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In this situation, do you hire someone to negotiate with or for you? I'm thinking the intention here was to sell the company for $10 million and that came acros

In this situation, do you hire someone to negotiate with or for you? I'm thinking the intention here was to sell the company for $10 million and that came across as a threat because of the language that was used. You would not record the call [1] and then publish it if you actually were blackmailing them for $10 million. I'm not faulting the guy here at all, I just think it comes down to lack of experience in dealing with negotiations of this level. He clearly has an awesome product if you look at any of the HN/Reddit comments. He probably could have walked away will at least a few million vs shutting it down if there was a small level of negotiation that took place here. I'm not sure who was on the other end of the call but strategic accounts normally get pretty seasoned sales folks assigned to them. They are used to having hard conversations around pricing and pissed off customers. That's all part of negotiation. That call was brutal to listen too. Or, is saying you're shutting down part of negotiation too? This likely took it too far if it was, in that you're making reddit look like the bad guy very publicly now. So, it's probably worth it for reddit to cut ties and force people into the reddit app. No winners here: * Apollo the company is gone. * Apollo users are gone. * Reddit has no customer paying money. * Reddit cannot reference them. * Reddit users are ticked off. This is a case study in bad negotiation tactics on both sides. Reddit tried to squeeze them pretty hard right off the bat. Should have tried a 3 year contract or something with heavy discounts. This is wild. [1] http://christianselig.com/apollo-end/reddit-third-call-may-31-end.m4a http://christianselig.com/apollo-end/reddit-third-call-may-3...

