Podcast Summary
Reddit's IPO marks first for social media since Pinterest in 2019: Reddit's unique community-driven model and potential IPO success could inspire other companies to go public
Reddit, the nearly 20-year-old social media platform known for its stability in design since its launch, is going public and offering shares to some of its most dedicated users. This marks the first social media company to do so since Pinterest in 2019. The success of Reddit's IPO could potentially lead to other companies following suit. Reddit, founded in 2005 by college roommates Alexis Ohanian and Steve Huffman, is unique in that it's made up of various message boards or forums, called subreddits, which cover nearly every topic. These communities, totaling over 100,000, allow even "lurkers" to potentially benefit, as one example being finding a great avocado stand in New York City. Reddit's IPO could set a precedent for other companies to go public, and its success will be closely watched.
A unique community-driven platform with robust moderation: Reddit, founded in 2005, stands out with its community-driven content, unique moderation system, and smaller user base, generating $804 million in sales in 2023, growing 21% YoY.
Reddit, founded in 2005, has stood out among early social media platforms due to its unique community-driven content and robust moderation system. Users submit content, which is then voted up or down by peers, creating a dynamic front page. Over the years, Reddit has been the birthplace of popular trends like Ask Me Anything sessions and meme stocks. For instance, the Wall Street Bets community caused market upheaval by buying up GameStop shares. Despite being an advertising-based business, Reddit's smaller user base, active engagement, and strong moderation have kept it distinct from larger competitors, such as Facebook, which was also founded in 2005. Reddit's sales reached $804 million in 2023, growing 21% from the previous year, but still significantly smaller than other major players in the industry.
Reddit Going Public Despite History of Losses and Small User Base: Despite losses and a small user base, Reddit is going public with plans to monetize users through tips and sell data to AI firms. However, user concerns about data usage and potential backlash from the community remain.
Reddit, which has been around for nearly 19 years and hasn't turned a profit yet, is going public despite its history of losses and small user base compared to competitors. The company lost over $90 million last year and acknowledged this as a risk factor in its prospectus. Some investors may be less interested in high-profile companies that aren't making money, following the failed IPO of WeWork in 2019. Reddit's plans to make up for this include monetizing users through tips and selling data to AI firms. A deal with Google worth $60 million has already been announced. However, there may be concerns from users about their data being used to train AI models. Reddit's major investor, OpenAI CEO Sam Altman, may indicate potential for more AI data licensing. The user base, consisting of various communities, may have mixed feelings about the IPO and making money on the back of their online activities.
Reddit's groundbreaking IPO move for loyal users: Reddit acknowledges community role, promises user platform for earnings calls, but faces skepticism over business model and potential conflicts of interest.
Reddit is making history by giving a select group of its most loyal users the opportunity to buy shares in the company's IPO before it becomes publicly traded. This move, which is usually reserved for high net worth investors and clients of underwriting banks, is Reddit's way of acknowledging the crucial role its community has played in building the business. However, this decision comes with risks. Some users are skeptical about the business model, particularly the licensing of user data to AI companies. There's also a concern about potential conflicts of interest and the impact on user behavior if they've also invested in the stock. Additionally, retail investors, including Reddit users, are skeptical about stock price volatility after the IPO. To address these concerns, Reddit has promised to give users a platform to submit questions during quarterly earnings calls. Overall, Reddit's decision to involve its community in the IPO is a bold move that could strengthen the relationship between the company and its users, but it also comes with significant risks.
Mint Mobile discount, Hulu's 'The Veil', Quince fashion, Reddit IPO: Mint Mobile offers $15/month for 3 months with conditions, Hulu streams new spy thriller, Quince provides affordable spring fashion, Reddit selectively allows IPO investments
Mint Mobile is currently offering new customers a deal of $15 a month for a 3-month unlimited wireless plan, which is a significant discount. However, there are some conditions such as a $45 upfront payment, slower speeds above 40 GB, and additional taxes, fees, and restrictions. On a different note, Hulu is now streaming the international spy thriller "The Veil," which follows two women involved in a deadly game of truth and lies. Quince is another topic, offering affordable springtime fashion with free shipping and 365-day returns. Lastly, Reddit, known for its unruly nature, is now offering some users a chance to buy into its IPO, raising questions about how the platform will handle the broader public ownership in the long term.
Reddit's decision to charge third-party apps for access to its data causes tension with users: Reddit's attempt to monetize its platform through charging third-party apps led to a crisis and backlash from its user base, highlighting the power and influence of Reddit's community.
Reddit's decision to charge third-party apps for access to its data has the potential to escalate conflicts with its user base, many of whom are also part-owners. This tension between maintaining Reddit as a stable business and preserving its unique, unruly character was exemplified in the protests from last year, when over 6,000 subreddits went dark in response to Reddit's deprecation of certain APIs. This move was seen as a betrayal by volunteers who rely on custom tools to manage large communities, leading to a crisis and an "uprising" of moderators. The incident highlights the significant power and influence of Reddit's user base and the potential risks of attempting to monetize or streamline the platform.
Reddit's Transition to a Public Company and User-Investors: The dynamic between Reddit users and the company could become more complex as user-investors emerge, potentially aligning interests or causing chaos and widening the gap between users and leadership.
The dynamic between Reddit users and the company is poised to become more complex as Reddit transitions into a public company. While some may see the opportunity for users to become financial investors as a way to align interests, others fear it could introduce new chaos and potentially widen the gap between users and leadership. The behavior of these new user-investors is uncertain, with some potentially advocating for users and others engaging in disruptive campaigns. Additionally, the company itself and the platform may change as it navigates the pressures of being publicly traded, potentially altering the essence of Reddit as we know it.
Going public: A double-edged sword for Reddit: Going public poses risks of losing community character and user base, but could also bring financial benefits. Balancing these goals is crucial for Reddit's success.
Going public could pose significant risks for Reddit, as it may lead to changes that could alienate its user base and compromise the unique community that has made it successful. Despite the potential financial benefits, there's a risk that the platform's core values and culture could be lost in the process. Reddit's current users, numbering in the hundreds of millions, are a critical part of its infrastructure and have kept it relevant and important on the web. The platform's leadership and investors see going public as a necessary step to tap into its untapped potential and generate revenue. However, the risks of user revolts and the potential loss of the platform's special character are significant. Whether Reddit can have it both ways and survive as a successful community and a profitable business remains to be seen. From the perspective of current investors and executives, going public could be a great outcome, but from the perspective of the user base, it could be a terrible idea. Ultimately, the success of Reddit going public will depend on how well the company balances its financial goals with its commitment to its community.
Reddit's core users unbothered by potential changes from going public: Reddit's core user base, numbering in the tens of millions, remains unfazed by the platform's decision to go public, as they are content with the way things are and not concerned about potential changes to the community.
Despite potential concerns about the pace of change that could come from a public Reddit, the platform's core user base, numbering in the tens of millions, remains unfazed. According to John Herman from New York Magazine, this group is not upset by the changes. The Today Explained team, including producer Amanda Llewellyn, editor Amina Al Sadi, fact checker Laura Gollard, and engineer David Herman, discussed this topic in today's episode. The team delved into the implications of Reddit going public and how it might impact the platform's community. However, the consensus seemed to be that the core users are content with the way things are and are not concerned about the potential changes that could come with a public company structure. This is an interesting insight into the Reddit community and their relationship with the platform.
