Reddit's long, rocky road to an IPO | Hacker News Reader

Reddit's long, rocky road to an IPO

nytimes.com

40 pointsmooreds104 comments

I know people here will always say "you have no idea the amount of work that goes into <xyz>" straightforward seeming function. But I still have to ask it:

The Reddit UI/app/experience hasn't changed in years, right? What do they need $450M/year of R&D costs [1] for? For serving advertisers? For infra ops? Seems bloated to me.

[1]: https://www.sec.gov/Archives/edgar/data/1713445/000162828024...

> The Reddit UI/app/experience hasn't changed in years

That's not true, the UI's gotten much worse.

I only use the old.reddit.com but the newer one appears to change rather frequently?

They also do things like the chat, live threads and other nonsense that I will never use but clearly will take a decent number of man hours to build.

There are the user avatars, the different events like Place. Or having to implement their own image/video sharing back-end.

Does that add up to $450M/year of R&D costs? I don't know.

I'm under the impression that the chat is only used by spam bots.

i have used it all of twice once was when i ran into a post about something that sounded familiar and sent a dm to the poster turned out it was a friend of mine's account, the other i messaged a moderator when a bot for the sub quit posting updates and they fixed it.

> implement their own video sharing back-end

Didn't they buy out a company for that?

Incorrect. The reddit UI/app/experience has frequently changed and always for the worse in every iteration. They "revamped" the new web UI just recently before this IPO after the "revamp" earlier maybe 5-6 years ago and is somehow both better and worse. Their app continues to be a crock of bile and the mobile web experience insists that you use it and we no longer have many viable alternatives after they told all the third party developers to suck eggs.

I speculate that the R&D costs are adjacent to their forays into NFTs, TikTok-esque video scrolling which requires a lot of investment into video capabilities, their new AI stuff where they sell all the data to AI companies and so on

I'm convincedthat the mobile web ui changes - bugs included - have been solely intended to drive traffic to the app. Issues like editing comments removing line breaks have been introduced and then subsequently ignored for months.

Orrrrr, to take off the tinfoil hat, they just don’t pay it any attention, because normal people really don’t mind and often prefer installing apps.

All those dark patterns and unusable UI aren’t going to develop themselves

Seems like a very risky investment to me. Unsupervised non-employee mods have a tremendous amount of power over the day to day user facing operations. Why would anyone invest money in a site that could be quickly destroyed due to a fashionable political trend at anytime? For example if the mods band together and decide Jews can no longer use Reddit or something equally ridiculous the stock will plunge.

If Reddit has stored historical mod actions, they could probably train an AI mod that mimics the behavior of the existing mods. Mods have much less leverage than they did 5 years ago.

I wonder what percentage of mods will buy stock? I would think that if you are willing to give that much of your time and attention to Reddit, you would be interested in owning a piece of the company. The more mods own stock, the less chance of them deciding en masse to tank the stock.

Thats in part why I subscribed to the IPO - also, its 800 dollars a small stake, enough that if I lose half of it, I wont care.

> if the mods band together

I think you're over-estimating how singular the mod community is. They can only impact their own subreddit, and even at worst, if the top ten subreddits did collude somehow - which is, fine, possible if not probable - that still leaves a wild long tail of Reddit content which is arguably a much better place to put ads than r/pics or r/amitheasshole.

I used to moderate three subreddits, one of them on a pretty serious basis. We couldn't even fucking get the mods of that community to "band together" on anything.

The best Reddit is the Reddit with no ads or selling of data or manipulating users into more clicks. The only way they can grow the business from here is to make the product worse, which I fear will lead to its self-destruction.

Reddit ideally should be a non-profit org funded with a generous endowment, like with Signal.

Or something like Kagi. Nobody will pay for it now because of what spez has done during his most recent tenure, but there was a point in time where I truly think turning it into a paid service was viable.

