Anthology #1: Reddit
Alexis Ohanian, Aaron Swartz, Sam Altman, Yishan Wong, Steve Huffman, Paul Graham, and Jessica Livingston
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Hey everyone! I’m trying something a little different today.
If you read this newsletter, you know about my compilations. In fact, you’ve probably even bookmarked a few. But you’ve probably (definitely) never actually read one cover-to-cover (shoutout to JL for being the only one I know who has even gotten close to finishing one).
Introducing “Anthologies.”
Unlike my compilations, which range from tens to thousands of pages, or my letters, which are typically a single letter that gives you insight into a single person, Anthologies will be my way of telling a story of some of the people and companies I find interesting through a series of letters, videos, and/or quotes (important: not “the” story, but “a” story).
Without further ado, here is Anthology #1: Reddit.
Earlier this week, Reddit IPOed. With 73mn different visitors a day and 267mn different visitors a week, Reddit is one of the top 20 most visited websites in the world.
But they weren’t always one of the most visited and most influential websites in the world. Their journey has been a long one, and their story is one of tragedy and triumph, including sales and IPOs, firings and hirings (and re-hirings), teamwork and turmoil, founders and investors, strong product-market fit and struggles to monetize, and much more.
This anthology is just one of the many stories of Reddit. Again, it is not “the” story of Reddit, but “a” story of Reddit that I find interesting.
It’s told in 8 parts: 6 letters and 2 videos.
Alexis Ohanian’s 2004 email to Steve Huffman that began the ideation for and commitment to starting a startup that led to the founding of Reddit. Alexis and Steve were the co-founders of Reddit.
Aaron Swartz’s 2006 blog post reflecting on the early days of Reddit. This was published right after (the month after) the company was acquired by Conde Nast. Aaron Swartz was the third co-founder of Reddit, via it’s merger with Infogami.
Sam Altman’s 2014 blog post announcing his investment in Reddit and his rationale. Just a month later, he became CEO for eight days before appointing Ellen Pao.
Yishan Wong’s 2015 Reddit comment about a hypothetical long con that he pulled at Reddit that hypothetically explained how Reddit spun out of Conde Nast and got its founders back involved after they initially sold it. Yishan served as CEO of Reddit from 2010 to 2014.
Steve Huffman’s 2024 S-1 shareholder letter from the co-founder. In it, he reflects on their founding story, their journey so far, what makes them special, and where they go from here.
Paul Graham’s 2024 blog post sharing his memories of the early days of Reddit. This was published right after (the week of) the Reddit IPO. Paul co-founded YC, which invested in Reddit, and helped Alexis and Steve come up with Reddit after rejecting their initial idea.
Jessica Livingston interviewing Alexis Ohanian in 2010, right after Alexis (and Steve) left Reddit. Jessica co-founded YC with Paul.
Jessica Livingston interviewing Steve Huffman in 2023, right before Reddit went public.
Relevant Resources
Letters
Compilations
Sam Altman Compilation (1,008 pages)
Jessica Livingston Compilation (173 pages)
Other
Tencent Research Report (112 pages) [Paywalled}
PayPal Mafia
Alexis’ Letter (2004)
hey bro,
i’m in singapore at this technepreneurial seminar, and am basically spending a week learning how to create a tech start-up.i spoke to Mark White (a professor in the comm school, the guy who took me to South Africa, and who recruited me to come here, as well as a generally good guy and technophile) over some drinks last nite, and pitched him on our idea…from his feedback-and let me remind you that he gets pitches every couple of months from students, and was very candid and honest with his thoughts, but basically said it was one of the best he’s heard, period.
Not only that, but he wants to be on the board of directors, and already knows some people to hit up for starting capital…
I’ve got plenty of more details, but I am seriously considering putting off law school for this, but i need you, and we’ll both need to be doing this full time for about a year to get it off the ground….but the potential he saw was in the millions my friend…we need to talkseriously.i am coming back the 20th so if we could have lunch around1pm i could meet you whereever you’d like… let me know.
honestly, this is the kind of thing that could change our lives-and his motivation has really spurredme.but i need you and the same kind of commitment.
Aaron’s Letter (2006)
The Early Days of a Better Website
A reporter asked me to describe what the early days of our startup were like. Here’s my response.
In the early days of Reddit, there were four of us crammed into a dingy little three-bedroom apartment (I slept in a kitchen cabinet). Every morning we’d wake up and stumble into the small space that I think was supposed to be a living room, where we’d placed desks along all four walls (Steve’s wall had a small window, with a beautiful view of the wall of the next building over, just a couple feet away). The sky would be gray, the floor would be filthy, and we’d be three feet floors away from the rest of the world. Looking back, it’s hard to see how we got any work done. Actually, looking back, I’m not sure we did.
