do you think it's been doing so well and cleaning clocks all over the place?

Because you had versions of that.

Everybody's had versions of what they managed to do.

When you look at a competitor, and often people have copied you.

Yeah, pretend you're Facebook.

What would you rip off from TikTok?

What?

Let's role play.

Let's do to TikTok what Facebook has been doing to you.

Your turn.

So I actually, I think the reason why this has been so challenging for companies to respond to in the United States, but also around the world, is the scale of TikTok's investment.

So I think what's so interesting, you know, as you look at their business strategy over time, they started by buying a very, very small application that was so small that at the time, you know, they bypassed Syphius Review.

And then they spent billions upon billions of dollars acquiring users, right, and buying content to subsidize both sides of that marketplace.

And of course, you know, with artificial intelligence, the more inputs you have, the the more people you have watching more content, the better it gets and the more personalized it is for the people that use it.

And I think what nobody had anticipated in the United States was the level of investment that ByteDance made into the US market, and of course, in Europe, because it was just something that was unimaginable.

I mean, no startup could afford to invest billions and billions and billions of dollars in user acquisition like that around the world.

So it was a totally different strategy than any technology company had expected before because it wasn't an innovation-led strategy.

It was really about subsidizing large-scale user acquisition around the world.

And now people like it though.

They like to use it.

What is the reason when you use it and look at it yourself?

I think the reason is that it gets to know you over time because you invest a lot of time in it.

And that investment means that the content is more personalized.

And so I think what people find, of course, if they uninstall the app and come back and they haven't created an account or something like that, is that it doesn't reflect their interest anymore and they have have to train it again.

And that's kind of exhausting.

And so TikTok got this great lead early on, of course, by really aggressively expanding, spending a huge amount of money to do that so that people could train

the algorithm and ultimately end up with a much more personalized feed that's harder to get on a new service.

Because

when you open up shorts or you open up

Reels, it hasn't been personalized for you yet until you start using it.

So what do you look at, as you've been on the edge of innovation most of the time, as he was joking about Facebook stealing stuff, but they do.

They have taken a lot of your ideas.

What do you think is really important in the area that you're strongest in, in communications?

You've morphed different things.

You've tried different things.

What are you thinking about right now?

You did a really cool thing at Con on Vogue where you yourself put on a gown that you look lovely.

All these filters and things like that you did with Vogue.

What are you looking at that is most exciting in creation and making things?

Yeah, well, so much of communication is visual, which is why we focused on augmented reality, right?

Because it empowers people to express themselves.

And as we started doing that and people started building more lenses and we open sourced our tools, Lens Studio, I shouldn't say open source, made available our tools like Lens Studio so that creators could build more and more of these lenses, that's when we started to recognize the possibility of augmented reality beyond just self-expression.

So what you mentioned is

trying on clothing is a huge area of investment for us because it's a way that augmented reality provides a huge amount of utility and differentiation

to merchants and monetization as well.

Because what we find is when people can visualize themselves trying on clothing, of course, they're more likely to buy that clothing and they're less likely to return it, especially if we can help them find the right size.

And so that's really a way that augmented reality today can make the shopping experience much better from the comfort of your home without having to actually change your clothes.

So a whole commerce business that you're thinking about, essentially?

Not commerce on Snapchat per se, but powering commerce with augmented reality, you know, with all sorts of merchants.

So we built out this AR enterprise team that's taking our AR shopping suite and helping merchants integrate our AR technology into their own applications and websites to help.

And then what do you get, a part or a piece?

Well, today, you know,

today we're just working on growing that business and getting feedback from our beta clients.

But over time, what we're planning on doing is more of an AR enterprise business model where there might be some small setup fee or something because it takes quite a lot of work to get it integrated up and running.

And then if we're really driving conversions for you because more people are trying things on and they like how they look and they want to buy, then we can take some small fee off of that transaction.

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So I want to do a compliment before a hard question.

