THE CORNELL DAILY SUN | Tuesday, March 14, 2017 5
OPINION
The Corne¬ Daily Sun
Hebani Duggal | Teach Me How to Duggal
Independent Since 1880 135TH EDITORIAL BOARD
SOPHIA DENG ’19 Editor in Chief
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Letter to the Editor
Why we should value Snap To the Editor: The basic premise of Soren Malpass’s “The Value of a Snap” was that we will be looking at another dot-com crash if today’s venture capitalists keep up their current investing habits. The author questioned the valuation of a number of well-respected unicorns and specifically targeted newly-public Snap, arguing that the service that Snap offers doesn’t justify its (at the time) $28 billion valuation. Frankly, I think the analysis of the industry, and Snap’s business specifically, was lazy. Here are my qualms with the skepticism over Snap’s valuation: 1. The idea that a business cannot be legitimate if it only relies on advertising revenue is ludicrous. Two of the six companies with the current largest market cap (Google and Facebook) get over 80 percent of their revenue from advertising. The placing of Google based on information that they deduced about you from your internet habits, which can sometimes lead to incorrect assumptions about users. Facebook ads are an upgrade on Google ads because all of the information that Facebook uses to target ads is offered up voluntarily by the user and therefore is much more accurate than the information Google uses. Snapchat advertisements are better than Facebook ads because they are either video, which allows advertisers to quickly engage viewers, or they are sent from friend to friend as part of a filter or lens, in effect having a friend endorse some product/event. This endorsement from someone a customer trusts is an advertisers dream. Because Snapchat’s ads are more effective and engaging, they can justifiably charge more for their advertising services than even Google and Facebook. 2. The author delegitimizes how important lenses (or bunny ears) are to Snap's overall product roadmap. Augmented reality, of which lenses are an example, is going to become a huge part of our day-to-day lives over the next decade. You only need to have heard of Pokemon Go to understand the craze that augmented reality can create. Snapchat has possibly the best AR technology in the industry and currently has a huge number of consumers using it. The thing that really cements a company as a dominant player in any industry is when they become a platform that other products are built on top of (see Microsoft — Windows; Intel — Core i7; Facebook — identity management for websites). This is what Snap has the opportunity to do with their current lead in AR: become a platform for the development of AR software by other companies. If they can successfully achieve that, Snap will be a Fortune 100 company for years to come. 3. A smartphone app is not the long-term focus of Snap. Snap has continually defined itself as a camera company. Smartphone apps are the easiest way to scale a service if you're a poor college student with little money but a great idea — you release it to the app store and everyone can use it immediately. It makes sense that Snap’s first product was Snapchat. Developing hardware is another story altogether. Spectacles is Snap's first step in developing a focus on hardware, and now that they have a huge influx of cash from their IPO they will push research and development further in that direction. When they start incorporating real-time AR into their glasses/cameras, they will be untouchable on that front. This shallow analysis of valuations extended beyond Snap to the industry as a whole. No investor in their right mind would invest hundreds of millions of dollars into a company that has “no real means to generate revenue.” The reason these companies are not generating revenue already is because they are focused on growth first and foremost. It is much easier to scale a product if the user experience is not impeded by ads or if prices are too high. Growth companies focus on adoption first, and only when they are satisfied that a slight drop in user experience will not scare off consumers do companies start to focus on making a profit. This is not to say that leaders in these companies do not have a plan for monetization — only that their product doesn’t reflect that while they are working hard to expand. While many of these companies don’t currently make any profit, I’d have a hard time believing that none of them ever will. In fact, out of the 226 companies listed as unicorns as of March 6, I believe that one of them will get to be the size of the big 5 technology firms (Apple, Microsoft, Google, Amazon and Facebook, all valued at $400 billion or more) and four more will get to one quarter of that valuation. If this turns out to be true and the valuation of every other unicorn goes to zero, the sum total of those valuations would be $800 billion, which is actually more than what all 226 companies are currently valued at in aggregate, $775 billion. With this in mind, it appears to me that our current unicorns are in fact undervalued. So rest assured that there is no calamity on the scale of the dot-com crash on our horizon. James Mackey ’17
Technologically Shook
I