I've been on the site since 2005 and turned down the ability to buy the stock early, and intend on throwing a couple thousand dollars at shorting it. I don't trust the c-suite, admins, or devs at all anymore. Spez directly edited a user's comment in the database. Admins directly manipulated the /r/place database.

I'm still there because...the fediverse sucks, and I can still use my hacked up Reddit is Fun client and old.reddit.com, but if that set of circumstances changes, I don't anticipate sticking around.

Wait, I knew about the comment stuff. They edited the /r/place DB as well?

> I'm still there because...the fediverse sucks, and I can still use my hacked up Reddit is Fun client and old.reddit.com, but if that set of circumstances changes, I don't anticipate sticking around.

Same exact scenario (but with Reddit Sync) for myself.

> Wait, I knew about the comment stuff. They edited the /r/place DB as well?

Yeah. At risk of making a drama/flame thread...

https://www.reddit.com/r/SubredditDrama/comments/tv2lmx/redd...

https://knowyourmeme.com/memes/marsey-the-cat

Please have mercy dang.

The orange cat on the orange site at last!

Just to add to the sample size, I abandoned Reddit as it got increasingly user-hostile, and I have been enjoying the fediverse. There's a lot of cool hackers on there, and I feel like I have a really good signal:noise ratio. Sorry to hear it wasn't a good experience for you tho.

> ...the fediverse sucks

Aside from a larger population or migration of communities that are important to you, what would improve it for you?

Not sure how reddit exists without ads either though. Running huge websites with user video hosting is a non trivial expense that's hard to entice enough users to cough up money for to make viable.

GenAI training data licensing. Forum participants get, at no cost, a curated venue that continues to operate in return. Chat amongst yourselves while the robot learns.

This. And HN greatly underestimates the public's tolerance for advertising.

The content isn't worth nearly enough to cover costs, even if they could somehow prevent scraping. Look around at how much people pay for text data, it's not a lot.

Don’t host media, just host text like they used to.

Image and video posts get way more activity than text posts constantly. People don't just want text posts and no one wants to be reddit's free image host like imgur used to be.

Who cares what gets most activity? Arguably the text/conversation content on Reddit is massively more valuable than the images shown there. (Not in the sense of market value, in the sense of value.)

Let the image host show ads to cover their costs.

Reddit cares as a business, more activity means more chances to make money whatever scheme they choose to use. Users also want more activity because that gives them more to do on the site.

Not sure that's the case. Sounds like a very shortsighted view.

Welcome to capitalism it's structurally allergic to long term plans when you're publicly traded or trying to be.

there are plenty of ads on reddit

Yes... and the person I was replying to was saying the best reddit is one without ads. If the best version of something can't exist because it would bleed itself dry paying for hosting it's not a real option to judge against.

> a non trivial expense that's hard to entice enough users to cough up money for to make viable

Yet the site's operators got rid of one of the most popular mechs for monetization: Awards.

reddit gold worked fine to cover infrastructure and administration costs.

of course it all went to hell when they went from a small dedicated team to a startup raising millions to add hundreds of employees doing god knows what

Ruining a good website takes a lot of manpower.

Seems more inversely correlated if we go by how Reddit has changed.

Reddit was good before that "manpower".

Infrastructure costs were covered by reddit gold. This was displayed on each community, some accrued years worth of server time.

Instead of organic stuff like the first IAMA's what that "manpower got you were promotional flybys by actors releasing a new movie or book or something, who didn't even understand what they were doing.

Was it though? I thought reddit was the standard VC money pit and never really had a profitable quarter under gold. Did they ever release numbers showing their cost vs gold revenue?

Did they even host video and image content originally though? Vaguely remember such content was only available through external links. I think that would be a good compromise. Make it free/paid by donations/subscriptions and only host cheap text.

Imgur for example was created by a reddit user specifically for hosting content posted on reddit.

The move to reddit itself hosting content came much later

Do you happen to know why they started hosting content themselves?

