How Kik Plans to Steal Snapchat's Teen Hearts
Each morning, Kik Chief Executive Officer Ted Livingston tries to spend an hour in the bath to read and contemplate. It's not always relaxing, especially when his mind turns to the mobile messaging business, in which he has no shortage of competitors.
They include Tencent's WeChat, the app that dominates in China, and KakaoTalk, which is wildly popular in Korea. There's also Facebook's Messenger application, about which Livingston read a lengthy story in Wired magazine during one of his long soaks in the tub.
But when Livingston thinks about Kik's future, he sees only one true competitor: Snapchat, based in trendy Venice Beach, Calif. Kik doesn't have a war chest that comes close to that of Snapchat, which revealed last month that it raised $485.6 million at a valuation that sources peg above $10 billion. By comparison, Kik has raised about $70 million in total. The Waterloo (Ontario)-based company would not disclose its valuation.
Kik also lacks Snapchat's buzz. CEO Evan Spiegel has achieved celebrity status through such decisions as turning down a $3 billion-plus acquisition offer from Facebook in 2013. He also has earned notoriety for missteps like his e-mails as a Stanford student that celebrated getting drunk and convincing sorority women to perform sexual acts. For his part, Livingston must sometimes tell adults who haven't heard of Kik to ask their children how popular the service is.
A lot of people "don't put Kik in the same kind of conversation" as Snapchat, says Eric Jackson, president of Ironfire Capital and an investor. "They're sort of out of sight, out of mind."
Downloads tell a somewhat different story. Recently, Kik's app was the 16th-most-popular free app on Apple's App Store, ahead of Twitter and Pinterest. Among social networking iOS apps, App Annie ranked it seventh, ahead of LinkedIn and WeChat. Also, a study of 14-to-25-year-olds released last week by Magid and commissioned by Kik showed that people who had both Kik and Snapchat on their phones spent more time using Kik—35 minutes a day, compared with 21 minutes—and that the users were younger and more diverse.
Livingston points out that both apps are moving in the same direction as WeChat, which offers ways to shop, hail taxis, and send money. The easiest way to become the "WeChat of the West," as he calls it, is to cater to people who have no brand alliances, such as teens, so you can train them to use services through the messaging application.
To make money, Kik currently lets companies send sponsored texts to its users, while Snapchat shows its users short-form video advertisements.
Livingston says his company has a position similar to Lyft in its rivalry with Uber over providing services that summon drivers. Lyft and Uber have been recruiting each others' executives, racing one another to be in as many cities as they can, and competing for venture capital funding. In the coming year, Kik's rivalry with Snapchat could become just as intense as that one, he says.
"There's two different ways to play this game," says Livingston. "There's the talk loudly, win-at-all-cost, all about the individual mentality, that very loud arrogant mentality, and there's the more quiet, prove-it-if-you're-confident way."
"In the Uber-Lyft analogy, we're the Lyft because we're not douchebags," he says, adding that he expects Kik to ultimately win.
Uber CEO Travis Kalanick has occasionally gotten into trouble for his competitive tactics, with employees calling up for Lyft rides and canceling them en masse, or taking Lyft rides only to recruit the drivers. He once told GQ that he has a word for the way being CEO of a fast-growing company has helped him get women: "Boob-er."
Mary Ritti, a spokeswoman for Snapchat, declined to comment.
While Kik and Snapchat offer something that appeals to the same kind of user base, they're different enough that a lot of teens use both, said Nikhil Sethi, co-founder of advertising company Adaptly. To say Snapchat and Kik are in competition "is what you say when you're looking for categories to compare things," Sethi said. "That's not how the world works anymore—they're evolving in parallel."
That's something else to ponder in the tub.