5 ms·

I'm honestly surprised to learn that Reddit is still VC dependant. Seems strange to me that a 16 year old company still isn't self sustaining.

deleted 5y ago
[deleted]
MattGaiser 5y ago
Anonymity really hurts profits.
majormajor 5y ago
The cost is fascinating. Is the value of a single place for all these conversations that much higher than having a bunch of independent forums scattered across the web? For users, there's a high discovery value... but at the cost of apparently far more expense running the site than has been able to be recouped yet. Curious to see that even where centralization hasn't financially paid off, people are willing to keep tossing money at the dream of it paying off one day after 16 years.
- zozbot234 5y ago
  > Is the value of a single place for all these conversations that much higher than having a bunch of independent forums scattered across the web? The problem with "independent forums scattered across the web" is that they make discovery (of users and service instances) harder. There are ways around this, like the Fediverse and SOLID standards, but most bulletin-board-like forums do not support them as of yet out of the box.
- RosanaAnaDana 5y ago
  Reddit should just shift to a paid model where there are no adds across the entire site and the subs you sub to get a portion of your revenue to manage the sub.
adventured 5y ago
It is strange. The obvious solution to Reddit's revenue problem was to build a marketplace into the foundation of the network, and they should have done that more than a decade ago. Etsy, eBay, FB Market, Craigslist, Fiverr, OnlyFans (which was built-up by riding on social media propagation, taking advantage of services like Reddit), and 400 other various types of online markets. There's no reason Reddit could not have have built something substantial in the ecommerce platform space over the years. Taking a small cut from transactions would have eliminated their advertising dependency. Reddit's karma also lends itself easily to forming an ecommerce trust network via transaction feedback, which would form the backbone of buying and selling products or services on there. Reddit figured out to absorb image hosting away from eg Imgur (which also piggybacked off of Reddit to then form a competing social network), and they didn't figure out to do the same thing in the ecommerce space, despite how obvious it was.
- screye 5y ago
  > build a marketplace into the foundation of the network I love this.
- twobitshifter 5y ago
  Reddit even has communities where sales are made like r/MechanicalKeyboards and those communities use karma and transaction tracking to rank sellers - the communities have done the proof of concept for them.
hbosch 5y ago
Reddit seems to me like a very hard product to monetize. As a daily user I get a ton of milage out of Reddit Enhancement Suite (desktop) and Apollo (iOS), in combination with typical ad-blockers. Combine that with the low friction of sign up (disposable e-mails allowed, no confirmation needed, sitewide bans rare) and the tacit allowance of "objectionable" content (porn, gore, hate speech, harassment, etc.)... you don't really have fertile ground for meaningful engagement from an advertiser perspective. Not only that, but if Reddit were to strongly disallow any or all of the above we have seen how EASY it is to simply clone the tech and re-host. There have been stories about certain communities being exiled from Reddit only to spring up just as quickly elsewhere with more or less the same exact user experience...
- zozbot234 5y ago
  > As a daily user I get a ton of milage out of Reddit Enhancement Suite (desktop) and Apollo (iOS), in combination with typical ad-blockers. Most users aren't going to do this. Really, the reddit folks should just go all-in on tailoring their official apps towards the most casual, highly "engaged" content consumers, and target most of their monetization towards that kind of user. As a bonus, make it trivially easy to post casual content directly from the app. Who cares about "objectionable" content when they'll have so many cat pictures and cute/funny memes to run their ads next to.
- trts 5y ago
  > if Reddit were to strongly disallow any or all of the above we have seen how EASY it is to simply clone the tech and re-host this seems doubtful to me. Reddit has tons of legendary threads, AMAs and is its own library of content at this point, similar to YouTube. Sure the tech could be replicated but the value is all in the content it generated.
  - wintermutestwin 5y ago
    Maybe that points to a way they could make $: curate and make anthologies of the actually valuable content. /r/askhistorians content could be turned into a few history books. Of course, then people might start looking at the fact that they are giving away valuable property to Reddit in return for access to a simple forum site...
closeparen 5y ago
Reddit's user base is poor and disaffected young men. Those might be valuable eyeballs to a warlord or a revolutionary but corporate America isn't buying.
- allochthon 5y ago
  I used to have a similar impression. Gradually my view has changed. I now see it as one of the best sources of information on the internet on specific topics.
  - closeparen 5y ago
    The question for an advertising business is how much do the people interested in those topics spend, and how hard are they to reach elsewhere.
- tootahe45 5y ago
  All you need is an imagination. Paid only-fans links for example would be a huge winner when targeted at virgin men in their 20s with no real life friends (AKA Reddit userbase). These subtle advertisements are already happening all over Reddit through user posts, it's just Reddit stupidly does not charge for it.
xtracto 5y ago
Now that they are setting up Cryptocurrencies in some subreddits (donuts in r/ethtrader and a couple of others that I don't recall right now) they should experiment with reddits where you initially "pay" for posting, commenting, up/down voting. Then somehow if your post gets upvoted or is heavily commented on, you get some of those tokens (shared revenue) as well as moderators in the subreddits that adopt that dynamic. It's akin to the "payment per Email" (hashcash as spam prevention) idea that a lot of us have yearned for a long time, which would deter spammers and make people think twice before commenting, so maybe it would increase the content quality. It would be an interesting experiment.
techrat 5y ago
> Seems strange to me that a 16 year old company still isn't self sustaining. Based on Reddit's own information, it would appear that they are. Picking just one frontpage sub, /r/News, you can check the guilded page and see: > gildings in this subreddit have paid for 142.83 years of server time pics? 291.80 years. funny? 364.09 years. aww? 624.43 years. askreddit? 724.03 years. politics? 314.93 years. That's 6 subs. According to Reddit's own guildings report, 6 subs on Reddit have paid for a combined 2461.21 years worth of server time. They're self sustaining. Reddit has bitten the 'growth at all costs' bug.
- shitloadofbooks 5y ago
  You do realize reddit is a company that hires humans, right, and those humans need to be paid for their time with money? You're making a huge leap about profitability based on a fraction of their running costs.
  - techrat 5y ago
    You do realise that TWO THOUSAND YEARS worth of server time just from six (of about 138,000 active subreddits) pays for more than just a handful of employees? And this is before ad sales. Hell, when it comes to ad sales... They hit > $100 mil this QUARTER. https://redditblog.com/2021/08/12/reddit-secures-funding-to-continue-growth-plans/ https://redditblog.com/2021/08/12/reddit-secures-funding-to-... Reddit is a 9 figure company. Soon to be 11 figures. > We will raise up to $700 million in Series F funding, led by Fidelity Management and Research Company LLC. and including other existing investors, at a post-money valuation of over $10 billion. They're not hurting.
chatfat 5y ago
Well it's been multiple years and hn still needs multiple pages, ironic considering they claim to deal with the best people in tech. So I guess things take time?

