I haven’t liked Reddit’s actions so far, but I figured that they were just taking a heavy handed approach toward achieving profitability or a state where they could take the business public. But to hear that they’re looking at social media management that’s resulted in the destruction of tens of billions of dollars of equity value as the path forward … wow.

I’m way too cynical to think Reddit is doomed but even as a for-profit venture this is just seemingly increasingly ill-conceived.

Also lmfao at the letter to RIF. You tear up your contract with them and THEN you tell them they’re required to respond within 48 hours? LOL get bent.

I'm starting to reach the view that VC have decided that Reddit must either see a large liquidity event or die trying. Given the present investment environment, it's time to close off taps.

That's not the risk perspective I face, and I'd prefer to see Reddit accede to community demands (though I've long since abandoned much hope they'd do so, my own personal subreddit's been all but dormant for about five years on just that basis, though I've continued to mine it for links on topics I'd posted previously).

I'm not certain what Reddit's end game is should the IPO fail, or fizzle, but it would seem that preparing for an alternative online presence might well be a good idea.

Yeah, I think you’re exactly right. My guess would be that as a public company, Reddit looks a lot like Lyft - not a terribly differentiated product, cost structure out of control, poorly performing stock, but still a multi-billion dollar company.

I think I read somewhere that Reddit had taken like $1.7 billion in VC money. Even if its current valuation is way down from what it appears to have peaked at ($15 billion), there’s still plenty of cushion for the VCs to get their money out and give the employees some liquidity.

They’ll probably torch the franchise in the process, but at least for a brief moment, they have created some real value for the shareholders.

> but at least for a brief moment, they have created some real value for the shareholders.

Not yet.

Spoiler: <https://2.bp.blogspot.com/-VzgIUW49PWQ/U3LSp6iN0xI/AAAAAAAAA...>

I think the VCs blame Reddit leadership for not somehow developing ChatReddit and becoming instant bazillionaires.

And management is scrambling to show they can still have a profitable exit.

That's one take. The other is much simpler: it has been communicated that investors will no longer bankroll Reddit and so now they will have to make ends meet, one way or another.

That would be a part of my assessment. What your response omits is the consideration of an IPO, what potential valuations might be achieved, and the fact that VC manage a portfolio of assets. The net risk of an (increasingly unlikely) large liquidity event, vs. a wash, still sees its upside in the big-pop IPO.

Which is to say: it really is rational for investors to pursue a course with a high probability of killing the goose, as the alternative is still little or no return.

The post-IPO Reddit would still be on its own, though it might be able to capitalise somewhat on the IPO itself for a time. That it will eventually have to make it on its own as a business does seem clear. And frankly, increasingly unlikely.

An IPO presumes that there will be buyers. I wouldn't touch Reddit stock with a 10 foot pole until 3 years post IPO if I would ever even consider it.

But investors don't have to work for someone else's book, just for their own and if they see an IPO as a way out that's an excellent reason not to want in.

You are not the entire market, clearly.

The relevant question is what market sentiment is on the IPO valuation, and how much that's shifted over the past month.

History shows that financial bubbles can and do occur. The market is not inherently rational. Who puts what value on the issue and why is a question that's hard to answer. History has also shown that those assisting in IPOs (e.g., investment banks) may commit to making purchases at specific price points in an attempt to bid up prices. Which is to say that the market is neither transparent nor entirely free or fair.

Again: the broader point is that VC manage a portfolio of investments, Reddit is one asset in that portfolio, and that calculus may well consider a 2x return as little different from a 1x or even a loss, relative to the possibility of a 10x+ exit.

Or to use the sportsball metaphor: this appears to be a Hail Mary pass.

And quarterback is about to get sacked.

> Or to use the sportsball metaphor: this appears to be a Hail Mary pass.

That we agree on, and it's one reason I'm not sure if the mods that revolted realize how thin the ice under Reddit is.

* * *

Where is the letter to RIF?

I assume it’s here: https://news.ycombinator.com/item?id=36362737

I think some of Musk's actions do make sense. Their staff and infrastructure costs were way out of control. They could have been reliably profitable every year just by cutting those costs. That's kind of insane.

The rest of his changes - stopping moderation and the API price changes are stupid.

Has Reddit cut staff? Seems like they're just copying Musk's mistakes.

They have indeed cut staff.

https://fortune.com/2023/06/06/reddit-layoffs-job-cuts-stall...

The staff they just hired with the massive fundraise they just had?

You think firing 70% of a company is sane? How about alienating your advertisers? On an advertising funded platform.

Railing against work from home and then stopping paying you office lease? The first eviction was ordered today. How long till the flagship office doors are chained shut?

No part of the twitter debacle is sane. Modeling any part of one’s strategy on it would be laughable.

Not OP, but he did caveat it with saying some decisions, which I assume he meant that cutting costs on an overstaffed org is a good idea, but maybe cutting 70% before you have a good idea what they do might have been a bad way to do it.

You can make the sane/rational decisions, yet implement those decisions in the most insane way possible.

Twitter cost cuts seem amazing...?

