While many view Facebook's (FB) - Get Facebook, Inc. Class A Report launch of Instagram Stories last August as its first big assault on Snap (SNAP) - Get Snap, Inc. Class A Report, the copycatting actually goes all the way back to 2012, according to Snap's chief strategy officer, Imran Khan.
"The most important thing to keep in mind is that Facebook has been copying Snapchat since Evan and Bobby were working at [Evan's] dad's house with a product called Poke," Khan said at the JP Morgan TMT conference in Boston on Tuesday morning, talking of Snap's co-founders Evan Spiegel and Bobby Murphy. "Despite all those things, we have grown our user base. Competition is not a new thing."
In his keynote address, Khan talked about Snap's intensifying competition with Facebook, the company's first public earnings report and its approach to user growth.
Facebook reportedly built Poke, a separate ephemeral messaging app, in just 12 days. The app later proved to be a bust and, soon after that, Snapchat even rebuffed Facebook's $3 billion bid for the company.
Snap's daily active users did rise 36% year-over-year to 166 million (or eight million new users quarter-over-quarter) in the most recent quarter, but that's small compared to Facebook-owned Instagram's 700 million monthly average users. And it's also a significant deceleration from when Snap added 21 million new users during the same period last year. Still, Khan said Snapchat users are spending more time on the app and creating more messages in the process, which bodes well for engagement on the platform -- a metric that Khan, Spiegel and other Snap executives have increasingly zeroed in on amid slowing user growth.
Product innovation and engagement are Snapchat's primary tools for fending off Facebook, Khan said.
"We are a creative company and we've been building a lot of new products," he explained. "You have to get comfortable that people will be copying you."
That statement was nearly identical to what Spiegel told investors on the earnings call, saying that copying is par for the course if you want to be a creative company and "you make great stuff."
Khan also talked about how part of being a young company means putting on the blinders when it comes to certain distractions, or specifically, the stock market. Snap's first quarterly results as a public company missed Wall Street's expectations across the board, which sent shares down more than 21% the following day. The stock hovered around its initial offering price of $17 for a few days following the earnings report, and is down 17% so far this year. Shares were up 1.6% to $20.38 on Wednesday morning.
When asked whether was surprised by the post-earnings selloff, Khan said his fifteen years on Wall Street as an analyst have afforded him some perspective.
"One thing I've learned is to never get surprised by market corrections," Khan noted. "You can't focus on day to day reactions. It's great products that create longterm shareholder value."