bogwog 3y ago
Yeah this guy didn't handle this situation very well. I don't know if it would've been possible to save Apollo for reddit, but that call didn't help at all. Also, what's the deal with him not wanting to start a competitor? That's like his only bargaining chip in this situation, and he's just throwing it away because he feels overwhelmed and wants to make iOS widgets. I totally sympathize with him and how this situation is probably incredibly stressful, but when you have 50k+ subscribers per year + millions of happy loyal users, you gotta start bringing in outside people to help with these things. He's just letting a lot of people down. I don't mean to trash the guy, but I hope that the other third-party apps see this example and change their response to find a better outcome for their users.
- WestCoastJustin 3y ago
  Yeah, Reddit needs to majorly up their game too. You strong arm your major customers right out of the gate. What a loss for both sides. You want the guy to pay $20 million and you just give him a call on the phone. Total amateur hour. This should have gone like, "Hey, in a few months we're rolling this out and wanted to give you a heads up so you know before anyone else, since you're a major API user. We wanted to offer you a grace period and special pricing. When's a good time to chat we'll fly out.". Fly the sales team over to where he lives, wine and dine him, etc. This is what sales people do all day long for deals that are like $250k+. For deals that are $20 million a year you'll have all parts of the company bending over backwards trying to win that. This is all just my opinion based on what I've read so far.
  - chimeracoder 3y ago
    > Reddit needs to majorly up their game too. You strong arm your major customers right out of the gate. What a loss for both sides. You want the guy to pay $20 million and you just give him a call on the phone. Total amateur hour. If they wanted him to pay $20 million, they'd certainly have given him much better than a brief phone call. But that's the point. They're revealing with their actions that they don't actually want him to pay the money. What they want is to shut it down. Charging a sum of money that they know he won't pay is just an easy way to do that.
    - deleted 3y ago
      [deleted]
    - imajes 3y ago
      'course it's not just him, but it's him and _everyone else_. i'm not sure what their overall intent here was, but it's been a shit show from start to finish, and they gotta at the very least start thinking hard about pausing the rollout till they can get their ducks in a row.
  - girvo 3y ago
    You only approach this deal this way if you don't want the deal to go through at all.
bubblethink 3y ago
>it comes down to lack of experience in dealing with negotiations of this level Yeah, the conversation is so cringe. Why is he beating around the bush so much ? He wants to sell, shut down, or whatever for a $10M payout. It sounds easy to make that proposition. Instead, he uses terrible verbiage like, "go quiet, I'm joking, opportunity cost, Bob's your uncle, yada yada". Why is he so terrible at talking ? Nothing in the call resembles a sales pitch if he is actually trying to sell a product for $10M.
- madeofpalk 3y ago
  > Why is he so terrible at talking ? He's a 20-something year old developer. This isn't his comfort zone and did not expect himself to be in this position. I know I would be terrible if I was in his shoes.
  - bubblethink 3y ago
    Fair enough. It just isn't the slam dunk that the post makes it out to be. He made some extremely vague proposition that can easily be misinterpreted and it was ultimately unproductive.
    - skeaker 3y ago
      The claim still stands, given that in the same call Reddit immediately and openly admitted that they misinterpreted him, only to later turn around and lie about it.
    - Aeolun 3y ago
      It’s not like the person on the other end of the line had no idea exactly what he was proposing. Even if the dev isn’t experienced at negotiating something like this you can bet the person on the other end of the line was.
      - bubblethink 3y ago
        Actually, I'm not sure if it's entirely clear to anyone on the other side (or even the world at large) how to value something. To a large extent, Reddit has drunk the cool aid and internalized that APIs are worth X. So going to a meeting with the implicit assumption that everyone knows that pricing is BS is not a safe assumption. They've already had the pricing discussion, so throwing more oblique references to BS pricing is not productive. It's like in a normal human argument. Once you are at an impasse, throwing more facts or presenting a logical paradox doesn't change the other person's mind.
lolinder 3y ago
I don't know how serious he was about pursuing a sale in the calls, but he made it pretty clear in the post that he's done dealing with Reddit. This isn't an attempt at blackmail or otherwise an attempt to get Reddit to buy him out, this is him getting everything out in the open to head off lies that were being spread. From the post: > I bring this [audio recording] up for two reasons: ... It shows why I've finally come to the conclusion that I don't think this situation is recoverable. If Reddit is willing to stoop to such deep lows as to slander individuals with blatant lies to try to get community favor back, I no longer have any faith they want this to work, or ever did.
aniforprez 3y ago
> I'm not sure who was on the other end of the call He mentions that it was spez AKA Steve Huffman the CEO of reddit. The call really does sound amateurish and the joke/negotiation tactic/money request/??? was really unprofessional but Steve seems to have completely misconstrued the whole interaction and blown up at him. I would say this is worse of the CEO to use this to spread slander especially when he already apologised for misunderstanding Selig and then privately walked it back
- nulltype 3y ago
  It seems a number of people believe that the recorded call has Steve Huffman talking, but I don’t see this claim anywhere in the original post.
  - aniforprez 3y ago
    If you read the section titled "Bizarre allegations by Reddit of Apollo "blackmailing" and "threatening" Reddit", he is directly addressing Steve. He starts with the transcript of the private mod call with Steve and then begins addressing Steve directly. The "you" in that section is the Steve Huffman he had calls with who heard the "threatening" bit
    - nulltype 3y ago
      Yeah that part says it’s Steve but where does it say it’s Steve in the phone recording? It just says “Reddit” in the transcript.
      - nulltype 3y ago
        Ah I see that he is claiming it’s Steve Huffman via all the use of “you” there.
        aniforprez 3y ago
        I think you're right. The Apollo dev didn't directly mention them by name but re-reading the post, I agree that that was not spez. My mistake
melvinmelih 3y ago
I genuinely don't understand the "pay me 10 million to save half on 20 million of costs" negotiation tactic... if they wanted to save money, why wouldn't they just shut down the API access?
