Evan Spiegel is going ‘startup’ mode as he says Snap faces a ‘crucible moment’

Snap is the latest tech company hoping small, ultra-efficient teams can help it get its groove back.

CEO Evan Spiegel said in his annual letter to employees that the social media company will restructure internally to create five to seven groups of 10 to 15 people, or “squads,” to operate as “startups” inside Snap. This move follows a challenging second quarter for the brand, in which ad revenue “stumbled,” as Spiegel put it in the letter.

He compared the company’s position to that of a middle child — bigger than its smaller rivals but dwarfed by the big guys.

“Squeezed between the tech giants and smaller competitors, on the verge of greatness, we find ourselves in a crucible moment,” Spiegel wrote.

Going startup mode

Snap, which has about 5,000 workers, is just the latest company to focus on smaller, more nimble teams.

Meta, a Snap competitor, is also embracing startup mode with its superintelligence unit, which includes a group of key hires called TBD Lab. An internal memo shows that it’s meant to create and train the most advanced AI models and be a nimble operator inside the company, which has more than 70,000 workers.

At Snap, the teams centered on the company’s “big, new bets” will include weekly demo days, efforts organized in 90-day cycles, and “a culture of fast failure,” Spiegel said in the letter.

The teams will have “single-threaded leaders accountable for outcomes,” he wrote.

“That same energy and willingness to move fast, risk failure, and build the impossible is the only way we’re going to win against competitors ten times our size and startups ten times more fearless,” Spiegel said in the memo.

Snap didn’t respond to a request for comment from Business Insider seeking details on the teams the company is establishing.

Spiegel referenced the company’s startup roots — when it comprised “a handful of people in my Dad’s dining room.” He made clear that he wants workers who believe that “every person matters, where the upside is massive but the work is hard, where accountability is extreme but the potential rewards are extraordinary.”

“If you want a 9-5 job, there are plenty of companies to choose from,” he wrote.

‘Focus, accountability, and hustle’

Spiegel pointed to how a small group can have a big impact.

He said the company’s Snapchat+ subscription service began as a “small, cross-functional squad that moved with urgency and launched fast.” The result, he said, is that in less than three years, the business reached about 15 million paying subscribers — driving more than half of Snap’s incremental revenue gains.

The letter followed a quarter in which Snap’s year-over-year ad revenue growth slowed to 4% and in which daily active users slipped 2% in North America to 98 million.

Spiegel said the company, which has 932 million users, is on track to reach 1 billion users in 2026.

By focusing on creating startups within the company, Spiegel said he hopes to use the company’s brand, distribution, and infrastructure and add in “focus, accountability, and hustle.”

“We need to replicate that energy across all of Snap. No one will hand us the future. We have to earn it,” he wrote.

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