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Snapchat adds new styles as Spectacles V2s get used 40% more than V1

Snapchat isn’t revealing sales numbers of version 2 of its Spectacles camera sunglasses, but at least they’re not getting left in a drawer as much as the V1s. The company tells me V2 owners are capturing 40 percent more Snaps than people with V1s.

And today, Snapchat is launching two new black-rimmed hipster styles of Spectacles V2 — a Wayfarer-esque Nico model and a glamorous big-lensed Veronica model. Both come with a slimmer semi-soft black carrying case instead of the chunky old triangular yellow one, and are polarized for the first time. They look a lot more like normal sunglasses, compared to the jokey, bubbly V1s, so they could appeal to a more mature and fashionable audience. They go on sale today for $199 in the US and Europe and will be sold in Neiman Marcus and Nordstrom later this year, while the old styles remain $149.

 

The new Spectacles styles (from left): Veronica and Nico

Spectacles V2 original style (left) and V1 (right)

Snap is also trying to get users to actually post what they capture, so it’s planning an automatically curated Highlight Story feature that will help you turn your best Specs content into great things to share. That could address the problem common amongst GoPro users of shooting a ton of cool footage but never editing it for display.

The problem is that V1 were pretty exceedingly unpopular, and those that did buy them. Snap only shipped 220,000 pairs and reportedly had hundreds of thousands more gathering dust in a warehouse. It took a $40 million write-off and its hardware “camera company” strategy was called into question. Business Insider reported that less than 50 percent of buyers kept using them after a month and a “sizeable” percentage stopped after just a week.

The new styles come with a slimmer semi-soft carry case

That means the bar was pretty low from which to score a 40 percent increase in usage, especially given the V2s take photos, work underwater, come in a slimmer charging case, and lack the V1s’ bright yellow ring around the camera lens that announces you’re wearing a mini computer on your face. Snap was smart to finally let you export in non-circular formats which are useful for sharing beyond Snapchat, and let you automatically save Snaps to your camera roll and not just its app’s Memories feature.

I’ve certainly been using my V2s much more than the V1s since they’re more discrete and versatile. And I haven’t encountered as much fear or anxiety from people worried about being filmed as privacy norms around technology continue to relax.

But even with the improved hardware, new styles, and upcoming features, Spectacles V2 don’t look like they’re moving the needle for Snapchat. After shrinking in user count last quarter, Snap’s share price has fallen to just a few cents above its all-time low. Given most of its users are cash-strapped teens who aren’t going to buy Spectacles even if they’re cool, the company needs to focus on how to make its app for everyone more useful and differentiated after the invasion of Instagram’s copy-cats of its Stories and ephemeral messaging.

Whether that means securing tentpole premium video content for Discover, redesigning Stories to ditch the interstitials for better lean-back viewing, or developing augmented reality games, Snap can’t stay the course. Despite its hardware ambitions, it’s fundamentally a software company. It has to figure out what makes that software special.

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The top 10 startups from Y Combinator’s Demo Day S18 Day 2

Fifty-nine startups took the stage at Y Combinator’s Demo Day 2, and among the highlights were a company that helps developers manage in-app subscriptions; a service that lets you create animojis from real photos; and a surplus medical equipment-reselling platform. Oh… and there was also a company that’s developed an entirely new kind of life form using e coli bacteria. So yeah, that’s happening.

Based on some investor buzz and what caught TechCrunch’s eye, these are our top picks from the second day of Y Combinator’s presentations.

You can find the full list of companies that presented on Day 1 here, and our top picks from Day 1 here. 

64-x

With a founding team including some of the leading luminaries in the field of biologically inspired engineering (including George Church, Pamela Silver and Jeffrey Way from Harvard’s Wyss Institute), 64-x is engineering organisms to function in otherwise inaccessible environments. Chief executive Alexis Rovner, herself a post-doctoral fellow at the Wyss Institute, and chief operating officer Ryan Gallagher, a former BCG Consultant, are looking to commercialize research from the Institute around accelerating and expanding the ability to produce functionalized proteins and sequence-defined polymers with diverse chemistries. Basically they’ve engineered a new life form that they want to use for novel kinds of bio-manufacturing.

Why we liked it: These geniuses invented a new life form.

CB Therapeutics

Sher Butt, a former lab directory at Steep Hill, saw that cannabinoids were as close to a miracle cure for pain, epilepsy and other chronic conditions as medicine was going to get. But plant-based cannabinoids were costly and produced inconsistent results. Alongside Jacob Vogan, Butt realized that biosynthesizing cannabinoids would reduce production costs by a factor of 10 and boost production 24 times current yields. With a deep experience commercializing drugs for Novartis and as the founder of the cannabis testing company SB Labs, Butt and his technical co-founder are uniquely positioned to bring this new therapy to market.

Why we liked it: Using manufacturing processes to make industrial quantities of what looks like nature’s best painkiller at scale is not a bad idea.

