Today, we’re talking about Reddit, the community network site started by two college roommates. Let’s dive into how it began and what we can learn from its success.
The Inspiring Startup Journey of Reddit
What is Reddit and Who Started It?
You probably have seen multiple links for a Reddit post whenever you ask a question on Google. Reddit has become the community for every topic you can think of.
Reddit is a website that allows users to create their own communities. You can find a community for any topic: like gardening, coding, world news, gaming, etc. Users can post pictures, links, videos, and text in communities they are a part of to spark any discussion. The website is gamified by “karma,” which you receive when your posts get upvoted by other users. Your posts can also get downvoted, in which you receive negative karma. Compared to other social platforms, Reddit is very community-focused. If the community loves your content, your post will get upvoted and you’ll receive good karma.
Reddit was created by Steve Huffman and Alexis Ohanian in 2005, who were college roommates at the University of Virginia.
Alexis Ohanian was working towards a career in law but wanted to focus on making a difference. He met Steve Huffman, a computer science major who was constantly working on new product ideas. The two linked up to start working on building something new.
How Did They Come Up with the Idea?
Initially, Steve and Alexis had a common problem: ordering food. The two wanted to allow people to order food via phone (this was before smartphones). They started building their idea and called it My Mobile Menu.
During their senior year, Paul Graham, who was the co-founder of Viaweb (sold to Yahoo for $49 million), was going to Harvard to speak about how to start a startup. Steve convinced Alexis to take a train up to go see him. After the talk, Alexis asked Paul to meet them for coffee and since they came from so far, Paul said why not.
The two shared their mobile food app idea with Paul. Paul was so impressed by their smarts and energy, that he decided to start a fund to help people like them. Days later, Paul suggested that they should apply to his new startup accelerator, Y Combinator. They ended up coming back up to Boston to do the pitch. Paul thought their idea was bad. Their goal was to fund ideas instead of founders, so they did not get accepted to YC. Jessica Livingston, the co-founder of Y Combinator and wife of Paul, felt sad they rejected them, considering they were the ones that inspired them to start YC.
On the train home, Paul called them and told them if they got off the train and came back, Y Combinator would fund them with a stipulation: they had to scrap the food app. They hopped off the train and went to hear what Paul had to say. Paul suggested that they focus on web apps. Paul had an idea from a site back then called Delicious, where you could save links. He wanted something similar to this idea where users can share links, similar to Reddit today. By the end of the day, Alexis and Steve were committed to building what Reddit is today.
r/RedditLaunch
In the summer of 2005, Paul wanted them to launch quickly. The two were given $12,000 to put together their MVP. Within 3 weeks, they launched the first version of Reddit. The first users were Steve, Alexis, Paul, and some of their YC batchmates and college friends.
Reddit, at one minute old (June 23, 2005)
Initially, Reddit launched with tons of fake accounts created by Steve and Alexis. Steve created a special submit page that allowed them to generate a new account at the same time. They pushed their friends to start sharing links also.
Until there were genuine users, Reddit had no subreddits. The goal was to get everyone into the same place so it looked like there was lots of daily usage when people came to the site.
Another important aspect of their growth was being censorship-free. Content that was labeled NSFW accounted for 10% of their traffic. Paul was a huge help also. He mentioned Reddit in one of his essays, which gave them ~4K visitors per day.
Within a few weeks of launch, Reddit’s traffic grew slowly but they realized people were regularly coming back.
“They would have liked to call it Snoo, as in "What snoo?" But snoo.com was too expensive, so they settled for calling the mascot Snoo” - Paul Graham
Snoo, the Reddit alien. Born from a doodle in one of Alexis’s boring marketing classes.
Reddit Since Then
Just 16 months after its launch, Reddit was acquired by Condé Nast Publications in October 2006 for around $10 million
At Y Combinator, Alexis and Steve were introduced to Aaron Swartz. Swartz was part of another wiki/blog platform, Infogami. The three agreed to merge under the Reddit name, and all would be labeled as co-founders. Swartz only worked with them for a short time, and once Condé Nast acquired Reddit, Swartz was quickly terminated
Chris Slowe, who was also in the first YC batch, joined Reddit eventually and is currently the CTO
As of 2024, Reddit has over 430 million monthly active users, making it one of the most visited websites in the world
In 2008, Reddit's code was made open-source, allowing developers around the world to contribute to its development. However, in 2017, the decision was made to no longer update the open-source code due to concerns about maintaining consistency and security
In 2017, Reddit launched a social experiment called "r/Place," a collaborative project where users could place a single pixel on a blank canvas every few minutes. It resulted in a massive, intricate digital artwork created by millions of users worldwide
Reddit IPO’d on the New York Stock Exchange (NYSE) in New York on March 21, 2024
Key Takeaways for Success
Open-Minded: Alexis and Steve initially had a different idea (a mobile food app) but were open to pivoting based on feedback. They took a chance on a more promising opportunity
Networking and Mentorship: It’s hard to say where they would have been if they hadn’t traveled to go see Paul Graham speak. Meeting him for coffee opened doors for them and allowed them to eventually get accepted to Y Combinator
Timing: When they launched, the internet was missing a place like Reddit. They saw the division of online content and created a platform that became the “front page of the internet.”
🧰 Inspiration for Founders💡
How Meta builds products via Zuckerberg:
“We just have this playbook for how we do this and there's like phase one is building a thing that kind of sparks some joy and that people appreciate. Then from there you want to get to something that is retentive so that way people who have a good experience with the thing come back and want to keep using it.
Those two things are not they're not always the same a lot of there are a lot of things that people think are awesome but may not you know always come back to. I mean I think you know some of what people are seeing now around like Chat GPT is this level of AI is it's like a miracle, right? It's awesome but I mean that doesn't mean that everyone is going to have a use case every week right so I think that there's first is like create the spark, second is create the retention.
Then once you have retention then you can start encouraging more people to join but if people aren't going to be retained by it why would you ask people to go sign up for something, right?
Then only at that point is step four which is monetization. We take a while to go through all those I mean we're really in in some sense only getting started on the monetization of the messaging experiences like WhatsApp now with stuff like business messaging but two billion people use the product every day right. I mean we scaled it pretty far but I think with our model that sort of works.
Summary of Steps:
Spark.
Retention.
Growth and scaling the community
Monetization
Thanks for reading Startup Roots! Subscribe for free to receive new posts and support my work.
