Some reddit communities threatening the current power structure of our world financial structure these guys are king makers and will make the ipo a pump and dump to inrich investors and leave everyone else holding the bag.
The key to analyzing these seemingly illogical moves is to think "How does reddit the company benefit from this?" Why reddit the company and not just Steve Huffman? Because reddit's board did two things: They made Huffman the CEO (well, two of them did, one joined the board in 2019), with full knowledge of who he is (protip: he's always been a twerpy little tyrant turd), and he's still CEO today.
Those board members are:
Robert A Sauerberg Jr "Bob" Nast Conde Inc. (Was CEO of Conde Nast)
Patricia D Fili-Krushel "Pat" current CEO of Center For Talent Innovation Inc., also sits on boards for Dollar General and Chipotle.
David C Habiger "Dave" President and CEO of JD Power.
These are all career businesspeople. They are surely steeped in a responsibility to shareholder value. Reddit is looking towards IPO, maybe later this year.
Since reddit does not currently have shareholders, neither of those mechanisms applies. The board, and the executive committee (empowered by the board and led by Steve Huffman), can essentially do anything they want, with impunity. I believe the end goal of these actions is to hasten the IPO, because (I assume) all of these people have big stock grants on the table when the IPO happens.
And it doesn't matter what happens to the stock price at IPO; no matter what, all of these people (and surely others) get giant piles of free money. Sure, they'd like that free money to be in as large a pile as possible, but a smaller pile is infinitely better than no pile. There's enough momentum behind reddit at this point that they can alienate a huge proportion of the users and the IPO will still happen.
Taking these actions now enables reddit the company to have greater control over its product, reddit the site. That is stability. Doesn't matter whether the product is "better" or "worse." If the product has a more predictable path forward, it will be more valuable to potential shareholders.
What's happening right now is identification of what reddit users are more likely to make the site less predictable. Subreddit mods, especially those of large subs, have a lot of opportunity to make their subs, and by extension, reddit the site, less predictable. So out they go, replaced by people who will play ball.
Control generates predictability, predictability generates increased share value at IPO, IPO puts money in pockets. It makes total sense that the board would want a control freak as CEO, and that that CEO would exert that kind of freakish control. Yes, that will disenfranchise a lot of reddit users, some of them with a lot of history at reddit. Those are not the users that reddit the company wants. Those users are the ones who make the site less predictable; reddit the company wants those users to leave.
I’m not nearly smart enough in business stuff but I feel like in the future we are gonna look back at how Elon and Spez unethically got rich off destroying their companies somehow.
His moves make sense when you realize that he answers to investors who are done with throwing money at a company that has never turned a profit. The cost of money is now higher than it was at the time Reddit was founded. The entire social media era is built on top of Great Recession monetary policy, and that policy is now done. These investors want to cash out, and they want to cash out now.
Bingo. He's following a WELL KNOWN playbook of making the company both leaner in terms of expenses, and trying to add revenue, with zero care about long term viability of the company.
The goal is to make the books look better then they are, so that you can dupe investors into thinking the turd you just shined up isn't a turd.
EVERYTHING he's doing is logical when you look at it in that sense, they are throwing a coat of wax on a used lemon to dump it on some unsuspecting suckers for a profit.
Even under that lens, I don't think his moves make sense. At least not now. He may have thought they would, and that the backlash wouldn't be too bad. BUT he didn't back down, when it became apparent that he was on the losing end. That makes him a egotistical moron, at best. They are losing advertisers, there is a lot of not flattering press, and they are bleeding users (it will only get worse on the 1st of July too). That's not typically endearing to investors, no matter how close to the IPO they are. In fact, that's the kind of shit you do right after the IPO, and the investor cashout.
I get it. Company isn't making money, so lets come up with ways to generate more income. Ok, let's charge for API access. On the surface, great idea. The issue is that he does what so many people do in that situation. He went from a good idea, that could keep him solvent, to a HUGE overreach. I honestly don't know anyone that's upset with reddit/spez for the IDEA of charging for API. The issue is the ridiculous price tag he applied, and the message behind it.