- csjh 3y ago
  They say somewhere that the 20m is from opportunity cost, so 10m for an app that's "costing" them 20m a year would be a deal.
  - az226 3y ago
    Exactly. They’re not doing the deal because the $20M is complete BS.
- robryan 3y ago
  The whole thing was just to illustrate the point that he thinks the Apollo API access is worth nowhere near $20 million a year in opportunity cost.
- Aeolun 3y ago
  20 million/year is how much the Apollo users would bring in when served ads (the opportunity costs). Reddit pays Apollo 10M, starts serving their ads in the app, and now rakes in 20M/year without any extra effort. Conversely, now they need to convince all the angry users of Apollo to come back to use their shitty website/app, something that will never happen. A lot of people that aren’t even using Apollo are going to be angry at the mistreatment and leave the site altogether. On the whole it’s quite likely that Reddit’s losses will amount to more than the 10M they’d have to pay once to get a ton of money in the future.
  - karmelapple 3y ago
    That sounds like a reasonable benefit to bargain over, but only if you have a great negotiator to make it happen.
LargeToes 3y ago
[flagged]
- hayst4ck 3y ago
  I love him. He is showing how labor needs to fight. There's a reason labor is losing power to owners and it's because they aren't having fights like Christian. Christian is showing how to give our children a future.
  - LargeToes 3y ago
    [flagged]
- DamnableNook 3y ago
  [flagged]
Guest9081239812 3y ago
It's certainly a strange call. Hey, you want to charge me $20 million per year, so why don't we make it easy and you just pay me $10 million to go quiet? It's really confusing. He wants Reddit to pay $10 million so he isn't "loud" with API usage? He wants them to buy and takeover the app? He's wants a payment to shutdown? Is he even serious about any of this? I get the impression he lacks the confidence to ask for a $10 million acquisition, so instead he approaches the subject casually as a joke, and the entire conversation spirals into confusion due to the lack of clarity. Either way, that's not a great deal for Reddit. They might as well charge the $20 million, and if he can't find a way to pay it then Apollo shuts down and the majority of users return to the official Reddit site/app for free. There's no benefit to paying $10 million. The call was a failure between the two parties and likely destroyed any future negotiations. I think the best suggestion was from another user here. Only allow Reddit official subscribers to use third party apps. Reddit can charge users whatever they want, and app developers can monetize their apps however they choose.
- rightbyte 3y ago
  If Reddit thinks Apollo can pay them 20 million a year, 10 million is certainly a nice deal for the app? I guess that is what he meant.
  - Guest9081239812 3y ago
    It's not a deal though. Reddit says the users are worth $20 million in lost advertising. So either Apollo pays the money, the users move to another app that pays, or the users return to the official site and app. Either way, Reddit gets their $20 million. Apollo has no leverage here unless there is strong evidence most of the Apollo users will leave Reddit if the app shuts down. I don't believe they will. The other potential leverage is the upcoming subreddit blackouts, or hinting at taking the Apollo users to start a competitor. The developer said they are not going to build a competitor (that was a mistake, they shouldn't have revealed that card), so I think the blackouts are the only chance of lowering API costs.
    - 3y ago
shmatt 3y ago
His app icon was showcased front and center at the WWDC keynote, something I always thought was bought with money, for (I assume) free. It has tons of users including paying users. I have a very hard time imagining being able to sell the app right now for less than 10 figures. All this fight has shown me is that people will gladly pay for this app monthly If he's leaving all that on the table out of spite, well thats his money to lose. But he shouldn't call the world unfair
- jhugo 3y ago
  As he mentions in the post, the main issue is the 30-day timeframe to completely rethink the business model of the app and move enough users over to paying subscriptions to not go bankrupt when the first API access bill comes in. The suggested API fees also seem quite unrealistic and it's unclear whether enough users would be willing to pay the necessary monthly fees to cover them. Reddit's actions here make it pretty clear that they just want the app (all third-party apps) to shut down — if they actually wanted a solution they could easily lower the pricing to something more realistic and/or give a slightly longer transition period.
- prawn 3y ago
  When our app has been featured in WWDC moments, it's at the discretion of Apple. I don't believe that it's paid, but more Apple choosing what they think are quality examples of apps to motivate developers.
- s3p 3y ago
  >something I always thought was bought with money, No. Apple chooses this on their own. Their internal teams find new and interesting apps, songs, etc. When they announced the iPhone X, they used a band without telling them before. They asked the band to send them some music samples and just a generic "this might end up on an Apple marketing material one day". The band was shocked when it turned out to be THE song on THE intro video for the iPhone X.
o_m 3y ago
Apollo still have some value. If there is another online mass migration, like with Digg, he can connect Apollo to whatever comes next. Maybe he even can affect the decision with his user base. Lemmy could over night have a much larger user base if Apollo switched to them.
the_gipsy 3y ago
Bad negotiation because the other end owns the platform, has all the leverage. Apollo simply cannot stand up and leave the table, which is what reddit predictably did. Let that be the lesson: don't sink your time (and money) into building OSS (or a business) on top of a platform. It's like building on sand.
- Normal_gaussian 3y ago
  If you have a quick and high return, it can be very much worth it. The business plan and your personal savings should reflect that it can (and will) disappear in an instant.
- truculent 3y ago
  This guy had a job he loved running his own business for 8 years. Yes, it can get taken away in an instant, but that doesn’t seem like a terrible deal to me in hindsight.
- ktr 3y ago
  Not sure I agree. Apollo is apparently monetizing these users above and beyond what Reddit is/was able to accomplish. I’m confident that this represents value to Reddit > 0. So Reddit may have leverage, but not all the leverage.
brokenodo 3y ago
I’m a lawyer and listening to this call was absolutely painful. I like to think I’m a pretty decent negotiator, and agree that there was likely a few million here were this handled competently. Don’t be afraid to bring people in when something is outside your area of expertise.