I'm coming back as you in my next life.

Just FYI I've decided that.

Stocks down 75% this year.

But you're very handsome.

Go ahead.

Seriously, Tall Drink of Lemonade.

All right, that's enough.

Sorry.

Growth is slowed.

And

this is a boomer question.

I've served on a bunch of public company boards.

I listened to your earnings call last night.

You didn't say anything.

How is your board not letting you speak on earnings calls?

Why aren't you speaking?

Isn't this exactly the time where CEOs should be speaking directly to investors?

That that was a huge mistake that I shouldn't have made.

To be honest with you, I wasn't even thinking about it.

I was obviously I'm on the call.

I'm waiting for a question.

No one asked a question addressed to me.

So it wasn't planned.

You just felt like there were other people.

I don't mean to put words in your mouth, I'm sorry.

Yeah, no, it wasn't planned.

I was waiting.

I actually kind of expected a question, kind of given everything going on.

But I'd also come in person in May to pre-announce that we were going to miss the bottom end of our guidance to a big investor conference, answered a bunch of investor questions there in person.

So I wasn't thinking, oh, I'm not engaged with investors, because I spend quite a lot of time answering their questions and really helping them understand our business.

And we thought we were doing the right thing by being really transparent and coming out and saying, hey, we're going to come in below

the low end of our guidance.

And obviously, plenty of other companies missed in that.

quarter too, but we thought it was important to pre-announce.

And so then when we were on the call, generally on all these calls,

we

let folks answer the question.

I don't think it was appropriate to step on top of Derek or Jeremy or something like that to answer it.

Can I follow up with a question?

Sure, go ahead.

You may.

Thank you.

Thank you, Karen.

So you own 13% of the stock, but you have 51% of the voting stock, which means you control the company.

That's the math I do.

You control it.

It feels like everyone but Facebook and Google in this space are sub-scale.

And unless they break out and start growing again, they should be acquired or they should partner with another company in terms of if they were really shareholder driven.

At least that's my view.

If at some point you didn't start scaling again

and someone like Comcast or Google approached you at this conference and said, we'll pay 100% premium for your stock today.

Would you entertain selling the company?

Before he answers, let's play something from 2018.

Okay.

Do you regret not staying private then?

Smoothing out things as you do this?

I think this was the logical step forward in being an independent company.

So when we raised a lot of money from venture capitalists, you know, I guess our first investor invested at like a $4.25 million valuation.

The understanding from the venture capitalists was that we were going to provide an exit for them.

And that was either going to be in the form of an acquisition or that would be in the form of an IPO.

So you did it for the venture capitalists?

Because they don't care, and you shouldn't care about them, but go ahead.

To be honest with you,

we do care about them, and we do care about our investors.

And I think for us, this was a really great transition to take what is ultimately short-term capital.

Venture investors are short-term investors.

They invest for a couple years and then they rotate out of their investments.

And so we were able to transition inherently short-term investors to long-term investors.

And despite there being a little volatility that comes with that, ultimately, that's the right thing to do to build our business.

By the way, I did not know that video was going to happen.

See, there you go.

Well done.

Sorry, because I'm the brains of the operation.

So,

answer his question.

Well, gosh, so as you point out, Bobby and I own 20-something percent of the business.

We're very focused on its long-term success because we own it.

But you control, just to be clear, you own 99%.

You control the, you make all the decisions.

Right here is the company.

You own 51% of the voting shares You make every decision at the end of the day.

Everyone else is just an advisor They're all influencers.

You're the decision maker at some point Would you personally be open to selling the company if it was fairly apparent it was the best thing for shareholders

Well personally from where I sit today when I look at the long-term opportunity in our business I really believe it's enormous.

I believe we're far from reaching our full potential.

And I believe over time, you know, the stock price has gone up and down.

And we've tried to stay focused on delivering, you know, real value for shareholders.

