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Snapchat Discover has updated its editorial guidelines to weed out explicit and misleading content, The New York Times reports.

Here is the strategic objectives that are likely guiding Snapchat’s decision to implement the new editorial rules, along with a couple final points to consider:

• Raise the quality of Discover content. The new rules restrict media outlets from publishing content with no news or editorial value, require all content to be fact-checked and accurate, and prevent reports or links to third-party "fake news" websites. Snapchat will also introduce an age-gating tool next month that can prevent certain age groups – minors – from seeing particular pieces of content.
• To be more attractive to advertisers. Premium content attracts premium advertisers — in part due to the brand benefits of running a campaign alongside such content, and partly due to the belief that such content attracts the types of audiences that advertisers value more. This new emphasis on quality content could help Snapchat lure luxury brands, but even on a more general basis, it will make the platform more appealing to brand advertisers at large.
• To stress Snap’s unique approach to news. These rules emphasize Snapchat’s hands-on approach to media curation, compared to the laissez-faire approaches of Facebook and Twitter. Snapchat’s overseeing of Discover is similar to how traditional media companies – in print and TV – curate and distribute content. This approach can bring benefits insofar as maintaining quality and integrity the platform, by blocking out poor-quality content that detracts from the app.
• And stoke investor appetite, pre-IPO. All Snap developments are happening under the backdrop of an imminent IPO, so most almost all news is being analyzed as a move by the company to shore up its product and revenue model before going public. This is no exception. Raising the bar on Discover content should strengthen investor confidence by 1) upping Snapchat’s pull on brands, (2) protecting Snapchat from the thorns of “fake news” and online abuse that hamper its rivals. 

Striking the right balance can be hard. There can be a fine, subjective line between content that’s newsworthy or not; determining this line is the job of an editors, be they human or algorithms. And typically, provocative "clickbait" content is successful in what it sets out to do, which is to generate clicks, which is in turn good for advertisers. But at the same time, too much click bait deprecates the app experience, frustrating users and advertisers alike.

Snapchat’s shift towards high-quality content follows an well-traveled path. Facebook, for example, updated its News Feed algorithm last summer to emphasize quality content over clickbait. For particular digital outlets, the quality of their content will progress stages: they begin with provocative content that begets clicks, and when the user base is built and the engagement patterns solidified, then shift towards higher quality content.

Mobile-app makers and content creators are vying for consumer attention in a crowded and noisy market.

Even if an app can stand out enough to prompt a consumer to download it from among a list of millions, it then faces the challenge of enticing him or her to use it enough times to recuperate development, maintenance, and marketing costs. To make matters worse, those marketing costs have hit record-high levels over the past year as discoverability has become more challenging.

And while consumers are spending more time in apps, most of that time is spent in a few favorites. Consumers spend almost three-quarters of their total smartphone app time in just their three favorite apps, according to comScore. 

But it's not all doom and gloom: There are numerous tools at a publisher's disposal to engage and re-engage consumers, and there are new products and solutions coming to market that can help alleviate some of the issues around this app engagement crisis.

Jessica Smith, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on app engagement that explores the current state of the app market, the issues around engaging consumers, and the tools at a publisher's disposal. It also identifies best practices for the implementation of some app engagement tools, and presents the pitfalls that some publishers fall into in this pursuit. 

Here are some key takeaways from the report:

• The app market today is challenging and volatile. It's difficult to stand out, and most apps have to be offered for free in order to entice consumers who have too much supply to choose from. This puts greater emphasis on engaging consumers after they've downloaded an app in order to recoup costs. 
• Consumers are more difficult to engage today, as most have dozens of apps installed on their devices yet spend most of their time in just a select handful of favorites. 
• There are numerous solutions at hand for mobile app publishers and content creators seeking to engage consumers. Push notifications, in-app messaging, and app message centers with badges are three tools publishers can use to engage consumers. 
• While many publishers mistakenly rely solely on push notifications for app engagements, this is a poor practice because many consumers don't allow push notifications and those that do can easily be overwhelmed when they receive too many. 
• The best solution often includes leveraging two or three of these tools to engage consumers with the right message at the right time. The technology in this market has grown increasingly sophisticated, and publishers that don't diversify their approach run the risk of annoying their consumers to the point of abandonment. 
• There are emerging engagement technologies that will change the current app engagement norms and present new ways for app publishers to communicate with users. The mobile ecosystem is changing quickly as technology improves and consumers become more comfortable conducting more activities on mobile devices.

In full, the report:

• Identifies the major challenges in today's app market and explains why employing good app engagement practices is more important than ever before.
• Presents the major app engagement tools currently available.
• Examines the pros and cons of each app engagement tool while outlining some pitfalls that publishers encounter in implementing them. 
• Prescribes best practices for adopting various app engagement tools or strategies. 
• Assesses how the market will likely change over the next five years as emerging technologies change both consumer behavior with mobile devices and introduce new tools with which to engage consumers. 

Interested in getting the full report? Here are two ways to access it:

1. Subscribe to an All-Access pass to BI Intelligence and gain immediate access to this report and over 100 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. »START A MEMBERSHIP
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As Snap Inc. accelerates towards its IPO, the company is reportedly meeting with ad agencies to seek huge commitments of their clients' ad spend for 2017.

Snap chief strategy officer Imran Khan and global head of sales Jeff Lucas are asking for amounts of between $100 million and $200 million, according to The Wall Street Journal.

