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Comment by neilv | Hacker News Reader

Devil's advocate... From the bits of transcript I saw, a plausible interpretation is that the Reddit person immediately felt like it was a shakedown, then Selig said it wasn't that (maybe true, maybe not), and then the Reddit person said words of apology but it is plausible that they still felt like it was a shakedown, and were only trying to deescalate/steer/negotiate.

If they still thought it was a shakedown, it would be honest for them to later say to their team that they thought it was a shakedown.

I don't know how much to trust Reddit, and the 30-days notice to showstopper API fees looks very bad. But I see a lot of people just repeating Tweet-sized soundbites, which leads to a dysfunctional and more easily manipulated society.

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Christian linked the entire phone conversation on reddit. It's available, and if you listen to it, it's clear reddit misinterpret his intention, was corrected, went public with their misinterpretation after stating they understood, and accused him of "leaking" private phone calls.

It's all horse shit and they know it. I don't claim to know the reason, I can only speculate. But, what I do know after reading Christian's posts and listening to the phone call is that reddit, and Spez specifically, are being super shitty.

Your interpretation sounds reasonable until you consider the fact that Reddit led with the “shakedown” (to use your word). Here’s a shortened version of the exchange:

Reddit: You will now pay us $20 million per year or we’re shutting you down. You have 30 days notice. Apollo: If Apollo is really costing you $20 million per year, you could pay us $10 million to stop, and you’d come out way ahead! I’m half joking.

Reddit: Are you threatening us?!

Apollo: No, I was just jokingly making a point.

Reddit: “Oh, I misunderstood. I immediately apologize.”

Reddit (to mods publicly): This guy is threatening us!

=======

Wait, what?

Who’s threatening who????

If you listen to the audio, it's much clearer. You can hear the dynamic / emotion etc in their voices.

Christian's post: https://old.reddit.com/r/apolloapp/comments/144f6xm/apollo_w...

Audio clip: https://christianselig.com/apollo-end/reddit-third-call-may-...

Thanks, the audio clip helps. Selig's initial voice and language signals sounded all over the place (maybe he was nervous, or was speaking very off-the-cuff when broaching an acquisition), but I agree that his correction starting around 2m17s sounds sincere.

Devil's advocate still: the perception of a shakedown isn't necessarily dependent on mishearing something literally as "go quietly". What reason does Reddit have to pay $10M, rather than pay $0? Reddit leadership might even feel like it's a shakedown from their perspective, whether or not that's the intention or perception from some app developers.

Personally, were I involved, I would indeed be mentally tracking everyone's perspectives and honesty, since that matters a lot (e.g., a mutually better deal might be reached when you understand each other; or you might get a contract, but they might not honor it in good faith, or will screw you at renewal time).

But I think Internet pitchforks would do well to keep memetic talking points to the unambiguous (e.g., the proposed API licensing fees, the short time horizon, a party's claims of how that will affect them), and avoid paths that seem more like (ahem) "We did it, Reddit!" loose cannon character assassination.

Reddit's already been caught lying, there's no justification to construct an alternate reality in which this was all a silly mistake rather than something they chose to do.

I'm interested in what came before that clip, but, it sounds like he's awkwardly asking for $10M in exchange for... nothing? Why would Reddit take that deal?

1) Shut Apollo down: increase ad revenues, decrease server costs (if the claim that Apollo is inefficient is true)

2) Apollo pays $20M: increase api revenues

3) Pay Apollo $10M: decreased revenue, maintain high server costs.

I don't even understand how this kind of deal would make any sense to propose.

To me, it comes across as a clumsy attempt to open a new line of negotiation, one which headed in the direction of Reddit buying Apollo outright.

Christian is clearly thinking on his feet, so obviously he doesn't have a value proposition for reddit. All he is really doing is letting reddit know he might be open to it, the details could be negotiated later.

Reddit clearly has all the power here (Apollo is fully dependant on reddit), so they would have been able to negotiate it down. Maybe all the way to $1 million?

Anyway, reddit clearly weren't open to it, so it fell flat on it's face.

Yeah. I think Christian meant to say 1 million.

That means, if you pay 1 million now, it would be less than the cost to upkeep for 30 days and it would we a win win

He's saying that he wants a fair deal where he can make money running his app. If Reddit has a good-faith belief that he can do $20M in revenue on his app, then they should be happy to buy the app for $10M and use it to drive $20M in revenue that goes to Reddit. In-context this seems pretty clear. Also in-context it seems pretty clear that Reddit is aware that their sudden price increase has made the Apollo app's value negative with no chance to keep it going.

I think he was trying to point out the ridiculousness of Reddit’s claim that Apollo is costing them $20m/year, but agreed, it didn’t really land.

1) Yes, but you could lose a lot of reddit's actual power users. See: Current Situation. :P

2) Yes, this is better for reddit but untenable for Apollo.

3) If you buy the app that makes your site SING, that everyone loves, then you keep all those users, and make money from them instead of losing them.

Also, don't forget that everything before an IPO is magnified. This has cost reddit perhaps hundreds of millions now in bad press and lowered valuation.

I really didn't see the issue with him asking reddit about acquisition. It's a fair exchange given the power dynamics at play, and Reddit taking that personally just speaks volumes to how immature and amateurish the management team is over there. This happens every day in the broader startup world and is how many M&A discussions start.

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