7 ms·

I have to say, this looks bad for the whole "users first, revenue later" mantra. Now, admittedly, the founders got paid on the flip. But there are users, and

by zach 16y ago

I have to say, this looks bad for the whole "users first, revenue later" mantra. Now, admittedly, the founders got paid on the flip. But there are users, and now it's later, so... where is the revenue? I heard this moment described as the "where is the land" moment. The crew has been sailing the ocean for a long time and they're running on slim hope. They grumble, then complain, and finally they confront the captain and say, "You promised us land. Where is the land?!" This doesn't look like a good resolution to the "where is the land" moment. Why decide to plead for cash? It's the business model of last resort. So yeah, this is definitely a cry for help. Unfortunately, it's one that reminds me a lot of the drowning article. I think this is Reddit grabbing its users and trying to climb on top of them.

zyb09 16y ago
This whole mantra was build on being bought by Google anyway.
nostrademons 16y ago
I think this is the "revenue later" part.
- zach 16y ago
  I strongly doubt it. I can't see a public-media-style "pledge week" as a primary source of revenue for a for-profit company. I think the best outcome would be that this is a one-time weird thing that happened before they found a real revenue model. That wouldn't be unprecedented at all, although every time I can think of, this happens before the founders sell to a large company who can monetize well. For example, I donated to faqs.org when it was just some guy, and now it's owned by some site aggregator I've never heard of. Which is fine with me, because I just wanted to keep it around. But assuming this works spectacularly, doesn't this just make Reddit completely illiquid? How can you go about selling a company based on revenues that are primarily free-will gifts? What would you sell, a share of profits from people just giving the company money? And what would you tell your donating customers who have zero ownership? Maybe that's all okay, or maybe I don't get it -- is there some way for this to succeed that I'm missing here?
  - nostrademons 16y ago
    They're asking people to subscribe, not to donate. A subscription is a recurring revenue stream.
    - deleted 16y ago
      [deleted]
    - zach 16y ago
      Yeah, I'm just probably not being imaginative enough. Even if you give someone a tiny bit of status that says they're a member, that's what they're "paying for," even if it costs nothing. And all the psychic benefits just happen to be lurking behind that. I just can't believe this is where you go to before exhausting everything else, though. Just up and asking your customers to give you money like this has got to change your relationship, just like lending or giving money to a friend, right? I have to say I am fascinated to see how this plays out.
      - nostrademons 16y ago
        "Just up and asking your customers to give you money like this has got to change your relationship, just like lending or giving money to a friend, right?" When taken out of context, that sounds remarkably absurd. ;-) It's an interesting development, simply because most businesses throughout history have demanded that you give them money before you receive service. Or they bill you afterwards with the full force of law behind their threats. Very few will give you the service first and then ask nicely for money. I'm hoping that it works out, simply because if it doesn't, I'd bet that we won't see very many businesses using this strategy in the future. OTOH, I have no plans to subscribe - Reddit just isn't worth all that much to me.
        zach 16y ago
        Yeah, I needed to weasel-ify it some more so it was clear I was talking about outright giving instead of giving in an exchange -- I probably should have just called it "donating" consistently. :) The thing that's interesting is that they're clearly willing to go for the donation angle. Again, the line is so thin that you wonder why they don't just announce they're selling you a digital doodad for an inflated price with the understanding that it's essentially a donation. It's something that works for PBS selling $100 DVDs but maybe the worry is that it triggers the "outrageous price" receptor...
brianpan 16y ago
Where is the revenue? I think that blog post, 1700 upvotes, and 1400 comments is pretty good indication of the possible revenue. Hint: it'll probably be more than the 3 readers of my blog will be ponying up this year. http://www.reddit.com/r/announcements/comments/cnth8/making_ends_meet_tldr_remember_that_joke_about/ http://www.reddit.com/r/announcements/comments/cnth8/making_...
Sidnicious 16y ago
I think that this is an attempt to keep the users first. If the users love the service enough to pay for it, there will be no need for potentially-user-experience-degrading changes like sponsored subreddits. I don't know if it's the right move.
ergo98 16y ago
>I have to say, this looks bad for the whole "users first, revenue later" mantra. I think you misunderstood the mantra. It really is "users first, flip it later". Let the next sap deal with it. We've seen that play out time, and time, and time again. They got their payout, hang around for a while, and then split off.
maukdaddy 16y ago
Those of us who lived through the first .com boom of the 90s have seen this too many times to count ;)
lkrubner 16y ago
This looks like a straight up request for charity. As they say in their blog post, they will not be able to offer any new features, at the current time, in exchange for you subscribing. I would feel uncomfortable with that business model, if I was them. Admittedly, National Public Radio survives that way, but then, NPR is registered as a non-profit, and donations are tax deductible.

