The following is the unofficial transcript of a CNBC EXCLUSIVE interview with Former Snap Inc. Chief Strategy Officer Imran Khan and CNBC’s Deirdre Bosa at the network’s inaugural technology event, East Tech West, in Nansha, Guangzhou earlier today. The following is a link to video from the interview on CNBC.com:
Former Snap Inc. Chief Strategy Officer Imran Khan Discusses His New E-commerce Venture
Q3 hedge fund letters, conference, scoops etc
DIERDRE BOSA: Thank you, Mandy. So, not a Bollywood star-,
FORMER SNAP INC. CHIEF STRATEGY OFFICER IMRAN KHAN: Sorry to disappoint you-,
BOSA: Not a cricket star-, that’s okay, we’re very pleased we have you.
KHAN: It’s very easy to get restaurant reservations-,
BOSA: [Laughter].
KHAN: ‘Imran Khan wants to come for dinner tonight-,’
BOSA: Do you sometimes-,
KHAN: Sometimes when I’m in London, I try to act like my own assistant, ‘Hello-,’
BOSA: There you go, it’s a-,
KHAN: ‘I’m calling on behalf of Mr Khan-,’
BOSA: It’s a great name to have, then [laughter]. But let’s talk-, let’s talk about Imran Khan, the man we have right in front of us, thank you, by the way, for coming all the way from LA-,
KHAN: Thanks for having me.
BOSA: One of our furthest guests to travel here. Let’s jump right in to – since I know you love to talk about Snap, we’ll save that one – we’ll talk about your business, first, this new business, you’re going in to ecommerce. My question for you is what can you do that Amazon cannot? Amazon is one of the most feared companies in the world, particularly where I sit, and where you sit, in California, especially in Silicon Valley. They don’t care about profits, necessarily, they have billions and billions to invest, and you were at Snap, you know what it’s like to have a giant tech company copy what you’re doing, so what can you do that Amazon can’t?
KHAN: Yeah, look, I think, you know, big is not always better, you know, I think if you look at the history of innovation, you know, if big was always better, new companies would never come up, and I think if you look at, in technology, the innovation is happening at such a rapid pace, and the market’s still so nascent, right? I was looking at the data yesterday, only 10% of all retail sales in the US in Q3 is ecommerce. Only 10%. So, when you have such a large population, and large market, not one or two players can serve everybody perfectly, so there’s a lot of room to innovate and supervise allocation.
BOSA: What is your innovation? What are you going to do?
KHAN: That’s-, you need to stay tuned [laughter].
BOSA: Oh, we have to stay tuned to that, okay, but you will offer something that Amazon is not, is that right?
KHAN: Of course.
BOSA: And you kind of said on the way out here, you are scared of Amazon, though. You’re going to be watching them, you watch what they do, and you need to protect your business from that.
KHAN: I think you should always be very fearful of your competition, but you shouldn’t let fear drive it. I think the big thing that-, what I learned over the last 20 years, focusing on technology, I think it’s all about, first you really have to identify who are your customers, and I think that so many companies always forget who their customers are. And once you identify your customers, you have to be maniacally focused on serving those customers the best.
BOSA: Well, now you sound like Jeff Bezos, that’s what he says, ‘Customer first,’ so you’re probably off to a good start. Now, you are no stranger to ecommerce, you worked on Alibaba’s IPO. What lessons did you learn from Jack Ma?
KHAN: I think probably the most amazing lesson I learned from Jack, and my time working with Alibaba Group-, you know, the IPO was not the only thing, I advised them buying back shares from Yahoo!, when we were at Credit Suisse, we actually invested $50 million dollars after doing the convertible process. I think one thing that I really admire about-, that how great culture he built. You know, I think the culture is the immune system of a company, because when you build a company, you’re going to have a good time, and you have a bad time, so you need to have a strong immune system to survive through it, and the culture is the immune system, and he built an incredible immune system, the team he put together, the culture he created, and the partnership culture, that’s really, really remarkable, and I think, as I think about building the new business, and trying to recruit people, I think culture is probably one of the most important things we want to do, because if you bring-, put in the right culture, and right innovation, and a great team, you know, people can do the impossible.