bogwog 3y ago

Yeah this guy didn't handle this situation very well. I don't know if it would've been possible to save Apollo for reddit, but that call didn't help at all. Also, what's the deal with him not wanting to start a competitor? That's like his only bargaining chip in this situation, and he's just throwing it away because he feels overwhelmed and wants to make iOS widgets. I totally sympathize with him and how this situation is probably incredibly stressful, but when you have 50k+ subscribers per year + millions of happy loyal users, you gotta start bringing in outside people to help with these things. He's just letting a lot of people down. I don't mean to trash the guy, but I hope that the other third-party apps see this example and change their response to find a better outcome for their users.

WestCoastJustin 3y ago
Yeah, Reddit needs to majorly up their game too. You strong arm your major customers right out of the gate. What a loss for both sides. You want the guy to pay $20 million and you just give him a call on the phone. Total amateur hour. This should have gone like, "Hey, in a few months we're rolling this out and wanted to give you a heads up so you know before anyone else, since you're a major API user. We wanted to offer you a grace period and special pricing. When's a good time to chat we'll fly out.". Fly the sales team over to where he lives, wine and dine him, etc. This is what sales people do all day long for deals that are like $250k+. For deals that are $20 million a year you'll have all parts of the company bending over backwards trying to win that. This is all just my opinion based on what I've read so far.
- chimeracoder 3y ago
  > Reddit needs to majorly up their game too. You strong arm your major customers right out of the gate. What a loss for both sides. You want the guy to pay $20 million and you just give him a call on the phone. Total amateur hour. If they wanted him to pay $20 million, they'd certainly have given him much better than a brief phone call. But that's the point. They're revealing with their actions that they don't actually want him to pay the money. What they want is to shut it down. Charging a sum of money that they know he won't pay is just an easy way to do that.
  - deleted 3y ago
    [deleted]
  - imajes 3y ago
    'course it's not just him, but it's him and _everyone else_. i'm not sure what their overall intent here was, but it's been a shit show from start to finish, and they gotta at the very least start thinking hard about pausing the rollout till they can get their ducks in a row.
- girvo 3y ago
  You only approach this deal this way if you don't want the deal to go through at all.

bubblethink 3y ago

>it comes down to lack of experience in dealing with negotiations of this level Yeah, the conversation is so cringe. Why is he beating around the bush so much ? He wants to sell, shut down, or whatever for a $10M payout. It sounds easy to make that proposition. Instead, he uses terrible verbiage like, "go quiet, I'm joking, opportunity cost, Bob's your uncle, yada yada". Why is he so terrible at talking ? Nothing in the call resembles a sales pitch if he is actually trying to sell a product for $10M.

madeofpalk 3y ago
> Why is he so terrible at talking ? He's a 20-something year old developer. This isn't his comfort zone and did not expect himself to be in this position. I know I would be terrible if I was in his shoes.
- bubblethink 3y ago
  Fair enough. It just isn't the slam dunk that the post makes it out to be. He made some extremely vague proposition that can easily be misinterpreted and it was ultimately unproductive.
  - skeaker 3y ago
    The claim still stands, given that in the same call Reddit immediately and openly admitted that they misinterpreted him, only to later turn around and lie about it.
  - Aeolun 3y ago
    It’s not like the person on the other end of the line had no idea exactly what he was proposing. Even if the dev isn’t experienced at negotiating something like this you can bet the person on the other end of the line was.
    - bubblethink 3y ago
      Actually, I'm not sure if it's entirely clear to anyone on the other side (or even the world at large) how to value something. To a large extent, Reddit has drunk the cool aid and internalized that APIs are worth X. So going to a meeting with the implicit assumption that everyone knows that pricing is BS is not a safe assumption. They've already had the pricing discussion, so throwing more oblique references to BS pricing is not productive. It's like in a normal human argument. Once you are at an impasse, throwing more facts or presenting a logical paradox doesn't change the other person's mind.