I don't have any inside knowledge, but I believe it was a mix of wanting to simplify things for users, and to keep users within their system.

I suspect that the rise of imgur as it's own community was seen as a threat, or at least competition, and the question "why are we basically helping our competitors" was asked at least once.

That was my impression from having lived through it as well. Imgur built it's own little community and figured they could make a go of it on their own instead of being purely a reddit image host. They still do host a fair amount of content but gone are the days when you could got to imgur.com/r/aww and see all the cute animal pics because imgur was the default host of all of reddit so they had the integration to show subreddit specific albums.

When you share an image or video with someone its now a Reddit link so it drives new users. Even if you Copy Image, you'll see a Reddit overlay when you paste it.

I mean this is what Lemmy is. It's funded by NLnet. https://nlnet.nl/

If you rank major social media websites by click fraud, reddit is typically in the 1st or 2nd spot in any given month.

Best of luck to anyone that buys their stock.

> If you rank major social media websites by click fraud, reddit is typically in the 1st or 2nd spot in any given month.

What do you mean by this? (Thanks in advance - I get click fraud in general, I'm just not clear on who is clicking on what is this case.)

There are orgs that specialize in detecting click fraud as a service.

They will offer research on what sites are the worst offenders in terms of click fraud. Reddit typically ranks at the top. Tik Tok is also very high.

Click fraud just means that someone deliberately clicked on an ad with no intention of engagement. This could be a bot network trying to fake engagement, a competitor trying to cost you money, or the advertising network might just be making up numbers altogether.

For instance, imagine you post an ad on google search. You enter keywords or phrases you want your ad to show up for. Every time someone searches your keywords, there is a chance your ad will be displayed to them. Among other things, Google will report to you how many users viewed your ad and how many clicked on it. Every time someone clicks on your ad, you'll be charged by google according to whatever you bid on the keyword. This cost-per-click (CPC) can be as high as $50 for a keyword like "insurance" or as low as $0.01 for a word that no one else is advertising against.

You can see how a bad actor could abuse this by spam clicking on ads.

Has Reddit called any of those out as risks in their IPO Documentation?

Yes:

> If we fail to detect attempts to manipulate our platform, including fraudulent activity within our advertising systems, Redditors and our advertisers could lose confidence in us, thereby damaging our reputation and deterring usage of our products and services.

To my reading, the rest of it describes it as a problem they need to keep solving, not one that's as broken as I understand it to be, as an outsider.

Can you provide some sources for that? We‘ve tried Reddit and the traffic was useless.

>Best of luck to anyone that buys their stock

Also the fact that everything that will make reddit a "good business" is antithetical to the community.

I mean, how does reddit grow at this point? Who is going to start using it?

It won't be different from any of the other silicon valley companies that went public based on numbers inflated by click fraud, but it may be one of the few that gets caught for it.

Anyone else have access to the directed sale at IPO? It is an unusual position because shares purchased this way are not restricted formally or informally by a lockup period.

The ones issued to mods?

Yeah got an invite. No way I’m putting money into that dumpster fire though

I got invited (i'm not a mod, but i evidently use Reddit more than a normal person), but i'm not in the US, so i can't participate.

Yeah I got mine and I’m on the fence

I haven’t funded the account but we have a few more days to decide

Feels like a scam tbh

What part? If it was the shares were part of the lockup I’d look harder at it.

But in this case what incentive would they have for this to go badly for participants?

I genuinely don’t know that’s why I’m wondering.

Maybe a Pump and dump on to people they know are already invested for the underwriters?

It's mindblowing that the legions of developers around the globe haven't already made a perfect replacement lined up when Reddit inevitably crashes and burn like Digg did.

Also, I know people are going to come out of the woodwork with examples, but they'll all be inexplicably inferior with even worse UI, terrible performance, and problems that even old.reddit.com solved decades ago.

