Snap Inc.'s chief executive, Evan Spiegel, has initiated a significant internal reorganization, rolling out a \"squad\" system designed to mimic startup agility. This move is a direct response to a slowdown in advertising revenue and increased market competition. The new structure involves creating five to seven autonomous teams, each comprising 10-15 employees, intended to operate with the independence and drive of a nascent company.
The company's struggles with advertising income are evident, with a mere 4% year-over-year growth reported in the second quarter of 2025. This deceleration is largely attributed to intense competition from major industry players such as Meta Platforms, Alphabet Inc., and ByteDance's TikTok. Snap's financial performance further reflects these challenges, reporting a net loss of $263 million in the same quarter, despite an improvement in operating cash flow. Spiegel highlighted the company's precarious position, caught between dominant tech corporations and emerging smaller rivals. He also pinpointed medium-sized customers as a key untapped market, noting that new business development in this segment could yield substantial annual revenue.
Compounding its advertising woes, Snap is experiencing a slowdown in user acquisition, particularly in North America, where daily active users decreased by 2% to 98 million in the second quarter. This trend, a decline from previous growth rates, is a concern for analysts. The company's stock has also seen a significant drop, trading around $7.22. In response, Spiegel's \"squad\" model draws inspiration from the successful growth of Snapchat+, which rapidly acquired 15 million subscribers and generated nearly $700 million in annual recurring revenue. The CEO emphasized fostering a culture of rapid innovation and iteration through weekly demonstrations and 90-day project cycles. This strategy underscores Snap's ambition to reach one billion users by 2026 and achieve Fortune 500 status, with analysts projecting close to $6 billion in revenue for 2025.
In today's fast-paced digital landscape, companies must embrace adaptability and innovation to navigate market challenges. Snap's adoption of the 'squad' model exemplifies a proactive approach to fostering creativity and efficiency, demonstrating that even established entities can learn from the nimble nature of startups. This commitment to internal transformation, driven by a clear vision for future expansion, underscores the resilience and forward-thinking spirit essential for sustained success in a competitive environment.