what reddit taught me about startups: fuck facebook, make real friends

I've already explained how fortunate we were to get that email from Kourosh back in Feb 2006, but I'm often asked how that email ever made it into my inbox.

Was it some savvy marketing? Advertising trick? PR scheme? Pure business acumen? Illicit activity?

None of them (although some days I wish my life were interesting enough to include illicit activity for the purpose of increasing business).

Through another YC startup founder, I became friends with a NYTimes reporter. She was this founder's guest to a Halloween party we threw that first Halloween. I was just sober enough to make a good impression. We hit it off and although she never wrote about reddit, she did me the much bigger favor of lending her sofa whenever I'd visit New York (I had a small rotation of very understanding friends whose sofas I slept on; I haven't forgotten their generosity -- a gentle reminder to all those friends of startup-founders-needing-a-place-to-crash).

On one of those Fung Wah journeys to NY, she introduced me to a freelance tech reporter who I met for coffee and cannoli one night in Little Italy. We became friends too, and it didn't seem right to write an article on reddit since we were friends. Understandable. But unbeknownst to me, she mentioned a cool site called reddit to one of her editors. This editor happened to work at Wired. And go figure, she was also Kourosh's wife.

So it wasn't long before the director of CondeNet biz dev was hearing from both this freelancer and his own wife that a certain social news site with an alien mascot might be worth contacting. And we know how persuasive women can be (see: MacBeth).

Then this showed up in my Gmail:

I'm a friend of [aforementioned freelancer]. I'm also the director of biz dev for CondeNet, the internet arm of Conde Nast [...] I'm intrigued with your technology and was hoping to set up a time to talk about possibly working together. I'm open the rest of the day today and Thursday, but will be traveling for a week starting Friday. Do you have time for a phone call? Also, are you based in Boston?

Go ahead and make a few new friendships (read: not facebook friends). Just don't think about these relationships through the lens of "what can you do for me?" -- not only will it doom you from the start, you'd never even guess what might happen anyway.


*Updated to add some more detail to the story. And link to a photo of Steve and me that first Halloween. He's the one dressed as Paul Graham.

what reddit taught me about startups: making more money (really??)

WARNING: These are still just the memories of a nostalgic startup cofounder. None of these are to be taken as guides for how to run your own startup. Except for anything involving a mascot -- you really ought to have one.

That said, I bet you didn't even think there'd be any more of these, let alone a sequel to "making money." Well, no one expected a sequel to The Matrix and look how well those turned out...

I was happy my Joel Spolsky shout-out made it into the BusinessWeek article from a couple weeks back. With a simple suggestion, Joel started us down the path that would eventually lead to an acquisition (I knew I should have titled this entry "Joel Spolsky: The reason why reddit got acquired"). He had remarked during a YC dinner (I think) that he was tired of sorting through all the link recommendations he'd get emailed from his readers.

"Create a joel.reddit.com for me to send them to!" he suggested (probably not an exact quote).

Steve was likely in the middle of some big update or new feature, so it was a couple months before joel.reddit went online and the Joel alien was born.

Hmm, this is neat, we thought, someone actually can use "reddit technology" (I still feels silly typing that) for their own community. Maybe we could make money from this?

This must be very disheartening, reading that so much of our business grew and adapted along with us, but it's true. A few months later I'd be fielding requests from someone wanting to license reddit for traders -- how's that for random?

We made a few more 'subreddits' for our friends and for other interested startups, but didn't give it much more thought until I got an email from Kourosh of CondéNet (spoiler: he is now our boss).

Admittedly, I hadn't heard of Condé Nast, but my phone rang not long after replying and we talked for a bit. He had noticed our white-labeling efforts and wanted us to build him a celebrity gossip version of reddit (lipstick.com). What he wanted to build sounded pretty feasible and he must have liked what he heard, because the conversation ended with an invitation to fly out west and a visit to WIRED (not screaming -- it's kinda like how reddit is always in lowercase, silly style guides).

That licensing deal turned out to be very fruitful for a few reasons. First, it gave us enough capital to live for at least another year (hell, it made us "profitable" -- although that's not saying much when you're just a few guys in an apartment). Second, and more importantly, it opened the door to a relationship with CN that would eventually lead to an acquisition.

Fortunately, the job wasn't even all that difficult. The design was handled entirely by them and Steve single-handedly hacked lipstick together in a less time than it took me to draw a week's worth of logos.

OK, that's not entirely true. He used two hands. Only Mr. XKCD types with one hand.

And thus the courtship dance with Condé began...

what reddit taught me about startups: making money (really?)

WARNING: I have a distorted perspective on startups, as I've only started one, and it happened to do well. Everything you're about to read is probably hogwash. So please don't go around saying "Alexis from reddit says we don't need to make money."

Say Steve told you.

It's been said before (although I wonder how encouraging it is to the new YCers who hear it) but here I go again: we didn't start reddit worrying about how to make money. Those first three months, Steve and I were in that Medford apartment just trying to build a good website; if it were popular enough, we'd be able to make money from it.

This refrain worked for a while, especially once we'd secured angel funding (all in all, we took less than $100,000) and we knew how little we spent every month in rent, food, and servers (in that order).

In January '06, Bill at Federated Media emailed Steve and me about selling banner ads for reddit (see how I wish I could take credit for generating this business connection?). At the time, the Google and AdBrite text ads we'd been half-heartedly running were bringing in literally a couple dollars every month. But we were always insistent on keeping the front page free of ads, so we'd always kept ads on the less-trafficked comments pages. Sure, it meant significantly fewer pageviews; we wanted the best user experience.

So we agreed to run skinny 120x600 skyscrapers (about as low-rate as a banner ad gets) on our comments pages. It was the smallest, most discrete ad we could run. I had a nifty admin tool to approve/reject any banner ad and before long we were getting a steady stream of new campaigns they'd sold.

To the credit of FM, checks in the hundreds started arriving (I know, as handler-of-things-non-technical, I kept the books). The final check we received from FM (we let the splendid Wired ad sales team take over post-acquisition) was for just over $4,000 -- that's a lot of Sam Adams.

Keep in mind that those comment pages got only a small fraction of reddit's traffic. When we finally put 300x250s on the entire site, we were pleased to see very little negative feedback. Most redditors probably have ad-block on anyway, heh.

I didn't intend for this to sound like an FM fluff piece, but they really did do us a solid. Then again, we never got offered a FashionBug ad campaign ;-)

And it was shortly after this relationship got started that another fortuitous email appeared in my inbox, this one from Condé Nast...