"The question then becomes how much is it actually worth?"
The correct answer is 'what someone will pay for it.' But I recognize that answer is unsatisfactory. Correct me if I am wrong, but I believe you are asking "What line of reasoning about Snapchat results in the highest valuation?" Or to put it differently, how does someone convince themselves that Snapchat could be worth billions rather than a few million at most.
4.) At an estimate of 305MM 'snaps' per day, assuming multiple snaps per user. We can estimate that Snapchat has something north of 70% of the high income youth smart phones captured.
What is that worth? Can you entice them buy 1 thing? What is the biggest expense of any transient product? Customer acquisition. What would you pay to say something to nearly every customer in your market?
My guess is that if your in a product space that depends on consumers in this demographic, then being able to talk to them through SnapChat would be as valuable as a SuperBowl advertisement to you. And if you are an investor, owning a piece of that channel might appear to be a very good bet.
The correct answer is 'what someone will pay for it.' But I recognize that answer is unsatisfactory. Correct me if I am wrong, but I believe you are asking "What line of reasoning about Snapchat results in the highest valuation?" Or to put it differently, how does someone convince themselves that Snapchat could be worth billions rather than a few million at most.
I suspect the answer goes something like this;
1.) 13 - 24 year olds spend a big chunk of money (http://www.bls.gov/cex/2012/combined/age.pdf)
2.) They compose a cohort of approximately 50M individuals. (http://www.census.gov/popest/data/national/asrh/2012/index.h...)
3.) Smartphone ownership in this market is high, and skewed to the high income members (http://www.nielsen.com/us/en/newswire/2012/survey-new-u-s-sm...)
4.) At an estimate of 305MM 'snaps' per day, assuming multiple snaps per user. We can estimate that Snapchat has something north of 70% of the high income youth smart phones captured.
What is that worth? Can you entice them buy 1 thing? What is the biggest expense of any transient product? Customer acquisition. What would you pay to say something to nearly every customer in your market?
Well we know from the SuperBowl that 30 seconds of your time, once a year, might be worth $4M (http://variety.com/2013/tv/news/super-bowl-ads-fox-seeks-4m-...).
My guess is that if your in a product space that depends on consumers in this demographic, then being able to talk to them through SnapChat would be as valuable as a SuperBowl advertisement to you. And if you are an investor, owning a piece of that channel might appear to be a very good bet.