Aside from the filth, my memories of those days mostly consist of an unending series of petty annoyances and frustrations. It’s hard spending your working days in such close quarters with other people. It’s even harder when you spend your nights there too. And it’s almost impossible when you’re all high-strung socially-awkward geeks. Tensions frequently flared.
Not that there wasn’t a lot to get flared about. There were always bugs or complaints or new features you just couldn’t get to work. And when you finally got the site working fine, a new storm of traffic would overwhelm things and you’d be back to picking up the pieces, making it run faster and more reliably.
There were lots of problems, but somehow we got over them. Take a nap, walk the fifteen minutes into town to get some food, go across the street to the abandoned playground, or, when things got really bad, just look at that ever-growing traffic graph. We must be doing something right, we figured, or at least not doing much that’s particularly wrong.
While behind the scenes work was a disaster, in public things were going great. Every time we went out, more people seemed to know what Reddit was. We started selling Reddit t-shirts and people wearing them and recognizing started to pop up over town. One fan, on a short trip to Boston, even made a pilgrimage to our apartment and stole the Reddit sticker off our door. (We only found out where the missing sticker had gone when he bragged about it on his blog.) Reddit heads started appearing on more and more weblogs and sites I read started talking about Reddit as if they assumed everyone already knew what it was.
At parties, the awkwardness of trying to tell people what we did for a living (“We, uh, build a website. You know, it’s kind of a news-type website.”) gave way to recognition (“Oh yeah, I’ve heard of that site.”), and then to profuse thanks for a great time-waster. Towards the end, actual introductions became unnecessary — people started recognizing us and coming up to say hi.
When I went home to visit my family, my dad insisted on setting up a meeting for me with a magazine publisher he knew. I was sure the visit would be a disaster — why would a magazine publisher take a punk kid like me seriously? — but once she heard our monthly visitor numbers, she was eager to start a partnership. The same scene repeated itself over and over.
Even when people had no idea what we did, the traffic gave us confidence. Once we won a free meal at a restaurant (actually, we won at least three different times) in exchange for suffering through a short lecture about financial planning opportunities. As the man talked about being sure to put money away for a safe day, we looked at each other knowingly. Either we’d sell big or blow up entirely. Staying safe just wasn’t in our vocabulary.
You should follow me on twitter here.
November 7, 2006
Sam’s Letter (2014)
I’m very excited to share that I’m investing in reddit (personally, not via Y Combinator).
I have been a daily reddit user for 9 years—longer than pretty much any other service I still use besides Facebook, Google, and Amazon—and reddit's founders (Steve Huffman and Alexis Ohanian) were in the first YC batch with me. I was probably in the first dozen people to use the site, and I shudder to imagine the number of hours I have spent there
reddit is an example of something that started out looking like a silly toy for wasting time and has become something very interesting. It’s been an important community for me over the years—I can find like-minded people that I can’t always find in the real world. For many people, it’s as important as their real-world communities (and reddit is very powerful when it comes to coordinating real-world action). There are lots of challenges to address, of course, but I think the reddit team has the opportunity to build something amazing.
In several years, I think reddit could have close to a billion users.
Two other things I’d like to mention.
First, it’s always bothered me that users create so much of the value of sites like reddit but don’t own any of it. So, the Series B Investors are giving 10% of our shares in this round to the people in the reddit community, and I hope we increase community ownership over time. We have some creative thoughts about the mechanics of this, but it’ll take us awhile to sort through all the issues. If it works as we hope, it’s going to be really cool and hopefully a new way to think about community ownership.
Second, I’m giving the company a proxy on my Series B shares. reddit will have voting control of the class and thus pretty significant protection against investors screwing it up by forcing an acquisition or blocking a future fundraise or whatever.
Yishan Wong has a big vision for what reddit can be. I’m excited to watch it play out. I believe we are still in the early days of importance of online communities, and that reddit will be among the great ones.
Yishan’s Letter (2015)
r/AskReddit: What’s the best “long con” you ever pulled?
Here’s one.
In 2006, reddit was sold to Conde Nast. It was soon obvious to many that the sale had been premature, the site was unmanaged and under-resourced under the old-media giant who simply didn’t understand it and could never realize its full potential, so the founders and their allies in Y-Combinator (where reddit had been born) hatched an audacious plan to re-extract reddit from the clutches of the 100-year-old media conglomerate.
