The current media buzz around Snapchat casts them as Twitter 2.0, a niche social media platform with a confusing interface and a user base whose growth has more or less peaked. Worse still, they are alleged to be at the mercy of Facebook, who can roll out “good enough” imitations of Snapchat’s key features as a way to neuter the platform and limit growth.We think that’s a shortsighted view however, one that ignores Snapchat’s secret weapon and greatest strength: it is home base for Generation Z, the 12–to–22–year olds who populate the nation’s middle schools, high schools and colleges. This Snapchat First generation—close to 90% of Gen Zers use Snapchat at least once a month—is not as susceptible to the predations of Facebook as older, Facebook First generations. Compare that to Twitter, which, despite being a darling of the media set, was never anyone’s “home” app and has always appealed to a somewhat random set of niche audiences.Four Monetization PointsIn addition to its demographic advantage, Snapchat has four unique feature sets that it can rely on to help monetize the platform, whereas Twitter really only had one. By taking a look at each of these features and their chances for success, we can evaluate the overall potential of a post-IPO Snapchat, bearing in mind CEO Evan Spiegel’s stated goal of increasing engagement to increase ARPU, rather than looking to increase the overall user base.ChatSnapchat started out as a photo-based chat app and for most of its user base, that is still its primary function. Users can now chat one-on-one with friends or with small groups, confident that their words and photos will quickly become history, at least in the smartphone window. Currently, monetization comes in the way of branded filters that users can place over their photos before they either send them to friends or add them to their Stories. These filters are very popular and achieve the enviable trick of not seeming like advertising.Pros: China’s WeChat is the best argument in favor of the monetization potential of Snapchat’s chat function. While there are major differences in functionality and market, WeChat has grown from a basic IM service to a multifaceted behemoth, with e-commerce, advertising and sponsorships, all of which rely on the fact that WeChatters are constantly using the app. If Snapchat, whose users are equally fanatical, can even figure out a piece of this, revenues could be huge. While parent Tencent does not break out WeChat’s revenue numbers, the company attributes a sizable part of its $1B in ad revenue to WeChat.  Adding additional features to Chat can also help increase time on site which would thus increase ARPU among the Gen Z user base.Cons: Introducing advertising to a platform that never had any will be a tricky move and could potentially alienate users if done in a heavy-handed fashion, especially if it creates the impression that users are being tracked for ad purposes.Facebook Threat: Low. Facebook already has a chat product—Facebook Messenger—and it does not impinge on Gen Zers use of Snapchat.  Were Facebook to introduce Snapchat-like features (e.g., disappearing messages) the likely target would be older Facebook users, not Gen Zers.StoriesWhile much has been made of a TechCrunch piece that shows Instagram stealing as much as 40% of the traffic from Snapchat stories with its copycat feature, the features remains a popular part of the Snapchat platform. There are essentially two types of Snapchat story: stories from a user’s friends and stories from brands and creators the user follows.Pros: Stories are still very popular and while brands and creators are seeing users defect to Instagram, the bulk of the user base is still high on Stories. Snapchat just needs to find a way to monetize them or use them to drive engagement on other, more easily monetized parts of the platform.Cons: Snapchat’s already blown it once with an attempt to monetize Stories: they introduced an autoplay feature last year that inserted ads between Stories. It was not popular and was quickly rolled back.  Stories arguably also competes with Discover, Snapchat’s professional-produced video section.Facebook Threat: High. A rumored Facebook Stories feature will likely steal even more users from Snapchat, or at least reduce the amount of time existing users spend on the platform.DiscoverDiscover is Snapchat’s home for professionally produced content. It features a wide range of publishers, from TV networks like CNN and NBC to web publishers like Vice, TasteMade and Brother. Most Discover stories involve a mix of text and video.Pros: Discover offers professional content that Snapchat can exert quality control over. Discover content appeals to a wide range of tastes, and as such, is a way to bring an older audience on board without alienating Gen Z. It could potentially be spun off as a separate app, a home for high-quality short-form video that integrates with the main Snapchat app the same way Facebook Messenger integrates with Facebook. Regardless, Discover offers Snapchat a chance to increase the amount of engagement and revenue around a portion of the site that already accounts for around 50% of existing ad revenue. The key will be to ensure that Gen Zers see Discover as an integral part of the Snapchat platform, not just a throwaway containment zone for advertising.Cons:  Users who come to Snapchat to chat with friends are not necessarily interested in watching short form video on the app—it’s not why they use Snapchat. In addition, Discover lacks any sort of library functionality and has no sharing or personalization options, omissions which limit its appeal.Facebook Threat: Medium. Facebook is doubling down on video and launching its own video service and TV app. These will be longer-form shows and thus different than Discover. The danger to Snapchat is if Facebook begins to push out Discover-style short form programming on its mobile app ad—we’d expect Facebook to then lean on publishers to stop working with Snapchat. Given the sheer size of Facebook’s audience, publishers are going to defer to Facebook’s wishes, even if that means pulling content from Discover.CameraThe camera—Spiegel refers to Snap as a camera company—is Snapchat’s newest addition. Right now, Snapchat’s camera offering takes the form of a pair of Spectacles, $130 sunglasses with a built-in camera, available via kiosks in major cities. Snapchat is allegedly working on updates to the glasses, but no other camera features have been introduced.Pros: Introducing hardware into the equation creates greater stickiness as the camera functionality can be tied into the app, creating a community for Snap camera users. The camera segment can grow along with AR and VR technologies as they expand. Being a camera company also allows Snapchat to expand into other areas—phones and drones for example, or even retail, relying on Gen Z’s affinity for the platform to drive adoptionCons: The market for sunglass cameras is not established and it’s unclear if the Snap name will be enough to make one happen. Users may decide that the camera on their smartphone is enough. Hardware is not Snap’s sweet spot either, and it’s hard to gauge how much their lack of expertise will become an issue.Facebook Threat: Medium. Facebook could conceivably come out with better cameras with more advanced features. But cameras that are tied in directly to the Snapchat platform will be hard to displace, particularly if Snapchat is able to create a community around them.Much Potential, Little CertaintySnapchat offers a great deal of potential for future growth if it can play off the strong affinity Generation Z has for the platform, an affinity that should work to keep most of Facebook’s “good enough” predations at bay.The key seems to be less about getting users to stick around longer and more about how to introduce advertising or something similar into a platform that grew up without it. CEO Spiegel has been very diligent about maintaining a user-friendly wall between ads and editorial within the app. The trick will be to find devices like Filters that allow for sponsorship and monetization but don’t feel like advertising. If Snapchat can figure this piece out, it’s already got plenty of ways to keep its secret weapon—Gen Z—very engaged in the platform for years to come.