I'm afraid I can't direct you to anywhere with the caveats you've set. If Reddit does do the inevitable, I hope you find an alternative that you can tolerate.

You don't understand network effects and information lock-in which is exactly why "legions of developers" fail at replacing reddit. Reddit is where the people are and because it is where the people are it is where all the information is and because it is where all the information is it is where the people are and etc etc. Until you break that loop you don't have a chance at replacing reddit no matter how much better your UI is.

There's a significant non-zero probability Reddit will break that loop themselves once they become beholden to big shareholders combined with their questionable internal decision making.

Wasn’t ‘questionable internal decision making’ exactly how reddit replaced Digg?

so it goes

What I guess will happen is that it won't die for long time. But IPO won't go great and it will be slow fall to zero, and then someone takes it private and then it continues as zombie being moved from one dying empire to next one.

“Will MySpace Ever Lose Its Monopoly?”

https://www.theguardian.com/technology/2007/feb/08/business....

“In social networking, there is a huge advantage to have scale. You can find almost anyone on MySpace and the more time that has been invested in the site, the more locked in people are"

>they'll all be inexplicably inferior with even worse UI

basically, yes. but their developers don't think their UI is inferior. because there are legions of developers around the world with replacements lined up, but all of their replacements are built with opinions about the bits of reddit they like. and while everybody can agree that the reddit UI sucks, nobody can agree about how it sucks, and everybody who sets out to fix it fixes it in a different way that everybody else hates.

A perfectly good UI exists. It's called old.reddit.com.

the problem with old.reddit.com is that it actually is a terrible UI. If you make a site that pixel-perfect mirrors old.reddit.com, the only users you'll attract are the vocal fans of that UI. i've been a reddit user since digg died, and i remember when we could all agree that reddit's UI was the worst. the fact that the newer redesigns are somehow even worse than the old UI doesn't make the old UI good.

a social site populated entirely by contrarians who think old.reddit.com is peak web design is not a site that anybody will want to visit.

Those "vocal fans" represent the potion of the user base that actually publishes most of the content. Drive them off and who's posting content for you to slather ads all over? At that point you're just another 3rd rate Digg knockoff.

the power users post because they have an audience. take away the audience of normies, and you've just got a bunch of nerds trying to entertain each other.

that's basically what lemmy is right now, and it's no fun.

> the power users post because they have an audience. take away the audience of normies, and you've just got a bunch of nerds trying to entertain each other.

Sounds like another orange site I know, that starts with an H and ends with an S ;)

It might be "terrible" but it is the only functional UI available for who doesn't have a tiktok/9gag addled brain

> the problem with old.reddit.com is that it actually is a terrible UI

I know I'm pretty bad at UI/UX, so could you explain how the old.reddit.com is terrible? Like it's not usable on mobile, but on desktop I have no issues with it.

> since digg died

Remind me what caused that again?

It's not perfect by any means, but I mostly settled on Lemmy since last July.

You could trivially make a Reddit clone and throw some UI/UX enhancements on top.

Then what?

"Build it and they will come" does not apply to social networks. The value of Reddit is in the information posted & pseudo-communities formed.

You could create the Platonic Ideal of a Reddit-like website but without massive numbers of users sharing information, forming communities, heading moderation efforts, then it will just collect dust.

It's an interesting question, how to create a viable social-based platform. It's certainly not a technical problem. How do you solve it? Forget creating the next Reddit / FB / Insta; how do you create a social network at all that doesn't fail to launch or wither and die?

A good start is having your ducks in a row for when conditions inevitably and suddenly lead to people jumping ship en masse to whatever Next Thing is waiting.

Lemmy was already built and deployed in several instances, but the reddit API controversy showed it wasn't quite ready. But now maybe it's closer?

Lemmy and other larger alternatives still leave some important problems unsolved, but the point is that "build it and they will come" still rings true if you have the patience to wait for the next inevitable misstep from the current major players.

