Snap at the Trade Deadline

While the rest of the world gives Apple products during the holiday season, Apple gives the rest of the world the finger. OK, more like the silent treatment: Apple is notorious for effectively shutting down during the back half of December. That’s a deserved perk for Apple’s hard-working employees, but it’s a lump of coal for app developers scrambling to ship their end-of-year updates into the App Store in time for use by holiday consumers. The looming shutdown creates a drop-dead date during the first week of December for any new version of an iPhone application to launch. After that, code is frozen and Apple goes dark; all those new devices under the tree are stuck running the early December versions of apps through December 27. As a developer, it’s the last chance to make changes before you have to live with the results that millions will see. It’s tech’s version of the trade deadline.

As that deadline approaches, Evan Spiegel dropped his own Woj bomb (and the worst-kept secret in L.A.) Wednesday morning: Snap is planning on releasing a significant redesign of Snapchat next week. The update, code-named Project Cheetah, was subtly alluded to by the Snap CEO on the company’s earnings call following financial results that sent the stock tumbling:

“One thing that we have heard over the years is that Snapchat is difficult to understand or hard to use, and our team has been working on responding to this feedback. As a result, we are currently redesigning our application to make it easier to use.”

This was a remarkable admission from a company that has long proffered its design aesthetic as both secret sauce and competitive advantage. Indeed, the emergence of Snapchat was a revolutionary challenge to the design construct of “the Feed”—the vertical time- or rank-based listing of content started by Twitter, refined by Instagram, and perfected by Facebook (which in buying Instagram out from underneath Twitter, altered the social landscape forever). Snapchat defined itself as a camera company, and in doing so changed how we think about what communication is—empowering an entirely new design construct around a series of chaotic, disconnected gestures: “the Swipe.”

Snapchat was so unintuitive to use that teens found social status in teaching friends the hidden Easter eggs of functionality within the app. But there was something undeniably viral about this knowledge once attained, and the app’s popularity seemed to spread in spite of itself. Snapchat was simply more fun, from its bite-sized Discover news stories to its augmented-reality face filters. Defenders of the Feed were horrified and disdainful; Snap took pride in its disruption and made it a core proposition. Ben Thompson rightly points out that the iPhone X wouldn’t exist without the Swipe. Those closest to the company know that those closest to Spiegel have always been designers. The Swipe, as an approach, has been sacred.

And that’s what made Spiegel’s latest comments so jarring. Alumni from Twitter’s “clown car” foresaw Snap’s user growth and revenue struggles coming for quarters. But to witness Snap’s founder rethinking the holy tenet of design suggested a deeper challenge. In business, design is often a bridge, but it is rarely a moat. And for the past 18 months, Instagram has been storming Snap’s castle, pilfering key features like stories and features, but slotting them into the design structure of the Feed. The data suggest they’re more accessible, usable, stickier, and—it appears—monetizable presented in the Feed’s construct. So in the design staring contest between Snap and Instagram, the inventor of the Swipe was going to blink. Right?

Well, sort of. In his post Wednesday morning, Spiegel struck a defiant tone reminiscent of Sean Parker’s recent comments, bus chucking Facebook and Instagram for warping our minds through over-weighting social validation and the spread of fake news. Snapchat’s new update will separate the two core features of the app: a Friends section for all communication with friends (including stories) to the left, and, on the right, a dedicated Discover section for content created by media partners, Snap, and influencers. The app’s entry point upon opening will remain Snapchat’s camera screen (it’s still a camera company, after all). Snapchat will adopt some of the principles of the Feed in how it surfaces content to you, by algorithmically curating it. But in a nod to Netflix, the drivers of the algorithm will be both human curation and your own history and preferences, not content surfaced within your friend network. It’s this boosting of content from your friends that Spiegel believes is accelerating the virality of fake news. By reducing the input signals, Snapchat thinks it can reduce the noise.

It’s now clear why Spiegel previously warned that the app redesign might have near-term revenue consequences. Snap’s popular stories created by friends and influencers are currently located on the ad-heavy Discover section, which brings significant incremental user traffic to Discover. By moving all friend activity, including stories, into a different section, traffic—and thus advertising revenue—is almost sure to fall. Snap’s bet is that by better curating the content in Discover, it can deliver a trusted and superior content experience through time.

That’s a big bet, particularly in light of the otherwise modest changes to Snapchat’s user experience announced Wednesday morning. The chaos of the Swipe abides, and it’s unclear from Spiegel’s post whether this latest update gets at the core usability problems that have alienated potential new users. Spiegel is under scrutiny to deliver transformative product changes to rebend the arc of the company upward. This year has punctured the mythical aura of the tech founder (ugh, Travis Kalanick), and as a public company CEO, Spiegel is no longer immune to accountability for results. Further revenue struggles will test the patience of investors. But the fact Spiegel is reflective enough to challenge his most deeply held assumptions should give even his harshest critics hope for his growth as a leader.

With the tech trade deadline upon us, we’re getting a chance to examine Spiegel’s mettle, like the general manager of a struggling contender facing a similar reckoning. What does he hold most dear? What is he willing to give up to make the product better? Can he change the parts without sacrificing the soul? The coming week will tell us much about whether, unlike the ephemerality of its product, Snapchat has built something that can endure.

Nathan Hubbard is an unpaid intern for The Ringer. He was previously CEO of Ticketmaster, head of commerce and global media for Twitter, and a touring singer-songwriter. His next project is currently in stealth.