A Tale of Two Cities

The West Coast’s Snap Inc (parent of Snapchat) announced it had lost more than $2 billion about the time I came home from Hannover Messe, a huge industrial trade show in Germany.

The contrast between the two “cities” couldn’t be more stark.

Hannover Messe featured the world’s leading companies that do all the heavy lifting, literally, that makes the world work. Factories. Transportation. Energy. Stuff that consumers take for granted.

An endless array of exhibit halls were filled with robots and other technology innovations; since it’s a trade show, much (if not most of it) was ready for purchase and use, if not already working somewhere. I was struck by how little attention it got from mainstream media, since it was clear to me that these brands were not just promising the future, but delivering it.

Then, when Snap announced its 1Q loss, a not-so small detail jumped out at me: It had spent most of that money paying off its investors.

It’s valued at something other then $0 because it promises it’ll make money selling advertising someday, even though there’s nothing particularly unique or protectable about the company’s tech, so it has no exclusive claim to its users’ attention (it’s a “camera company,” whatever that means).

The efficacy and future of advertising itself is by no means certain.

But, like other tech startups, it has a vocal lobby of investors and media that promotes its visions of grandeur, transforming the public markets into a mechanism that converts buzz into dollars. Earnings announcements are opportunities to promise future riches despite the lack of any semblance of a real business in the present.

It’s a massive wealth redistribution program…

Read the entire essay at Medium