In November 2013, Mark Zuckerberg offered Evan Spiegel $3 billion in cash to buy Snapchat. Spiegel was 23 years old. Snapchat had no revenue.

The offer would have made him extraordinarily wealthy for life.

He said no.

In 2016, he was still saying no to a $30 billion offer from Google. By then, Snapchat had launched Stories, a feature that was changing how Gen Z communicated.

It was a visual, ephemeral feed that expired after 24 hours, designed not for the highlight reel but for the raw, unfiltered moments in between.

Spiegel understood what he had. He just could not hold onto it.

Let’s dig in!

Snapchat entered the market in September 2011 with a simple concept of sending a photo, and it disappears after being viewed once.

The founders, Spiegel, Bobby Murphy, and Reggie Brown, all Stanford students, built it around a specific frustration. Every photo you post on Facebook lives forever.

You tagged, edited, and curated obsessively because the stakes felt high. Snapchat removed the stakes. Send something funny, embarrassing. It vanishes in 10 seconds.

In October 2013, Snapchat introduced Stories: a 24-hour feed of snaps in chronological order. It was a small change in mechanics but a large shift in behaviour.

Stories gave people a broadcast channel for their day, not a curated post, not a live video, but something in between. Casual, sequential, ephemeral.

The format caught on fast.

By 2016, Snapchat users were watching 10 billion videos per day.

Zuckerberg had been watching.

Facebook had already tried to build its own disappearing-message product. In 2012, it launched Poke, an app for ten-second messages. Nobody cared.

It shut down in 2014. A second attempt, Slingshot, also shut down. So, buying Snapchat was the clear solution. In November 2013, Facebook offered $3 billion in cash.

Reports said Google countered with $4 billion. Spiegel turned down both, saying that trading the company for short-term gain was not interesting to him.

At the time, this looked reckless.

Snapchat had no revenue. But Spiegel had read the moment correctly: Stories was about to become one of the most replicated formats in the history of social media.

What he did not fully anticipate was what would happen when a platform with 500 million users decided to copy it exactly.

On 2 August 2016, Instagram launched Stories. It was not a variation on Snapchat.

It was Snapchat. A 24-hour feed of photos and videos, a row of circular avatars at the top of the screen, drawing tools, and text overlays.

The mechanics were identical. Instagram CEO Kevin Systrom did not pretend otherwise. "Snapchat deserves all the credit," he told The Verge.

He framed it as format evolution, the same way Facebook's News Feed had been adopted across social networks. But the framing was elegant, and the impact was brutal.

Instagram had 300 million daily users and 500 million monthly users. It had influencers, celebrities, and brands already on the platform.

And it now had Snapchat's signature feature.

Within months, Instagram Stories had more daily active users than Snapchat's entirety.

By early 2017, Instagram reported 200 million daily active users on Stories. That's more than Snapchat's entire daily user base of around 160 million at the time.

The growth curve that had defined Snapchat's story flattened almost overnight.

Snap went public on 2 March 2017, six months after Instagram Stories launched. The IPO valued the company at roughly $24 billion.

It raised almost $3.4 billion on the first day. Then the first earnings report landed: a $2.2 billion quarterly loss, and the stock fell more than 20%.

User growth was not materialising the way investors expected.

Snap had 173 million daily active users by the end of 2017, up from 143 million the year before. That was a reasonable growth.

However, it was nothing like the trajectory that had justified the valuation.

The problem was visible in the mix. North American and European users had stalled. The teenagers and young adults who had built Snapchat spent more time on Instagram.

By December 2018, Snap's stock had fallen from its IPO high of $27.09 to $4.92. They had turned down $3 billion worth of less than $8 billion.

The problems ran deeper than Instagram.

A controversial app redesign in late 2017 merged Stories with direct messages and separated friends' content from brands. Users hated it.

A tweet from Kylie Jenner in February 2018 reportedly wiped more than $1.3 billion from Snap's market cap in a single day.

Over 1.2 million people signed a petition to reverse the update.

Then there was hardware. Snap had renamed itself from Snapchat Inc. to Snap Inc. in September 2016, signalling a bigger ambition.

Spectacles launched with hype, custom vending machines, and media attention.

Snap sold around 220,000 pairs of the first version. It was not enough. Unsold inventory piled up, and Snap took an inventory write-down in 2017.

Then, spectacles V2, V3, and AR-enabled versions followed.

None found mass adoption. The company's stated ambition to be a camera company, not just a social app, remained an ambition.

Discover, Snap's media partnership hub for short-form publisher content, also struggled to find identity, sitting between a social feed and a content aggregator.

When TikTok arrived and showed what a truly addictive algorithmic feed looked like, the gap became harder to close.

Snap has never recorded an annual profit. Not once in 14 years. Revenue grew significantly, from $400 million in 2016 to $5.3 billion in 2024.

But net losses have been persistent.

$1.3 billion in 2023, improving to $697 million in 2024. The company laid off 20% of its workforce in 2022 and another 10% in early 2024.

Daily active users reached 432 million in 2024, up from 173 million at IPO.

Most of that growth has come from outside North America and Europe, where advertising rates are lower and monetisation harder.

The core business of selling ads to Western users, the engine that was supposed to justify the IPO valuation, has proved difficult in a market where Meta and Google own the infrastructure and the data.

Snap's market cap peaked at $90.9 billion in early 2021.

It fell to less than $20 billion by 2023. As of 2024, it is at around ~$25 billion, roughly where it started at IPO, after seven years of operating losses.

Snap has not given up. Two things are worth watching.

The first is AR. Snap has invested more in augmented reality than almost any consumer platform. Lens Studio has enabled over one million creator-built lenses.

More than 250 million Snapchat users engage with AR features daily.

The fifth version of Spectacles, launched in 2024, targeted developers with an honest positioning that signals long-term infrastructure building rather than hardware sales.

The second is Snapchat+, the paid subscription. From a million subscribers at launch in 2022, it grew to seven million by early 2024 and reached 17 million by 2025.

At roughly $3.99 per month, that is real and growing revenue independent of advertising cycles. It shows that Snap's most engaged users are willing to pay for a better experience, a different kind of proof than advertising scale.

Neither of these is yet a transformative business.

But they represent something Snap has rarely had: a credible theory of value creation that does not depend on beating Instagram.

The Snapchat story is not about copying. Every major format gets cloned.

TikTok spawned YouTube Shorts, Instagram Reels, and Snapchat Spotlight. Format proliferation is just how the technology industry works.

The harder question is why being first did not protect Snap.

Part of it was distribution. Instagram launched Stories with 500 million monthly users already on the platform. The switching cost was zero. They were already there.

Snap had to ask people to go somewhere new for the same experience.

Part of it was monetisation timing.

Snap spent years building its user base before it had business.

By the time the ad machine was running, the growth story had stalled, and investors had priced in a trajectory the company could not sustain.

And part of it was the pace of innovation. Snapchat kept launching Stories, Discover, Snap Map, Spotlight, and My AI, but rarely had enough runway between each launch for a feature to become platform behaviour before a larger competitor absorbed it.

The app that invented ephemeral messaging and the Stories format spent the decade that followed watching those inventions become the default options of other platforms.

Spiegel was right that he had built something worth more than $3 billion.

He just has not yet found a way to prove it.