You know, since our IPO, we've, I think, grown revenue 10x or something, last 12 months, revenue 10x.

It's about

50 plus percent year over year on average for the last five years.

We've doubled the size of our community.

We believe those things are really important for building long-term value

for shareholders.

And of course, along the way, we've really tried to continue to innovate, to increase our long-term opportunity with things like our map, for example, our augmented reality platform.

These are big innovations and big investments that we think really contribute to the long-term value of our business as we monetize those parts of our service over time.

And so, if you look at the engagement across Snapchat, 350 million daily active users growing really rapidly, and the level of monetization of our service right, on a just average revenue per user basis, I think it's something

still today, like half of Twitter's, right?

Certainly a small fraction of Facebook's.

And so when we look at our overall opportunity, we look at the engagement just on the core Snapchat platform today, we believe we have an enormous amount of opportunity ahead of us.

So we've really got to focus on executing.

It's going to be difficult because you're right, we are smaller than these other very, very large companies.

But these other very large companies started as small companies too.

They were asked many of the same questions about competition.

They were asked many of the same questions

about revenue growth.

They faced a lot of volatility and many challenges themselves.

That's the difficulty of building an independent business.

But I think so far, Bobby and I believe that the best way to realize our long-term potential is by building an independent company.

And I think, you know, while the stock price has gone up and down over time, we have slowly and steadily increased the long-term value of our business.

We'll be back in a moment with more from Code.

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Welcome back.

Here's more of our conversation with Evan Spiegel at Code.

Code.

So let's talk about small companies.

We have a lot of talk about tech regulation here.

You've said in the past you would support thoughtful regulation.

How do you look at the

most of the people who have been on stage here do not support Amy Klobuchar's antitrust bill.

There's lots of bills out there.

There's some in Europe, everywhere else.

How are you looking at the regulatory landscape as a smaller company compared to these larger?

You wouldn't be subject to many of these things.

How do you look at that?

Well, there are so many pieces of proposed legislation flying around all over the world right now that I think it's really hard to engage sort of piece by piece.

So I think for us it's much more important to sort of look at like the big ideas that might influence the way that tech evolves in the future and more importantly to build a strategy that does not rely on government intervention for our success.

I think historically these processes have taken a long time.

The outcomes have been quite mixed.

And what's been really important for small businesses is not to wait for the government to come to the rescue but actually just to continue executing on you know the our strategy to focus on our community which is so important to the long-term growth of our business and just to continue to delight them with great products.

So while we're keeping an eye on that, I think there's just too much

through the antitrust bill.

Would that help you if it passes?

Again, it's so hard to know because in its current form, I'm sure it would change a lot before it ever was considered to pass.

So I don't know, and it's hard to respond to.

And we could spend so much time chasing all this legislation around, but that would take us further away from our customer and really delivering value for us.

So right now, what companies do you view as your core competition at this moment?

I think today as it pertains to performance advertising, direct response advertising, which is a big focus of ours,

Meta continues to be a very, very large

and challenging competitor.

Meta continues to be.

How do you look at what's going on?

And they've made a big bet on the the metaverse.

How are you looking at that?

You talk about AR, but not meta.

Well, we like to talk really specifically in terms of the value that we provide our community, which is why AR is so important to our strategy, because they know what it is, they use it every day, and they love it because it brings value to their lives, right?

It helps them express themselves or learn about things in new ways or even solve a meth problem.

I mean, you can point your Snapchat camera at a really complex

quadratic equation, and our camera will help you solve it.

And so I think AR is really real in the lives of our community because of the utility that it provides.

And so we try to talk really specifically about that and show our community

our innovation rather than sort of talking about some future.

Do you have any investments in doing that averse stuff or are you just like whatever, Mark?

We've been trying to figure out what it means.

It seems to mean virtual reality, you know, putting on a headset and sort of escaping the real world and going somewhere else.

And that's going in a totally different direction than our strategy, which is about integrating computing into the real world.

