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Reddit has been raising money for almost 15 years! I wish I had the connections to VC's that reddit apparently does. I can definitely spend all the money a VC

Reddit has been raising money for almost 15 years! I wish I had the connections to VC's that reddit apparently does. I can definitely spend all the money a VC gives me, then raise more money, and then spend all that money, and never turn a profit for 15 or 20 years.

callinyouin 8y ago
I've been thinking about this, too. If you have the right connections and can pull down a bunch of VC money year after year for your business it seems you could go your entire career without having to generate profit!
- jandrese 8y ago
  It seems crazy to me that Reddit can't figure out a way to become profitable. Facebook is hilariously profitable on a fairly similar business model for example. It's not like Reddit is without ads, nor are they lacking in data they could sell (albeit not as high of quality as Facebook or Google). They even sell "Reddit gold" for real money. Maybe they have exceptionally high operating costs? Or are they just really bad at selling ad space? I get that there are some advertisers that don't want to go on there because they are afraid their ad will show up next to a picture of a naked lady (which is something Reddit could control pretty easily), but Reddit is so big that it seems pretty hard to ignore.
  - cm2012 8y ago
    I can answer this as an advertiser. Most reddit users don't log in or subscribe to subreddits, and thus reddit has a very small targetable userbase. Like, if I want to serve an ad to business owners, I can serve it to subscribers to /r/smallbusiness but that audience exhausts very quickly. All of FB's users are logged in and can be targeted by interest.
  - nopriorarrests 8y ago
    Consider a few cases. - you want to advertise B2B software to small/medium business owners. - you want to advertise expensive fashion items to 20-35 y.o. women in NY/CT. Will you pick FB or reddit? And then yes, lack of brand safety for non-targeted ads.
    - YeahSureWhyNot 8y ago
      genuine question. is reddit good place to advertise a B2B software? my startup offers B2B warehousing/ecommerce solution and I never thought about reddit in that way even if I visit its front page daily.
      - taurath 8y ago
        You might get some brand awareness if you target specific subs (devops, etc), but I'd imagine the decisionmakers in companies that need what you're providing are not spending their time on subreddits, and the non-decisionmakers probably have adblocking on. Thats just my perception though - also that reddit as a whole is very lowest common denominator tech/business wise.
    - jandrese 8y ago
      Can you not pick specific subreddits to advertise in (or have your ad appear next to on the home page)? Seems like your userbase self-segments pretty quickly on Reddit, although it's no doubt a fulltime job for several engineers to keep up with the classifications on subreddits. I guess the biggest problem is that so many users don't log in and just browse the default, which is pretty generic. Reddit could track the not-logged-in users and what they click on like Google, but that's a fair bit more work.
      - nopriorarrests 8y ago
        How efficient are subrrddits compared to always logged-in audience which told you their age, interests a location, explicitly? Rethoric question.
      - stevekemp 8y ago
  - i_am_nomad 8y ago
    Reddit seems to have a huge but very fragile audience. Monetizing the site would introduce changes that might drive off the users much the way Digg did.
  - sotojuan 8y ago
    reddit ads aren't very profitable as most of the userbase is probably logged out or just goes to /r/all. reddit also houses tons of NSFW and controversial content which probably scares some companies away, even if their ads won't show up there.
  - milquetoastaf 8y ago
    Reddit's data isn't that valuable (as you cannot key it back to a real human), a huge swath of their users adblock, and it has tons and tons of pornographic content which - and i do not necessarily agree with - will lower ad values. The current path to monetization Reddit is trying is making their data more valuable via more detailed user profiles and chats, essentially creating a pseudonymous social network and hoping itll take off like FB. However, I think the real money would be for them to be more like Craigslist. Subreddits could pay to upgrade to become more feature-rich "Classified"-like pages whose posts could then be further boosted (re: upsell for ad team) across other subreddits. Users react with hostility to forced social media / redesigns geared to ad revenues. They like new features that are actually useful and enhance the experience.
deleted 8y ago
[deleted]
tambourine_man 8y ago
It's easy to get such connections with half a billion active users.
- growlist 8y ago
  I'm actually quite amazed at this. I thought Reddit had gone the way of Digg some time ago. Isn't it mostly manufactured content these days? I certainly remember it had that feel about it at certain times in the past when they were trying to paper over a mass exodus.
  - eikenberry 8y ago
    It really depends on the subreddits you are subscribed to.
  - taurath 8y ago
    Its really not - I can't think of a single game community site of which a subreddit isn't the better/more popular option - ditto with all sorts of interests (other than programming/entrepreneurship which HN has a pretty good slice of).
  - LordHumungous 8y ago
    No
- CM30 8y ago
  At some point you'd think they'd expect them to make a profit though. At what point do the venture capitalists say 'screw this, it's not working' and let some of these 'unicorns' crash and burn?
jondubois 8y ago
They could have funded 150 startups for 10 years and created 1500 highly motivating startup jobs with that money but instead it will just maintain the status quo, pay Reddit engineers to be corporate cattle and allow reddit to be as innefficient as ever.
- nopriorarrests 8y ago
  >They could have funded 150 startups for 10 years This round is 150-300mln. How do you fund 150 startups for 10 years with 2mln per startup?
  - jondubois 8y ago
    That's a lot of money. 200k per year. Enough to pay for two or three employees in most developed countries. 2 or 3 people is really all you need to build a meaningful startup. It seems that investors in the US have gotten so used to paying high economic rents and financial middlemen that they have lost track of the real value of money. 2 million is an enormous amount of money. I could build an entire reddit from scratch for 100k. Scaling to millions of users is not difficult these days. I could even build an entire cloud platform from scratch for less than 200k on top of Kubernetes.