Together with Sam Altman, they recruited a young up-and-coming technology manager with social media credentials. Alexis, who was on the interview panel for the new reddit CEO, would reject all other candidates except this one. The manager was to insist as a condition of taking the job that Conde Nast would have to give up significant ownership of the company, first to employees by justifying the need for equity to be able to hire top talent, bringing in Silicon Valley insiders to help run the company. After continuing to grow the company, he would then further dilute Conde Nast’s ownership by raising money from a syndicate of Silicon Valley investors led by Sam Altman, now the President of Y-Combinator itself, who in the process would take a seat on the board.
Once this was done, he and his team would manufacture a series of otherwise-improbable leadership crises, forcing the new board to scramble to find a new CEO, allowing Altman to use his position on the board to advocate for the re-introduction of the old founders, installing them on the board and as CEO, thus returning the company to their control and relegating Conde Nast to a position as minority shareholder.
JUST KIDDING. There’s no way that could happen.
Steve’s Letter (2024)
LETTER FROM OUR CO-FOUNDER
I think of August 13, 2005 as the day Reddit really came to life. We had been online for a couple of months, but until then there had never been enough posts from users on any day to fill the front page. That morning, to my surprise, I opened Reddit to discover the home page was overflowing with posts from real users for the first time.
Reddit has been teeming with activity ever since. More than 76 million people, on average, visited every day in December 2023. They come to Reddit to participate in a vibrant community, a constantly evolving place where anyone, anywhere, can connect with like-minded people and dive into any topic. The conversation ranges from the sublime to the ridiculous, the trivial to the existential, the comic to the serious. Whatever people are into or going through, it is on Reddit. I am particularly proud of the role Reddit plays in providing support to people during pivotal life moments when turning to friends and family may not be an option. Somebody might visit r/ Parenting for help when they’re having trouble with a child, or go to r/ lgbt for advice about coming out, or they might turn to r/ stopdrinking for help quitting drinking, as I did more than four years ago.
The communities of Reddit help people at a scale that I never imagined might be possible. To help Reddit live up to the opportunity this presents is why I came back here as CEO in 2015, why our team works with such dedication, and why our users spend so much time and energy building authentic, trusted, and passionate communities. One of the founding principles of Reddit was that it be a real place cultivated by real people instead of a fake place manicured by editors and other gatekeepers. Reddit is not a social media platform optimized for self-display; it is a community that rewards candor and honest advice. This is why millions of people trust Reddit for everything from relationship guidance to in-depth product recommendations (and add “reddit” by name to their searches for virtually anything). We have confidence in the magic of human-curated organization, creativity, and generosity. Reddit enables these human virtues, which means we can mostly stay out of the way.
Another important quality of Reddit is that we let users choose whether to reveal their identities or to stay anonymous. We believe it is more respectful and safer not to force users to combine their real-world and online identities. Reddit allows people to be themselves, to be vulnerable and honest in a way that is difficult or sometimes impossible in the real world or other places online. Looking around, it’s easy to be disheartened about people and the state of the world, but on Reddit I have experienced the opposite: people naturally create community, and they are smarter, funnier, and more helpful and caring than I think we often give them credit for.
And this is not because our users are some special subset of humanity. They’re just people. But when people are in the right context, they can do incredible things. Time and again, Reddit communities have provided exactly that context and been a tremendous force for good: they have created and catalyzed global movements, including campaigning for net neutrality in 2015, starting the March for Science in 2017, or standing up for retail investors, as r/wallstreetbets did in 2021. They have also provided witness and galvanized worldwide response in times of crisis, such as r/worldnews’ coverage of the war in Ukraine and the generous outpouring of assistance coordinated by Redditors themselves.
As a way of capturing the richness, scale, diversity, and infinite possibilities for discovery encompassed by Reddit, I often compare it to a growing city. Today, our city has more than 100,000 unique neighborhoods, which we call subreddits, and each has its own slang, vibe, sense of humor, and both written and unwritten rules. We did not create these communities. Reddit’s users did. Our role is to develop and maintain a common infrastructure that helps keep the city secure and thriving, with space to grow. Sometimes, people break the rules, do harmful things, and force us to devise new rules—just as in physical cities. But our core commitment remains unchanged: to make Reddit as healthy, accessible, and enjoyable as possible.
