Week in Review - Is Snap latest play too ambitious?

Hello friends, and welcome back to Week in Review!

Last week, I wrote about crypto turning on Elon. This week, I’m looking at Snap’s high-growth year and the potential dangers of their ambition.

If you’re reading this on the TechCrunch site, you can get this in your inbox from the newsletter page, and follow my tweets @lucasmtny.

The big thing

Snap has always framed itself as a “camera company” first and foremost but for the past several years, it has been clear they’re staking their growth trajectory on being an augmented reality company when the time is right.

This week, that became a little clearer as they showed off a clunky first-generation pair of Spectacles with dual augmented reality displays built into them. They’re not quite a mass market device given that they have a 30-minute battery life… but they’re a sign that Snap has larger ambitions ahead than chat and picture messages.

That’s not to say they haven’t already found more ambition inside those verticals in recent months.

The company is still trading well below the all-time-high it hit this February, down some 20 percent since, but Snap’s value is three times higher than it was this time last year with a market cap north of $85 billion. After years of stagnant growth that made it the butt of tech stock jokes, the company has fueled a turnaround as its platform has continued to find more revenue and more users.

But even though the company’s stock popped on the reveal of the company’s AR glasses design, there are reasons to be wary. Even as a company well on its way to a $100B market cap, there is some concern whether its efforts to become a hardware player in this space competing with Apple and Facebook is too daunting a challenge for a tier two tech giant.

Apple and Facebook have thousands of employees developing AR/VR hardware with Facebook very publicly having dumped billions into its AR/VR efforts. Augmented reality has been lauded by plenty of tech executives as the clear successor to mobile as we know it and is an opportunity worth fighting for, but it’s also a clear risk for Snap which will have to commit hard if they want to find a platform opportunity in the space that’s bigger than itself.

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Other things

Here are the TechCrunch news stories that especially caught my eye this week:

ByteDance founder is stepping down
In a surprise announcement this week, ByteDance founder Zhang Yiming whose company runs the TikTok social network announced he will stepping down as CEO of the company by the end of the year.

Everything Google announced this week
This week, Google shared a number of announcements at its virtual I/O developer conference, including what’s next in Android 12, a new flavor of document collaboration and a futuristic 3D video calling booth.

Snap debuts AR glasses
Snap has been a devoted acolyte of augmented reality for years, but this week they finally showcased a pair of augmented reality glasses — beating Apple and Facebook to the punch. The lightweight glasses are still far from sexy and seem to be geared towards creators.

Bitcoin suffers a major crash
This week in crypto news… Things took a bit of a dive this week and though prices seem to have leveled out for now, investors seem less bullish that the future of crypto is up and to the right — in the short-term at least.

Review: 2021 iPad Pro with M1 chip
Shocker: the new iPad Pro running on Apple Silicon is intensely quick, also not surprising, it’s the software, not the hardware, that’s holding the device back.

US Treasury calls for stricter crypto rules
The US government is still piecing together its crypto financial policy, but the Treasury department seems to be forming more stringent guidelines on tax policy, announcing this week that businesses would be required to report cryptocurrency transactions above $10,000 under new requirements.

Extra things

Some of my favorite reads from our Extra Crunch subscription service this week:

Chasing hype is human nature: the tyranny of startup trends
“The hype around a given business or category has become a form of bias for investors and founders when vetting ideas to pursue. At any point in time, you can find FOMO-flavored bad business decisions based on false market signals somewhere in tech. It’s human nature for excitement to be contagious, but treating it as a leading factor when considering a new opportunity is not a good idea.”

Want to double your rate of return?
“Our analysis of startups with successful exits found that companies with multiple founders who have prior relevant leadership experience will exit 33% faster — but this earlier exit is coupled with a finding that they will have also raised 34% less capital. Combined, these two improvements can nearly double an investor’s rate of return.“

5 innovative fundraising methods for VCs
“Approaching institutions to raise capital for your venture capital or private equity fund is relatively transparent, but what if you’re targeting family offices and high-net-worth individuals? I see five innovative new methods for raising capital that emerging managers such as Versatile VC are using, which I’ve ranked in roughly descending order of popularity…”

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