Whenever a technology company gears up to go public, I feel a wave of empathy tinged with nostalgia and a little PTSD. Nearly three years ago, Box, my then-employer, filed to go public. Ten grueling months later, we finally pulled it off. We dropped our S-1 at the start of a pretty brutal market correction and morphed overnight from a darling of enterprise software to a cautionary tale. The subsequent months were spent clawing our way back to a more nuanced place somewhere in between. It was the hardest and best thing I've ever been through professionally.
Of course, Snap is a very different beast, and its IPO is a very different (and much larger) IPO. To state the obvious: Box is an enterprise software company; Snap aspires to be the modern "camera company." Box is an open and vocal product of the Valley; Snap prefers a more secretive existence in Venice. Perhaps most importantly, Box's CEO has never been photographed by Vogue.
Despite these differences, I believe the survival of any high profile IPO ultimately comes down to your story: how well you tell the parts of it you can control, and perhaps more importantly, how well you anticipate and prepare for the parts you can't. Some of the communications lessons we learned the hard way at Box seem to apply to Snap, and I'm not the only one who thinks so (hi, Dan!).
But first, some disclosures. I am a happy Box shareholder and cheerleader, but no longer an employee (I used to lead communications). And although my whopping Snapchat score of 202 might lead you to assume otherwise, I am not an expert on Snap, nor anything else #teens find exciting.
Lesson #1: Understand what story your numbers tell in a vacuum.
The S-1 is a major production. It's a chance to perfectly articulate your strategy on the brink of your most profound state change as a company. While the communications team obsesses over the Founder's Letter, your colleagues in finance will drop in the requisite charts. It turns out those charts, if disappointing or surprising in any way, will overshadow everything else in that carefully crafted document.
At Box, we of course understood how our financials reflected our long-term strategy. I'll spare you the SaaS gospel. But to people who were seeing our accounting for the first time, the numbers did not tell an obvious story. There was no easily projectable path to profitability for people who weren't familiar with our business model, and when the market started to go south for SaaS stocks, we became the poster company for the end of the "growth at all costs" era. Clouded by too much context, I had thought the numbers would be part of our story, not the story. In hindsight, we should have done more education about the mechanics of our business in advance — something that most startups happily ignore in favor of technology and people-driven stories. Now two years post-IPO, Box has worked to prove it has a healthy and sustainable business model, quarter by quarter, earnings by earnings.
The Snap S-1 is a fascinating read. You can see Evan Spiegel's fingerprints all over it. It's a rare glimpse into a truly remarkable company, and one that prides itself on being mysterious. But Snap's metrics dominate the story, including its costs and slowing user growth. Snap surely has a plan, but to the numerically-inclined outsider who has never enhanced a selfie with dog ears or rainbow vomit, the path forward might not be obvious. These numbers, and especially where they sit on a spectrum that includes the likes of Twitter and Facebook, will be the prevailing narrative until they change (or Snap does the hard work of helping us understand why that's the wrong spectrum).
Lesson #2: Be ready for your momentum to turn against you.
Understanding where you are in your narrative arc is one of the hardest things to grasp from inside a company. The year leading up to Box's filing was all momentum. We'd raised a boatload of money, back when that was only interpreted as a positive sign. Our CEO was on the cover of Inc as "Entrepreneur of the Year." Dropbox seemed to be struggling with its business offering. Things were good!
I remember when longtime Box board member Josh Stein gently warned me that at some point, the positive narrative simply wouldn't be interesting anymore. That we should prepare for some sort of backlash as soon as folks had the ammunition. Smart guy! (This guy is smart, too.)
Now Snap has already had higher highs and lower lows than pre-IPO Box (for some strange reason, wildly popular apps for teens get more attention than content sharing platforms for businesses). But its IPO comes at an interesting time: on the heels of its Spectacles-induced media frenzy. Surprise hardware launch? Check. Vending machines filled with aforementioned hardware dropped in exotic locations? Check check. Heightened buzz around Snap's threat to Facebook? Check check check.