RevenueCat

RevenueCat founders

RevenueCat helps developers manage their in-app subscriptions. It offers an API that developers can use to support in-app subscriptions on iOS and Android, which means they don’t have to worry about all the nuances, bugs and updates on each platform.

The API also allows developers to bring all the data about their subscription business together in one place. It might be on to something, though it isn’t clear how big that something is quite yet. The nine-month-old company says it’s currently seeing $350,000 in transaction volume every month; it’s making some undisclosed percentage of money off that amount.

Read more about RevenueCat here.

Why we liked it: Write code. Release app. Use RevenueCat. Get paid. That sounds like a good formula for a pretty compelling business.

Ajaib

Indonesia is a country in transition, with a growing class of individuals with assets to invest yet who, financially, don’t meet the bar set by many wealth managers. Enter Ajaib, a newly minted startup with the very bold ambition of becoming the “Ant Financial of wealth management for Indonesia.” Why the comparison? Because China was in the same boat not long ago — a  country whose middle class had little access to wealth management advice. With the founding of Ant Financial nearly four years ago, that changed. In fact, Ant now boasts more than 400 million users.

China is home to nearly 1.4 billion, compared with Indonesia, whose population of 261 million is tiny in comparison. Still, if its plans work out to charge 1.4 percent for every dollar managed, with an estimated $370 billion in savings in the country to chase after, it could be facing a meaningful opportunity in its backyard if it gains some momentum.

Why we liked it: If Ajaib’s wealth management plans (to charge 1.4 percent for every dollar it manages) work out — and with a total market of $370 billion in savings in Indonesia — the company could be facing a meaningful opportunity in its backyard.

Grin

The scooter craze is hitting Latin America and Grin is greasing the wheels. The Mexico City-based company was launched by co-founder Sergio Romo after he and his partner realized they weren’t going to be able to get a cut of the big “birds” on the scooter block in the U.S. (as Axios reported). Romo and his co-founder have already lined up a slew of investors for what may be the hottest new deal in Latin America. Backers include Sinai Ventures, Liquid2 Ventures, 500 Startups, Monashees and Base10 Partners.

Why we liked it: Scooters are so 2018. But there’s a lot of money to be made in mobility, and as the challenge from Bird and Lime to Uber and Lyft in hyperlocal transit has revealed, there’s no dominant player that’s taken over the market… yet.

Emojer

Creating animated emojis made from real photos, Emojer just might be the most fun you can have with a camera. The company’s software uses deep learning algorithms to detect body parts and guides users in creating their own avatars with just a simple photo take from a mobile phone. It’s replacing deep Photoshop expertise and animation skills with a super simple interface. The avatars look very similar to Elf Yourself, a popular site that let you paste your friends’ faces on dancing Christmas elves goes viral every year at Christmastime. Founders have PhDs in machine learning and computer vision.

Why we liked it: As the company’s chief executive said, Snap was for sexting, and Facebook was hot or not, so who says the next big consumer platform couldn’t be the Trojan horse of easily generated selfiemojis (akin to Elf Yourself)?

Osh’s Affordable Pharmaceuticals

Osh’s Affordable Pharmaceuticals is a public benefit corporation connecting doctors and patients with sources of low-cost, compounded pharmaceuticals. The company is looking to decrease barriers to entry for drugs for rare diseases. Three weeks ago the company introduced a drug to treat Wilson’s Disease. There was no access to the drug that treats the disease before in Brazil, India or Canada. It slashes the cost of drugs from $30,000 a month to $120 per month. The company estimates it has a total addressable market of $17 billion. “Generic drug pricing is a crisis, people are dying because they can’t get access to the medicine they need,” says chief executive Alex Oshmyansky. Osh’s might have a solution.

Why we liked it: Selling lower-cost medications for rare diseases in countries that previously hadn’t had access to them is a good business that’s good for the world.

Medinas Health

Tackling a $75 billion problem of healthcare waste, Medinas Health is giving hospitals an easy way to resell their used supplies. The company has already raised $1 million for its marketplace to help healthcare organizations buy and sell equipment. With a seed round led by Ashton Kutcher and Guy Oseary’s Sound Ventures, and General Catalyst’s Rough Draft Ventures fund, the company is also working to lower costs for cash-strapped rural healthcare centers.

Why we liked it: Finding uses for hospital equipment that’s been lying fallow in corners is a big business. A $75 billion business if Medinas’ estimates are correct. Add helping cut costs for rural medical facilities and Medinas is a business we can get behind.

And Comfort

Plus-size women have limited clothing options even at the largest retailers like Nordstrom and Macy’s. While a majority of American women fall into the plus-size clothing category, 100 million women are constrained to shopping for a very small percentage of options. And Comfort wants to solve the supply problem. To do this, the founders, two former Harvard classmates, are building a direct-to-consumer fashion brand with stylish, minimalist offerings for plus-size women, including tunic shirts and an apron dress. It’s very early days for the brand, but since launching in recent weeks, they’ve seen $25,000 in sales.