BOSA: Right, now Jack Ma was in the news for another reason, this week, made some headlines, while the East Tech West conference was going on. The People’s Daily said he was a Communist Party member. Some people were surprised by that. Were you surprised by that? Is that-, do you need to be close to the Chinese government, a member of the Communist Party, to operate, to grow to the scale that Alibaba has?
KHAN: Look, I think different countries have different political systems, and their citizens have different political beliefs, right? And I don’t-, when I meet a CEO, of NBC, like Steve Burke, I don’t ask him, ‘Hey, what’s your political affiliation?’ So-, so I think-, I think-, I don’t know if it’s that relevant, from a business perspective, what people’s personal political beliefs are, or who they vote, or who they don’t vote.
BOSA: Right, so not something that you and Jack ever spoke about?
KHAN: I did not talk to him about his political belief.
BOSA: Let’s talk about China and your business. We spoke to some people yesterday, one VC said that startups now have to look at China immediately, from the get-go, because of the scale, and we’ve heard a lot about the enormous opportunity here this week. Are you looking at China now?
KHAN: I think for ecommerce, you know, it’s such an operational-heavy business, right, there is a lot of operational work you need to do, and so I think at the beginning, we’re going to focus on the US, which is the core market for us, at the beginning.
BOSA: Okay. Let’s get to the elephant in the room, Snap, you helped it go public at $17, it’s now trading at $6 and change. I know that you helped grow revenue, and do a lot of things there. Clearly there’s still a lot to do, and markets don’t think it was enough, so why leave when you did, which was just a few weeks ago?
KHAN: Yeah, I think, first of all, it’s never-, I never believe in timing things, right, because if you’re always trying to time things, you always miss the bigger picture. I think what we achieved, in the last four years, as Snap, in the business, I’m incredibly proud of. Right? When we joined, the company had pre-revenue, when we left, they had $1.2 billion dollar run rate revenue. When we joined, there were, like, a little over 100 or so people, now we have 3,000 people. The company was in a QuickBook, now we’re a public company. So, as a business, over the last four years, we have incredibly achieved a lot of things. Look, stock price is a sentiment barometer at that point what investors are thinking about your company, what they are thinking about the overall landscape, what they are thinking about the overall macro economy. You just cannot really make a decision based on stock price. You know, as I said yesterday, in our conversations, that Evan and team are focused on building the business, you know, I think it’s all about innovation, so if they can continue to innovate, they will do fine.
BOSA: Then what are you seeing, that the market is not seeing? Why doesn’t the market seem to believe in that innovation, and all the things that you put in place?
KHAN: Look-,
BOSA: What are they missing about Snap?
KHAN: I think, you know, Snap has to execute in terms of some of the newer product innovation, you know, I think, this year, obviously, the redesign, and some of the things, there were some hiccups, and I think they need to show that they can continue to innovate the way they did in the past.
BOSA: Right. Now, there’s been some reports that Evan looks at the long-term. Is that-, do you think that that’s the right way to look at your company, if you’re a public company CEO, not worry about the markets and the day-to-day, and look at the long-term?
KHAN: Look, I cannot really comment on what Evan does or doesn’t do, that’s-, I think you need to ask him, but I think, you know, if you look at-,
BOSA: Well, you worked with him on strategy, though-,
KHAN: Yes-,
BOSA: So, you know, you guys would work together on this, so would you talk about the long-term-, how much would you talk about the short-term, and what you needed to share and show investors?
KHAN: Yeah, look, I think what-, I think it’s really- have to appreciate what I did during the work was, that’s probably not the right thing to talk about, because of a variety of reasons, but I think if you take a step back, and look at the people who build big businesses, you know, they always really have to believe in long-term, and-, and, you know, if you don’t execute-, primarily in the technology space, the world has changed so fast, if you don’t take a long-term view, and just really manage business, from day to day, and quarter to quarter, you will miss a lot of different things. So, I think, you know, my interactions with a lot of great entrepreneurs, you know, they always really focus on long-term, so I think that’s a good thing to do, but also, at the same time, you obviously have to recognize that long-term consists of a series of short-terms, but focus-, losing focus on long-term, and who your customers are, is never the right thing to do, so I think all great entrepreneurs should focus on long-term.