That would see the biggest advertising group, WPP, more than double its $90 million spend on Snapchat from 2016. WPP CEO Sir Martin Sorrell told Business Insider earlier this month his firm had only expected to spend within the region of $20 million to $30 million at the beginning of 2016. Other advertising holding companies would also be significantly upping — likely tripling — their spend even to reach the $100 million mark.

Snap declined to comment.

Here's how advertising commitments work

Media-buying companies very, very rarely guarantee a level of spend with any media owner. Nevertheless, all the big platforms — Facebook, Google, TV companies, newspaper groups — pursue upfront deals with agencies. What those platforms are looking for is an expression of intent, in writing. But it is unusual for there to be a 100% guaranteed level of spend.

For media platforms like Snap, gathering these expressions of intent gives them a clearer idea as to what their revenue run rate might be for the following year. Snap, in particular, is keen to show potential investors in its IPO that its revenue outlook is strong, and growing.

It is also in the agencies' interests to sign these contracts because it helps them set a framework for how they will work with the platforms in the year ahead. 

The most immediate benefit is pricing, which tends to be tiered: If you're committing to spend $100 million a year, you'll tend to pay less per ad than if you were spending just $20 million.

But it's not just pricing. The nuance of such deals — which can often get lost in the big upfront numbers — is that the platforms usually agree to give agencies a certain level of account management, data, or first access to tech, depending on how much they pay.

However, while the agencies are signing these expressions of intent in good faith, it's very hard for media-buying agencies to really commit their clients' dollars in advance.

For that reason, there is usually some sort of get-out for the agency. For example, in 2007 and 2008, following the global financial crisis, many companies decided to limit their spend on advertising. Also, advertisers may simply change their strategies and want to go after different audiences. And some agency groups could lose a big client, which would immediately result in the reduction of their overall spend with a media platform. That usually leads to the media platform levying some sort of penalty on the agency.

Advertising commitments are a fairly good predictor of actual spend. The media buyers we spoke to said they tend to make their commitments quite a conservative number that they usually do reach by the end of the year. But, to use a retail analogy, they are not forward-order numbers that Snap can take to the bank.  

Snap's big pitch to IPO investors is all about showing growth

Snap will no doubt be using these numbers in its pitch to investors as it looks to convince them it can build a big, sustainable ads business to rival the likes of Google and Facebook. 

Snapchat has 150 million daily active users, an amount now equaled by Instagram's very similar disappearing video and photo sharing feature Stories, which the Facebook-owned app launched in August. 

Snap's Khan will not only need to convince investors that its revenue is growing, but that its userbase is increasing, and that its userbase in nuanced enough and more engaged with Snapchat than other platforms, which will encourage advertisers to continue spending.

New data points from eMarketer might throw up some uncomfortable questions about whether Snap's userbase is still growing.

EMarketer suggests fewer internet users in the US said they watched live streaming video in November 2016 compared to June 2016:

And fewer US teens said they accessed Snapchat daily in November 2016, compared with November 2015, according to eMarketer:

EMarketer predicts that Snapchat generated $367 million in ad revenue last year and that it is on course to get close to $1 billion in 2017.

Snap has moved quickly to build out measurement and targeting options to encourage advertisers to spend more money there. Most recently, the company signed a deal with Oracle Data Cloud, that will allow advertisers to use offline data, such as information from loyalty cards, to target consumers on Snapchat.

Snap now partners with more than a dozen measurement companies as it looks to prove to advertisers that it is not only a viable alternative to Google and Facebook — a duopoly advertisers and agencies are longing to become less dominant — but that advertising with Snapchat actually boosts their sales. If it can successfully do that, then Snap is set for a bumper IPO.

SEE ALSO: A leaked report shows how much money publishers make from platforms like Facebook, Google, and Snapchat

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Snapchat’s parent company Snap is in talks with the media-buying arms of several big advertising holding groups — including WPP, Omnicom, Publicis, and Interpublic — with an aim to secure ad-spending commitments of $100-$200 million from each of these firms this year, The Wall Street Journal reports.

Snap’s primary goal is to siphon money away from the lucrative US TV advertising market, which PwC estimated will reach $76 billion this year. These are the steps Snap is taking to accomplish this: 

• Facilitating a shift in TV ad dollars. Snap’s advances towards big ad agencies arrives with the announcement of a Snapchat-Nielsen partnership. Advertisers can now buy ads on Snapchat using a similar system as Nielsen’s TV offerings. Making the transition from TV to Snapchat for advertisers as seamless as possible will nudge them into spending on Snapchat. 
• Emphasizing Snap's demographics. Imran Khan, Snap's chief strategy officer, pitched Publicis executives and clients last month. He argued that Snapchat merited TV ad dollars by calling attention to the platform's large user base of 18 to 34 year-olds – a demographic that traditional TV is increasingly hard-pressed to reach.
• Tapping into professional networks. A key figure leading Snapchat's pursuit of TV ad dollars is Jeff Lucas, the company's global head of sales, and former ad sales chief at media giant Viacom. Lucas is well-connected to TV ad executives, which should help Snapchat capture some of the $70 billion spent on US TV ads each year.
• Creating a “third force” in the space. Ad agencies are also keen to support Snapchat as a new superpower to counteract Facebook and Google’s influence over digital advertising. Snap is aiming for $1 billion in revenue this year — a small sum compared with the $27 billion and $70 billion that Facebook and Google are respectively expected to rake in this year.