Why we liked it: This direct-to-consumer fashion brand is bringing higher quality, better-designed clothing options to a market that’s underserved and growing quickly. What’s not to like?

ShopWith

Influencers of the world are uniting on mobile app, ShopWith, which allows shoppers to browse virtual storefronts and aisles alongside their favorite fashion and beauty creators and YouTubers. Users can see exactly what products those influencers have featured and can buy them without ever leaving the app. It’s a free download and hours of commercially consumptive fun.

It’s like the QVC model, but for GenZ shoppers whose buying habits are influenced by social video content on YouTube, Instagram and Snapchat. The company revealed that one beauty influencer made $10,000 within five hours using the ShopWith platform. The founders are former product managers with experience building social commerce products at Facebook and Amazon.

Why we liked it: The QVC for GenZ not only has a nice ring to it, it’s a recipe for making cash registers hum. A mobile-first, influencer-based shopping company is something that we’d definitely not call an impulse purchase.

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Openbook is the latest dream of a digital life beyond Facebook

As tech’s social giants wrestle with antisocial demons that appear to be both an emergent property of their platform power, and a consequence of specific leadership and values failures (evident as they publicly fail to enforce even the standards they claim to have), there are still people dreaming of a better way. Of social networking beyond outrage-fuelled adtech giants like Facebook and Twitter.

There have been many such attempts to build a ‘better’ social network of course. Most have ended in the deadpool. A few are still around with varying degrees of success/usage (Snapchat, Ello and Mastodon are three that spring to mine). None has usurped Zuckerberg’s throne of course.

This is principally because Facebook acquired Instagram and WhatsApp. It has also bought and closed down smaller potential future rivals (tbh). So by hogging network power, and the resources that flow from that, Facebook the company continues to dominate the social space. But that doesn’t stop people imagining something better — a platform that could win friends and influence the mainstream by being better ethically and in terms of functionality.

And so meet the latest dreamer with a double-sided social mission: Openbook.

The idea (currently it’s just that; a small self-funded team; a manifesto; a prototype; a nearly spent Kickstarter campaign; and, well, a lot of hopeful ambition) is to build an open source platform that rethinks social networking to make it friendly and customizable, rather than sticky and creepy.

Their vision to protect privacy as a for-profit platform involves a business model that’s based on honest fees — and an on-platform digital currency — rather than ever watchful ads and trackers.

There’s nothing exactly new in any of their core ideas. But in the face of massive and flagrant data misuse by platform giants these are ideas that seem to sound increasingly like sense. So the element of timing is perhaps the most notable thing here — with Facebook facing greater scrutiny than ever before, and even taking some hits to user growth and to its perceived valuation as a result of ongoing failures of leadership and a management philosophy that’s been attacked by at least one of its outgoing senior execs as manipulative and ethically out of touch.

The Openbook vision of a better way belongs to Joel Hernández who has been dreaming for a couple of years, brainstorming ideas on the side of other projects, and gathering similarly minded people around him to collectively come up with an alternative social network manifesto — whose primary pledge is a commitment to be honest.

“And then the data scandals started happening and every time they would, they would give me hope. Hope that existing social networks were not a given and immutable thing, that they could be changed, improved, replaced,” he tells TechCrunch.

Rather ironically Hernández says it was overhearing the lunchtime conversation of a group of people sitting near him — complaining about a laundry list of social networking ills; “creepy ads, being spammed with messages and notifications all the time, constantly seeing the same kind of content in their newsfeed” — that gave him the final push to pick up the paper manifesto and have a go at actually building (or, well, trying to fund building… ) an alternative platform. 

At the time of writing Openbook’s Kickstarter crowdfunding campaign has a handful of days to go and is only around a third of the way to reaching its (modest) target of $115k, with just over 1,000 backers chipping in. So the funding challenge is looking tough.

The team behind Openbook includes crypto(graphy) royalty, Phil Zimmermann — aka the father of PGP — who is on board as an advisor initially but billed as its “chief cryptographer”, as that’s what he’d be building for the platform if/when the time came. 

Hernández worked with Zimmermann at the Dutch telecom KPN building security and privacy tools for internal usage — so called him up and invited him for a coffee to get his thoughts on the idea.

“As soon as I opened the website with the name Openbook, his face lit up like I had never seen before,” says Hernández. “You see, he wanted to use Facebook. He lives far away from his family and facebook was the way to stay in the loop with his family. But using it would also mean giving away his privacy and therefore accepting defeat on his life-long fight for it, so he never did. He was thrilled at the possibility of an actual alternative.”

On the Kickstarter page there’s a video of Zimmermann explaining the ills of the current landscape of for-profit social platforms, as he views it. “If you go back a century, Coca Cola had cocaine in it and we were giving it to children,” he says here. “It’s crazy what we were doing a century ago. I think there will come a time, some years in the future, when we’re going to look back on social networks today, and what we were doing to ourselves, the harm we were doing to ourselves with social networks.”

