Snap’s unusual structure has created breakthroughs but could it break the company

This fall, employees on the product team of Snap received a surprising message from CEO Evan Spiegel telling them to stop what they were working on. Plans have changed.

Since its stock price was falling and user growth was stagnant, Snap would undertake a mad dash to overhaul its flagship app. In just over six weeks starting in October, the company shifted 100 engineers to the project codenamed “Cheetah” aimed at simplifying Snapchat in a way that shifts its focus from big publishers back to close friends.

The result, which creates a separate, dynamic feed for content from your friends and another one for publishers and other users who don’t follow you, is supposed to be rolling out to users although Snap is yet reveal when to expect it.

Snap has placed the redesign as a more evolved form of social media. “While blurring the lines between professional content creators and your friends has been an interesting internet experiment, it has also produced some strange side-effects (like fake news) and made us feel like we have to perform for our friends rather than just express ourselves,” the company said in a statement.

The hub-and-spoke model means the company can sometimes iterate faster than its peers, cutting through internal politics to arrive at visionary breakthroughs. However, the model can also create bottlenecks that result in core complaints going unaddressed for months or years, confirmed by insiders. Among other consequences, Spiegel’s more deliberate approach can put the company at a disadvantage to Facebook, which has not just cloned its most successful products, but has also rapidly iterated on them.

Furthermore, at Snap, Spiegel’s priorities reign supreme, and everything else is secondary. Spiegel’s instincts have also led the company astray. Former employees said Snapcash and Spectacles has cost the company time and money. Snap lost an eye-popping $443 million in the past quarter. The company’s stock price has declined by $15 billion, or about 60 percent, since it went public in March.

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