WPP was Snapchat's biggest customer last year, investing $90 million into the platform.  According to the Wall Street Journal, rival agencies spent much less than that, with one spending about $30 million. Snap's target of $100 to $200 million from each ad agency would be two to three times more than these companies spent on the platform last year, says the Wall Street Journal. 

App developers long considered the "pay once and play" model — in which users pay up front an app and aren't prompted to make in-app purchases — the best way to generate revenue. But as more "free-to-download" apps entered the market, users increasingly opted for these experiences. These apps offer microtransactions for in-app goods and services, and in-app ads.

As the app ecosystem expands further, it will become increasingly challenging for developers to compete in a crowded market. Overall, global gross app revenue will double to reach $102 billion by 2020, according to recent projections by App Annie. As a result, app monetization strategies need to shift at least as quickly as consumer trends and preferences in order for developers to capture a piece of this growing market.

Laurie Beaver, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on app monetization that explores the top app monetization strategies under user- and advertising-paid approaches, and the growing combination of both. We will also look at emerging trends that could help developers navigate the fiercely competitive app ecosystem, and address the potential barriers that developers will have to overcome to reap the benefits of the multi-billion dollar market.

Here are some of the key takeaways: 

• The app ecosystem is expanding quickly, and it's becoming increasingly challenging for app developers to compete in a crowded market. 
• To capture a piece of the growing market, app developers must adapt their strategies at least as quickly as consumer trends and preferences change. 
• Developers can choose a user-paid or an advertising-paid approach to monetizing their apps. Different monetization strategies work best with different apps.
• There are a number of widespread challenges that developers must contend with both before and after they enter the app market.  

In full, the report:

• Provides key factors driving the expected growth of global app revenue
• Evaluates the top app monetization strategies
• Looks at emerging trends to help developers navigate the app ecosystem
• Explains the challenges that developers face to compete in the app market
• And much more

Interested in getting the full report? Here are two ways to access it:

1. Subscribe to an All-Access pass to BI Intelligence and gain immediate access to this report and over 100 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. » START A MEMBERSHIP
2. Purchase & download the full report from our research store. » Purchase & Download Now

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Facebook has started testing the ephemeral Stories format in its main mobile app, Business Insider reports.

The test has rolled out in Ireland initially, and the company plans to bring it to more countries in the coming months.

Facebook Stories is based on the format of the same name originated by Snapchat. Users can add photos and videos, complete with selfie- and geo-filters, to a story that friends can tap through, while new posts disappear after 24 hours. Stories appear near the top of the interface, below the search function and above the status update box. Users can also reply to a story with a direct message.

The new feature aims to tap into the growing trend of visual social sharing. Facebook acknowledged in a statement that people are sharing more photos and videos than ever before – insinuating a shift away from text-based sharing – and that it wants to make it as easy as possible for users to do this in the app. More than this, Facebook Stories is part of a broader strategy by the company to emphasize its video and camera experiences, as company CEO Mark Zuckerberg touched upon in Q3 2016:

• Becoming video-first is Facebook’s primary near-term priority. Video was Facebook’s biggest theme of Q3 2016 and is the biggest product priority for Facebook and Instagram, and increasingly important WhatsApp and Messenger too.
• Facebook is also focused on enhancing its camera experience. The company wants to enhance both the consumption and production/sharing side of the camera, with new camera-centered interfaces and photo-sharing features in its apps.

Meanwhile, Facebook Stories will hope to curb Snapchat’s momentum. This could be particularly effective in keeping older age groups, who may not have migrated to Snapchat, loyal to Facebook’s app. It could also cut short Snapchat’s global growth efforts. Facebook is widely used around the world and is in certain countries where Snapchat doesn’t have a strong presence yet. People would be discouraged from using Snapchat in these countries if Facebook can bring the Stories feature to market first.  

Introducing the new Stories feature also unlocks revenue opportunities. It opens the door for ad products to be worked into the Stories format in the future, a tactic that Facebook has already found success with on Instagram. Instagram Stories began monetizing earlier this month, with 5-second photo and 15-second video ads between stories, after growing engagement for the feature to more than 150 million daily active users. This opportunity will be welcome by Facebook, which has stressed that it’s starting to run out of ad space.  

BI Intelligence, Business Insider's premium research service, has compiled a detailed report on mobile video that takes a look at how short-form mobile video has exploded. The report examines how YouTube, the historically dominant force in short-form video, was slow to implement a mobile video strategy, opening the door for new players —namely Facebook and Snapchat — to emerge.

It also takes a look at how winners will begin to emerge in distinct video content categories. YouTube, for instance, will rely heavily on its homegrown YouTube stars to distinguish its video library and drive loyalty. Facebook will become the go-to place for brands and media companies to engage with the largest audience. And Snapchat will utilize its live-events coverage and exclusive content to promote video communication among younger mobile audiences.

Here are some key takeaways from the report:

• The rise in mobile video viewing can be attributed to several factors: an increase in overall time spent on mobile, the convenience of on-demand viewing, a preference for digital video viewing, and the increased availability of mobile video content.
• As video becomes mobile-first, YouTube's hold on the short-form video industry is waning. The number of videos that are uploaded to the platform per month has remained stagnant over the past year, according to Socialbakers data shared with BI Intelligence.
• Facebook is in the best position to upset YouTube as the go-to place for brand and media companies to upload videos and for users to watch these videos. Although Snapchat may not be competing with Facebook and YouTube on video volume, the app is changing how consumers, brands, and publishers are using mobile video for communication, news and entertainment, and live-event coverage.