“We need an alternative to the social network work revenue model that we have today,” he adds. “The problem with having these deep machine learning neural nets that are monitoring our behaviour and pulling us into deeper and deeper engagement is they already seem to know that nothing drives engagement as much as outrage.

“And this outrage deepens the political divides in our culture, it creates attack vectors against democratic institutions, it undermines our elections, it makes people angry at each other and provides opportunities to divide us. And that’s in addition to the destruction of our privacy by revenue models that are all about exploiting our personal information. So we need some alternative to this.”

Hernández actually pinged TechCrunch’s tips line back in April — soon after the Cambridge Analytica Facebook scandal went global — saying “we’re building the first ever privacy and security first, open-source, social network”.

We’ve heard plenty of similar pitches before, of course. Yet Facebook has continued to harvest global eyeballs by the billions. And even now, after a string of massive data and ethics scandals, it’s all but impossible to imagine users leaving the site en masse. Such is the powerful lock-in of The Social Network effect.

Regulation could present a greater threat to Facebook, though others argue more rules will simply cement its current dominance.

Openbook’s challenger idea is to apply product innovation to try to unstick Zuckerberg. Aka “building functionality that could stand for itself”, as Hernández puts it.

“We openly recognise that privacy will never be enough to get any significant user share from existing social networks,” he says. “That’s why we want to create a more customisable, fun and overall social experience. We won’t follow the footsteps of existing social networks.”

Data portability is an important ingredient to even being able to dream this dream — getting people to switch from a dominant network is hard enough without having to ask them to leave all their stuff behind as well as their friends. Which means that “making the transition process as smooth as possible” is another project focus.

Hernández says they’re building data importers that can parse the archive users are able to request from their existing social networks — to “tell you what’s in there and allow you to select what you want to import into Openbook”.

These sorts of efforts are aided by updated regulations in Europe — which bolster portability requirements on controllers of personal data. “I wouldn’t say it made the project possible but… it provided us a with a unique opportunity no other initiative had before,” says Hernández of the EU’s GDPR.

“Whether it will play a significant role in the mass adoption of the network, we can’t tell for sure but it’s simply an opportunity too good to ignore.”

On the product front, he says they have lots of ideas — reeling off a list that includes the likes of “a topic-roulette for chats, embracing Internet challenges as another kind of content, widgets, profile avatars, AR chatrooms…” for starters.

“Some of these might sound silly but the idea is to break the status quo when it comes to the definition of what a social network can do,” he adds.

Asked why he believes other efforts to build ‘ethical’ alternatives to Facebook have failed he argues it’s usually because they’ve focused on technology rather than product.

“This is still the most predominant [reason for failure],” he suggests. “A project comes up offering a radical new way to do social networking behind the scenes. They focus all their efforts in building the brand new tech needed to do the very basic things a social network can already do. Next thing you know, years have passed. They’re still thousands of miles away from anything similar to the functionality of existing social networks and their core supporters have moved into yet another initiative making the same promises. And the cycle goes on.”

He also reckons disruptive efforts have fizzled out because they were too tightly focused on being just a solution to an existing platform problem and nothing more.

So, in other words, people were trying to build an ‘anti-Facebook’, rather than a distinctly interesting service in its own right. (The latter innovation, you could argue, is how Snap managed to carve out a space for itself in spite of Facebook sitting alongside it — even as Facebook has since sought to crush Snap’s creative market opportunity by cloning its products.)

“This one applies not only to social network initiatives but privacy-friendly products too,” argues Hernández. “The problem with that approach is that the problems they solve or claim to solve are most of the time not mainstream. Such as the lack of privacy.

“While these products might do okay with the people that understand the problems, at the end of the day that’s a very tiny percentage of the market. The solution these products often present to this issue is educating the population about the problems. This process takes too long. And in topics like privacy and security, it’s not easy to educate people. They are topics that require a knowledge level beyond the one required to use the technology and are hard to explain with examples without entering into the conspiracy theorist spectrum.”

So the Openbook team’s philosophy is to shake things up by getting people excited for alternative social networking features and opportunities, with merely the added benefit of not being hostile to privacy nor algorithmically chain-linked to stoking fires of human outrage.

The reliance on digital currency for the business model does present another challenge, though, as getting people to buy into this could be tricky. After all payments equal friction.

To begin with, Hernández says the digital currency component of the platform would be used to let users list secondhand items for sale. Down the line, the vision extends to being able to support a community of creators getting a sustainable income — thanks to the same baked in coin mechanism enabling other users to pay to access content or just appreciate it (via a tip).

So, the idea is, that creators on Openbook would be able to benefit from the social network effect via direct financial payments derived from the platform (instead of merely ad-based payments, such as are available to YouTube creators) — albeit, that’s assuming reaching the necessary critical usage mass. Which of course is the really, really tough bit.

“Lower cuts than any existing solution, great content creation tools, great administration and overview panels, fine-grained control over the view-ability of their content and more possibilities for making a stable and predictable income such as creating extra rewards for people that accept to donate for a fixed period of time such as five months instead of a month to month basis,” says Hernández, listing some of the ideas they have to stand out from existing creator platforms.