have hit the point in the semester where I could not bring myself to care less about things even if I tried. I thought I hit that point two weeks ago; unfortunately, I was wrong, and here I am, eating ice cream out of a tub in the middle of Klarman Atrium. I can feel even the statues frowning at my life decisions. Two weeks ago, I wrote a horrific column on something related to technology and how people make it out to be worse than it is and why that was a narrow way to look at a complex topic, especially one that is not going anywhere just by having us wish it away. Quite frankly, I hated it, and I would like to apologize to anyone who’s eyes might have perused those particular set of words. It wasn’t so much that I didn’t agree with what I had written — I very strongly believe that we tend to classify what is online as unreal and what is tangible in our lives as real, and in that lies our fallacy in understanding the role of technology in our lives today. However, that is nowhere near a complete picture
I like their values,” I slowly replied. Their values. I chose Airbnb as my tech workplace of choice because I liked that their Superbowl ad and their recent stance against transphobic homeowners demonstrated a progressive trend in their company values. What a strange reason to choose a company, I thought to myself. After having given it a couple days of thought, I don’t actually believe it was that strange of me to choose a company based on its values at all. But a part of me does question how fair it was: is it right to hold a company in either high or low regard based on their values or the values of their leadership? Take, for example, Uber. Their CEO, Travis Kalanick, has had an interesting year in the limelight. First, he decided to sit on the Trump Advisory Council, a move that did not sit well with Silicon Valley, tech elites and the entirety of Twitter (#deleteuber, anyone?). Public outrage might have prompted Kalanick to step down, however, his woes did not end there. A viral blog post by a former
After having given it a couple days of thought, I don’t actually believe it was that strange of me to choose a company based on its values at all. But a part of me does question how fair it was: is it right to hold a company in either high or low regard based on their values or the values of their leadership? of how I believe tech interacts with our lives today. As a columnist, I always struggle with raising topics up again that I have already spoken to in the past. I don’t believe I have actually ever done it, not necessarily because I don’t believe you shouldn’t be able to address the same issue twice, but because I have found other questions to occupy my mind and subsequently my place in The Sun’s opinion section every other week. There are two topics, however, I know I will address multiple times over the course of the last two semesters I have left with The Sun: technology and makeup. I’ve written articles on both before, but I’m just not done talking about them. This week, however, we are readdressing tech. Trust me, I wanted to bring up make up again, but given how literally SHOOK I am from Cornell Fashion Week, I need at least a week to recover before I may contribute well formed opinions about the week on campus (stay tuned, shameless pitching will never end). I ended up deciding to expand on some thoughts I hold about tech today after a recent conversation with a friend. “Given the choice to work at Airbnb, Snapchat or Uber, where would you work?” Let me begin by first stating that should I ever be choosing between such options, someone please remind me to pinch myself and then proceed to enjoy several wine nights with friends. Also to attempt to negotiate for as much as I possibly can before they realize I do not deserve these offers and rescind them immediately. After all that has occurred, I believe I would be inclined to choose Airbnb. “Why?” asked my friend. “Well, because
female Uber engineer relayed stories of rampant sexual harassment and H.R. nightmares within the company. Days later, NPR reported that Waymo, the origin of Google’s self-driving car project, had filed to sue Uber over claims that “thousands of design files that had been inappropriately downloaded from [Waymo] servers.” Oh, and this is all in addition to the criticism Uber and its business model already faces for its labor abuses. My point here is not to outline simply the ways in which Uber is the worst. In fact, you could even argue that for all of Airbnb’s great “company values,” their business model contributes to an increase in negative wealth distribution and feeds into greater income equality within the American economy. My point, rather, is to highlight that as nice as it is to profile Silicon Valley startups by the value they and their top executives seem to promote, it is not entirely accurate. We must recognize that even companies that strive to create atmospheres of diversity and acceptance are susceptible to the same vices as many other tech companies share — the lack of women in their workforce, contributions to a greater economic disparity not only within Silicon Valley, but throughout the nation (Uber and Airbnb are two very fitting examples). It is important to make progress and recognize the progress that is being made, yes. But it is just as important to continue creating room for more opportunities, more inclusion and less division. Hebani Duggal is a junior in the College of Arts and Sciences. She can be reached at hduggal@cornellsun.com. Teach Me How to Duggal appears alternate Tuesdays this semester. Comments and responses may be sent to associate-editor@cornellsun.com.