808 sats \ 8 replies \ @0xIlmari 14 Jun 2023 \ on: Why is Reddit currently not turning a profit? tech
My guess is they're part of the debt-fueled pathological system borne out of a decade of free money.
All growth, no profit, requiring a constant stream of new debt to exist.
A recession is the reckoning for companies that overextended in this way. Those that start to reach for actual yield more aggressively in these times reveal their cards this way.
Reddit is bleeding potential ad money through third party apps and clients and needs to plug that hole to survive.
Yep, we are going to keep seeing more of this as easy money dries up.
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There are companies that I look at (like monday.com) and I instantly think "you are clearly a fiat-fuelled one-hit wonder". Reddit has been around since like 2005, they benefit from easy money, sure, but they weren't exactly the first company that came to mind when thinking of tech bubble excess.
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As an aside, do you think Monday.com has a future? I use it for some planning and would be open to an alternative.
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I've never used it TBH, so I don't know, but productivity tools in general are well-tread ground. There's a bunch of open source options. I understand how a company can make a profit by providing such software as a service, but having an IPO at the valuations they did seemed so bizarre to me. Or that a VC would fund something like that in the first place.
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I use plain text files for planning, but maybe I am not planning complex enough stuff, who knows...
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A side-effect of not caring about third-party apps for so long is that they could be ignorant of how horrible their newer UIs are.
I used to use their UI on mobile but switched to RIF and used it even more once I made that change.
Perhaps the thing we want as users doesn't make a business, but yeah I'd sooner pay $8 to reddit than Twitter.
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As long as Reddit allows subs to arbitrarily permaban users on a whim, I will never give them a damn sat.
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I completely agree that we're going to see a ton of malinvestments implode in the near term. And I'm not surprised that Reddit would be pressured by VC backers to increase profitability without much thought to how that would affect the sustainability of the platform. What I'm surprised by is that they're not profitable at all, at least according to the article.
You make a solid point about the 3rd party apps though. I guess those must be a major drain. Didn't think of that. Which is a perfect segue into...
...why am I asking this question? I think social media has the potential to bring tremendous value to the world, but has in practice mostly disappointed. (I actually never saw any of the toxic behavior and spamming that people mention with regards to Reddit, but I didn't participate actively and I only turned to very niche subs for specific info). Stacker News has been a very refreshing experience. I've learned a lot from interacting with people here, and I'm only a few weeks in.. I just want to believe that it's sustainable, that someone can build a platform like this, that provides value to people and allows the owners to turn a profit, but without having to make the kind of decisions that ultimately undermine the well-being of both.
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