Snap CEO Evan Spiegel is taking his $19 billion social media company back to its roots. In his annual letter to employees, Spiegel said Snap will undergo a major internal restructuring to form five to seven small squads, each with 10 to 15 employees, designed to operate like startups inside the company.
The move comes after a tough second quarter in which ad revenue stalled and daily active users slipped in North America. Spiegel described Snap’s position bluntly:
“Squeezed between the tech giants and smaller competitors, on the verge of greatness, we find ourselves in a crucible moment.”
Running Snap Like a Startup
Spiegel wants to recreate the scrappy culture from Snap’s earliest days, when the company was run out of his father’s dining room.
The new squads will focus on Snap’s “big, new bets,” working in 90-day cycles with weekly demo days and an explicit culture of fast failure. Each team will have a “single-threaded leader” accountable for results.
“That same energy and willingness to move fast, risk failure, and build the impossible is the only way we're going to win against competitors ten times our size and startups ten times more fearless,” Spiegel told employees.
Snap has around 5,000 workers, meaning the majority won’t be in these squads, but Spiegel emphasized that everyone is expected to embrace a high-accountability, high-reward mindset.
“If you want a 9-5 job, there are plenty of companies to choose from,” he wrote.
Inspiration From Within — and From Rivals
Spiegel pointed to the Snapchat+ subscription service as proof that small, cross-functional teams can have an outsized impact. Launched in 2022, Snapchat+ now has 15 million paying subscribers and is responsible for more than half of Snap’s incremental revenue gains.
Other tech companies are experimenting with similar approaches. Meta has formed a nimble “TBD Lab” inside its AI division, focused on developing advanced models with the speed of a startup despite the company’s 70,000-plus headcount.
The Stakes for Snap
Snap’s challenge is clear. In Q2, ad revenue grew just 4% year over year, and North American daily active users dropped 2% to 98 million. Still, globally, Snap counts 932 million users and says it is on track to reach 1 billion by 2026.
By leaning on smaller teams, Spiegel hopes to blend Snap’s scale with the urgency and focus of a startup. The strategy, he argues, is the only way to “earn the future.”
“We need to replicate that energy across all of Snap,” Spiegel wrote. “No one will hand us the future. We have to earn it.”