“Once we have such a platform and people start using tips for this purpose (which is not such a strange use of a digital token), we will start expanding on its capabilities,” he adds. (He’s also written the requisite Medium article discussing some other potential use cases for the digital currency portion of the plan.)

At this nascent prototype and still-not-actually-funded stage they haven’t made any firm technical decisions on this front either. And also don’t want to end up accidentally getting into bed with an unethical tech.

“Digital currency wise, we’re really concerned about the environmental impact and scalability of the blockchain,” he says — which could risk Openbook contradicting stated green aims in its manifesto and looking hypocritical, given its plan is to plough 30% of its revenues into ‘give-back’ projects, such as environmental and sustainability efforts and also education.

“We want a decentralised currency but we don’t want to rush into decisions without some in-depth research. Currently, we’re going through IOTA’s whitepapers,” he adds.

They do also believe in decentralizing the platform — or at least parts of it — though that would not be their first focus on account of the strategic decision to prioritize product. So they’re not going to win fans from the (other) crypto community. Though that’s hardly a big deal given their target user-base is far more mainstream.

“Initially it will be built on a centralised manner. This will allow us to focus in innovating in regards to the user experience and functionality product rather than coming up with a brand new behind the scenes technology,” he says. “In the future, we’re looking into decentralisation from very specific angles and for different things. Application wise, resiliency and data ownership.”

“A project we’re keeping an eye on and that shares some of our vision on this is Tim Berners Lee’s MIT Solid project. It’s all about decoupling applications from the data they use,” he adds.

So that’s the dream. And the dream sounds good and right. The problem is finding enough funding and wider support — call it ‘belief equity’ — in a market so denuded of competitive possibility as a result of monopolistic platform power that few can even dream an alternative digital reality is possible.

In early April, Hernández posted a link to a basic website with details of Openbook to a few online privacy and tech communities asking for feedback. The response was predictably discouraging. “Some 90% of the replies were a mix between critiques and plain discouraging responses such as “keep dreaming”, “it will never happen”, “don’t you have anything better to do”,” he says.

(Asked this April by US lawmakers whether he thinks he has a monopoly, Zuckerberg paused and then quipped: “It certainly doesn’t feel like that to me!”)

Still, Hernández stuck with it, working on a prototype and launching the Kickstarter. He’s got that far — and wants to build so much more — but getting enough people to believe that a better, fairer social network is even possible might be the biggest challenge of all. 

For now, though, Hernández doesn’t want to stop dreaming.

“We are committed to make Openbook happen,” he says. “Our back-up plan involves grants and impact investment capital. Nothing will be as good as getting our first version through Kickstarter though. Kickstarter funding translates to absolute freedom for innovation, no strings attached.”

You can check out the Openbook crowdfunding pitch here.

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Snapchat shrinks by 3M users to 188M despite strong Q2

The Stories War has officially killed Snapchat’s growth, leading to its first user count decline ever. In Q2 2018 earnings today, Snapchat’s daily active users number shrank 1.5 percent to 188 million this quarter, down from 191 million and positive 2.9 percent user growth last quarter.

Snapchat did beat earnings expectations with $262.3 million in revenue and a loss of $0.14 while Wall Street estimated an EPS loss of $0.17 with $249.8 million in revenue. Snap’s net loss decreased by 20 percent year-over-year, so it only destroyed $353 million this quarter compared to $385 million last quarter. Snap will have some extra cash to extend its runway despite its still-massive losses thanks to a $250 million investment from Saudi Prince Al-Waleed Talal in exchange for a 2.3 percent stake in the company.

Despite its user count shrinking for the first time since its launch in 2011, the improvement to revenue (up 44 percent year-over-year) and reduced losses led Wall Street to give Snap’s shares an immediate 11 percent pop in after-hours trading. But after dodging multiple questions about how it would improve revenues and when its optimized Android app would arrive, shares fell back to just below the day’s closing price of $13.12.

Snapchat is coming off a disastrous Q1 earnings with its slowest-ever user growth rate that led to a 24 percent plunge in its share price in May. But the company has been highly volatile, seeing a 37 percent boost in its share price after surprisingly positive Q4 2017 earnings. Now it’s proving that Facebook isn’t the only social network with growth troubles.

In hopes of distracting from the shrinking DAUs, Snapchat shared a monthly active user count for the first time: 100 million monthly active users in the U.S. and Canada. Snap says this is the highest it’s ever been, yet the reveal highlights that teens are as addicted to daily Snapchat use as they once were. DAUs are a much more accurate way of measuring engagement and ad revenue potential, as opening a single notification and never returning can still register someone as an MAU.

CEO Evan Spiegel blamed the DAU shrinkage on “a slightly lower frequency of use among our user base due to the disruption caused by our redesign.” But since, he believes “we have now addressed the biggest frustrations we’ve heard” so he’s optimistic about future growth. On the other hand, he credits the redesign as producing an 8 percent increase in retention among users older than 35, demonstrating the new design is more obvious and well labeled.

