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Comment by screye | Hacker News Reader

I am surprised that reddit is on #13.

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.

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> I am surprised that reddit is on #13.

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.

Why do you feel they need to either be a top 10 YC company or they should just be a foundation? Seems like if they can make a few hundred million an year they can just be an ongoing business.

“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.

> Why do you feel they need to either be a top 10 YC company or they should just be a foundation?

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.

> 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.

Reddit is still majority owned by Advance Publications, no? They’ve had 3 fund raises since Advance Publications spun out reddit as an independent company. That’s up to 30% taken by investors. The only other shareholders are employees from the spin out. Reddit can still go another 1-2 rounds before Advance Publications doesn’t own more than 50% of reddit. Maybe the latter two rounds have deals that will force an IPO sooner, but otherwise it seems Reddit doesn’t have the same pressure as your average startup that has raised $500M+.

> "It's just a CRUD application"

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.

Twitter, so much so that it has been a typical "example app" for MVC-framework intro books and tutorials for the last decade and a half!

Calling Reddit a CRUD makes me think of saying an airplane is "aluminium and a bit nails with glue"?

One can fold paper planes too (example airplane app)

> 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.

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.

Almost every app is pretty much a Create Read Update Delete app!

Reddit traffic converts much worse than FB traffic for advertisers at scale. This is because besides certain subreddits (which are very low scale relatively) the targeting is very weak. Unlike on FB where you can profitably target all sorts of sub groups.

How so? Reddits whole thing is having subreddits for relatively small communities formed of people that have a very specific interest. ie. what better platform is there for a pencil company to advertise than /r/calligraphy

> what better platform is there for a pencil company to advertise than /r/calligraphy

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.

A clever company or marketing agency can just disguise advertisements as genuine posts. If I'm a pencil company, I'll just create my own username and visit those subreddits on the downlow and casually mention my products. There's no need to ever pay Reddit.

the same can be said for instagram. it's called social media presence and it different than advertising.

On Instagram the poster matters, on Reddit the poster does not. This means it's completely different. A random made-up user on Instagram will have no audience, a random made-up user on Reddit will. Additionally, Instagram has an opportunity to form a relationship with the popular users and can control their accounts in specific if it wishes.

You realize you have to pay an employee to do that right? Odds are it’s still more cost effective to just buy ads.

"Organic" advertising though, the current big thing. It's the word-of-mouth from internet strangers. Supposedly converts better.

How do you go about trying to track the conversion rate on organic advertising-cum-Reddit post? It seems like it'd be impossible without the consent of Reddit.

You would use different metrics. It costs nothing to make the post so you can just pump them out, you don't need to use impressions as a metric anymore because you're not paying for impressions. Instead you get good at curating titles, images and articles that gain traction on the site. This isn't a wild idea, it's all over the reddit frontpage every day.

I don't understand the meaning of saying an employee is paid to do that. You might also pay a marketing agency to do it. The point is, Reddit doesn't get paid. As someone who uses Reddit everyday, I never see their ads, but I do notice posts that mention specific brands, websites, companies, etc.

The issue is the audience for calligraphy and every other niche subreddit is tiiiny if you're a serious advertiser.

Facebook allows you to target anyone who has shown interest in calligraphy and not just those who follow a subreddit. I’ve played with it and Facebook targeting is both disturbingly detailed and disturbingly large in coverage.

I know twitter is a household name and everyone knows about it but is reddit really that far behind? My mom isnt using it yet but has probably been linked to it via twitter and facebook over the last year. Not to sound pretentious but there has been a huge shift in the site as it's grown over the last couple of years. Most of the popular subreddits are just pointing out silly behavior on other websites or asking for the hivemind to weigh in on their personal life.

No one wants to acknowledge that they use reddit, because there is a certain stigma associated with being an internet nerd.

Is that still a thing? I get that with like 4chan (and allllll of the up-front, in your face porn there), but with super mainstream sites like reddit? Is that still a thing?

Apparently they just got funding at a 3 billion value

https://www.reuters.com/article/us-reddit-funding/reddit-val...

Reddit's content and success is based on its user base.

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.

>Reddit will be left with the Facebook meme crowd.

Look at r/all. This is already the set-up at reddit.

Yeah but it's still not even remotely as bad as the content horror that is Facebook.

stripe, airbnb, doordash, and instacart make sense because they offer a service people pour money through, and they can take their commission for facilitating the transaction. i would expect valuations to treat those companies better than ad driven link aggregation and message board hosting.

The fact that they offer a paid service is also their weakness in potential valuation, since they have significant marginal costs unlike Reddit. (Stripe is a bit different but I’m referring to Doordash etc.)

Have you been on Reddit lately? Beyond the most mainstream posts, most subs (and their participants) are full of toxicity. I've tried posting helpful comments on there to my detriment.

I went to a Reddit meet-up sponsored by the dev team a couple years ago. Some of the numbers are crazy, like 1 developer per million daily users.

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