Reddit might be a #1 project out of all the startups ever funded by Y Combinator, but it's unlikely to ever become a top 10 company.
Because as an ad business it can neither match Google at targeting audience by exact user intent, nor Facebook at targeting audience by exact user profile.
In fact, I see reddit more like Couchsurfing: a project which would do much better as a foundation rather than a corporation, based on the role it plays in the society.
At its essence, it's a highly scalable CRUD application, which requires a simple user interface, respectful community moderation, and as little user tracking as possible.
If I had a quarter every time I heard this. You can say that for half of the companies on that list. If Facebook and Google can make so much money from ads, heck even Twitter. Reddit can do the same if they really put in the effort in building a strong ad platform. They are quite comfortable.
One can fold paper planes too (example airplane app)
“Just a CRUD app” is not a good analysis because very few of the companies on this list are based on technological breakthroughs. They are mainly B2B SaaS apps.
The history of reddit shows that its growth doesn't depend on a constant technological innovation, and that it can be successfully supported by a small number of technical employees.
Building an ad company requires a huge number of sales and support people, which significantly increases spending without adding anything to the product itself.
> Seems like if they can make a few hundred million an year they can just be an ongoing business.
That would be fine, but reddit is not Craiglist, which never took any money from the outside. They have raised money at $3 billion valuation, and they will have to IPO – or get acquired by a larger company, again.
If reddit becomes a publicly traded company, it will have to demonstrate the growth in revenue every quarter. A failure to do so might result in the heads of the company being replaced, and its direction becoming unpredictable.
> “Just a CRUD app” is not a good analysis because very few of the companies on this list are based on technological breakthroughs. They are mainly B2B SaaS apps.
SaaS companies are making money by solving easily measurable problems of their customers. Reddit is not.
I derive a lot of obvious value from reddit that's not their explicit goal. It's the best review and recommendation platform on the web for any random product category I can think of, for example.
User profiles are primarily useful to build up a picture of user intent.
User interests, which Reddit possesses, are another way to do that.
It's not obvious to me the disparity in valuation should be so great.
aren't only hardcore pencil users are on /r/calligraphy and weak targets for persuasion via advertising.
I would rather target dabblers not hardcore users who already know which pencil is the best.
https://www.reuters.com/article/us-reddit-funding/reddit-val...
If it turns into a Facebook type place with gratuitious advertising, data mining, and privacy concerns it will be short lived revenue in my opinion.
The fun people that create the content and culture will migrate away to other sites, and Reddit will be left with the Facebook meme crowd.
Just my thoughts.
Look at r/all. This is already the set-up at reddit.
It's alexa rank in US social media websites is #2 behind Facebook. Apart form their redesign shenanigans, people actually like the product they offer (in contrast to facebook) and they are still growing.
I wish Reddit stays in the kind of "grey" area where it never gets as "official" as twitter, despite the popularity. If anything, that might be entirely its appeal.
That predicament will eternally present a glass ceiling for reddit's revenue, but as a consumer I'd rather see that than it going the full facebook -> hyper growth above anything else approach.