Snap CEO Evan Spiegel lays out plan to grow users and revenue after layoffs

After being ‘punched in the face’ by a plummeting stock price and brutal layoffs, Snap CEO Evan Spiegel told employees this week how the company plans to further grow its revenue and base. users next year.

In an internal note sent to employees on September 6 and obtained by The edge, Spiegel said the company aims to grow Snapchat’s user base by 30% to 450 million by the end of next year, and aims to increase revenue to $6 billion. in 2023. He said the plan calls for $350 million of that revenue to come from the recently introduced Snapchat paid subscription to unlock additional features, which is already on track to hit 4 million subscribers by the end of this year.

“We saw challenges on the horizon and hedged our bets accordingly, but we were still hit hard in the face by the new economic reality of 2022,” Spiegel wrote in the nearly 4,000-word memo to the press. Snap employees. “We did not anticipate the war in Ukraine, soaring energy and food prices, continued high inflation and a more than 45x increase in the federal funds rate since last September. We have decisively entered a new era, and we must adapt and overcome to succeed in this new reality.

To achieve its user growth goal, Spiegel said Snap will focus on “increasing our penetration in at least one new major country or demographic” and onboarding over 30-40 year olds. Directing more users to Snapchat’s Map and Spotlight sections “helps make our service more appealing to our community, harder to copy and more resilient to competition, and increases our longer-term monetization opportunities.”

Russ Caditz-Peck, a spokesperson for Snap, confirmed the authenticity of the memo.

Snap recently laid off 20% of its workforce, cutting entire teams and projects like its recently introduced camera drone. Even still, Spiegel said the company remains committed to augmented reality, which he says “represents the next major evolution in computing,” and that the next generation of its Spectacles AR glasses is in development.

“Leadership in augmented reality is important to Snap because it helps us build a sustainable competitive advantage that comes from long-term investment, building technically challenging things, and growing an ever-increasing platform. harder to replicate,” Spiegel said. “It also positions us to benefit from the next major platform shift: from mobile to wearables. Leading this shift will be one of our most significant contributions to human progress; empowering people to express themselves, live in the moment, discover the world and have fun together.

Here are some other highlights from the memo, which you can read in full below:

  • Snap aims to increase time spent on content by 10% per user in 2023.
  • It wants 35% of users to interact with Snapchat’s Map tab daily and 30% of users on Spotlight, its competitor TikTok, every day next year.
  • The plan is to generate $6 billion in revenue and at least $1 billion in free cash flow in 2023.
  • Snap wants AR-based advertising to make up 10% of its total ad revenue next year.
  • The company wants to increase the number of people using its AR effects, called Lenses, in other apps to 1 billion monthly users by next year.
  • He sets up an AR business division to sell his technology to other companies.
  • “We will help developers explore the possibilities offered by our next generation” of Spectacles in confidence, according to Spiegel, who suggests that the next version will not be available for sale.

You can read Spiegel’s full internal memo, dated September 6, below:

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