As for the next step, it looks less like starting a reddit competitor and more like building individual, independent communities that can stand or (more likely) fall apart from any others.

For example, I was pleasantly surprised to see Discourse have so much success and high profile roll outs (like Boing Boing and Blizzard). It turns out that everyone was ready for a modern revitalization of the forum experience, not that forums were doomed.

I think I'd liken it to the explosion of Slack/Discord popularity. It would have been a mistake to look at the slow death of IRC and conclude "I guess people don't like chatting anymore."

You mention it in your post. It's Discord. We're looping back to IRC. Give forums another 5 years or so

Forums (Discourse) are probably next up when we remember forums have great SEO benefits and discord none

The solution is to attract small communities off reddit. There are countless decent communities on reddit that have issues with the vast majority of the website outside their niche interest. If each of these small communities will have their own little place to discuss and share ideas without having the Damocles sword of the larger reddit assholery and bad design over their heads, I feel like there's a chance they'll move to a different platform.

I am planning such an alternative to reddit that targets these small communities. I hope it will actually be useful to people.

Other groups might be people who feel harassed by people who aren't banned from the incumbent. For example, I think Mastodon saw early large influxes of LGBT users who were getting tired of Twitter's lack of moderation.

(Though of course, Mastodon has seen other influxes as well that might have helped it get over a specific niche - IIRC many Japanese who had different ideas about what is tolerable than Western platforms, and of course techies enthusiastic about federation.)