lolinder 3y ago

I don't know how serious he was about pursuing a sale in the calls, but he made it pretty clear in the post that he's done dealing with Reddit. This isn't an attempt at blackmail or otherwise an attempt to get Reddit to buy him out, this is him getting everything out in the open to head off lies that were being spread. From the post: > I bring this [audio recording] up for two reasons: ... It shows why I've finally come to the conclusion that I don't think this situation is recoverable. If Reddit is willing to stoop to such deep lows as to slander individuals with blatant lies to try to get community favor back, I no longer have any faith they want this to work, or ever did.

aniforprez 3y ago

> I'm not sure who was on the other end of the call He mentions that it was spez AKA Steve Huffman the CEO of reddit. The call really does sound amateurish and the joke/negotiation tactic/money request/??? was really unprofessional but Steve seems to have completely misconstrued the whole interaction and blown up at him. I would say this is worse of the CEO to use this to spread slander especially when he already apologised for misunderstanding Selig and then privately walked it back

nulltype 3y ago
It seems a number of people believe that the recorded call has Steve Huffman talking, but I don’t see this claim anywhere in the original post.
- aniforprez 3y ago
  If you read the section titled "Bizarre allegations by Reddit of Apollo "blackmailing" and "threatening" Reddit", he is directly addressing Steve. He starts with the transcript of the private mod call with Steve and then begins addressing Steve directly. The "you" in that section is the Steve Huffman he had calls with who heard the "threatening" bit
  - nulltype 3y ago
    Yeah that part says it’s Steve but where does it say it’s Steve in the phone recording? It just says “Reddit” in the transcript.
    - nulltype 3y ago
      Ah I see that he is claiming it’s Steve Huffman via all the use of “you” there.
      - aniforprez 3y ago
        I think you're right. The Apollo dev didn't directly mention them by name but re-reading the post, I agree that that was not spez. My mistake

melvinmelih 3y ago

I genuinely don't understand the "pay me 10 million to save half on 20 million of costs" negotiation tactic... if they wanted to save money, why wouldn't they just shut down the API access?

csjh 3y ago
They say somewhere that the 20m is from opportunity cost, so 10m for an app that's "costing" them 20m a year would be a deal.
- az226 3y ago
  Exactly. They’re not doing the deal because the $20M is complete BS.
robryan 3y ago
The whole thing was just to illustrate the point that he thinks the Apollo API access is worth nowhere near $20 million a year in opportunity cost.
Aeolun 3y ago
20 million/year is how much the Apollo users would bring in when served ads (the opportunity costs). Reddit pays Apollo 10M, starts serving their ads in the app, and now rakes in 20M/year without any extra effort. Conversely, now they need to convince all the angry users of Apollo to come back to use their shitty website/app, something that will never happen. A lot of people that aren’t even using Apollo are going to be angry at the mistreatment and leave the site altogether. On the whole it’s quite likely that Reddit’s losses will amount to more than the 10M they’d have to pay once to get a ton of money in the future.
- karmelapple 3y ago
  That sounds like a reasonable benefit to bargain over, but only if you have a great negotiator to make it happen.