In full, the report:

• Maps out the rise of mobile video viewing and lays out the main drivers of this trend.
• Examines why YouTube's hold on the short-form video industry is waning as viewers migrate to mobile viewing.
• Illustrates the dramatic increase in the number of videos that brands and media companies are publishing to Facebook over the past year.
• Forecasts the number of videos that US brands and media companies will publish to both Facebook and YouTube in 2016.
• Explains how Snapchat is able to compete with larger video platforms and is changing how brands, media companies, and consumers are using mobile video.

To get your copy of this invaluable guide, choose one of these options:

1. Subscribe to an ALL-ACCESS Membership with BI Intelligence and gain immediate access to this report AND over 100 other expertly researched deep-dive reports, subscriptions to all of our daily newsletters, and much more. >> START A MEMBERSHIP
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The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of the rapidly changing world of mobile video.

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Snap Inc. CEO and co-founder Evan Spiegel had a big haul in 2016.

Snap made its IPO filing public on Thursday, revealing that it generates over $400 million in annual sales and has an average of 158 million people using its namesake app on a daily basis.

It also revealed some information on executive compensation.

The 26-year-old chief executive earned a $503,205 salary, according to the SEC filing, plus a $1 million bonus.

His total salary for the year of $2.4 million also includes the $890,399 that the company pays for a security detail.

Of note, Spiegel's base salary will be reduced to $1 when Snap's IPO is registered and his bonus will be based on the company achieving performance criteria agreed upon by the board.  By taking a $1 salary, Spiegel is following in the footsteps of other tech company founders like Google's Larry Page and Facebook's Mark Zuckerberg.

Spiegel holds 21.8% of class A shares, 2% of class B shares, and 50% of class C shares.

SEE ALSO: IT'S OFFICIAL: Snap just filed for its IPO

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Snapchat parent company Snap Inc. posted a net loss of $514.6 million in 2016, according to the initial public offering prospectus it filed on Thursday.

The company's losses have been widening in recent quarters as Snap ramps up spending and hiring.  

And Snap also that it "may never achieve or maintain profitability," as it plans to continue investing heavily in its business.

"We began commercial operations in 2011 and for all of our history we have experienced net losses and negative cash flows from operations," Snap said in its regulatory filing with the SEC. "If our revenue does not grow at a greater rate than our expenses, we will not be able to achieve and maintain profitability."

The warning comes as Snap plans to list shares in March, and could fetch a valuation of as much as $25 billion, people familiar with the matter have said.

Snap reported a net loss of $372.9 million in 2015, further indicating that its expenses will continue to grow. It had annual revenue of $404.4 million in 2016, up from $58.6 million in 2015.

SEE ALSO: Here's how Snapchat thinks strategically about 'reinventing the camera'

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Snapchat parent company Snap filed for IPO today— and if one thing is clear, it's just how much the startup and its potential $25 billion valuation depend on cofounders Evan Spiegel and Robert Murphy.

You can read Snap's IPO filing for yourself here.

The short version is that Spiegel and Murphy are considered indispensable to the company, and that they'd retain total control over the company, even if one or both of them were fired by the board of directors — which, thanks to their high degree of control, would only happen if they turned on each other.

And if one of them dies, then nine months later, the remaining cofounder would be able to "exercise voting control over our outstanding capital stock."

In other words, the filing indicates that there is no Snapchat with Spiegel and Murphy, and their control is going to last for a very long time.

The important bits about Spiegel and Murphy from the filing are as follows:

• CEO Evan Spiegel owns 21.8% of the company, the filing shows, making him the largest shareholder along with CTO Robert Murphy who owns the same amount. "Our two co-founders have control over all stockholder decisions because they control a substantial majority of our voting stock."
• "While Mr. Spiegel, as CEO, has been responsible for our company’s strategic vision and Mr. Murphy, as CTO, developed the Snapchat application’s technical foundation, should either of them stop working for us for any reason, it is unlikely that the other co-founder would be able to fulfill the responsibilities of the departing co-founder," says the filing. 
• According to the filing, Spiegel and Murphy have both signed employment agreements, meaning they can theoretically quit or be fired by the board of directors at any time. Given their control of the company, it seems that the only way for one of them to be fired would be in the unlikely event of one turning on the other.
• Even if one or both of them is fired, "they will continue to have the ability to exercise the same significant voting power and potentially control the outcome of all matters submitted to our stockholders for approval."
• If either Spiegel or Murphy passes away, their Class C stock will convert into Class B stock nine months later, and "the remaining co-founder will be able to exercise voting control over our outstanding capital stock."

On a weird, morbid note, the filing also notes that "Mr. Spiegel and Mr. Murphy are high profile individuals who have received threats in the past and are likely to continue to receive threats in the future." In other words, Snap is warning that the two men may be facing danger from crazed fans. 

Mark Zuckerberg wields a similar kind of total control over Facebook. But, it should be noted, back in June 2016, Facebook changed its rules such that he'd relinquish that control if he leaves the company for any reason.

SEE ALSO: Facebook is changing its rules so that Mark Zuckerberg can't keep control if he leaves

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Snap is a social media startup with just over 1800 employees. Apple is the world's most valuable company, with over 80,000 US workers.

But Snap still sees the iPhone company as a competitor. 

In an SEC filing released on Thursday, Snap mentions Apple several times as a competitor, despite the fact that Snap's revenue comes from advertising, a business that Apple almost entirely ignores.

Snap also mentions Facebook, Google, and Twitter as competitors, among others. But those companies have businesses that are more closely in competition with Snap's primary product, Snapchat. 

