Snapchat's Evan Spiegel: Billionaire Life, Model Wife and Social Strife
Evan Spiegel was 26 when Snap Inc. went public in March 2017, making him the youngest CEO of a publicly traded company. The initial public offering came six years after Spiegel co-founded the company with Bobby Murphy and Reggie Brown, his fraternity brothers at Stanford University, and as 150 million people were using Snapchat, the company's marque product, to send and receive disappearing messages every day.
Spiegel and Murphy each own 18 percent of Snap and their voting shares give them control of the company's board, but Snap's run as a publicly traded company has been anything but charmed. The company's shares have spent most of that time below the IPO price of $17 a share and Snap — which spent $2.24 billion on stock-based compensation while recording just $331.3 million in revenue for last year — has been accused of enriching insiders at the expense of investors. Analysts are also worried that the company is failing to keep pace with Facebook's Instagram.
Snap's stumbles have led to speculation that Spiegel may regret turning down a Facebook offer to buy Snapchat for $3 billion in 2013.
For now, though, Spiegel is married to supermodel Miranda Kerr and has an estimated net worth of $3.1 billion, enough to put him in the top 10 of Forbes List of Richest Entrepreneurs Under 40. Spiegel, now 27, knows he is lucky. "I am a young, white, educated male," he reportedly said at a Stanford business conference. "I got really, really lucky. And life isn't fair."
Growing Up In California
Spiegel is the son of two lawyers and grew up in Pacific Palisades, just outside of Malibu. His Ivy League-educated parents divorced when Spiegel was in high school.
Spiegel attended Crossroads in Santa Monica, an exclusive school that lists Kate Hudson, Jonah Hill, Jack Black, and Gwyneth Paltrow among its alumni. Spiegel grew up in a home with a full-time housekeeper and the family held memberships at the exclusive Jonathan Club in Santa Monica and the La Jolla Beach and Tennis Club.
"We live in a bubble," Spiegel conceded in a 2008 letter to his parents.
Spiegel's parents gave him a Cadillac Escalade when he turned 16 and got his license. Later, when he landed an unpaid marketing internship at Red Bull, Spiegel decided he wanted something more fuel efficient and asked his parents to lease him a BMW 550i.
"Cars bring me sheer joy," he wrote in a 2008 letter to his parents requesting the $75,000 car. "I would really appreciate you validating me and all of my hard work by leasing the BMW."
Of their time at Stanford, Murphy has said "We weren't cool, so we tried to build things to be cool." But as social chair of Kappa Sigma, Spiegel developed a reputation for partying. In 2014, Valley Wag published leaked emails in which Spiegel bragged about getting women drunk and having sex with them.
"I'm sorry I wrote them at the time and I was jerk to have written them," he said in 2014. "They in no way reflect who I am today or my views towards women."
Luck in the Lecture Hall
As an undergrad, Spiegel was allowed to sit in on a graduate seminar that featured guest speakers like Google CEO Eric Schmidt and YouTube cofounder Chad Hurley, as well as Intuit founder Scott Cook. Cook let Spiegel work on a product Intuit was developing for India as he continued to attend school.
Cook would become an early investor in Snapchat, but he did so more for his admiration of Spiegel than for the business plan. "I didn't believe in the product," Cook said in an interview with Business Insider. "Who needs disappearing photos? I thought he was dead wrong on the business."
Close, But No Degree
Spiegel was just a few credits short of graduating from Stanford when he dropped out in 2012 to work on Snap full time. The company, which was originally called Picabo, was headquartered at Spiegel's father's house in Palisades.
Snapchat eventually moved to offices in Venice, but Spiegel continued to live with his father until 2014 because "the rent is cheap." In November of that year he purchased a three-bedroom house in Brentwood for $3.3 million.
Three's A Crowd
After overhearing a conversation between Spiegel and Murphy, Brown believed they were trying to force him out of the company. He responded by withholding Snapchat's patents and filing a lawsuit in 2013, which was eventually settled for $157.5 million.
In the lawsuit, Brown claimed that Snapchat was his idea and he and Spiegel had co-founded the company, only bringing Murphy on later to help with the coding. Brown, who served as the company's chief marketing officer before the split, is credited with coming up with the Ghostface Chillah character that is still used as the company's logo.