BOSA: Right, and, you know, I know that Evan, and you working with him, big picture, you have this vision for Snap to be essential, right, especially based on the camera. Is there a business plan to get there? Why is execution taking so long?
KHAN: I think-, you know, I probably would beg the question with that, you know, because I think-, you know, there’s very few companies – you know, in China, obviously, that happens all the time, apparently – but outside China, there’s very few companies that goes from $0 to $1.2 billion dollar revenue, run rate revenue, in 45 months. So, that’s-, to me, it’s a pretty good execution, but-,
BOSA: You’re happy with that?
KHAN: I’m very proud of it, what we achieved.
BOSA: Okay. What have you learned from your time at Snap, then? What lessons are you going to take, when you start your own business?
KHAN: Look, I think-, a few things. I think-, you know, I think, one, really continue to build a great team, surround yourself with really, really smart people, bring a-, create a great culture that is transparent, and-, you know, and be deliberate, very deliberate what decisions you make.
BOSA: Okay. Let’s talk a little bit about what was going on at Snap, when you were there, you were Chief Strategy Officer, and, all of a sudden, Instagram starts doing some very similar things that Snap was doing. What was that like? How did your strategy change, or not change? Did you start to pay more attention to Instagram? Or were you paying attention all along?
KHAN: I think-, look, I think, again, the right way to run a business is really focus on how you continue to innovate your product, and the moment you cannot innovate, you know, you are not be able to succeed. You know, I think if you look at, in the mobile, what’s happening, that people are continually spending more and more time on mobile devices, and the time spent on mobile devices will continue to grow, and as the time spent on mobile continues to grow, everybody’s trying to fight for how can they capture more share, and the only way you’re going to get it is through innovation, and continuing to build the best product and best engagement.
BOSA: Right, and Snap’s product is still more innovative? Would you say that? To Instagram? Is Instagram now creating its own, or is it still copying?
KHAN: I think they’re very different products, in many different ways. There are obviously a lot of similarities, but then there’s a lot of differentiation, so there’s a couple of differences, right? So, in Snap, you open to a camera, so you actually record your experience. In Instagram, you go there, and you actually open to someone else’s experience. A very different experience. While they have a lot of similarities, they also have a lot of differences like that. For example, Snap has products like maps, you know, Instagram doesn’t. So, I think, you know, while we focus a lot on the different similarities, there’s-, also there’s a lot of different things, that the different products have, and I think, long-term, who is going to win will ultimately depend on who is going to continue to innovate.
BOSA: Is it a zero sum game, then, if you say it depends on who’s going to win?
KHAN: I think-,
BOSA: Or can both win?
KHAN: I think, if you look at markets like China, there are multiple players that exist, time spent continue to-, perfect example is if you look at the network television, right? There are ABC, CBS, NBC, Fox, they all create different kind of shows, but you have four different networks who are doing really, really well.
BOSA: Right. Let’s talk a little bit-, I would love to get your view on the very bad year for Facebook. How do you see-, where have they misstepped? Have they? And what do you think needs to happen now? Not just what Facebook needs to do, but perhaps in terms of regulation?
KHAN: So, two different questions. I think tech companies, as they’re becoming really, really big, you know, there will be-, you know, obviously, they’re impacting a lot of people’s lives, they’re impacting a lot of different businesses, and when that happens, you know, there has to be some sort of regulations. But I think one of the things that’s really, really important, is that it has to be smart regulations. Right? I think-, I am not opposed to having regulations, but what-, we really need to be very, very mindful that the regulations we are doing are the smart regulations. Because I think-, take an example of the banking industry, right? In 2008, the financial crisis happened, all these different regulations came along, you know, because-, I think probably one of the goals was, make the banks safer, let’s make sure that they’re not too big to fail. Ten years later, you know, the US biggest banks are still the biggest banks, and they’re bigger than ever. So, I don’t-, I don’t think-, are those-, so now I really have to take a step back, and say, ‘Were those regulations really smart? What happened to all the smaller businesses? What banks? What happened to all these community banks? So, again, I think one of the reasons the technology companies are really, really being very successful, is that there’s a lot of entrepreneurs who are able to come and build great businesses, and suddenly, if you want to bring regulations, that’s fine, but those regulations have to be smart, so that it doesn’t stifle, you know, innovation. And I think that’s really, really important.