"We compete with other companies in every aspect of our business, particularly with companies that focus on mobile engagement and advertising," Snap leadership wrote in its S-1 filing. "Many of these companies, such as Apple, Facebook (including Instagram and WhatsApp), Google (including YouTube), and Twitter, have significantly greater financial and human resources and, in some cases, larger user bases."

"We compete broadly with the social media offerings of Apple, Facebook, Google, and Twitter, and with other, largely regional, social media platforms that have strong positions in particular countries," according to a risk factor listed in Snap's filing. 

Snap is likely referring in the case of Apple to iMessage, a messaging platform that features stickers and animations similar to Snapchat. Apple says there are 1 billion Apple devices in use, and most of those can run iMessage. 

One worry for Snap is that Apple could use its dominant position in the smartphone market to muscle Snap off of consumers' home screens. Apple has been rumored to be working on a Snapchat-like video editing product, maybe in its camera app. 

From the filing: 

Certain competitors, including Apple, Facebook, and Google, could use strong or dominant positions in one or more markets to gain competitive advantages against us in areas where we operate, including by:

• integrating competing social media platforms or features into products they control such as search engines, web browsers, or mobile device operating systems;
• making acquisitions for similar or complementary products or services; or
• impeding Snapchat’s accessibility and usability by modifying existing hardware and software on which the Snapchat application operates.

Snap has released a hardware product, Spectacles, putting the company more closely in competition with Apple, which makes its money by selling hardware. However, Apple does not have a glasses product to compete with Spectacles, a pair of camera-equipped glasses that Snap CEO Evan Spiegel has called "a toy."

In Thursday's filing, Snap admitted that the revenue from Spectacles was "not material."

SEE ALSO: IT'S OFFICIAL: Snap just filed for its IPO

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Snapchat just filed its paperwork to go public. And its 26-year-old CEO isn't the only one who's about to get paid.

Lightspeed Ventures was the first venture capital firm to invest in Snapchat, and it owns a meaningful chunk of the company. 

Lightspeed found the startup thanks to one of its partners, Jeremy Liew. And in March 2012, Liew's Facebook profile picture was of himself and US President Barack Obama.

He didn't know it at the time, but that picture would help him land a crucial early stage investment.

When Liew first found Snapchat, the disappearing photo app had fewer than 100,000 installs. Liew's VC partner had seen it on his teenage daughter's phone. She told her father there were only three apps high school kids were using: Angry Birds, Instagram, and Snapchat. Liew was familiar with the first two. But he had never heard of Snapchat.

The comment was enough to pique Liew's curiosity. He made it his mission to find out who was behind the mysterious app.

Liew did a Google search and came up dry. No articles had been written about Snapchat. There was no contact information on the startup's website except for a generic email address. Liew messaged it and heard nothing back. Liew looked up the company on LinkedIn and sent a message.

Again, there was no response. 

Determined, Liew did a WhoIs lookup on the domain name, Snapchat.com. It had been registered by Toyopa Group, the former parent company of Snapchat. Spiegel had named it after the street his father lived on, Toyopa Drive.

Liew did a Google search for Toyopa Group and found Evan Spiegel's name. He was a student at Stanford, where Liew had also gone to school. Liew was able to message him on Facebook through the Stanford alumni network.

When Liew sent the Facebook message, Spiegel finally replied. He wasn't looking to raise a round of financing; Liew was fine with that. Liew invited Spiegel to meet him at his office on the most famous street in the entrepreneurial world, Sand Hill Road in Menlo Park.  A few feet to the left sits Greylock Partners, Sequoia Capital and Institutional Venture Partners. To the right sits Khosla Ventures.

During the meeting, Spiegel shared his vision for Snapchat. Facebook, he said, was a place where you could share superficial feelings with the world. It was for sharing times when you were happy, confident, and enjoying life. But what about all the other times when you were sad, feeling crazy or even depressed?

Spiegel felt there should be a place where intimate feelings could be expressed privately via fleeting messages.  After all, true friendships are formed when people share both positive and negative experiences. And negative experiences can't be housed on a public, identifying platform like Facebook.

Spiegel's app hadn't been downloaded many times, but engagement metrics were strong. "People were using it like crazy and staying for a really long time," Liew recalls.

Eventually, Spiegel let Lightspeed invest in his company. It was the only investor in a $485,000 seed round, which Spiegel raised in May 2012. He was still three classes shy of graduating. On Thursday afternoon, Snapchat filed for a $3 billion IPO.

Liew later asked Spiegel why he returned the Facebook request and none of his other messages.

"It was because you had President Obama in your profile picture," Spiegel said. 

"There's serendipity involved in all this stuff," Liew said.

SEE ALSO: Here's who's going to get rich from the Snapchat IPO

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Snapchat's parent company Snap Inc. has set in motion what could be the biggest tech flotation in years. 

The filing for its initial public offering revealed the compensation of Imran Khan, a former JPMorgan research analyst turned Credit Suisse technology banker, who moved the company in January 2015 as chief strategy officer. 

Now, for a bit of background, Khan made the kind of move many on Wall Street dream of, swapping a job in finance for a big role at a fast-growing startup. 

Others have done the same. Anthony Noto, a Goldman Sachs banker became Twitter's CFO in 2014, and Ruth Porat became Alphabet's finance chief last year. 

But for Khan, who worked on the IPO of Alibaba Group, Groupon and China's Weibo before he moved to Snap, this trade is going to pay off like no other. 

