Lenny's Podcast: Product | Career | Growth
00:05:25 · Evan Spiegel, Lenny Rachitsky
And so if you could just connect someone, not to all their friends, but to their best friend, to their partner, to their spouse, the people that they cared most about in the world, that's where the majority of the value is in the network. And so that's what really allowed us to grow in those early days. We had the benefit of the app store and mobile distribution, but we also had a different way of growing our service, which wasn't about having the most friends. It was about having your close friends. [00:05:52] S0: That is so interesting. It's something that I've been thinking a lot about actually, this idea of distribution, because of AI. If you think about just where AI has come into the market, it started originally just like helping people auto complete code. There's something I've been talking about a lot on this podcast. So it's like, okay, auto-complete code. Okay, now it's writing all our code. Okay. Now it's reviewing our code and now it's testing itself and now it's going to help us come up with ideas. So it's like starting in the middle of the product development process and expanding out. And I feel like it will be very good at coming up with great ideas and developing strategy. It's going up, I don't know, the funnel or the timeline of building a product. And I feel like distribution is where it ends up being, what ends up being the new moat and the new biggest challenge because AI is not going to really help you there. So it's really interesting that that's even more so true for consumer products.
00:06:37 · Evan Spiegel, Lenny Rachitsky
[00:06:37] S1: No, I think that's absolutely the case. And the only thing I would say is the most exciting times in technology are when there are new platforms that get created. And that tends to be where a lot of the value comes from. You think about a lot of the big consumer technology companies today, they were really born out of mobile, whether it's Uber, Snapchat, some of those early generation companies that really got distribution and built themselves on mobile. And so I think as we look forward to these next generation form factors, things like glasses, there's going to be a whole new set of opportunities and a whole new surface for people to build generational consumer companies. And I'm really excited about that. [00:07:12] S0: Especially if they have distribution already. I'm just worried for startups. It's going to be very hard to get distribution just like there's so much launching every day, so much to pay attention to. And it just feels very hard for a startup to get any attention against existing incumbents. [00:09:17] S1: Oh gosh. Well, I just saw Instagram plus launch, so I think that's the latest rip. Which is a subscription. Yeah, I think we just hit 25 million subscribers on Snapchat plus more than a billion revenue run rate. So was I think probably enough to get Meta's attention that it's a good time to copy.
00:09:17 · Evan Spiegel, Lenny Rachitsky
[00:09:17] S1: Oh gosh. Well, I just saw Instagram plus launch, so I think that's the latest rip. Which is a subscription. Yeah, I think we just hit 25 million subscribers on Snapchat plus more than a billion revenue run rate. So was I think probably enough to get Meta's attention that it's a good time to copy. [00:09:35] S0: And the plus, he's just even taking the plus as the name. Oh my God. Let me just ask you, as a human, how does it feel just to see this consistently happen to you? You guys come up with something awesome, someone rips it off, benefits hugely from it, and you just have to keep doing that again and again.
00:09:55 · Evan Spiegel
[00:09:55] S1: It's certainly better than making stuff that people don't want to copy. So I think in many ways it's a blessing that we've been able to continue to innovate to make new things that really resonate with folks and that ultimately people want to end up copying from Snap. So I think it certainly beats the alternative, but it does mean that we have to be really thoughtful about our strategy. And so I think one of the things, it's been an interesting time for me to reflect a lot on our strategy over the last 15 years, because 15 years ago, we essentially learned that software is not a moat, which is something that everyone is discovering today with AI. But 15 years ago, because all the software features that we could create were so easily cloned by our competitors, we started to think about how to build a more durable business, how to build a business that had bigger and more effective modes. One of the first things we did was focus a lot on building ecosystems, whether those are the relationships between creators and Snap-chatters, whether that's the platform we built around augmented reality where developers have built millions of these lenses. So it's very easy to copy software features. It's very hard to copy or to replicate a full ecosystem or a platform. And so we realized that the more that we could build a platform around our business, the more that we could build an ecosystem with creators and developers, the harder it would be for folks to just copy that. And then it also informed a lot of our thinking about investing in other places that are really hard to copy, including hardware, where it's really, really challenging to copy our fully vertically integrated stack around augmented reality. So I'm certain there's a lot more to talk about there, but I think we learned early on that software's easy to copy, and so it's really important to build more durable modes.
00:11:40 · Lenny Rachitsky, Evan Spiegel
[00:11:40] S0: That's really interesting hearing this from you. And I was going to get to this later, but we can talk about this now, this big investment you've been putting into hardware. You would think network effects would be the moat. That's what everybody's always trying to get to because that's classically a great moat. Are you saying that that's maybe not even as great a moat or that's just not enough and then you need something more like say hardware? [00:12:02] S1: I think network effects are certainly an important piece of the puzzle for sure, but I don't think they're enough when it comes to these sorts of software cloning. And so despite the fact that we've got a ton of patents and we protected all these ideas, the way that it works in software is that it's quite easy for folks to copy or iterate on top of these ideas. And so I think in addition to network effects, it's really important to try to build businesses that are more defensible by truly building out a platform that can support relationships between creators, developers, and the community, because that in and of itself we found is incredibly difficult to copy.
00:12:02 · Evan Spiegel, Lenny Rachitsky
[00:12:02] S1: I think network effects are certainly an important piece of the puzzle for sure, but I don't think they're enough when it comes to these sorts of software cloning. And so despite the fact that we've got a ton of patents and we protected all these ideas, the way that it works in software is that it's quite easy for folks to copy or iterate on top of these ideas. And so I think in addition to network effects, it's really important to try to build businesses that are more defensible by truly building out a platform that can support relationships between creators, developers, and the community, because that in and of itself we found is incredibly difficult to copy. [00:12:38] S0: It's so interesting. If you think about it, you're working on two of the hardest types of businesses, a consumer social platform and hardware. And I love that you're doing that. And this hardware investment, you've been at it for a long time. You had spectacles, you had drones. I don't think people are remembering yet this drone that could take photos of you. And then you have specs coming out. Is it specs or spectacles the name of what's coming out today, by the way? [00:12:59] S1: Specs is coming out this year. [00:13:00] S0: Specs. [00:13:01] S1: Yep. [00:13:01] S0: Okay, cool. We're going to talk about it, but just maybe you've already answered it, why this is something you're so passionate about, but why this kind of ongoing investment in hardware?