During the earnings call, Snap’s new CFO Tim Stone mentioned that it’s interested in monetizing every part of the app, including “communication.” That could foreshadow more ads in the messaging inbox beyond the sponsored lenses users can play with to send augmented reality Snaps to friends. Snap is also hoping that after a decline in ad prices as it moved to self-serve auctions, ad prices and revenue will climb.

One big bright point for Snap was that its average revenue per user in the Rest Of World region grew 65 percent just this quarter to reach $0.96. Figuring out how to monetize these developing countries where buying power is lower will be key to the company’s outlook. Snap says it’s still working to re-engineer its Android app to boost performance and reduce churn, since that’s where most of its new users are coming in.

The quarter saw Snapchat escape much of the scrutiny facing other social networks regarding fake news and election interference. But it clearly still has issues with security, as Snapchat accidentally leaked its own source code, which was archived by someone who then posted it to GitHub today, though it was eventually taken down.

Snapchat started running un-skippable ads in its Shows that could be a big money maker if extended to Stories. It began experimenting with e-commerce in earnest, allowing brands to sell things people can buy without leaving the app. It also opened self-serve buying of its augmented reality lens ads that people not only post, but play with for extended periods of time. And it launched its privacy-safe Snap Kit developer platform in hopes that alliances and referral traffic would help revive its user growth.

But problematically, its competitors like Instagram Stories continued to surge, with it now having 400 million daily Stories users and WhatsApp Status now having 450 million. Combined, Facebook has over 1.1 billion daily (duplicated) Stories users across its family of apps. That reach could make it tough for Snap to compete for ad dollars. And with its user count actually decreasing, that could make for a grim future for the teen sensation.

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Snapchat code reveals team-up with Amazon for ‘Camera Search’

Snapchat is building a visual product search feature, codenamed “Eagle,” that delivers users to Amazon’s listings. Buried inside the code of Snapchat’s Android app is an unreleased “Visual Search” feature where you “Press and hold to identify an object, song, barcode, and more! This works by sending data to Amazon, Shazam, and other partners.” Once an object or barcode has been scanned you can “See all results at Amazon.”

Visual product search could make Snapchat’s camera a more general purpose tool for seeing and navigating the world, rather than just a social media maker. It could differentiate Snapchat from Instagram, whose clone of Snapchat Stories now has more than twice the users and a six times faster gro

wth rate than the original. And if Snapchat has worked out an affiliate referrals deal with Amazon, it could open a new revenue stream. That’s something Snap Inc. direly needs after posting a $385 million loss last quarter and missing revenue estimates by $14 million.

TechCrunch was tipped off to the hidden Snapchat code by app researcher Ishan Agarwal. His tips have previously led to TechCrunch scoops about Instagram’s video calling, soundtracks, Focus portrait mode and QR Nametags features that were all later officially launched. Amazon didn’t respond to a press inquiry before publishing time, and it’s unclear if its actively involved in the development of Snapchat visual search or just a destination for its results. Snap already sells its Spetacles v2 camera glasses on Amazon — the only place beyond its own site. Snap Inc. gave TechCrunch a “no comment,” about visual search but the company’s code tells the story.

Snapchat first dabbled in understanding the world around you with its Shazam integration back in 2016 that lets you tap and hold to identify a song playing nearby, check it out on Shazam, send it to a friend or follow the artist on Snapchat. Project Eagle builds on this audio search feature to offer visual search through a similar interface and set of partnerships. The ability to identify purchaseable objects or scan barcodes could turn Snapchat, which some view as a teen toy, into more of a utility.

What’s inside Snapchat’s Eagle eye

Snapchat’s code doesn’t explain exactly how the Project Eagle feature will work, but in the newest version of Snapchat it was renamed as “Camera Search.” If you remember, Snap used another animal name, “Cheetah”, as the secret word for its big redesign. The app’s code lists the ability to surface “sellers” and “reviews,” “Copy URL” of a product and “Share” or “Send Product” to friends — likely via Snap messages or Snapchat Stories. In characteristic cool kid teenspeak, an error message for “product not found” reads “Bummer, we didn’t catch that!”

Eagle’s visual search may be connected to Snapchat’s “context cards,” which debuted late last year and pull up business contact info, restaurant reservations, movie tickets, Ubers or Lyfts and more. Surfacing within Snapchat a context card of details about ownable objects might be the first step to getting users to buy them… and advertisers to pay Snap to promote them. It’s easy to imagine context cards being accessible for products tagged in Snap Ads as well as scanned through visual search. And Snap already has in-app shopping.

Snapchat’s Camera Search could become a direct competitor for Pinterest’s Lens, which identifies objects and brings up related content. Pinterest has evolved the product, embedding it inside the apps of retailers like Target. Beyond shopping, Camera Search could let Snapchat users find Stories that contain the same object they’re snapping.