Khan received $145.3 million in stock awards in 2015, according to the filing, in addition to $230,000 in salary. In 2016, he received a $5.3 million bonus, in addition to $241,539 in salary.

Khan is sure to be the envy of Wall Street.

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Now that Snap has published details of its business operations as part of its plans to become a public company, we are learning all sorts of things about the company and its 26-year-old founder CEO, Evan Spiegel.

For instance, in addition to rewarding Spiegel with a 2016 salary of $500,000 and a $1 million bonus, the company was amenable to loaning him millions of dollars, not just once but twice.

In 2014, Snap loaned Spiegel $5 million, and loaned cofounder Robert Murphy the same amount.

And a year ago, in February, when the value of his company's shares had already made him a paper billionaire, the company loaned Spiegel another $15 million.

The following month in March Snapchat raised$175 million at a $16 billion valuation.

And in September 2016, the company bought $8.1 million of shares from Spiegel, at of $30.72 per share. He repaid both loans in full by the end of September, just seven months after he took out the $15 million loan.

At that time, Murphy also sold $8.1 million in shares to the company, and paid back his $5 million loan, too.

Selling their stock didn't impact their control of the company. Not only do each of them still own about 22% of the Class A common stock, 2% of the Class B, they each own 50% of the Class C stock. All told the founders retain more than 44% of the voting power in the company apiece, the SEC documents show.

As to what Spiegel did with the cash in 2016, that was not disclosed in the filing (nor would we expect it to be). However, in May, 2016, he and his girlfriend supermodel Miranda Kerr, bought a 7,164-square-foot house for $12 million. The house had been owned by Harrison Ford. They got engaged a month later.

And back in 2014, the company famously settled a lawsuit with by its ousted co-founder, Reggie Brown, for an undisclosed sum. If the co-founders were on the hook to pay any of that money from their own holdings, a loan from the company would probably be a reasonable way to go about it.

SEE ALSO: IT'S OFFICIAL: Snap just filed for its IPO

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Snap's main product, Snapchat, has a reputation for being difficult to use, especially if you're not part of its target market of teens and young millennials. 

But since it's asking investors who are typically older to invest in its IPO, Snap included a handy 10-slide guide to navigating and using the app, which has 158 million daily users, according to a financial filing published on Thursday. 

Here's how to use Snapchat, the disappearing messages app, according to Snap: 

SEE ALSO: Snap files for its IPO revealing surging sales growth and huge losses

Here are the five main screens that comprise Snapchat.

Let's take a look at the first screen you see, the Camera screen.

Snap writes:

Making a Snap is simple. Users either tap the Camera button to take a photo, or hold the Camera button to record a video up to ten seconds long. Immediately after a Snap has been created on the Camera screen, the Preview screen displays the photo or video Snap for the user to review and edit using our Creative Tools.

From the camera screen, you can turn on "Lenses," that transform your face into a dog, or a taco, or other fun cartoons.

Snap writes:

The Camera serves as the interface for our Creative Tools. Most of these tools are available on the Preview screen after a user takes a Snap, but Lenses are used on the Camera screen before taking a Snap.

When you tap on the screen, the Camera focuses and detects objects in the scene. For example, if a user taps on his or her face, we immediately show Lenses at the bottom of the screen, adjacent to the Camera button. Lenses are interactive animations that are overlaid on a person’s face or the world around them. A user can easily create a Snap while using a Lens.

Snapchat parent company Snap has finally filed for its long-awaited IPO, planning to raising $3 billion at a valuation of $25 billion.

The $3 billion number is a placeholder amount and certain to change as the company sets a price on the deal.

Snap's S-1 filing gives us our first detailed look ever into Snapchat's business — from daily active users, to trends, to annual revenue. 

Here are the 13 charts that tell you everything you need to know about Snap's business.

SEE ALSO: Snap is asking investors to put a $25 billion valuation on 2 people

Snap cofounders Evan Spiegel and Bobby Murphy will become billionaires overnight when their company goes public at a potential $25 billion valuation.

One person who will not share in their glory is Reggie Brown, who went to Stanford with both men and claimed he came up with Snapchat's core idea of disappearing photos.

Brown filed a lawsuit against Spiegel and Murphy in 2013 after he was forced out of the company and not given equity.

On Thursday, Snap disclosed for the first time that it paid a total of $157.5 million to settle with Brown.

• SEE ALSO:The photos, texts and emails that show the alleged betrayal of Brown at the founding of Snapchat. 

"In February 2013, an individual filed an action against us, our predecessor entity and two of our officers in Los Angeles Superior Court, alleging that we were using certain intellectual property that the individual jointly owned with our founders," Snap said in its initial public offering prospectus. "In September 2014, the parties entered into a settlement agreement that resolved all claims among the parties."

As part of the settlement, Snap said it agreed to pay Brown a total of $157.5 million in cash, $50 million of which was paid in 2014 and $107.5 million of which was paid in 2016. The settlement ended up being much less than the more than $500 million Brown originally asked for.

SEE ALSO: Here's who is going to get rich from the Snap IPO

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Snap just released its prospectus for its IPO. The company is expected to list shares in March and fetch a valuation of $25 billion, sources say.

The big question for investors is, will Snap be another Facebook — a can't-be-missed opportunity? Or will it be another Twitter, a much-hyped IPO for a company that has struggled to grow enough and, sources say, would like to sell itself but is hindered by its huge valuation (read: can't find a buyer willing to pay that much)?