Lemmy can't even handle seeing all the posts from the federated instances on a topic.

Cueing Internet meme: You had one job ...

yup! the user base is 99% of the value in any network enabled platform

>The value of Reddit is in the information posted & pseudo-communities formed.

And what incentive do people have to build or maintain these communities going forward, for the sake of shareholders? How does reddit "get better"?

Reddit has had access to frankly mind boggling amounts of investor capital over the years, though. Arguably far more than it's needed, but I can't see a competitor scaling up without at least a fraction of that cash.

Reddit goes hand in hand to me with Facebook Groups. I dont think either will follow the path of Digg to be honest, the adoption is just far too wide. Some people on this website might be in an echo chamber of old school geeky subreddits.

But I recently found /r/NYCbitcheswithtaste/ to be surprisingly active. a bunch of teen and 20something females in NYC asking for recommended lip injections. Its a natural expansion from the many skincare subreddits that have been popular for years, but I admit I didn't think the userbase has expanded that much

No social media or aggregator site has ever been a developer's opportunity. If anything, they're a trap for entrpreneurial developers.

The technology to start one of the communities and get it through the first several waves of order-of-magnitude growth is trivial.

What's not trivial is drawing in enough users to seed a network effect and guiding/filtering those users towards a desired culture.

That's not developer stuff; that's marketing, partnerships, opportunity, and luck.

Yea and moderation is an absolute horrible minefield these days. You will always have someone complaining they’re being moderated out of the discussion, whether they are or not.

There are several UI/UX things I hate about reddit that a competitor could easily fix:

1. Clicking on the side of the page -- on the background -- navigates to the subreddit main page. This makes it easy to navigate away when e.g. clicking on the page to focus on it.

2. Having to click expand a million times.

3. Having expand sometimes navigate to a new page so you have to reclick on the items you have expanded.

> Having to click expand a million times

Which is almost impossible on mobile with the tiny (+) target on the latest iteration of new Reddit. If you miss then, as you say, it opens a new page instead, which has random unpredictable effects on the browser history for some reason. You can sometimes click on the whitespace above the comment to do the job, assuming the username isn’t so long as to fill all the whitespace.

Actually writing all this out really brings it home how much of a clusterfuck Reddit’s UI is.

> when Reddit inevitably crashes and burn like Digg did.

The lesson of 2023 with Reddit and Twitter is that they've grown so large that they're immune to consequences of enshittification. The eternal September is staying where it is this time. It's been shown that only a small number will move on to better places.

> It's mindblowing that the legions of developers around the globe haven't already made a perfect replacement lined up when Reddit inevitably crashes and burn like Digg did.

Because on today's Internet the hard part isn't the content. There's always some idiots willing to post for imaginary Internet points.

The hard part is anti-spam/anti-abuse.

Anything "free" immediately becomes a magnet for all the bad actors across the entire world. And if you take payments, you have to be careful not to wind up being a credit card fraud magnet.

It's kind of funny. Back in the day, SomethingAwful seemed kind of weird for requiring a single payment to sign up. Now they look kind of prescient.

It existed and it was called Voat and it was glorious.

I have spent millions on the top social media ad platforms. Reddit is the worst performing and has the lowest engagement.

If you're looking to short a stock, this is the one.

(This is not financial advice and I am not a financial advisor. I just get a feeling this is gonna be an absolute shitstorm)

Will wallstreetbets work for or against this IPO?

The sentiment is extremely bearish there, although many admit there is likely to be an initial pop.

Which one will cause more chaos?

I’m sure that’s been discussed at length.

The Wall street bets crowd will probably try to short squeeze you, though some Redditors were talking about trying to tank the price.

Either way it could be a meme stock for a long time.

Management has taken so many anti-user actions that even most of the people still using it are quite down on Reddit-the-corporation.

that's probably priced in at this point

They're going for what $6 billion? That's just wildly inflated, even without considering that a huge portion of their active users are bots.

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