We believe that that's the healthiest way to use computing.

It's the most familiar because you can rely on all of these interactions that you're used to, of course,

from just navigating the physical world.

And so our focus in our business is we believe most people are going to spend most of the time in the real world.

And how can we augment that and make that better through computing?

And that's really different than this idea of virtual reality, which is about escaping the world.

Scott, last question.

So you're a, well, by most standards, by tech standards, you're a young dad.

You're 34, is that right?

32.

Jesus Christ.

You have two young kids and an 11-year-old.

And do you have any, I mean, you're facing, you have a tremendous amount of business pressure, and you're under a lot of spotlight and a lot of scrutiny as a public company CEO, and you have three kids.

Do you have any advice for young fathers in terms of trying to balance

the push and the pull of having that kind of scrutiny and that kind of pressure and also trying to manage a household with three kids and be a good partner?

So I struggle with it every day.

I mean, you know, just before going on stage, I'm thinking about, you know, I'm hosting a dinner after this.

I'm thinking about, do I have 30 minutes in between the time I get off stage?

You know, 15 minutes to drive home, 15 minutes to read to Hart, who's our

four and a half year old, before I have to go to this dinner so that I can have that precious time together.

It's all-consuming.

I think this is, as parents, what all of us struggle with all the time.

And Miranda's actually out of town for these couple days, which is not ideal timing.

So

yeah, it's difficult.

It's always difficult.

I haven't found a magic solution or answer because I also feel an enormous responsibility to our business, to our team, to our community, hundreds of millions of people that use our product.

And so I feel pulled in you know, a million directions all the time.

So I wish it were easy.

I think it's hard.

I think it's hard for all dads to make those

trade-offs.

And it was much harder before the pandemic because I really rarely saw our kids.

I would get up and go to the office before they were awake.

I'd get home obviously before or after they...

had fallen asleep.

I was traveling, let's call it half the weekends, and it was eating at me.

And the last couple of years profoundly changed my life because I got to be home with them during such a formative part of their lives.

You know, now the two youngest are both off to preschool this year.

And, you know, so I just feel so grateful to have had this little moment in time to be with our family like that because I, you know, I know that that's not what it's going to be like going forward.

All right, questions.

All right.

You weren't expecting a dad question, were you?

Okay.

Right here.

Hi.

Okay.

Until today, I just searched you up on Google and you're 32.

That's kind of crazy.

Right.

So that means I was one of the first Snapchat users probably back in like 2010, 2011, something like that.

And I didn't know you were 22 or 21 at the time.

So what was your biggest challenge finding partnerships for your startup?

So in terms of finding partnerships, I think the bigger challenge for us early on, you know, as the as the service started

growing was that most people hadn't used it.

Many people, if they knew about it, knew about it through their kids.

And so, actually, what we found very quickly is: you know, we talked with partners or spoke with investors, we could really quickly filter, you know, partners and investors by whether or not their kids had used Snapchat.

And if partners had kids that used Snapchat and investors had kids that use Snapchat, they totally got it right away and were ready to have a really interesting conversation.

And they saw the role that it played in the lives of their kids.

And for investors and partners that didn't, it was so hard to overcome the misperceptions, the confusion about

Snapchat that at that point we just kind of flipped the conversation, tried to figure out how much can we learn from them because we know that it's really going to be difficult to get any investment or partnerships.

So I think it was really just about the level of understanding of our partners or investors.

Hey, Evan, Alex at The Verge.

So the only thing you and Mark Zuckerberg agree on, I think, is that ARGLASS are...

going to be big one day.

The problem is that they're investing a lot, but way more than you can.

Apple is going to to come into it as well.

And so this conversation has revolved around companies being able to invest more at scale and how that impacts companies like yours.

You implied in your annual letter yesterday to employees that the next version of spectacles will be dev-only as well.

So it's going to take a while for it to hit consumer scale.

