Snap Inc. CEO and founder Evan Spiegel has warned that the platform’s beta is killing its business.
In a letter to employees and investors dated Friday, Spiegel said that Snapchat’s business model has been disrupted, and it is too early to know the long-term implications of the beta.
“Snapchat has been transformed from a messaging service into a digital advertising network,” Spiegel wrote.
“In the last two years, our business has experienced a remarkable transformation.
We have grown from the size of a small startup to one of the most valuable media companies in the world.
In order to sustain that growth, we must now build a new business model, one that will not be disrupted by the emergence of Snapchat’s beta.”
Spiegel noted that Snapchat has built a team of 10,000 developers.
Snapchat has had about 6 million active users since its launch on August 21, 2015.
But, Spiegel wrote, Snapchat is now being disrupted by a “beta” on its platform, which it believes is “designed to make it difficult for users to find, interact, and engage with content.”
The beta, Spiegel noted, “is a new approach to digital advertising that relies on the user being able to see and engage in a certain type of content to get more value out of their advertising spend.”
The letter was released ahead of a scheduled earnings call on Tuesday.
In February, Snapchat said it was launching a beta for advertisers.
The beta will test how users use the platform and how advertisers can engage with the content they’re targeting.
The company has been in a free-fall since launching in August.
In December, the company lost nearly half its value and was down to less than $3 billion.
The beta has been met with criticism from users.
In a series of tweets earlier this month, Snapchat’s former head of global marketing, Emily Krasnow, said, “I do not think the beta is going to be successful.
It’s not a good idea to make this a test market.”