by zach 16y ago

zyb09 16y ago

This whole mantra was build on being bought by Google anyway.

nostrademons 16y ago

I think this is the "revenue later" part.

zach 16y ago
I strongly doubt it. I can't see a public-media-style "pledge week" as a primary source of revenue for a for-profit company. I think the best outcome would be that this is a one-time weird thing that happened before they found a real revenue model. That wouldn't be unprecedented at all, although every time I can think of, this happens before the founders sell to a large company who can monetize well. For example, I donated to faqs.org when it was just some guy, and now it's owned by some site aggregator I've never heard of. Which is fine with me, because I just wanted to keep it around. But assuming this works spectacularly, doesn't this just make Reddit completely illiquid? How can you go about selling a company based on revenues that are primarily free-will gifts? What would you sell, a share of profits from people just giving the company money? And what would you tell your donating customers who have zero ownership? Maybe that's all okay, or maybe I don't get it -- is there some way for this to succeed that I'm missing here?
- nostrademons 16y ago
  They're asking people to subscribe, not to donate. A subscription is a recurring revenue stream.
  - deleted 16y ago
    [deleted]
  - zach 16y ago
    Yeah, I'm just probably not being imaginative enough. Even if you give someone a tiny bit of status that says they're a member, that's what they're "paying for," even if it costs nothing. And all the psychic benefits just happen to be lurking behind that. I just can't believe this is where you go to before exhausting everything else, though. Just up and asking your customers to give you money like this has got to change your relationship, just like lending or giving money to a friend, right? I have to say I am fascinated to see how this plays out.
    - nostrademons 16y ago
      "Just up and asking your customers to give you money like this has got to change your relationship, just like lending or giving money to a friend, right?" When taken out of context, that sounds remarkably absurd. ;-) It's an interesting development, simply because most businesses throughout history have demanded that you give them money before you receive service. Or they bill you afterwards with the full force of law behind their threats. Very few will give you the service first and then ask nicely for money. I'm hoping that it works out, simply because if it doesn't, I'd bet that we won't see very many businesses using this strategy in the future. OTOH, I have no plans to subscribe - Reddit just isn't worth all that much to me.
      - zach 16y ago
        Yeah, I needed to weasel-ify it some more so it was clear I was talking about outright giving instead of giving in an exchange -- I probably should have just called it "donating" consistently. :) The thing that's interesting is that they're clearly willing to go for the donation angle. Again, the line is so thin that you wonder why they don't just announce they're selling you a digital doodad for an inflated price with the understanding that it's essentially a donation. It's something that works for PBS selling $100 DVDs but maybe the worry is that it triggers the "outrageous price" receptor...

brianpan 16y ago

Where is the revenue? I think that blog post, 1700 upvotes, and 1400 comments is pretty good indication of the possible revenue. Hint: it'll probably be more than the 3 readers of my blog will be ponying up this year. http://www.reddit.com/r/announcements/comments/cnth8/making_ends_meet_tldr_remember_that_joke_about/ http://www.reddit.com/r/announcements/comments/cnth8/making_...

Sidnicious 16y ago

I think that this is an attempt to keep the users first. If the users love the service enough to pay for it, there will be no need for potentially-user-experience-degrading changes like sponsored subreddits. I don't know if it's the right move.

ergo98 16y ago

>I have to say, this looks bad for the whole "users first, revenue later" mantra. I think you misunderstood the mantra. It really is "users first, flip it later". Let the next sap deal with it. We've seen that play out time, and time, and time again. They got their payout, hang around for a while, and then split off.

maukdaddy 16y ago

Those of us who lived through the first .com boom of the 90s have seen this too many times to count ;)

lkrubner 16y ago

This looks like a straight up request for charity. As they say in their blog post, they will not be able to offer any new features, at the current time, in exchange for you subscribing. I would feel uncomfortable with that business model, if I was them. Admittedly, National Public Radio survives that way, but then, NPR is registered as a non-profit, and donations are tax deductible.