Many people tend to be binary thinkers.
So, they see things as either A or B, and don't consider the option of Q.
The Snap IPO has a bit of this problem.
A lot of people are thinking that it is either going to be like Facebook, which is up more than 250% since going public in May 2012 and is still growing users and revenue like crazy, or Twitter, which has lost more than half its value since going public in November 2013 and has basically been stuck in place for a couple years.
It's entirely possible that it's like one of them. But it's just as likely to be similar to Tesla, or Amazon, or Ford, or some other random company.
If you insist on thinking about Facebook versus Twitter, here's a reason to think Snap is less like Twitter and more like Facebook.
Snapchat CEO Evan Spiegel is widely hailed as a product visionary in Silicon Valley.
Former Twitter CEO Dick Costolo privately raved about Speigel in emails that were later leaked, saying, "I really think he is one of the best product thinkers out there right now."
Mark Zuckerberg paid Spiegel an even bigger compliment — he tried to buy Snapchat for $3 billion, and when he was rejected he decided to clone just about every aspect of Snapchat he could clone.
Spiegel is also a known control freak who gets directly involved product decisions, similar to his idol Steve Jobs, whose picture reportedly hangs in Spiegel's office. Spiegel is so determined to retain control of Snap after it goes public, the common stock will contain zero voting rights -- an unprecedented move that will ensure Spiegel and his cofounder Bobby Murphy retain control over all big decisions. If Snap succeeds or fails, it will be because Spiegel succeeds or fails.
Why does this matter in the comparison to Twitter and Facebook?
Because Twitter executives never managed to create great product innovations on their own in the early days of their products. As Sarah Friar at Bloomberg pointed out on a recent podcast, Twitter's most important innovations came from its users. Hashtags, which are used everywhere, were a user invention. The "retweet" which helps tweets go viral was a user invention.
In comparison to Twitter, Snapchat's product innovation has nearly all come from its team, not its users.
What does this mean for the stock? Who knows!
But if you're worried that Snapchat is the next Twitter, you probably shouldn't be.