In a cover profile in Forbes today, Snapchat’s CEO and co-founder comes across as both a genius(?) and a petulant child that used his parent’s divorce as leverage against the two when it suited him to do so and he felt the need for a leased BMW 550i.
Who is Evan Spiegel?
Some would see that as indicative of someone who would have no problem squeezing out someone who suggested the idea in the first place. Shades of Zuckerberg and the theme of The Social Network? The litigation that revolves around that will come to light soon enough.
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Either way, the tech community was fairly shocked when a report in the Wall Street Journal suggested late last year that Evan Spiegel turned down a $3 billion cash offer for Snapchat when Mark Zuckerberg offered it. For the first time, Evan Spiegel has decided to address what happened and what his reasoning was.
Why not sell?
“There are very few people in the world who get to build a business like this,” Evan Spiegel told Forbes for a cover story profiling the co-founder and CEO, which was published online earlier today. “I think trading that for some short-term gain isn’t very interesting.”
I’m certain that I’m not alone in having a considerably different definition of what “short-term gain” means. In today’s piece by Forbes, the magazine suggests that both Spiegel and co-founder Bobby Murphy would each have seen around $750 million added to their bank accounts had they accepted the reported offer by Zuckerberg and Facebook.
If you’re to read further into the piece, it appears that Spiegel believed that Zuckerberg was weak and there existed an opportunity to drive the price of Snapchat up given the failures of Facebook Inc (NASDAQ:FB)’s Poke.
According to Forbes, Zuckerberg flew out to meet Spiegel at the end of 2012 and decided to use the “stick versus carrot.” He attempted to frighten Spiegel, and Spiegel didn’t bite. Certainly, that took a bit of courage. “It was basically like, ‘We’re going to crush you,'” Spiegel told Forbes about the first meeting.
Facebook Inc (NASDAQ:FB)’s Poke turned out to be a tremendous flop and Spiegel may have won that round.
Perhaps with a touch of contrition in his heart, Zuckerberg returned with checkbook in hand only to be turned down late last year. There is some contention as to whether or not Spiegel refused to fly to Zuckerberg to hear his offer with Forbes reporting today that Spiegel demanded Zuckerberg come to him. This has been refuted by Spiegel in the hours since the article was published online.
In the time since the offer was turned down, Snapchat has raised another $50 million at a valuation of $2 billion. They have also been hacked and had customer information revealed on the Internet, something that many believe Spiegel has failed to properly apologize for to its users that are estimated at 50 million.
If Snapchat ever reaches a $4 billion valuation, well, he did the right thing. If not, he’s just the arrogant “rich kid” who Forbes has portrayed in today’s cover story. A kid who takes his ball home while the other kids make do without him.