Being able to recognize what you’re seeing makes Snapchat more fun, but it’s also a new way of navigating reality. In mid-2017 Snapchat launched World Lenses that map the surfaces of your surroundings so you can place 3D animated objects like its Dancing Hotdog mascot alongside real people in real places. Snapchat also released a machine vision-powered search feature last year that compiles Stories of user-submitted Snaps featuring your chosen keyword, like videos with “puppies” or “fireworks,” even if the captions don’t mention them.

Pinterest’s Lens visual search feature

Snapchat was so interested in visual search that this year, it reportedly held early-stage acquisition talks with machine vision startup Blippar. The talks fell through with the U.K. augmented reality company that has raised at least $99 million for its own visual search feature, but which recently began to implode due to low usage and financing trouble. Snap Inc. might have been hoping to jumpstart its Camera Search efforts.

Snap calls itself a camera company, after all. But with the weak sales of its mediocre v1 Spectacles, the well-reviewed v2 failing to break into the cultural zeitgeist and no other hardware products on the market, Snap may need to redefine what exactly that tag line means. Visual search could frame Snapchat as more of a sensor than just a camera. With its popular use for rapid-fire selfie messaging, it’s already the lens through which some teens see the world. Soon, Snap could be ready to train its eagle eye on purchases, not just faces.

In related Snapchat news:

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Benchmark’s Mitch Lasky will reportedly step down from Snap’s board of directors

Benchmark partner Mitch Lasky, who has served on Snap’s board of directors since December 2012, is not expected to stand for re-election to Snap’s board of directors and will thus be stepping down, according to a report by The Information.

Early investors stepping down from the board of directors — or at least not seeking re-election — isn’t that uncommon as once-private companies grow into larger public ones. Benchmark partner Peter Fenton did not seek re-election for Twitter’s board of directors in April last year. As Snap continues to navigate its future, especially as it has declined precipitously since going public and now sits at a valuation of around $16.5 billion. Partners with an expertise in the early-stage and later-stage startup life cycle may end up seeing themselves more useful taking a back seat and focusing on other investments. The voting process for board member re-election happens during the company’s annual meeting, so we’ll get more information when an additional proxy filing comes out ahead of the meeting later this year.

Benchmark is, or at least was at the time of going public last year, one of Snap’s biggest shareholders. According to the company’s 424B filing prior to going public in March last year, Benchmark held ownership of 23.1% of Snap’s Class B common stock and 8.2% of Snap’s Class A common stock. Lasky has been with Benchmark since April 2007, and also serves on the boards of a number of gaming companies like Riot Games and thatgamecompany, the creators of PlayStation titles flower and Journey. At the time, Snap said in its filing that Lasky was “qualified to serve as a member of our board of directors due to his extensive experience with social media and technology companies, as well as his experience as a venture capitalist investing in technology companies.”

The timing could be totally coincidental, but an earlier Recode report suggested Lasky had been talking about stepping down in future funds for Benchmark. The firm only recently wrapped up a very public battle with Uber, which ended up with Benchmark selling a significant stake in the company and a new CEO coming in to replace co-founder Travis Kalanick. Benchmark hired its first female general partner, Sarah Tavel, earlier this year.

We’ve reached out to both Snap and a representative from Benchmark for comment and will update the story when we hear back.

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Snap is reportedly about to launch its own gaming platform

Snap is seeking to explore new ground as it tries to outrun Instagram’s efforts to copy its features. Its newest effort may be building out a bona fide hub for gaming inside Snapchat, according to a new report from The Information. The platform will launch later this year, the report says, and Snap is already signing on game publishers to participate in its efforts.

We reached out to Snap for comment.

The news makes a lot of sense, given the efforts Snap has increasingly been pouring into its own Lens Studio software for developers to create its specialized AR filters. Snap reportedly bought a web-based 3D game engine last year, called PlayCanvas, which would serve as a good backbone for even more robust developer tools.

It’s not clear from the report whether these gaming titles would be focused largely on AR gaming, though one might expect it given all of the attention Snap has paid to the emerging mobile platform.

In April, the company launched “Snappables,” which were basically short selfie AR games that integrate easily into Snapchat’s Lens selection UI.

Augmented reality applications really benefit from sidling up closely to a camera platform, where you can snap a photo or record some video of an encounter with an AR T-Rex. This thinking benefits Snap. Snap is probably not competing with Google’s ARCore or Apple’s ARKit anymore; with these technologies, Snap simply seems to be striving to be the app that’s home to several of these experiences. This is an advantage Snapchat still seems to hold over Facebook and Instagram’s in-app cameras, which anecdotally don’t seem to be used very heavily by users, though the companies have not released usage numbers.

Snap won’t exactly be blazing the trail with messaging-based gaming experiences. Facebook Messenger has already experimented with short, shareable mini-games. As noted by The Information report, CEO Evan Spiegel has expressed admiration for Tencent’s business model, which sees nearly 40 percent of its revenues come from in-game purchases in the WeChat app. If the gaming platform did have a skew toward augmented reality, that would certainly be a unique proposition — though many of AR’s promises have still been unrealized as developers grapple with what makes an engaging experience.

