Eric Schmidt Explains How Google Enabled Snapchat's Success

Alphabet’s Chairman Eric Schmidt revealed that Google played a key role in enabling Snapchat’s success. While speaking at the Google Cloud Next conference on Wednesday, Schmidt said that Snap’s decision to go public marks one of the strongest initial public offerings (IPOs) in the tech industry in a long time and shed some light on how the Mountain View-based tech giant helped the social media company realize its potential. Despite the fact that Snap is one of the most valuable tech startups in the industry, the company achieved its goals without using a lot of capital, which is something that puzzled many industry watchers. However, as Schmidt explained yesterday, the secret of that success lies in the fact that the makers of Snapchat decided to use Google’s infrastructure to support their business.

As Snap’s recent filing with the United States Securities and Exchange Commission (SEC) revealed, the Venice-based company is planning to purchase at least $400 million worth of cloud services from Google on an annual basis over the course of the next five years. Snap’s decision to use Google Cloud wasn’t made recently as Schmidt said that the company was one of Google’s clients for many years. The scalable business model utilized by Google Cloud allowed the company formerly known as Snapchat to quickly meet the growing user demand without wasting money, i.e. without purchasing cloud computing power that went unused. Google’s cloud unit enabled Snap to not only scale their service as more users were joining it, but also roll out the platform in more territories in an efficient manner, Schmidt revealed. Apart from rolling out the social media platform itself, Snap was also able to quickly add new features to it thanks to Google Cloud, which is another important factor that contributed to its rapid growth, the Chairman of Google’s parent company believes.

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Schmidt used Snap’s example to inspire other entrepreneurs looking to make it big in the industry. The point he was trying to get across is that tech startups with a cloud-based product don’t need to have an incredible amount of funds to make it big in the industry and can instead use Google’s offerings to grow in a sustainable manner, even if they’re adding millions of new users on a monthly basis.

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