For the most part, Snap is looking more like another Facebook than another Twitter, analyst Rohit Kulkarni tells Business Insider. Kulkarni is head of SharesPost research. SharesPost is a secondary-market exchange, where startup employees and early-stage investors can sell their shares in their private companies. Kulkarni is known for his days as a Wall Street analyst at RBC Capital Markets and at Baird and Citi before that.

He likes Snap's opportunity for revenue growth.

"Snap is very early in its monetization. Snap earned $2.15 per user in North America versus almost $20 earned by Facebook per user recently," he says. "Facebook has shown if you execute well, there is significant upside."

So there's tons of per-user revenue growth possible.

"Snap has been doubling on a year-by-year basis and that is one of the biggest positives," he says.

By some measures, its revenue growth is even more: Snap made $0.31 per user worldwide in Q4 2015 and made $1.05 for Q4 2016. A good sign.

But even as revenue is skyrocketing, Snap's losses have increased every quarter, too. "In fact, Snap hasn’t shown a hint of profitability. Revenue has grown six times and losses have increased 150% during that time," Kulkarni added.

Snap lost a whopping $514 million last year and even warned investors that it "may never be profitable."

And Kulkarni says there's another really big red flag that makes Snap look like Twitter: "Snap’s user growth is generally slowing down, even in newer geographies outside North America and Western Europe."

The company has blamed its sequential slowdown in user growth on "technical issues"related to recent product launches. But it's worth noting that the 48% year-over-year growth of daily active users in Q4 2016 was actually not that much lower than the 50% in Q4 of 2015. 

And while Snapchat's overall international growth will be important in the long run, the company could impress investors if it can continue to expand in the most valuable markets like the US, Canada, and Europe.

SEE ALSO: Snap files for its IPO, revealing surging sales growth and huge losses

DON'T MISS: Snapchat lent its founder $15 M last year and he paid it back in 7 months

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New products and features are intended to boost growth. But in Snapchat's case, the company claims its new products have had the opposite effect.

The company says the slowdown in user growth it suffered in the second half of 2016 is because of bad product updates — and not necessarily an increase in competition.

During the second half of 2016, Snapchat's growth took a hit. It added only six million new daily active users between July and September. The three months prior, Snapchat had added triple that, or 18 million users. That was a number on par with the first quarter of 2016 when the app added 20 million users. 

In its S-1 filing, Snap ascribed the problem to unspecified hiccups in new product launches:

"For example, in mid-2016, we launched several products and released multiple updates, which resulted in a number of technical issues that diminished the performance of our application," the company said in its risk factor section. "We believe these performance issues resulted in a reduction in growth of Daily Active Users in the latter part of the quarter ended September 30, 2016."

Snapchat didn't go into detail about exactly what the "technical issues" were, though it did not that the impact was more pronounced with users of Android devices. 

Interesting timing

One of the biggest updates of the summer was Memories, its go-to place for users to save their Snaps. It was the first time the company made something "permanent" and lasting within the app. Snapchat also added Bitmoji integrations to the app — but neither seemed to boost Snapchat's numbers.

While the company may blame it on its own product updates, the timing of its growth slow down does match with when Instagram launched its Snapchat competitor: Stories. 

On August 2, Instagram created a near-clone of Snapchat's stories feature, which let users post images that disappear in less than 24 hours. According to TechCrunch, Snapchat influencers have already seen a drop-off in views on Snapchat as people start paying attention to Instagram's version.

Snapchat didn't address Instagram by name, but it did list "users increasingly engage with competing products instead of ours" and "our competitors may mimic our products and therefore harm our user engagement and growth" as two reasons why its growth in general could be negatively affected.

While Snapchat's slowdown did happen right as Instagram launched its own competitor, it's sticking by the "technical issues" excuse. Now investors will have to wait to see if this quarter's product updates — including Search to find people easier — bring people back to the app or if they've fled to Instagram for good.

SEE ALSO: Here's who is going to get rich from the Snap IPO

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It finally happened. Snapchat's parent company Snap, Inc. filed for a $3 billion initial public offering on Thursday, offering the world a highly-anticipated look inside the secretive startup's finances, operations, and plans for the future.

Snap declares itself a "camera company," after all, so the US Securities and Exchange Commission filing was chock-full of images, diagrams, and charts.

We pulled out the the ones you need to see. Take a look:

SEE ALSO: Snap files for its IPO, revealing surging sales growth and huge losses

DON'T MISS: Snap lost $514 million last year and warns that it 'may never be profitable'

The filing starts with Snap's mission, declaring it's a "camera company."

Next, a timeline of the rise of Snap from a picture messaging app in 2011. The company only launched video at the end of 2012.

Stories, videos that all users' contacts can see for 24 hours, just launched in 2013.

Life by the beach is often a selling point when it comes to working at Snap Inc, the parent company of Snapchat.

In its early days, Snapchat moved from Evan Spiegel's dad's house to a beach bungalow. From there, it's slowly eaten up Venice Beach's available real estate — turning beachfront live/work condos into offices and buying out local restaurants to service as employee cafeterias.

Yet, its sprawling campus is also a risk to the company's future, according to its S-1 filing. The company's lack of a designated headquarters and jumble of office buildings could cause employee morale problems:

"This diffuse structure may prevent us from fostering positive employee morale and encouraging social interaction among our employees and different business units. Moreover, because our office buildings are dispersed throughout the area, we may be unable to adequately oversee employees and business functions," the company said in a filing. "If we cannot compensate for these and other issues caused by this geographically dispersed office structure, we may lose employees, which could seriously harm our business."