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SeatGeek brings ticket buying into Snapchat

You can now buy game and concert tickets from teams and musicians within Snapchat, thanks to an integration with SeatGeek .

While Snapchat has started testing e-commerce features in the past few months, SeatGeek says this is the first ticket-buying experience built into the Snapchat app.

The Los Angeles Football Club was the first team to sell tickets through this integration, by posting a Snapchat Story (and a Snapcode on the team website) that allowed users to swipe up to buy tickets to the May 26 game. The full purchase experience takes place without leaving the app.

“We’re always looking to reach our fans in innovative ways, and selling tickets directly to our followers on Snapchat gives us an incredible opportunity to connect with our most dedicated supporters,” said Los Angeles Football Club President and co-owner Tom Penn in the announcement.

SeatGeek Snapchat

SeatGeek co-founder Russ D’Souza said that as “the pipe gets solidified,” you’ll start seeing more Snapchat/SeatGeek ticket sales. He added that this is the kind of integration he was hoping for when the company launched the SeatGeek Open platform a couple of years ago, allowing teams, musicians and other rightsholders to sell tickets directly through SeatGeek. (The platform also supports ticket sales through Facebook.)

“For too long, the legacy ticketing approach has been to make it difficult for teams to sell tickets in lots of places,” D’Souza said. “Teams should want to sell their tickets in as many places as possible.”

And it sounds there are additional deals in the works: “What we’re excited about over the next few months is beating the drumbeat of openness with new partnerships … We want to drive the whole industry forward and create more tangible results that cause the industry to open up.”

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Snapchat now lets advertisers sell products directly through Lenses

This week Snapchat is rolling out Shoppable AR, a new feature that makes it even easier for advertisers to sell goods through sponsored lenses. The new offering builds on top of the Sponsored Lenses the service rolled out in late-2015, which let advertisers create branded filters, bringing product placements to selfies.

Now companies can essentially close that shopping loop, while keeping users inside the Snapchat experience. Shoppable AR makes it possible to add a button directly to a Lens, which users can tap on to visit a website where they can learn more about or — more to the point — just buy the product. Other options include a link to install an app or a “long form” video like a trailer. All of that happens directly inside the app. 

The feature is rolling out with a quartet of media partners to start. Clairol is selling an AR “beauty product trial,” Adidas is moving its Deerupt running shoes, King has an AR Candy Crush game and STX will try to get you to watch Amy Schumer’s new comedy, I Feel Pretty.

There’s no price increase here for advertisers. The additional features will no doubt be an easy sell for those companies that have already been using Snapchat to advertise. Keeping users inside the app reduces friction of sales quite a bit, offering up ads and product sales as a more organic feature — one that doesn’t necessarily feel like advertising. For Snap, of course, the more time users spend engaged directly inside the app, the better.

According to Snap, 70 million users engage with Lenses each day. Earlier this week, the company also rolled out updates to Lens studio, which lets users create their own AR Lenses for the platform. 

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Snap launches new features for Lens Studio

At the end of last year, Snap introduced Lens Studio, a platform that allows developers to create AR lenses for Snapchat. Today, the company is announcing new features for Lens Studio, including seven brand new templates for the creation of face lenses.

Before now, only World Lens creation was available to everyone within Lens Studio, meaning developers could create 3D AR objects but not overlay AR experiences over faces. Now, developers can create Face Lenses, with seven different templates from which to choose.

Here are the new templates for Face Lenses:

  • Face Paint: focuses on face substitution, mapping the face to let developers create art tied to facial features like the lips or nose (great for makeup or accessories)
  • Photo: much like Face Paint, Photo lets creators overlay lenses onto a single static (head-on) photo
  • Distort: lets developers stretch or shrink facial features
  • Trigger: with Trigger, developers can create a trigger (blinking, raising eyebrows, open/close mouth) to execute a lens
  • 2D Objects: this template works the same way as Snap’s famous dog ears filter, letting developers create 2D objects that can be overlaid on a picture of video
  • 3D Objects: same as 2D Objects, but with 3D objects; this template also includes a helper script to play looping animation on the 3D objects
  • Baseball Cap: revamp a 3D baseball cap to change color, brim style and add an image

Alongside the new templates, Snap is also integrating with Giphy to give Lens Studio developers access to Giphy’s massive library of animated GIF stickers.

With the introduction of these new features, Snap is opening up these third-party lenses to the public with the launch of Community Lens Stories. Each story will include public Snaps submitted on Our Story that highlight a community lens. Folks can swipe up on one of these Snaps to unlock the lens, or browse other Lenses by tapping the ‘i’ button above a Community Lens in the carousel.

This is all in an effort to open up Snap to third-party developers and creators, which is why the company is launching the Official Creator Program. This will allow the Snap team to partner with select creators to offer support, including visibility on the Lens Studio website as well as direct support from the Lens Studio team. Official Creators will also get early access to features and templates.

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