BOSA: In the case of Facebook, have they mishandled their users’ data?
KHAN: Look, I think-, I don’t have all the details to really talk about what they did or they didn’t, you know, but-,
BOSA: What you know-,
KHAN: But, based on-,
BOSA: And there’s a lot of evidence that has come out.
KHAN: Based on-, based on what I read, in the newspaper, you know, that’s clearly very disappointing, you know, I think, in terms of, you know, like, for example, users- opposition research for people who criticize you, that sounds a little bit of a silly thing to do, if you’re a corporate leader, that somebody criticizes you, and you have to go after an opposition leader. And this probably begs the question that, if you are so conscious about those kind of things, what other things you have potentially-, you know, have done. You know, so the code of conduct, that-, you know, that, I think, is obviously something-, they need to look in to it, that whether there is a right standard of code of conduct in the business.
BOSA: Right. So, you’re saying, essentially, there could be more skeletons in the closet?
KHAN: I have no idea. I think, you know, if I were running that business, and issues like that, I would probably look in to it, those other area, that code of conduct that’s something I can be proud of.
BOSA: Okay. When the article came out, about opposition research, did anything sort of go off in your mind, ‘That made sense’? Do you think that that was ever directed towards Snap?
KHAN: I don’t know, so I’d rather not speculate.
BOSA: Okay. Fair enough.
KHAN: Hopefully they didn’t do opposition research on me-, just kidding [laughter].
BOSA: [Laughter]. If you see a piece now-,
KHAN: [Laughter].
BOSA: [Laughter]. Okay, well, we have just about a minute left, and I would also love to open it up for questions, are you okay with that, Imran?
KHAN: Sure.
BOSA: Anyone like to ask Imran a question? Favorite Snapchat filter? Better not ask about favorite Instagram filter-,
KHAN: I don’t even know.
BOSA: You do have Instagram on your phone, you were showing me, so-,
KHAN: Yeah, I obviously use-,
BOSA: In different-, yes, exactly-,
KHAN: But I-,
BOSA: Different needs-,
KHAN: Yeah, but I don’t use it.
BOSA: What do you use Instagram for and what do you use Snap for?
KHAN: Uh, I use Snap for communications, I use Snap, too, for expressing my day-to-day life. And Instagram, I use to look at some influencers, or celebrities, you know.
BOSA: Can’t you do that on Snap, too?
KHAN: You can, but Instagram captures their best moment. Right?
BOSA: Okay.
KHAN: It’s just you take one picture-, if you take 80 pictures, you take the one picture, and put the one picture. It is the best of yourself, and Snap is more for your daily life-,
BOSA: But isn’t that what Snap is supposed to do, too? You think about someone, like, uh-, which-, Kylie Jenner, who-,
KHAN: No, Snap is-, Snap-, Snap is more of a visual communications, right? So, the company started with the core thesis that people are communicating more and more with pictures, and-, and that’s how the familial communication came, that you take pictures, and you communicate with pictures, and-, whereas Instagram is you are basically putting your best scene. And it’s great, like, look, I can-, in my opinion, they serve, you know, two different objectives, and that’s fine.
BOSA: And, by the way, I should note, Imran’s phone, I think the first row-, first few rows are all social media, so clearly there is room for-, you know, to have all of them, and multiple platforms, and obviously you’re on WeChat, right?
KHAN: Yes.
BOSA: So, last question, what is your favorite Instagram filter, then?
KHAN: I don’t know, I don’t use-,
BOSA: A classic one?
KHAN: I’ve never used Instagram filters.
BOSA: You don’t use filters?
KHAN: I don’t-, I don’t use Instagram filters.
BOSA: [Laughter].
KHAN: [Laughter].
BOSA: Okay, well, after this, we’ll take a picture-,
KHAN: Sure.
BOSA: With Instagram filters, and I’ll-, I’ll say that this is your first one.
KHAN: I think Snapchat camera is better, I like that one better.
BOSA: [Laughter].
KHAN: [Laughter].
BOSA: Okay. Thank you very much, Imran, for joining us.
KHAN: Thank you.