He truly could have been the hero if he had come up with a reasonable price. Or, alternatively, started with the ridiculous price, and then left himself an out, for if the users revolted. Ok guys, I see that I was being dumb, my $2.50 average per user IS a bit too much. Let's go down to $1.50 per person. Suddenly he would have been a great guy, who is willing to work with the community. He's seemingly doing the one thing in business you should never do. Bringing your emotions into it. So I guess it does kind of make sense, just not good sense IMO
There's no scenario where he comes out of this the hero, though. Their business model going forward is ads and charging generative model owners for access to user posts. Their most invested and active users -- that is, their most valuable ones from both an advertising and a model training perspective -- were using 3rd party apps.
They needed to get everyone in house under a 1st party umbrella, and they needed to peg API pricing AI training pricing.
This is what a profit-driven Reddit just looks like. Their only other option is to become Facebook and track and serve ads to users off-site, and they don't have the same kind of controls over user identity that Facebook has. Plus, it puts them in direct competition with Facebook, and Zucks will absolutely destroy them in toe-to-toe.
He's already looking at slitting Twitter's throat with Barcelona...
I was in no way implying he can look like the hero anymore. I was saying, had he used his brain, instead of his emotions, he COULD have made himself into one.
I believe that the actual motive behind the API pricing is the part he hasn’t totally said out loud yet, only eluded to. I don’t think it actually has anything to do with 3rd parties or AI.
One of the absolute biggest profitable businesses is information on people. So for Reddit YOU are the product. Your browsing history, click through, devices you’re using, browser, location, and a HUGE one, what parts of Reddit you’re using/your posts.
This info can be worth large sums of money, they just need to be able to capture it. Yeah, that’s where the 3party apps are really the issue, but at the core the Apollo’s of the world aren’t the actual problem. It’s that Reddit can’t collect your info with Apollo in the way. Ffs spez said in an article, which I can’t currently find, something to the effect of people post things on Reddit they won’t tell other people or only tell their therapist and it’s not fair that Reddit can’t capitalize on that info.
"There’s a lot of stuff on the site that you’d only ever say in therapy, or AA, or never at all … But we don’t need to give all of that value to some of the largest companies in the world for free."
We're seeing a huge shift in the economy due to the interest rates. LOTS of companies have been operating at a loss for a decade or more. That time is over.
This reminds me of a thrift store. Items, or content, is provided for free and the store owner gets greedy. Prices are increased until sales decrease and greed kills sales to some degree.
I know most people are saying it's totally reasonable to expect this kind of crazy behavior from rich narcissists... but I agree with you, there are too many people around spez, would have been so much warning, it's ridiculous that this not only happened but that he's still holding his ground. It's following the same trend as Twitter and other SM platforms, there HAS to be an alterior motive imo. Reddit is arguably the largest online community that spans worldwide, what makes most sense to me is that someone(s) wants to shut down and destroy this massive venue of information sharing... but that's just my opinion.
They want fascists to take it over and spread their bigotry faster. I think that's the ulterior motive when the entire world seems hell bent on boosting extreme right wing ideologies, apparently trying to push the world into the next great war.
I sound like a tinfoil hat nut writing like this, I know. I'm a lot more level-headed normally but I feel a bit hyper right now for some reason.
Yeah. It looks like they had enough of failing to organically grow right-wing spaces so they are now working to take over left wing ones. They don't seem to understand that the inherent toxicity of right wing ideology is why those places fail. It's really sad and disgusting.
Nah, he's just fucking stupid and out of touch how his platform and internet works. He wanted to make profit on companies scraping data for ai's and move people to official app with ton of apps before IPO but he didn't expect to people retaliate that much. Now because users were stupid enough to make strike only 48 hours long he decided to wait it out and he was correct, it worked for him and users are giving up with the strike. At least there are still subreddits that strike but it's nothing compared to first 2 days.
This is what I don't understand. Data from before ChatGPT is useful but nothing after it is. Now you can't tell for sure if anything on reddit is made by AI or not, which is critical for training AIs. It's like the "bomb pulse" after the first atomic bomb tests which resulted in a release of carbon-14 in the air.
Spez is just flailing trying to make as much money off reddit as possible and trying to find any justification to do so, no matter how illogical it is.
I'm wondering the same, language models have been on the training for years, they already have all the reddit data they want, why would anyone spend a lot of money now for something they already have?
Unless there's something new we're not yet aware of, I don't see how "scraping AI" is a valid reason for what spez is doing.
Lol, someone went through comments and downvoted them for shitting on a super rich guy that has no respect for users on a platform that is in 99.999% run by users.
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