What You Can Learn From Snapchat
I wrote recently about my concern that too many young entrepreneurs have what I call “situational ethics”: they believe that it's "nice" to tell the truth (or the whole truth) when it's easy or convenient, but that it certainly isn’t essential, especially when it gets in the way of getting something else done. Or, put another way, a little inaccuracy can save a ton of explanation--if you don't care about your reputation or your customers.
Then, when the truth gets out and they've got to explain bad news (or worse), they try to paper over the problem with legalese and after-the-fact improvements to their boilerplate policies and written disclosures. Worse yet, I see too many cases where there's an even more upsetting and gratuitous attitude toward their customers (who are often millions and millions of young kids with their own "whatever" attitudes): They not only take them for granted but take them for idiots, believing that they either don’t care about the truth or will forget and forgive a little "mistake" in the service of making a lot of money and sticking it to the man.
Which brings us to Snapchat. The co-creators are the newest poster boys for slick and superficial attempts to apologize for a host of problems (see below). Saying you're sorry doesn't mean a thing unless you mean it, and it isn't worth a thing if what you're sorry about is getting caught versus screwing up in the first place.
Their mediocre and self-serving mea culpa blog post is a complete crock. They were "so busy building" that they didn’t pay "enough" attention to the very things that were the core principles and the basic value proposition of their product--privacy and ephemerality. It turns out that the government has determined that (a) the "snaps" don’t necessarily disappear in a few seconds; (b) that Snapchat's claims and promises about privacy were lies; (c) that the alert notification system was also flawed and by-passable; and (d) that private location and other data were being collected even though Snapchat expressly said that this was not happening.
The fact that they've settled their "dispute" with the FTC's division of privacy and identity protection (which accused them of deceiving their users and making multiple misrepresentations to consumers about how things actually worked, prompting the company to agree to hire an independent expert watchdog for the next 20 years) doesn't mean squat and certainly doesn't give me any confidence that anyone has learned anything useful from this episode.
Privacy (and honesty) issues aside, there is an even larger lesson for smart entrepreneurs who are trying to create real businesses and real value for themselves, their users, and their investors: It's just too easy today to build something that looks good and seems to solve a problem or create a solution, but only on the surface. If you're in such a big hurry to get something out there, and you don't take the time and invest the hard work and resources to build the infrastructure necessary to really deliver on your promises, then ultimately you haven't built anything real or lasting. It's a triumph of form over substance. Your solution won't scale. Your design won't survive real due diligence. Your prospective acquirers will be happy to take the concept, but not the code or the crew. And you'll find out that you built a toy, not a technology, and wasted a lot of time in the process.
The biggest lesson from Snapchat is not that they were unethical egotists, it's that they were bad engineers.
HOWARD TULLMAN | Columnist
Howard Tullman is the CEO of 1871 in Chicago where, at the moment, 260 digital startups are building their businesses every day. He is also the general managing partner of G2T3V, LLC and Chicago High Tech Investors – both early-stage venture funds; a member of Mayor Emanuel’s ChicagoNEXT Innovation Council; and Governor Quinn’s Illinois Innovation Council. He is an adviser to many technology businesses and an adjunct professor at the Kellogg Graduate School of Management. @tullman