Beyond spez (and the fact that he is a greedy little pig boy), I’m curious about the corporate dynamics that prevent a company like Reddit from being profitable. From an outside perspective, they make hundreds of millions per year via advertising, their product is a relatively simple (compared to industries that need a lot of capital to build their product), and their content is created and moderated for free by users. Could any offer some insights or educated guesses? Additionally, I’m curious how this all ties into the larger culture of Silicon Valley tech companies in the 2010s.
At a high level it just comes down to the company not being structured to generate profit – fundamentally it exists to justify moving money from investors to the owners of reddit. That has worked up until now but in the current economic climate investors are looking for a return and it’s exposing how many tech companies have been burning cash because of how easy it was to get with minimal accountability. Any feature reddit adds hasn’t actually had to increase revenue, it’s had to convince investors that it is going to increase revenue, which is why the few features they’ve added have basically been clones of features that attracted investors to other platforms (like the video streaming thing)
After nearly two decades of running the company that way it’s going to be hard to pivot to actually generating money directly to cover what I imagine are loads of unnecessary expenses and inflated salaries
Expenses and salaries that were surely decided upon based on the thought, “Well, OBVIOUSLY, we’re going to be a big, multi-billion-dollar tech company like the other guys, so we’d better spend like one!”