Snap's most senior executive outside the US says it must solve its 'perception versus reality' problem

Snap

Claire Valoti, Snap's vice president of international.

• Claire Valoti is Snap's most senior executive outside the US, and one of the company's few high-profile women.
• She oversees every international market that isn't the US, which makes up an increasing portion of Snap's revenue.
• She says the company has a "perception versus reality" problem, meaning it's not fully understood by advertisers and is seen as secretive.
• Valoti spoke to Business Insider after being named in the UK Tech 100, a ranking of the 100 coolest people in the UK tech industry.

Business Insider

Claire Valoti can laugh about her job interview with Snap's two most powerful executives now, but it was pretty stressful at the time.

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It was 2015, and she was heavily pregnant and running late. Chief Executive Evan Spiegel and Chief Strategy Officer Imran Khan were waiting patiently for her in a hotel in central London.

"Evan flew to meet with me, because they knew I wouldn't fly," she told Business Insider in an interview. "I was 15 minutes late, and that's not a great way to go for an interview with a founder. And I blamed it on the traffic and being heavily pregnant... my husband was appalled."

When Valoti was hurrying into her meeting, Snap was still called Snapchat. The company had recently registered its UK subsidiary, its first office outside north America, and begun to build a team to make inroads with European advertisers. All it needed was someone to lead it.

AWNY2017/REX/Shutterstock

Imran Khan, Snap's outgoing chief strategy officer.

Valoti would keep Khan and Spiegel waiting again while she assessed the job. She was already one of the most senior British executives at Facebook, which would make $17.9 billion in revenue and $3.7 billion in profit that year. Snap made $59 million in revenue and no profit. There was also her pregnancy to consider.

She corralled opinions from other big players at Snap, such as its content chief Nick Bell, a fellow Brit. Eventually, she was convinced. And then she went on maternity leave.

Valoti's star rose on her return. She was promoted to vice president of international in February this year, making her the most important executive outside the US.

"It's about what motivates you as an individual," Valoti said of her decision to jump from Facebook to Snap. "I often talk about my parents, and my upbringing. My parents have their own business, they have a bed and breakfast in Kings Cross, I grew up in it, so I grew up in an environment of seeing my parents [be] entrepreneurial.

"It wasn't about the choice of what was safe or not. It was about: What's my passion? It's the fact I know I can say, when I look around, I was part of that."

Valoti is responsible for every market that isn't the US

In person Valoti is warm and personable, prone to gesturing to emphasise her talking points.

She is liked among her ad industry peers in the UK. One told Business Insider: "She has always been an absolute inspiration. She is strong, determined and extremely intelligent.

"She's a great manager who cares about the people she works with, mentors younger women and treats everyone with fairness and kindness - taking on advice and ideas and building them up instead of breaking them down."

Snap's Khan, in a comment to Business Insider, added: "When I first talked with Claire, I was impressed with how much she cared about her customers, her partners, and her employees. It was evident she was a kind and thoughtful leader, and one who embraced and could carry forward Snap's culture as we expanded internationally - to be kind, smart, and creative."

Valoti's main impact has been ensuring Snap is on international advertisers' radar, as she oversees all non-US markets including Dubai, Europe, Canada, and Australia.

Other achievements she cites: Poaching Ed Couchman, who replaced her at Facebook, to take on her previous UK general manager role at Snap. Another was pushing the company to rethink its approach to selling ads. Snap has renamed its sales organisation to "business solutions" to reflect a consultancy rather than sales-led approach.

Valoti echoes her boss Evan Spiegel when asked about Snap's woes. He recently described unflattering comparisons to Facebook and other issues as "misperceptions." Valoti says the company has communicated poorly.

Greg Sandoval/Business Insider

Evan Spiegel, Snap cofounder and CEO.

Analysts are fretting over a decline in daily active users to 188 million in the second quarter. Spiegel attributed this to the Snapchat app's poorly received redesign, but the worry is that rivals are still growing. Instagram Stories, a clone of a Snapchat feature, has 400 million daily users alone.