How do you do hardware in that environment when you've got these massive companies that also think what you think about air glasses?

Do you want to license Snap OS, the software in the glasses, to another company?

Is that how you survive if that transition to wearables really happens, like you think it will?

A lot in there.

Okay,

so first and foremost, I think one of the things that's so exciting about the technology industry over time is that capital is not always a predictor of success.

That's, I think, one of the things that draws so many people to this industry and excites so many people about this industry because true innovation, especially long-term, complex, technical innovation, can create really breakout products even when your competitors have way more money and are spending a lot more and hiring more people.

Because in fact, I think what happens is that many of those companies that are spending a lot more money aren't having to make hard choices.

And design is all about those hard choices and trade-offs.

And when you have lots of money and someone presents you with three options, you know, you say, let's do all three, right?

And that means that ultimately over time, you miss the opportunity to learn and to iterate and evolve the product as quickly as you could if you were really constrained by

the amount you could invest.

And so, we're not constrained the way that we were a few years ago when we started investing in spectacles.

I think we started working on our glasses product seven or eight years ago now.

We took a very measured and step-by-step approach, you know, first integrating one camera, then two cameras, then really understanding

how 3D could play a role with content, then, of course, releasing glasses that have a display now.

And we've learned along the way making those tough design trade-offs so much about what people want from AR glasses.

And so to your point, we have along the way also developed really amazing software.

And now that people are understanding how difficult it is to build

an AR platform, not only in terms of the Snap OS, but also in terms of the developer platform with Lens Studio, the engine itself that runs

lenses, you're right, people are asking us, hey, can you help out with your software?

We're working on our glasses too.

So I think that might be an option for us in the future.

But when we started, nobody was working on glasses for consumers.

That's why we had to start working on it ourselves, because we believed that breaking AR out of the confines of this phone, right, with this tiny touchscreen, was going to totally transform the experience for our community because it's immersive.

You can walk around, you can engage with your hands in a totally different way.

And that's why we started building it.

So obviously, I can't predict what the future will hold, but what gives me a lot of hope is that historically in our industry, spending huge amounts of money is not always correlated with long-term success.

You should be speaking on earnings calls, trust me on that.

All right, one more very quick question right here, and that's all we have.

We got to get to the last panel.

Go ahead, very quick.

Thanks.

Hi, Clara Chan with the Hollywood Reporter.

You announced some pretty major restructuring last week, part of the layoffs, and one of the parts I was interested in was the departure of Snap Originals.

And I'm curious, why did Snap not find success with original content?

I mean, YouTube's also moving away from it.

Are we going to see other platforms that primarily have user-generated content essentially get scared off from

attempting original content?

Yeah, so as we looked at restructuring our business, one of the primary things we were focused on was focus.

We really wanted to help the team rally around our core priorities because we really believe that that focus is what's going to drive the results that we're looking for.

And so, while we've actually had a lot of success with originals, and many of the originals we've created have reached a really large audience, of course, helped us drive revenue.

What we found was that making original content is not one of our core strengths.

We're much more focused on technical innovation around our core platform.

And that's really what our team needs to focus on right now.

So, it's one of those heartbreaking instances where you're faced with really, really tough trade-offs and choices.

And in this case, we said, you know, look, let's focus on, you know, what our core strengths are because we can't do everything in this really volatile and uncertain macroeconomic environment.

And our partners are incredibly good at making content.

I mean, I think this year we're on track to pay out more than half a billion dollars to our content partners and creators who make amazing content on Snapchat.

And so with all these amazing partners that we're working with who have found a sustainable business model, you know, releasing their content on Snapchat, we're going to focus on that strategy and then, of course, you know, really evolve the platform rather than

working on something that's outside of really our core strengths, even though it's been a really important piece of our business historically.

Okay, Evan, you really just should speak on earnings calls.

Thank you so much.

We really appreciate it.

We'll have more bonus episodes in the weeks to come.

Stay tuned.

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