We love business success stories about inevitable winners: a Silicon Valley unicorn that got big fast and went straight for the stars. We love these stories because we feel that if we work hard enough or come up with a great idea, we could be them.
And we love failure. Especially crashing public failure. The delicious spectacle of a Quibi or Theranos that we can marvel and thinkpiece at as they fall to their doom. These stories we love precisely because we’re not them.
But there’s a third story that’s rarer, and more satisfying, than the inevitable success or the crashing failure: the comeback story. Almost fails. It’s the company everyone expected to fail that not only survived, but thrived. Because what’s more satisfying than proving everyone wrong? There are plenty of companies that fall into this category; indeed, many success story companies failed and pivoted countless times behind the scenes first.
But sometimes it’s necessary to not only pivot, but to change your entire approach to fixing a problem. Sometimes you even have to choose a new problem to fix, and businesses today succeed or fail based on their ability to do this.
This is what happened with Vimeo and Snapchat (now Snap Inc), two companies that at one point were widely assumed to be on the downhill. Vimeo struggled as a competitor to YouTube, and Snapchat was being edged out by other social media platforms like Instagram. While everyone was spelling out their demise, these companies paused, analyzed the market, and made bold steps that entirely changed their company setups.
Now, Vimeo has transitioned from a content company to a technology company, and Snap has transitioned from a social media platform to one of the leaders in VR technology. Making big changes publicly isn’t easy to do, but these companies showed us it can have big payoffs. Read on to see the strategic changes and positioning these companies did to end up back at the top.
Vimeo has been around since 2004, and has always been considered as an indie version of YouTube. In fact, even though it’s four years into another strategy, it still has the reputation of being a video platform in the eyes of the public.
The company now rejects the idea that its primary purpose is an entertainment destination; it now primarily sees itself as a provider of SaaS video-creation software. It’s been quietly working hard to make a very cool and increasingly relevant service of cloud-based video software that’s flexible and intuitive.
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Vimeo is positioned in an entirely unique way in the video creation space. It’s not a content platform like YouTube, and not a primarily professional tool like Adobe, but it has more capabilities than iMovie.
Its product is made for creating content, whether you’re a small business owner who has never picked up a camera or a seasoned visual storyteller. It even has templates that guide you in how to make certain kinds of videos, and AI that makes suggestions on how to make your content pop.
But Vimeo supports more than content-creation: it also facilitates content distribution, supporting creators as they embed and monetize videos across the internet.
Here’s some lessons we can learn from Vimeo:
Lesson 1: Find new solutions for old problems
There’s ongoing pressure on Vimeo to be in competition with YouTube, because it started in that space. But becoming the next YouTube would have been antithetical to Vimeo’s mission, which was, and continues to be, serving creators. The conflict was this: their best chance at directly competing with YouTube would have been to turn into an ad-driven platform, but becoming an ad-driven platform wasn’t what best served creators.
Instead of banging their heads against the same old wall, the Vimeo team realized that they could serve creators even more effectively by pivoting to be a technology platform. At the root of it, the need people had was to be able to create and monetize high-quality video content. They figured out that although the YouTube model is one way to address that need, it’s not the only way.
If Vimeo had stuck its head in the sand and insisted on pushing forward as a content platform, it would have missed the opportunity to be a leading B2B video software service.
Lesson 2: Listen to the market
Video is the future. It’s the most consumed online media, and there’s an ever-increasing need for professional-quality video. The problem is that even though everyone is competing with professional-quality production teams, not everyone has the resources to hire one. Vimeo found the sweet spot of helping people become better at making videos, without having to commit to hours of building expertise.
Its tools even the playing field, making video creation more accessible and user-friendly. Every decision Vimeo makes is based on its clients’ needs. That includes its big pivot to SaaS, and every decision they’ve made since then. This is a winning strategy because video isn’t going away anytime soon, and its creator-focus is making it a go-to solution for a ubiquitous problem.
Although Vimeo did sacrifice being the closest competitor to YouTube, they prioritized listening to the market and consumers and are adding more value now because of it.
Lesson 3: Not all is lost
When you give up on an old strategy, you don’t have to scrap everything and start over. Although being a content platform didn’t work out long-term, Vimeo’s history gives it an edge. The company gained name recognition, as well as deep and abiding relationships with creators.
When creating tools for content creation, it knew what it was doing because it had years of previous experience listening to creators. Its current solution is both deep and broad, flexible and complex: the kind of solution only Vimeo could have built. And it’s able to do it because of the company history, not despite it.