LargeToes 3y ago

[flagged]

hayst4ck 3y ago
I love him. He is showing how labor needs to fight. There's a reason labor is losing power to owners and it's because they aren't having fights like Christian. Christian is showing how to give our children a future.
- LargeToes 3y ago
  [flagged]
DamnableNook 3y ago
[flagged]

Guest9081239812 3y ago

It's certainly a strange call. Hey, you want to charge me $20 million per year, so why don't we make it easy and you just pay me $10 million to go quiet? It's really confusing. He wants Reddit to pay $10 million so he isn't "loud" with API usage? He wants them to buy and takeover the app? He's wants a payment to shutdown? Is he even serious about any of this? I get the impression he lacks the confidence to ask for a $10 million acquisition, so instead he approaches the subject casually as a joke, and the entire conversation spirals into confusion due to the lack of clarity. Either way, that's not a great deal for Reddit. They might as well charge the $20 million, and if he can't find a way to pay it then Apollo shuts down and the majority of users return to the official Reddit site/app for free. There's no benefit to paying $10 million. The call was a failure between the two parties and likely destroyed any future negotiations. I think the best suggestion was from another user here. Only allow Reddit official subscribers to use third party apps. Reddit can charge users whatever they want, and app developers can monetize their apps however they choose.

rightbyte 3y ago
If Reddit thinks Apollo can pay them 20 million a year, 10 million is certainly a nice deal for the app? I guess that is what he meant.
- Guest9081239812 3y ago
  It's not a deal though. Reddit says the users are worth $20 million in lost advertising. So either Apollo pays the money, the users move to another app that pays, or the users return to the official site and app. Either way, Reddit gets their $20 million. Apollo has no leverage here unless there is strong evidence most of the Apollo users will leave Reddit if the app shuts down. I don't believe they will. The other potential leverage is the upcoming subreddit blackouts, or hinting at taking the Apollo users to start a competitor. The developer said they are not going to build a competitor (that was a mistake, they shouldn't have revealed that card), so I think the blackouts are the only chance of lowering API costs.
  - 3y ago

shmatt 3y ago

His app icon was showcased front and center at the WWDC keynote, something I always thought was bought with money, for (I assume) free. It has tons of users including paying users. I have a very hard time imagining being able to sell the app right now for less than 10 figures. All this fight has shown me is that people will gladly pay for this app monthly If he's leaving all that on the table out of spite, well thats his money to lose. But he shouldn't call the world unfair

jhugo 3y ago
As he mentions in the post, the main issue is the 30-day timeframe to completely rethink the business model of the app and move enough users over to paying subscriptions to not go bankrupt when the first API access bill comes in. The suggested API fees also seem quite unrealistic and it's unclear whether enough users would be willing to pay the necessary monthly fees to cover them. Reddit's actions here make it pretty clear that they just want the app (all third-party apps) to shut down — if they actually wanted a solution they could easily lower the pricing to something more realistic and/or give a slightly longer transition period.
prawn 3y ago
When our app has been featured in WWDC moments, it's at the discretion of Apple. I don't believe that it's paid, but more Apple choosing what they think are quality examples of apps to motivate developers.
s3p 3y ago
>something I always thought was bought with money, No. Apple chooses this on their own. Their internal teams find new and interesting apps, songs, etc. When they announced the iPhone X, they used a band without telling them before. They asked the band to send them some music samples and just a generic "this might end up on an Apple marketing material one day". The band was shocked when it turned out to be THE song on THE intro video for the iPhone X.

o_m 3y ago

Apollo still have some value. If there is another online mass migration, like with Digg, he can connect Apollo to whatever comes next. Maybe he even can affect the decision with his user base. Lemmy could over night have a much larger user base if Apollo switched to them.

the_gipsy 3y ago

Bad negotiation because the other end owns the platform, has all the leverage. Apollo simply cannot stand up and leave the table, which is what reddit predictably did. Let that be the lesson: don't sink your time (and money) into building OSS (or a business) on top of a platform. It's like building on sand.

Normal_gaussian 3y ago
If you have a quick and high return, it can be very much worth it. The business plan and your personal savings should reflect that it can (and will) disappear in an instant.
truculent 3y ago
This guy had a job he loved running his own business for 8 years. Yes, it can get taken away in an instant, but that doesn’t seem like a terrible deal to me in hindsight.
ktr 3y ago
Not sure I agree. Apollo is apparently monetizing these users above and beyond what Reddit is/was able to accomplish. I’m confident that this represents value to Reddit > 0. So Reddit may have leverage, but not all the leverage.

brokenodo 3y ago

I’m a lawyer and listening to this call was absolutely painful. I like to think I’m a pretty decent negotiator, and agree that there was likely a few million here were this handled competently. Don’t be afraid to bring people in when something is outside your area of expertise.