The idea for Reddit was shaped from one simple sentence, "build the front page of the internet". Let's take a deep dive into Reddit and find out how the social news aggregation, web content rating, and discussion website built a user base roughly the size of the population of the United States.
The Founders of Reddit
Alexis Ohanian and Steve Huffman graduated high school in 2001 and made their way to the University of Virginia. They first met as University floormates and bonded over their love for video games. As they played Gran Turismo together in their dorm rooms, neither of them could have expected that together they would become multimillionaires by building what is known as the front page of the internet.
Over the next 4 years, Ohanian and Huffman grew closer and continued to live together every year. Ohanian pursued his degree in History and Business while Huffman studied computer science. During Spring Break of their senior year their journey to build Reddit began. Huffman heard that Paul Graham was speaking in Boston. Paul is a computer scientist, entrepreneur, and venture capitalist best known for founding what is now the Yahoo! Store. Ohanian admittedly didn’t know who Paul was but nonetheless the two of them drove 9 hours from Virginia to Boston. Afterwards they convinced Paul to sit down with them over drinks and talk about their idea for a startup, MyMobileMenu. That’s right, Reddit was not the first idea that they came up with. MyMobileMenu was a mobile food ordering business that Huffman thought up while simultaneously pumping gas and wanting to order a sub sandwich.
Reddit and Y Combinator
After pitching MyMobileMenu they were elated when Paul said that he loved their idea. The meeting ended without an agenda until Ohanian emailed Paul to thank him for meeting. Paul replied and explained a project he had been working on called Y Combinator, a startup accelerator and seed capital firm. They invest money in startups and provide mentorship and resources and Ohanian and Huffman were invited to interview for it. Now these were the early days of Y Combinator before they incubated companies like Twitch, DoorDash, and Instacart. Instead, they were interviewing to be a part of Y Combinator's very first class.
After the interview, they got a call from Paul Graham who told them that they were not going to be accepted into Y Combinator. Devastated, they got very drunk and starting tomorrow, would prove Paul Graham wrong.
Ohanian woke up tired and hungover to a phone call from Paul Graham. He explained that they made a mistake by denying their entry into Y Combinator all together. The YC team didn’t like the idea of MyMobileMenu, but they did like Steve and Alexis. He said they would accept them into Y combinator but they needed an idea different than MyMobileMenu. They hung up and got on the next train back to Boston to brainstorm new ideas with Paul who told them they needed to build the front page of the internet. And with that, during the early months of 2005, Reddit was born.
Reddit's Sneaky Growth Strategy
With Y Combinators investment of $12,000, version 1.0 of Reddit was built in just 3 weeks. It served as a web only board to post links with a small text caption.
Ohanian and Huffman have gone from two College Freshman at the University of Virginia to having a working product but the question still stands, how did they begin taking Reddit from 0 users to 330 million? Very sneakily. While ordinary users would be met with a page that allowed them to fill out a link and caption when posting to Reddit, Ohanian and Huffman allowed themselves to fill out a link, caption, and username. This allowed them to shape the tone of the content and make it appear that Reddit had hundreds of real users when they actually had none.
That is until Paul Graham took it upon himself to include Reddit in one of his blog posts and just like that, Reddit had their first real users directed to the site which at first glance, appeared to be popular thanks to the fake users.
Alexis Ohanian's Startup Adversity
Just a few months into building Reddit, Ohanian fought through some tough adversity. He got a call from his girlfriend’s mom who told him that his girlfriend had fallen off of a five story balcony and was in a coma. She was in the hospital for a few months and was then released. Shortly after, his mom had a seizure which led to the discovery of a brain tumor that was diagnosed as terminal brain cancer.
Through this devastation, Ohanian wasn’t going to give up on Reddit. It’s early 2006 and Reddit was growing fairly quickly. Alexis was advised by a co-founder at Y Combinator to go to New York and do a press tour to spread the word about Reddit. He met with some people, and after returning he got an email from the head of business development at a company called Conde Nast. Condé Nast is a global media company that produces some of the world’s leading print, digital, video and social brands including vogue, GQ, The New Yorker, Vanity Fair, Wired and more. He had been told about Reddit by his wife who is an editor at Wired, who was told about Reddit by one of her writers that had met with Ohanian during his visit to New York.
Selling Reddit - Million Dollar Acquisition
Conde Nast quickly became interested in bringing Reddit into their portfolio which began talks to acquire Reddit from Ohanian and Huffman. That is exactly what happened in October of 2006 just 16 months after they started building it.
The amount of money that Reddit sold for has been kept private; Ohanian apparently had never even told his girlfriend. However, it’s been estimated that it was somewhere in the ballpark of $10 - $20 million which isn’t too shabby for 16-months of work.
This made Reddit the first significant acquisition of a Y Combinator company.
Ohanian's mom was extremely sick but was able to see Reddit, the company her son had built, turn successful and be acquired before she passed away. Both Alexis and Steve continued working on Reddit for 3 years after the acquisition, took a five year break to pursue other ventures, and then returned to executive roles within Reddit. They made major changes including launching the iOS and Android apps and rehauling the design of Reddit.com which was previously criticized for looking like a “dystopian craigslist”.
In June 2020, Ohanian announced that he is stepping down from the board of Reddit and wishes to be replaced by a black candidate. Steve Huffman is currently still serving as the CEO of Reddit. Reddit has 330 million active users and is valued at $3 billion.
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