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Former Twitter CEO Dick Costolo has advice for Snapchat on how to deal with Facebook

When Dick Costolo led Twitter, it was the little guy that takes on Facebook — and he thinks that Snapchat needs to find its area of attack.

"What you have to understand about the specific space at which Twitter is operating in — and you're seeing this a bit now with Snap — is that when you're competing directly against Facebook, they can just bring enormous market leverage to bear against you and so you have to look for, you know, flanks, if you will, into which you can operate and move," Costolo said.

Costolo spent six years at Twitter, and served as CEO from 2010 until he stepped down two years ago. After going public in 2013, Twitter failed to keep up with the growth of rival Facebook amid complaints of harassment and abuse on the platform.

The situation is not unlike Snap, which has seen shares languish below their IPO price amid slower-than-expected first quarter user growth.

"I think Mark [Zuckerberg] and Facebook have been very smart about the way they've thought about this space," Costolo told CNBC's "Squawk Alley" on Thursday. "Instagram is the platform through which they are really going...