Casey Newton, writing for The Verge:
To create a custom Story, tap the new “Create Story” icon in the top-right corner of the Stories screen. Give your Story a name, and then invite the friends you want to participate — no matter where in the world they live. You can also invite all nearby Snapchat users to participate. Snapchat will create a 1-block geofence around your current location; those Stories can only be seen and contributed to by your friends and, if you like, friends of friends.