In 2005 Alexis Ohanian and Steve Huffman approached Y-Combinator with the idea for a website called MyMobileMenu, and were turned down. The seed accelerator, though, encouraged them to come back with other potential ideas. Soon, they returned with greater ambitions; to create the front page of the internet. Just months later, their project, Reddit, would turn into a major success.
Today, Reddit receives over 20 million unique visitors per month, and Ohanian has been hailed as “the mayor of the internet” by Forbes magazine. Moreover, Ohanian has amassed an estimated personal net worth of over $70 million, despite leaving Reddit in 2010. His success with Reddit, and his later ventures, is attributable both to his entrepreneurial approach, and his ability to relate to and capitalise on the needs of internet users.
The rise of Reddit
Even when it was founded in 2005, Reddit looked relatively low-tech on its face. The design of the website is simple, and all content is shared or created by users. Since then, little has changed. Unlike Facebook, Twitter, and other major social media platforms, Reddit has remained largely the same in terms of its design and function. Fundamentally, it’s designed to allow users to form interest-based communities and to interact with one another on their own terms.
Its largely laissez-faire attitude with regard to its content allowed it to become the central hub for communities and content centered around a wide variety of issues, ranging from major political issues to relatively meaningless internet memes. The most immediate effect of this was that Reddit grew incredibly fast. Just five months after going online, Reddit began to receive over a million views per day. Since then, it has continued to grow, establishing itself as a household name on the web, and becoming the source of shareable content for other major websites like Buzzfeed, Tumblr, and occasionally even major news sites. This prominence has allowed it to post annual revenues as high as $100 million, despite its lack of aggressive monetisation, and the fact that it does not collect personal user data.
The center of a political internet
Reddit refers to itself as the “front page of the internet”, and in some ways this is true. The Reddit community, with the encouragement and participation of Ohanian, is a center of political activism for internet-related issues. Reddit doesn’t require users to use a personal email address to create an account, and doesn’t collect personal information from its users. This allows users to remain anonymous, and has made Reddit a major center of advocacy for an open internet, for net neutrality, and for internet privacy. Besides this, activists for a wide variety of political and social causes organise on the site.
This tolerance for controversy is a major part of Reddit’s appeal to its users, and is ultimately what makes it unique and irreplaceable to them. Ironically, it’s also what has made the site relatively difficult to monetise, as advertisers ultimately can’t allow their brands to be associated with overly controversial content. The business success of Reddit lies in balancing the interests of its user base and its advertisers.
Sticking to entrepreneurship
Unlike many entrepreneurs, Ohanian did not stick with his big success in the long term. Instead, he left Reddit in 2010 to pursue other projects. In 2007, even before he left Reddit, he founded another business, Breadpig, which produced geek-focused merchandise. After leaving Reddit, he founded Das Kapital Capital, a startup investment and consulting firm. Since then, he has made numerous seed investments, helping other entrepreneurs get on their feet.
What we can learn
Ohanian’s approach to business has allowed him to focus on leveraging his own talents and interests as much as possible. Reddit allowed him to create something that reflected his own personal values, as well as those of many internet users. Moreover, it created a platform that he himself has also used to engage with and advocate for his personal and political interests, such as paternity leave and net neutrality. After Reddit was established, he went on to pursue his passion for entrepreneurship by getting involved in investing in other new businesses. This allowed him to continue to do the work that he was experienced in, and that he was passionate about.
This provides an important lesson to other entrepreneurs. While it’s tempting to stick with our greatest successes, it’s not always what’s best for our business, or ourselves as entrepreneurs. Running a business is not the same job as founding a startup, and great entrepreneurs often don’t make great CEOs. By moving on, Ohanian ensured that he could continue doing what he was best at.