The spread-out offices — and lack of a central meeting space — is one concern that Business Insider has heard repeatedly from current and former employees. 

The company’s offices are typically converted houses and condos, many just steps from the ocean and outfitted with unisex showers to wash sand off from the beach. Despite the idyllic oceanfront setting, the scattered offices can also foster a sense of isolation and fiefdom between teams, former employees once told Business Insider. If people have to work with multiple teams, like engineering and product design, meetings often entail a 15-minute walk through Venice Beach to get between buildings.

Many employees aren’t even aware where their colleagues or other Snap buildings are located. The only clue that a building belongs to Snap is usually a small ghost — the company’s iconic “Ghostface Chillah” logo — etched onto the front door. When CEO Evan Spiegel travels between his company's scattered outposts, he normally has a Range Rover with a private driver transport him from building to building. 

As the company looks to grow its headcount — it grew 210% in the last year — it'll have to work on making sure its campus sprawl doesn't become a detriment to its growth.

SEE ALSO: http://www.businessinsider.com/what-its-like-to-work-at-snapchat-2016-10

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Snapchat seems to have hit a bit of a wall. In early 2016, Snap was unstoppable. Between the fourth quarter of 2015 and the third quarter of 2016, the service added 46 million average daily active users — pushing its total to 153 million active users per day.

And then Q3 happened.

In the beginning of Q3, Instagram released a new feature that looked curiously like the one Snapchat had been poaching millennials with for the past three years. User acquisition slowed… considerably.

Between the launch of Instagram Stories and Snapchat’s IPO filing (a full quarter), Snapchat managed to add just five million new active daily users. Now resting at 158 million, Snap had reason to worry whether previous success that saw the company add 11, 21, 15, and 13 million new users (respectively) in subsequent quarters was beginning to erode.

That’s not to say Instagram was directly responsible. But it didn’t help.

Upstart international competitor Snow is further eroding Snaps’ userbase and Facebook is continuing its quest to copy all of its most popular features on Facebook proper, Messenger, and Instagram. For comparison sake, Instagram Stories launched in August, and reached 100 million active daily users by October.

The drop in daily active users is going to give investors pause, but impressive engagement numbers could ease some of the concern. The IPO filing detailed an active user base, and one that’s highly engaged — something the redesign should further improve. According to the IPO, the average user opens Snapchat 18 times daily, and uses the app for 25 to 30 minutes at a time. 60 percent of them are creating Snaps or using the chat feature daily.

For now, the IPO success is going to hinge on Snapchat convincing investors the business is viable even in periods of stagnated growth. The highly-engaged userbase is a pro, as is the redesign that makes it easier to find brands to interact with. The lynchpin, though, might be in the roll-out of full-screen ads that could one day fetch TV-priced ad buys from companies willing to bet on an engaged, but slow-growing userbase.

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Snap, the parent company of Snapchat, cited Brexit as a potential risk for anyone considering buying stock in its business when it filed for a $3 billion (£2.4 billion) IPO on Thursday.

The secretive company, headquartered in Venice, California, wrote in its S-1 IPO filing that it plans to base a "significant portion" of its business in the UK. It also intends to register some of its intellectual property in the UK.

"Exposure to United Kingdom political developments, including the outcome of the referendum on membership in the European Union, could be costly and difficult to comply with and could seriously harm our business," Snap wrote in the filing.

Last month, Snap announced that it intended to make London its non-US hub, which was interpreted to mean its international headquarters. Snap confirmed it would not be routing sales made in the UK through other European countries for tax reasons, saying sales in countries where Snap does not have a local office or salesforce would also be channelled through the UK.

Snap first opened its UK office in 2015, and it now has 75 staff members across a three-story office in Soho, many of whom have been hired from rival tech firms.

In addition to the Brexit risk, Snap said in the filing that other investor risks include:

• unfavourable media coverage
• rapidly growing company costs
• hackers
• loss of key personnel or failure to attract other high-quality personnel in the future
• the fact that the cofounders have too much control
• Snap's reliance on Google's cloud platform
• potentially damaging acquisitions
• competition from Apple, Facebook, Google (including YouTube), Twitter, Line, and others
• new tax legislation
• the fact that Snap has never turned a profit and that it may never do so

Here's everything Snap had to say about Brexit:

Exposure to United Kingdom political developments, including the outcome of the referendum on membership in the European Union, could be costly and difficult to comply with and could seriously harm our business.

In June 2016, a referendum was passed in the United Kingdom to leave the European Union, commonly referred to as 'Brexit.'

This decision creates an uncertain political and economic environment in the United Kingdom and other European Union countries, even though the formal process for leaving the European Union may take years to complete.

We have licensed a portion of our intellectual property to our United Kingdom subsidiary and intend to base a significant portion of our non-U.S. operations in the United Kingdom.

The long-term nature of the United Kingdom’s relationship with the European Union is unclear and there is considerable uncertainty when any relationship will be agreed and implemented.

The political and economic instability created by Brexit has caused and may continue to cause significant volatility in global financial markets and uncertainty regarding the regulation of data protection in the United Kingdom.

Brexit could also have the effect of disrupting the free movement of goods, services, and people between the United Kingdom, the European Union, and elsewhere.

The full effect of Brexit is uncertain and depends on any agreements the United Kingdom may make to retain access to European Union markets. Consequently, no assurance can be given about the impact of the outcome and our business, including operational and tax policies, may be seriously harmed or require reassessment if our European operations or presence become a significant part of our business.

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