deleted 5y ago

[deleted]

MattGaiser 5y ago

Anonymity really hurts profits.

majormajor 5y ago

The cost is fascinating. Is the value of a single place for all these conversations that much higher than having a bunch of independent forums scattered across the web? For users, there's a high discovery value... but at the cost of apparently far more expense running the site than has been able to be recouped yet. Curious to see that even where centralization hasn't financially paid off, people are willing to keep tossing money at the dream of it paying off one day after 16 years.

zozbot234 5y ago
> Is the value of a single place for all these conversations that much higher than having a bunch of independent forums scattered across the web? The problem with "independent forums scattered across the web" is that they make discovery (of users and service instances) harder. There are ways around this, like the Fediverse and SOLID standards, but most bulletin-board-like forums do not support them as of yet out of the box.
RosanaAnaDana 5y ago
Reddit should just shift to a paid model where there are no adds across the entire site and the subs you sub to get a portion of your revenue to manage the sub.

adventured 5y ago

It is strange. The obvious solution to Reddit's revenue problem was to build a marketplace into the foundation of the network, and they should have done that more than a decade ago. Etsy, eBay, FB Market, Craigslist, Fiverr, OnlyFans (which was built-up by riding on social media propagation, taking advantage of services like Reddit), and 400 other various types of online markets. There's no reason Reddit could not have have built something substantial in the ecommerce platform space over the years. Taking a small cut from transactions would have eliminated their advertising dependency. Reddit's karma also lends itself easily to forming an ecommerce trust network via transaction feedback, which would form the backbone of buying and selling products or services on there. Reddit figured out to absorb image hosting away from eg Imgur (which also piggybacked off of Reddit to then form a competing social network), and they didn't figure out to do the same thing in the ecommerce space, despite how obvious it was.

screye 5y ago
> build a marketplace into the foundation of the network I love this.
twobitshifter 5y ago
Reddit even has communities where sales are made like r/MechanicalKeyboards and those communities use karma and transaction tracking to rank sellers - the communities have done the proof of concept for them.