Though still widely known for Snapchat, in recent years Snap has made big steps to create an entire ecosystem of ecommerce, communication, and VR.
It has been acquiring AR research labs and secretly working on a number of VR offerings in their “Snap Lab”. The fashion world features heavily in Snap’s ongoing plans as it partners with brands including Farfetch and Prada to create try-on filters and even sell clothes in-app. For now, it allows users to try on simple items like purses and shoes, but moving forward it plans to deliver 3D full-body tracking.
Snap created virtual shared spaces through their Collected Lenses feature, where users can join each other and interact in the same virtual room, feeding into its plan to position Snapchat as a virtual permanent storefront. During the pandemic, IKEA even created an AR escape room that encouraged users to interact with IKEA items as part of the escape tasks.
And, significantly, Snap is a major player in the race to build AR glasses. Now on its fourth generation, Spectacles are the first AR glasses that overlay digital content on the physical world, beating competitors like Google and Apple to the chase.
Here are some key takeaways from Snap’s rise and fall (and rise again):
Lesson 1: Fail on purpose
Do you know what’s more embarrassing than failing publicly? Doing it twice. In 2018, articles titled “Is Snapchat Dead??” piled up across the internet. As far as the cool teens of the world were concerned, Snapchat was not doing so hot as a social media platform, and as far as everyone in Silicon Valley was concerned, the company was overly ambitious in its attempts to be a VR company.
Its launch of first-generation Spectacles in 2016 had a lot of initial marketing hype (remember those bright yellow vending machines?), but ultimately not enough demand. And then it launched the second generation in 2018, to a lukewarm response. Why did it keep launching a failing product?
Because it was testing an MVP and validating an idea—essential practices for agile product leaders. It was never Snap’s intention for the gen-one Spectacles to be a massive launch; in the words of Snap’s CEO Evan Spiegel, they intentionally sold a limited amount to “figure out if it fits into people’s lives and see how they like it.” And as it turns out, they didn’t like it quite enough for it to be profitable.
By 2021, Snap had figured out that there wasn’t enough broad consumer demand yet to do a mass launch of AR glasses. So when it launched fourth-generation Spectacles, they weren’t available for mass consumers. In fact, they weren’t even available for purchase. Instead, Snap gave a pair of glasses to a select number of AR effects creators to experiment with creating new experiences with the Spectacles.
Though they’re not available for sale, the glasses did succeed in getting Snap attention and creating consumer interest in a potential future version of the product.
The lesson is: don’t worry so much about failing, even if it looks bad from the outside. Though the first few versions of Spectacles were poorly received, Snap knew what it was doing, purposely using the information it gained from each launch to move forward strategically. It showed us that failure is not just bad press—it’s actually one of the keys to a successful business.
Lesson 2: Think outside the box
Snapchat took to the VR space in an inventive way, creating a robust and multifaceted strategy. In particular, its focus on fashion and partnering with brands is a stroke of genius that let it stake out its place in the future of social and virtual shopping. Body tracking and AR try-on capabilities address a longtime problem in online shopping: consumers never know how their purchases fit until they receive them in person.
And beyond showing consumers how they look wearing virtual items, Snap is creating a lot of value for brands. The easy sharing capabilities of Snapchat, combined with the desire to show off potential purchases to friends, means that brands get to showcase their items in private conversations, a space that is usually difficult for brands to reach.
In addition, Snap is positioning itself as a go-between for brands, AR developers, creators, and agencies. Moving forward, access to this network of AR specialists will solidify Snap’s position as an authority and permanent fixture in the AR world.
Lesson 3: Keep going when no one’s looking
Many people dismissed Snap, but it kept its head down, acquired a couple of strategic research and tech companies, and worked hard towards a long-term VR vision. It kept moving in the direction of its goal because it had an internal understanding of its company goals and mission, even when external approval was at an all-time low.
In fact, both Vimeo and Snapchat kept working even in the dark and came out shining.
And although they both drastically changed their business models, they never deviated from their values and mission. Vimeo always aimed to serve creators first; Snapchat wants to help people communicate and see the world in new ways. By focusing on the problem, not the solution, they opened themselves up to change and are now both leaders in emerging markets.
Finally, they both had a long vision and ignored public opinion that was invested in the story of their failure or the story of who they used to be.
The reasons why businesses fail, or almost fail, are complicated. But what’s clear is that to get out, you have to be brave enough to stick to your mission, listen to the market, and take a leap. None of this guarantees that your business will make it, but the cases of Snap and Vimeo demonstrate that it’s possible to make it through a bad moment and pivot to success.