The damning email to emerge in the case confirmed that Brown was a founder. In it, Spiegel was trying to drum up publicity for Snapchat and told a blogger he had created the app with two friends, who he also called "certified bros." In another message revealed in the lawsuit, Spiegel texted to Brown, "I want to make sure you feel like you are given credit for the idea of disappearing messages because it sounds like that means a lot to you."
Snapchat 'Is Only For Rich People'
By early 2017, Spiegel was likely wishing lawsuits by former employees would disappear as easily as video messages on his app. Details in a lawsuit filed by Anthony Pompliano, who had been recruited away from Facebook and lasted just three weeks at Snap in 2015, fueled criticism of Snap while bolstering Spiegel's image as an out-of-touch rich kid.
Pompliano said he was not given key metrics when hired. His lawsuit claims that in a meeting with Spiegel he raised concern that Snapchat's user base wasn't growing overseas. Spiegel responded by saying "This app is only for rich people. I don’t want to expand into poor countries like India and Spain.”
Pompliano's lawsuit, which is still pending, paints a picture of a company that had "an institutional aversion to looking at user data” and inflated key metrics, including registration completion rate and the number of daily active users.
“By the end of this litigation — and rest assured this is only the beginning — we will prove that every claim Mr. Pompliano has made about the long history of misconduct, going to the heart of the astronomical valuation of this now public company, is true," John Pierce, Pompliano's lawyer, told Variety.
Snap billed Spiegel as a "once-in-a-generation founder" during the roadshow leading up to its March IPO.
Snap's shares are structured in a way to give Spiegel and Murphy 89 percent control of all voting shares, while the typical investor has no voting rights and even insiders have to convert their voting shares to nonvoting shares before selling them.
That structure leaves shareholders with little recourse and has fueled criticism that Spiegel doesn’t really care about his backers. While Snap's shares rose to $27 in the first day of trading, they have fallen steadily in the intervening months. Given that the shares were sold on the promise of its founder, those price drops haven’t been helped by Spiegel's highly publicized wedding celebrations.
Marrying a Model
Spiegel — who was once romantically linked to Taylor Swift — met Kerr in 2014 at a Louis Vuitton dinner in New York and started dating the following year. They purchased a house that had once been owned by Harrison Ford for $12 million in May 2016 and were married in Los Angeles in May 2017.
Kerr, 34, told the Times of London that Spiegel is "very traditional" and that they were waiting to have sex until after marriage. Kerr, who was married to Orlando Bloom from 2010 to 2013, has a six-year-old son and is best known for her work as a Victoria's Secret model.
The Australian publicly blasted Facebook for stealing her husband's ideas when Facebook tried to position its Instagram app to compete with Snapchat. "Can they not be innovative?" she said. "Do they have to steal all of my partner's ideas?"
That did not, however, stop her from posting photos of the couple's wedding on Instagram for her more than 11 million followers.
When the company went public, its SEC filings raised red flags, including personal loans it made to Spiegel and Murphy of $5 million each in 2014, and another $15 million to Spiegel in 2016 (the loans were repaid after the IPO). In 2015, after completing a round of funding, Spiegel bought a Ferrari. In 2016, he spent more than $890,000 on a personal security detail that accompanied him as he moved among different Snap offices in southern California.
Most early backers were able to look past those excesses as Snap's paper valuation continued to rise. But once the company went public, the criticism of Spiegel's spending intensified.
The couple's nuptials drew fire from shareholders who were seeing the company's share price fall in the weeks following the IPO. They were critical first of Spiegels' decision to honeymoon on a private island in Fiji that cost tens of thousands of dollars per night and then of his decision to take a "bro trip" to celebrate his marriage with friends. Spiegel reportedly paid $1 million to rent a yacht for a week for the trip
Facing Off With Facebook
After having its acquisition offer rejected, Facebook first tried to create a similar app called Poke. When that app failed, it started copying Snapchat features across its platforms, with an emphasis on positioning Instagram as a Snapchat alternative.
At the same time, Spiegel said Snap was pivoting into a camera company, unveiling camera-equipped sunglasses called Spectacles in September 2016. Spiegel said he wanted his company to "reinvent the camera" and "inspire creation," according to the Los Angeles Times.
Spiegel finally broke his silence about Facebook's copycat strategy during the company's first quarterly conference call in May. "At the end of the day, just because Yahoo has a search box, it doesn't mean they’re Google," he said.