Last fall, Facebook CEO Mark Zuckerberg made an offer to Evan Spiegel and Bobby Murphy to buy their smartphone app, Snapchat. Snapchat has one function: the ability to send others a photo that they will (in theory) only have access to for a few seconds before it disappears. Snapchat has approximately 50 million users, with a median age of 18, but it also generates no revenue and has no concrete plans to do so in the future. The price Zuckerberg offered them? $3 billion. And Spiegel and Murphy turned it down.
What makes the story even more incredible are the ages of everyone involved. Mark Zuckerberg is 29, Bobby Murphy is 25, and Evan Spiegel – who still lives in his father’s house – is just 23.
So why did they turn down so much money for a product that is entirely sustained by investment? The New York Times gives the standard take: “It’s not that they don’t want billions of dollars. In part, it’s because they think making a deal now would leave many billions more on the table.”
And they may not be far off. In 2012, Facebook bought another photo sharing app with no profits, Instagram, for $1 billion. The size of the deal was shocking in 2012, but less than two years later, Instagram may be worth ten times that amount.
But could there be another factor in this story? Billions of dollars is great, but they’ve already raised millions of dollars for their company and could have sizable salaries if they wanted them.
What may be more important, though, is whether they enjoy what they are doing. I have to assume that they do, or else they would have taken the money and left the company long ago. And what’s not to love about their situation? Setting aside the moral problems with how their product is used, they’re young and getting to build what could become one of the most important companies in the world. Does that experience have a price tag?
It’s a cliche, but it’s true: there’s more to life than money. Perhaps we should not be so surprised that everyone isn’t so easily swayed with large amounts of money.