hbosch 5y ago

Reddit seems to me like a very hard product to monetize. As a daily user I get a ton of milage out of Reddit Enhancement Suite (desktop) and Apollo (iOS), in combination with typical ad-blockers. Combine that with the low friction of sign up (disposable e-mails allowed, no confirmation needed, sitewide bans rare) and the tacit allowance of "objectionable" content (porn, gore, hate speech, harassment, etc.)... you don't really have fertile ground for meaningful engagement from an advertiser perspective. Not only that, but if Reddit were to strongly disallow any or all of the above we have seen how EASY it is to simply clone the tech and re-host. There have been stories about certain communities being exiled from Reddit only to spring up just as quickly elsewhere with more or less the same exact user experience...

zozbot234 5y ago
> As a daily user I get a ton of milage out of Reddit Enhancement Suite (desktop) and Apollo (iOS), in combination with typical ad-blockers. Most users aren't going to do this. Really, the reddit folks should just go all-in on tailoring their official apps towards the most casual, highly "engaged" content consumers, and target most of their monetization towards that kind of user. As a bonus, make it trivially easy to post casual content directly from the app. Who cares about "objectionable" content when they'll have so many cat pictures and cute/funny memes to run their ads next to.
trts 5y ago
> if Reddit were to strongly disallow any or all of the above we have seen how EASY it is to simply clone the tech and re-host this seems doubtful to me. Reddit has tons of legendary threads, AMAs and is its own library of content at this point, similar to YouTube. Sure the tech could be replicated but the value is all in the content it generated.
- wintermutestwin 5y ago
  Maybe that points to a way they could make $: curate and make anthologies of the actually valuable content. /r/askhistorians content could be turned into a few history books. Of course, then people might start looking at the fact that they are giving away valuable property to Reddit in return for access to a simple forum site...

closeparen 5y ago

Reddit's user base is poor and disaffected young men. Those might be valuable eyeballs to a warlord or a revolutionary but corporate America isn't buying.

allochthon 5y ago
I used to have a similar impression. Gradually my view has changed. I now see it as one of the best sources of information on the internet on specific topics.
- closeparen 5y ago
  The question for an advertising business is how much do the people interested in those topics spend, and how hard are they to reach elsewhere.
tootahe45 5y ago
All you need is an imagination. Paid only-fans links for example would be a huge winner when targeted at virgin men in their 20s with no real life friends (AKA Reddit userbase). These subtle advertisements are already happening all over Reddit through user posts, it's just Reddit stupidly does not charge for it.

xtracto 5y ago

Now that they are setting up Cryptocurrencies in some subreddits (donuts in r/ethtrader and a couple of others that I don't recall right now) they should experiment with reddits where you initially "pay" for posting, commenting, up/down voting. Then somehow if your post gets upvoted or is heavily commented on, you get some of those tokens (shared revenue) as well as moderators in the subreddits that adopt that dynamic. It's akin to the "payment per Email" (hashcash as spam prevention) idea that a lot of us have yearned for a long time, which would deter spammers and make people think twice before commenting, so maybe it would increase the content quality. It would be an interesting experiment.

techrat 5y ago

> Seems strange to me that a 16 year old company still isn't self sustaining. Based on Reddit's own information, it would appear that they are. Picking just one frontpage sub, /r/News, you can check the guilded page and see: > gildings in this subreddit have paid for 142.83 years of server time pics? 291.80 years. funny? 364.09 years. aww? 624.43 years. askreddit? 724.03 years. politics? 314.93 years. That's 6 subs. According to Reddit's own guildings report, 6 subs on Reddit have paid for a combined 2461.21 years worth of server time. They're self sustaining. Reddit has bitten the 'growth at all costs' bug.

shitloadofbooks 5y ago
You do realize reddit is a company that hires humans, right, and those humans need to be paid for their time with money? You're making a huge leap about profitability based on a fraction of their running costs.
- techrat 5y ago
  You do realise that TWO THOUSAND YEARS worth of server time just from six (of about 138,000 active subreddits) pays for more than just a handful of employees? And this is before ad sales. Hell, when it comes to ad sales... They hit > $100 mil this QUARTER. https://redditblog.com/2021/08/12/reddit-secures-funding-to-continue-growth-plans/ https://redditblog.com/2021/08/12/reddit-secures-funding-to-... Reddit is a 9 figure company. Soon to be 11 figures. > We will raise up to $700 million in Series F funding, led by Fidelity Management and Research Company LLC. and including other existing investors, at a post-money valuation of over $10 billion. They're not hurting.

chatfat 5y ago

Well it's been multiple years and hn still needs multiple pages, ironic considering they claim to deal with the best people in tech. So I guess things take time?