That's rippled into alarm over the company's ability to turn a profit in the face of the Facebook juggernaut. Emarketer recently revised its US and UK ad revenue forecasts for Snap down. Then there's chatter about whether Snap will even be an independent company in 2019, a theory put forward by marketing professor Scott Galloway, who correctly predicted Amazon's acquisition of Whole Foods.

International may be the bright spot for Snap's future growth and its more bullish supporters on Wall Street say there could be improvement. Progress is looking good so far.

Snap is making more money from countries that aren't its home market. Countries outside the US accounted for 32% of Snap's revenue in the second quarter, up from 19% the prior year.

And the amount of money Snap makes from each user outside of Europe and the US is going up too, rising from just $0.29 per user in 2017 to $0.96 per user in the second quarter of 2018.

Snap/Business Insider

Snap is making more money from users who are outside the US and Europe.

Valoti says Snap's intense focus on redesigning its Android app will help too, given Android's popularity in emerging economies.

"I still think there's a huge opportunity for us to go further," she said. "All my market visits... the same thing I hear is that people still don't understand the opportunity of what Snap is about."

Snap is trying to dispel a reputation for secrecy

Snapchat; Samantha Lee/Business Insider

Something Valoti repeats throughout the interview is the idea of a "perception versus reality" problem at Snap.

"People have a perception about our business, but the reality is frankly quite different," she said. This, she said, applies to advertiser misunderstanding of what Snapchat can offer, or the way the media portrays Snap as highly secretive.

It is a little difficult square this with the company's apparent tendency to avoid the limelight. Snap built its own secret pavilion at the Cannes Lion advertising festival in 2016, and in subsequent years reportedly refused to allow party guests to take photos. There are many anecdotes around the company's secrecy.

"I can only speak to my own experience, but I haven't felt the secrecy," Valoti said. "I have never felt so connected to my peers or the wider company, so I've never faced that challenge."

She acknowledged that part of the reputation for secrecy may stem from Snap's original setup of having offices all over Venice Beach in California, meaning employees would be working on discrete projects in different buildings. The company is now housed in new headquarters in Santa Monica.

"I think the one thing we have learned, and Evan [Spiegel] would say the same, we have to communicate more," she added. "We haven't communicated a great deal, and so lots of people have made assumptions about us."

The goal now is to be more transparent.

Valoti is a fan of openness, and of the company's "council" meetings. This is a fortnightly office ritual that involves a small group of employees sitting together in a room and sharing their innermost feelings about a subject. Whatever is said stays confidential.

Not all councils are about deep dark subjects. The last was about people's experiences of school, such as what their favourite subjects and teachers were.

"I love council," said Valoti, who said she ensured the councils take place across all international offices. She regularly takes part herself. "The essence is that it's about connecting people in a deeper way, that you work with. That's an extraordinary thing to have in your culture."

As Snap's CSO leaves, the company needs a smooth transition into its next phase

Snap is still a young company at seven years old. Its chief executive hasn't hit 30 yet. Facebook, by comparison, is 14 years old.

One of the elder statesmen in Snap's upper ranks, Imran Khan, will leave the company to start his own investment firm, a development that caused investor jitters. Khan is one of Spiegel's closest advisors, and was responsible for building out the firm's strategy and ad business in its early years.

After that first London interview with Valoti in 2015, he also became one her key allies inside the company.

"Personally, I'm really sad to see him go," Valoti said. "He was a big part of my journey into Snap and, I felt, a real champion for me and friend for me. I think equally, [while] Imran did an amazing job, we're at a new stage of the company, and it allows us to think about, 'What does that look like?' and who is the right person to take us into that next phase?

"As much as I'm sad to see him go, I'm excited to see where we're headed and what that means. When someone like Imran leaves, it gives you an opportunity to step back and think: 'What do we need to do next?'"

There is still room for Snap to win. Instagram is at risk of turning into Facebook now its founders are leaving. And Snap may have more tricks up its sleeve in the vein of its innovative visual shopping partnership with Amazon.

"It's an exciting place to be," said Valoti. "I will keep going to back to perception versus reality. The opportunity is huge."

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