We are going public to advance our mission and become a stronger company. We hope going public will provide meaningful benefits to our community as well. Our users have a deep sense of ownership over the communities they create on Reddit. This sense of ownership often extends to all of Reddit. We see this in our users’ passion for their communities, their desire for Reddit to be as amazing as possible, and in their disapproval when we let them down. We want this sense of ownership to be reflected in real ownership—for our users to be our owners. Becoming a public company makes this possible. With this in mind, we are excited to invite the users and moderators who have contributed to Reddit to buy shares in our IPO, alongside our investors. Of course, we would love our investors to be users as well. Additionally, being public lets us raise capital and offer liquidity to our employees who have worked tirelessly to build Reddit. It also comes with additional disclosure obligations, which aligns with our values around transparency. Finally, to help further support the positive impact of our communities and invest in new opportunities that align with our mission, we have reserved about 1% of our common stock to fund community-related programs.
I have never been more excited about Reddit’s future than I am right now. We have many opportunities to grow both the platform and the business, the latter through advertising, monetizing commerce on the platform, and licensing data. Our work to make Reddit faster, easier to use, easier to moderate and govern, and simpler to navigate and find relevant communities is driving growth today and will continue to be our focus into the future.
Advertising is our first business, and advertisers of all sizes have discovered that Reddit is a great place to find high-intent customers that they aren’t able to reach elsewhere. Advertising on Reddit is rapidly evolving, and we are still in the early phases of growing this business.
The growth opportunity in our user economy is just as exciting. We see a spirit of entrepreneurship among Redditors, who are constantly pushing the boundaries of what Reddit can be used for. To support their creativity, we are developing new ways to earn money on Reddit. We have enabled artistic users to earn millions creating avatars. Our Contributor Program lets users directly reward one another. The developer platform will expand what a subreddit can be and what it can be used for. We have learned that whenever we create a new canvas for expression on Reddit, users adopt it in surprising ways and expand Reddit in directions we never anticipated. Today, subreddits are mostly communities for content and conversation, and they will evolve into places where Redditors can generate revenue for themselves. Already, users have created marketplaces like r/ PhotoshopRequest to edit photos, r/ Watchexchange to sell watches, and r/ artcommissions to commission art.
Finally, Reddit’s vast and unmatched archive of real, timely, and relevant human conversation on literally any topic is an invaluable dataset for a variety of purposes, including search, AI training, and research. Reddit is one of the internet’s largest corpuses of authentic and constantly updated human-generated experience. Reddit data constantly grows and regenerates as users converse. As the world becomes increasingly data-driven, we offer solutions that are human- and experience-focused. We expect our data advantage and intellectual property to continue to be a key element in the training of future LLMs.
I want to thank everyone who has contributed to making Reddit the extraordinary place it is today: our employees, users, and the moderators behind it all. We have many opportunities and much to do. We will do our best to fulfill our mission to bring community, belonging, and empowerment to the world and to do so in harmony with our values.
Thank you,
Steve Huffman
Paul’s Letter (2024)
The Reddits
3/21/2024
I met the Reddits before we even started Y Combinator. In fact they were one of the reasons we started it.
YC grew out of a talk I gave to the Harvard Computer Society (the undergrad computer club) about how to start a startup. Everyone else in the audience was probably local, but Steve and Alexis came up on the train from the University of Virginia, where they were seniors. Since they'd come so far I agreed to meet them for coffee. They told me about the startup idea we'd later fund them to drop: a way to order fast food on your cellphone.
This was before smartphones. They'd have had to make deals with cell carriers and fast food chains just to get it launched. So it was not going to happen. It still doesn't exist, 19 years later. But I was impressed with their brains and their energy. In fact I was so impressed with them and some of the other people I met at that talk that I decided to start something to fund them. A few days later I told Steve and Alexis that we were starting Y Combinator, and encouraged them to apply.
That first batch we didn't have any way to identify applicants, so we made up nicknames for them. The Reddits were the "Cell food muffins." "Muffin" is a term of endearment Jessica uses for things like small dogs and two year olds. So that gives you some idea what kind of impression Steve and Alexis made in those days. They had the look of slightly ruffled surprise that baby birds have.
Their idea was bad though. And since we thought then that we were funding ideas rather than founders, we rejected them. But we felt bad about it. Jessica was sad that we'd rejected the muffins. And it seemed wrong to me to turn down the people we'd been inspired to start YC to fund.
I don't think the startup sense of the word "pivot" had been invented yet, but we wanted to fund Steve and Alexis, so if their idea was bad, they'd have to work on something else. And I knew what else. In those days there was a site called Delicious where you could save links. It had a page called del.icio.us/popular that listed the most-saved links, and people were using this page as a de facto Reddit. I knew because a lot of the traffic to my site was coming from it. There needed to be something like del.icio.us/popular, but designed for sharing links instead of being a byproduct of saving them.
