Dharmesh Shah's Blog

In a weird twist of fate, within 24 hours of posting my last blog entry regarding reddit.com I ended up meeting the founders of reddit (this was the second time).

I presented last night at the Boston Startup meetup (which is basically an informal group of local Boston/Cambridge area folks that are interested in startups).  The group has been meeting for a while, but this was the first meeting I was actually able to attend.

As it turns out, the speakers immediately before me were the reddit founders.  One thing I have to say is that these guys are just exceptionally nice.  They have a genuineness and humility about them that is refreshing.  Its hard not to like them.

Having said that, I found myself getting a little frustrated (as were others in the meeting) about their lack of real plans for revenue generation for reddit.  Though there were some oblique references to advertising, subscription fees and other possible avenues, they didn’t really seem to be worried a lot about revenues.  One of their rationales provided was that their burn rate was so low that even in their worst case scenario wasn’t all that bad.  They have obviously gotten a fair amount of success with reddit, and I’m sure a lot of personal gratification by working on something they are passionate about and meeting cool people along the way (they have said as much).

But, this brings me to an interesting (at least to me), point.  And, I can’t take credit for this particular point (Ray Deck gets the credit for that – who I also met for the first time last night).  Reddit, like many other initiatives is more a “project” than a “company/business”.  I hadn’t really quite thought about it this way before, but Ray is right.  The cause for my frustration is that that Reddit is really not trying to be a business (yet).  Its really just a project (and a reasonably successful one at that).  

In any case, things I learned (or validated) about Reddit during the presentation yesterday.  (Note:  None of this is confidential as the startup meeting was an “open” event and everyone there, including me, understood that this was a public forum):

• The concept behind reddit wasn’t the initial idea that the founders had floated through YCombinator.  But, they established a relationship with Paul Graham, hit it off, and ultimately ended up pursuing reddit – which was inspired in part by delicious (I can never figure out where the dots go in the name).  

• Digg is likely reddit’s biggest competitor, and as fate would have it, because of timing, many people perceived reddit as being a “digg clone” even though they came up with the idea independently.

• Reddit is up to 20,000 unique visitors a day (pretty good in my book) and growing.

• They’ve got a feature called “sub-reddits” (which are basically subsets of reddit for special areas of focus – the most common being certain languages).

• They’ve experimented with Google AdSense on some of their sub-reddits, but didn’t seem particularly enthused about the concept (and I don’t blame them).

• One of their challenges (brought up by someone in the audience) is that advertising is difficult for sites like reddit that have a wide diversity of “content”.  It makes it difficult for engines like Google to really figure out what kinds of ads to place.

• They’ve had “issues” with their hosting providers and are in the process of moving to a new infrastructure and multiple servers.  

• They’re still a small, tight-knit team (3 people) and don’t seem to have plans to grow in the near-term.

• They’ve had “almost daily” offers for investment and/or acquisition.  When asked (by someone other than me) if Google was one of the companies, they had “no comment”.

Overall, it was a good presentation and gave me a better feel for what they’re up to.  However, I still don’t see a clear strategy for the future yet (which is ok, as that’s likely by design).  They’re just having fun, building new features and meeting new people.  More power to them.  Like I said, its hard not to like these guys.