You didn't see that video of the girl who worked at Twitter but didn't seem to do anything other then drink coffee and go to yoga class? I think if the company is not making a reliable profit then maybe there's some costs that could be cut.

They were making a profit... It's also not possible to deduce anything from a video of someone supposedly only drinking coffee and doing yoga. She's still be an order of magnitude more productive than the CEO splitting his time between five full time CEO positions.

Obviously there was an insane amount of bloat. Many popular apps with similar scale run with 20-100 engineers ....... they had like 4500 or something?

Insane waste. Remember that lady going on about "how dare you critique infra! we use graphql!" Nonsense, they were obviously not that valuable: twitter is running great with them all gone..

I just posted a comment elsewhere to this effect, but as a extremely light Twitter user (have an account, don’t post, click on a handful of links to Twitter posts a week), really basic functionality has become mostly unusable for me since the buyout. Like, a good portion of the time, the site doesn’t even load for me. Video rarely works. The one time since then I tried to log into my account, it took probably 20 minutes between demented captchas and getting kicked back to the start of the process. And I’m not even talking about any higher level functionality or whatever the subjective experience as a poster is like, just simple passive viewing.

Obviously a lot of people were unduly pessimistic about Twitter’s technical resilience, but from what I can see, it does not seem to be a well oiled machine.

I have had the exact opposite experience. Do you remember how used to take a second for replies to load under a tweet? Now it’s instantaneous. My suggested feed is a lot better too.

To add another data point from someone who used to use the site regularly but still occasionally checks in once and a while, I have noticed a significant degradation in quality for the main feed and random outages/errors seem to crop up a lot more frequently. But aside from our respective pieces of anecdotal evidence, we’ve seen how pathetically they’ve been recently handling scaling and technical issues with high traffic events like the Desantis campaign announcement.

My suggested feed is absolutely useless, I'm not interested in what Musk has to say and I'm especially not interested in the unfiltered mouth diarrhea from MAGA morons like MTG. I don't even live in the US, why would I be interested in seeing it?

Honestly, no, I don’t remember, but my mental model of replying/threading on that site has been broken for a very long time. I’ve never been very sure how it works, or if it’s working properly, so I’m probably not the right person to ask about that aspect!

Glad you’re liking the feed.

It's working perfectly afaict. "What is a woman?" for example was streamed a gajillion times just fine. The 700k stream of DeSantis or whatever took twitter down though, I doubt it will next time..

Huh? No one else has experienced this as far as I can tell. any sources? I can ping it right now from AWS or something, it's working great ...

There's a much more diverse range of opinions now which is nice. Before it was just a bland vanilla follow the narrative or get suspended vibe

I find that now it's all just MAGA types, whereas anything left of center has been purged.

For me the suggestion algorithm used to insistently make me learn about music/celebs and random topics I don't care about, but now it just shows you friends of friends and random Blue users, who are largely crypto rightist propaganda like "black people getting in fights" accounts.

There does some to be an effort to make it look like the reddit default page since there's some viral meme pages mixed in.

Though for the last week it really desperately wanted to show me posts about some Spider-Man movie, so the old stuff still activates sometimes.

Interesting you say that since it seemed to be the exact opposite before Musk.

I feel like it was already leaning pretty far right before, it's just straight up Nazis now.

Are we even talking about the same website?

Seriously. Elon Musk might be able to pull something off but that doesn't mean you can, because you're not Elon Musk. Spez saw Musk do a thing and tried to copy him, only to find out that he isn't Elon Musk.

The problem is that it's not working for Elon either, Elon is just insulated from bad decisions because he can pay for them.

Are you sure he can pay? https://arstechnica.com/tech-policy/2023/06/judge-ruled-twit...

Refusing to pay your vendors is actually a surprisingly common (small) business strategy. Notice nobody else has shut them off yet, even GCP or their main office landlord.

Translations briefly disappeared. I strongly suspect money wiring was involved in getting them back.

They're still gone for me, but only maybe 75% of the time, so I suspect a bug that nobody has tried to fix.

(Especially because the way it fails involves a "(null)" string being returned instead of the translation.)

Wasn't an eviction order just issued in relation to their Boulder office?

They weren't actually using that space, it's empty.

Even Elon is struggling to pull this off!

> Elon Musk might be able to pull something off

If you're referring to the cost-cutting at Twitter the Reddit CEO referenced, there's no indication that Musk pulled it off. Twitter has likely damaged its reputation beyond repair.

Why post the AMP link when you really didn't have to?

https://www.nbcnews.com/tech/tech-news/reddit-blackout-prote...

Cuz there wasn't a way to de-AMP it on my phone.

I hate this timeline where all these tech CEOs now aspire to follow in Musk's footsteps and be assholes with zero empathy.

Yes, many tech companies are bloated. You (CEOs and other execs) did that yourself. You can at least be empathetic and have some tact when your actions drastically alter your employees lives.

Say what you will but Musk wanted to take it in a different direction, one that didn't need to pay activists to meddle with the algorithm and censorship, and didn't need to pay rent in it's buildings