So I called Steve and Alexis and said that we liked them, just not their idea, so we'd fund them if they'd work on something else. They were on the train home to Virginia at that point. They got off at the next station and got on the next train north, and by the end of the day were committed to working on what's now called Reddit.
They would have liked to call it Snoo, as in "What snoo?" But snoo.com was too expensive, so they settled for calling the mascot Snoo and picked a name for the site that wasn't registered. Early on Reddit was just a provisional name, or so they told me at least, but it's probably too late to change it now.
As with all the really great startups, there's an uncannily close match between the company and the founders. Steve in particular. Reddit has a certain personality — curious, skeptical, ready to be amused — and that personality is Steve's.
Steve will roll his eyes at this, but he's an intellectual; he's interested in ideas for their own sake. That was how he came to be in that audience in Cambridge in the first place. He knew me because he was interested in a programming language I've written about called Lisp, and Lisp is one of those languages few people learn except out of intellectual curiosity. Steve's kind of vacuum-cleaner curiosity is exactly what you want when you're starting a site that's a list of links to literally anything interesting.
Steve was not a big fan of authority, so he also liked the idea of a site without editors. In those days the top forum for programmers was a site called Slashdot. It was a lot like Reddit, except the stories on the frontpage were chosen by human moderators. And though they did a good job, that one small difference turned out to be a big difference. Being driven by user submissions meant Reddit was fresher than Slashdot. News there was newer, and users will always go where the newest news is.
I pushed the Reddits to launch fast. A version one didn't need to be more than a couple hundred lines of code. How could that take more than a week or two to build? And they did launch comparatively fast, about three weeks into the first YC batch. The first users were Steve, Alexis, me, and some of their YC batchmates and college friends. It turns out you don't need that many users to collect a decent list of interesting links, especially if you have multiple accounts per user.
Reddit got two more people from their YC batch: Chris Slowe and Aaron Swartz, and they too were unusually smart. Chris was just finishing his PhD in physics at Harvard. Aaron was younger, a college freshman, and even more anti-authority than Steve. It's not exaggerating to describe him as a martyr for what authority later did to him.
Slowly but inexorably Reddit's traffic grew. At first the numbers were so small they were hard to distinguish from background noise. But within a few weeks it was clear that there was a core of real users returning regularly to the site. And although all kinds of things have happened to Reddit the company in the years since, Reddit the site never looked back.
Reddit the site (and now app) is such a fundamentally useful thing that it's almost unkillable. Which is why, despite a long stretch after Steve left when the management strategy ranged from benign neglect to spectacular blunders, traffic just kept growing. You can't do that with most companies. Most companies you take your eye off the ball for six months and you're in deep trouble. But Reddit was special, and when Steve came back in 2015, I knew the world was in for a surprise.
People thought they had Reddit's number: one of the players in Silicon Valley, but not one of the big ones. But those who knew what had been going on behind the scenes knew there was more to the story than this. If Reddit could grow to the size it had with management that was harmless at best, what could it do if Steve came back? We now know the answer to that question. Or at least a lower bound on the answer. Steve is not out of ideas yet.
Bonus #1: Jessica and Alexis (2010)
Description: Circa 2010, Jessica Livingston sat down with Alexis Ohanian to talk about the early days of Reddit. This interview was conducted shortly after Alexis left the company.
Bonus #2: Jessica, Carolynn, and Steve (2023)
Description: In 2023, Jessica Livingston and Carolynn Levy sat down with Steve Huffman to talk about Reddit's eventful early years and how they affected what it eventually became. This interview was conducted shortly before the company went public.
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Wrap-up
If you’ve got any thoughts, questions, or feedback, please drop me a line - I would love to chat! You can find me on twitter at @kevg1412 or my email at kevin@12mv2.com.
If you're a fan of business or technology in general, please check out some of my other projects!
Speedwell Research — Comprehensive research on great public companies including Constellation Software, Floor & Decor, Meta (Facebook) and interesting new frameworks like the Consumer’s Hierarchy of Preferences.
Cloud Valley — Beautifully written, in-depth biographies that explore the defining moments, investments, and life decisions of investing, business, and tech legends like Dan Loeb, Bob Iger, Steve Jurvetson, and Cyan Banister.
DJY Research — Comprehensive research on publicly-traded Asian companies like Alibaba, Tencent, Nintendo, Sea Limited (FREE SAMPLE), Coupang (FREE SAMPLE), and more.
Compilations — “An international treasure”.
Memos — A selection of some of my favorite investor memos.
Bookshelves — Collection of recommended booklists.