callinyouin 8y ago

I've been thinking about this, too. If you have the right connections and can pull down a bunch of VC money year after year for your business it seems you could go your entire career without having to generate profit!

jandrese 8y ago
It seems crazy to me that Reddit can't figure out a way to become profitable. Facebook is hilariously profitable on a fairly similar business model for example. It's not like Reddit is without ads, nor are they lacking in data they could sell (albeit not as high of quality as Facebook or Google). They even sell "Reddit gold" for real money. Maybe they have exceptionally high operating costs? Or are they just really bad at selling ad space? I get that there are some advertisers that don't want to go on there because they are afraid their ad will show up next to a picture of a naked lady (which is something Reddit could control pretty easily), but Reddit is so big that it seems pretty hard to ignore.
- cm2012 8y ago
  I can answer this as an advertiser. Most reddit users don't log in or subscribe to subreddits, and thus reddit has a very small targetable userbase. Like, if I want to serve an ad to business owners, I can serve it to subscribers to /r/smallbusiness but that audience exhausts very quickly. All of FB's users are logged in and can be targeted by interest.
- nopriorarrests 8y ago
  Consider a few cases. - you want to advertise B2B software to small/medium business owners. - you want to advertise expensive fashion items to 20-35 y.o. women in NY/CT. Will you pick FB or reddit? And then yes, lack of brand safety for non-targeted ads.
  - YeahSureWhyNot 8y ago
    genuine question. is reddit good place to advertise a B2B software? my startup offers B2B warehousing/ecommerce solution and I never thought about reddit in that way even if I visit its front page daily.
    - taurath 8y ago
      You might get some brand awareness if you target specific subs (devops, etc), but I'd imagine the decisionmakers in companies that need what you're providing are not spending their time on subreddits, and the non-decisionmakers probably have adblocking on. Thats just my perception though - also that reddit as a whole is very lowest common denominator tech/business wise.
  - jandrese 8y ago
    Can you not pick specific subreddits to advertise in (or have your ad appear next to on the home page)? Seems like your userbase self-segments pretty quickly on Reddit, although it's no doubt a fulltime job for several engineers to keep up with the classifications on subreddits. I guess the biggest problem is that so many users don't log in and just browse the default, which is pretty generic. Reddit could track the not-logged-in users and what they click on like Google, but that's a fair bit more work.
    - nopriorarrests 8y ago
      How efficient are subrrddits compared to always logged-in audience which told you their age, interests a location, explicitly? Rethoric question.
    - stevekemp 8y ago
- i_am_nomad 8y ago
  Reddit seems to have a huge but very fragile audience. Monetizing the site would introduce changes that might drive off the users much the way Digg did.
- sotojuan 8y ago
  reddit ads aren't very profitable as most of the userbase is probably logged out or just goes to /r/all. reddit also houses tons of NSFW and controversial content which probably scares some companies away, even if their ads won't show up there.
- milquetoastaf 8y ago
  Reddit's data isn't that valuable (as you cannot key it back to a real human), a huge swath of their users adblock, and it has tons and tons of pornographic content which - and i do not necessarily agree with - will lower ad values. The current path to monetization Reddit is trying is making their data more valuable via more detailed user profiles and chats, essentially creating a pseudonymous social network and hoping itll take off like FB. However, I think the real money would be for them to be more like Craigslist. Subreddits could pay to upgrade to become more feature-rich "Classified"-like pages whose posts could then be further boosted (re: upsell for ad team) across other subreddits. Users react with hostility to forced social media / redesigns geared to ad revenues. They like new features that are actually useful and enhance the experience.

deleted 8y ago

[deleted]

tambourine_man 8y ago

It's easy to get such connections with half a billion active users.

growlist 8y ago
I'm actually quite amazed at this. I thought Reddit had gone the way of Digg some time ago. Isn't it mostly manufactured content these days? I certainly remember it had that feel about it at certain times in the past when they were trying to paper over a mass exodus.
- eikenberry 8y ago
  It really depends on the subreddits you are subscribed to.
- taurath 8y ago
  Its really not - I can't think of a single game community site of which a subreddit isn't the better/more popular option - ditto with all sorts of interests (other than programming/entrepreneurship which HN has a pretty good slice of).
- LordHumungous 8y ago
  No
CM30 8y ago
At some point you'd think they'd expect them to make a profit though. At what point do the venture capitalists say 'screw this, it's not working' and let some of these 'unicorns' crash and burn?

jondubois 8y ago

They could have funded 150 startups for 10 years and created 1500 highly motivating startup jobs with that money but instead it will just maintain the status quo, pay Reddit engineers to be corporate cattle and allow reddit to be as innefficient as ever.

nopriorarrests 8y ago
>They could have funded 150 startups for 10 years This round is 150-300mln. How do you fund 150 startups for 10 years with 2mln per startup?
- jondubois 8y ago
  That's a lot of money. 200k per year. Enough to pay for two or three employees in most developed countries. 2 or 3 people is really all you need to build a meaningful startup. It seems that investors in the US have gotten so used to paying high economic rents and financial middlemen that they have lost track of the real value of money. 2 million is an enormous amount of money. I could build an entire reddit from scratch for 100k. Scaling to millions of users is not difficult these days. I could even build an entire cloud platform from scratch for less than 200k on top of Kubernetes.