It's alexa rank in US social media websites is #2 behind Facebook. Apart form their redesign shenanigans, people actually like the product they offer (in contrast to facebook) and they are still growing.
I wish Reddit stays in the kind of "grey" area where it never gets as "official" as twitter, despite the popularity. If anything, that might be entirely its appeal.
That predicament will eternally present a glass ceiling for reddit's revenue, but as a consumer I'd rather see that than it going the full facebook -> hyper growth above anything else approach.
Reddit might be a #1 project out of all the startups ever funded by Y Combinator, but it's unlikely to ever become a top 10 company.
Because as an ad business it can neither match Google at targeting audience by exact user intent, nor Facebook at targeting audience by exact user profile.
In fact, I see reddit more like Couchsurfing: a project which would do much better as a foundation rather than a corporation, based on the role it plays in the society.
At its essence, it's a highly scalable CRUD application, which requires a simple user interface, respectful community moderation, and as little user tracking as possible.
If I had a quarter every time I heard this. You can say that for half of the companies on that list. If Facebook and Google can make so much money from ads, heck even Twitter. Reddit can do the same if they really put in the effort in building a strong ad platform. They are quite comfortable.
Why do you feel they need to either be a top 10 YC company or they should just be a foundation? Seems like if they can make a few hundred million an year they can just be an ongoing business.
“Just a CRUD app” is not a good analysis because very few of the companies on this list are based on technological breakthroughs. They are mainly B2B SaaS apps.
> Why do you feel they need to either be a top 10 YC company or they should just be a foundation?
The history of reddit shows that its growth doesn't depend on a constant technological innovation, and that it can be successfully supported by a small number of technical employees.
Building an ad company requires a huge number of sales and support people, which significantly increases spending without adding anything to the product itself.
> Seems like if they can make a few hundred million an year they can just be an ongoing business.
That would be fine, but reddit is not Craiglist, which never took any money from the outside. They have raised money at $3 billion valuation, and they will have to IPO – or get acquired by a larger company, again.
If reddit becomes a publicly traded company, it will have to demonstrate the growth in revenue every quarter. A failure to do so might result in the heads of the company being replaced, and its direction becoming unpredictable.
> “Just a CRUD app” is not a good analysis because very few of the companies on this list are based on technological breakthroughs. They are mainly B2B SaaS apps.
SaaS companies are making money by solving easily measurable problems of their customers. Reddit is not.
> SaaS companies are making money by solving easily measurable problems of their customers. Reddit is not.
I derive a lot of obvious value from reddit that's not their explicit goal. It's the best review and recommendation platform on the web for any random product category I can think of, for example.
Reddit is still majority owned by Advance Publications, no? They’ve had 3 fund raises since Advance Publications spun out reddit as an independent company. That’s up to 30% taken by investors. The only other shareholders are employees from the spin out. Reddit can still go another 1-2 rounds before Advance Publications doesn’t own more than 50% of reddit. Maybe the latter two rounds have deals that will force an IPO sooner, but otherwise it seems Reddit doesn’t have the same pressure as your average startup that has raised $500M+.
> Because as an ad business it can neither match Google at targeting audience by exact user intent, nor Facebook at targeting audience by exact user profile.
User profiles are primarily useful to build up a picture of user intent.
User interests, which Reddit possesses, are another way to do that.
It's not obvious to me the disparity in valuation should be so great.
Reddit traffic converts much worse than FB traffic for advertisers at scale. This is because besides certain subreddits (which are very low scale relatively) the targeting is very weak. Unlike on FB where you can profitably target all sorts of sub groups.
How so? Reddits whole thing is having subreddits for relatively small communities formed of people that have a very specific interest. ie. what better platform is there for a pencil company to advertise than /r/calligraphy
A clever company or marketing agency can just disguise advertisements as genuine posts. If I'm a pencil company, I'll just create my own username and visit those subreddits on the downlow and casually mention my products. There's no need to ever pay Reddit.
How do you go about trying to track the conversion rate on organic advertising-cum-Reddit post? It seems like it'd be impossible without the consent of Reddit.
You would use different metrics. It costs nothing to make the post so you can just pump them out, you don't need to use impressions as a metric anymore because you're not paying for impressions. Instead you get good at curating titles, images and articles that gain traction on the site. This isn't a wild idea, it's all over the reddit frontpage every day.
I don't understand the meaning of saying an employee is paid to do that. You might also pay a marketing agency to do it. The point is, Reddit doesn't get paid. As someone who uses Reddit everyday, I never see their ads, but I do notice posts that mention specific brands, websites, companies, etc.
On Instagram the poster matters, on Reddit the poster does not.
This means it's completely different.
A random made-up user on Instagram will have no audience, a random made-up user on Reddit will.
Additionally, Instagram has an opportunity to form a relationship with the popular users and can control their accounts in specific if it wishes.
Facebook allows you to target anyone who has shown interest in calligraphy and not just those who follow a subreddit. I’ve played with it and Facebook targeting is both disturbingly detailed and disturbingly large in coverage.
I know twitter is a household name and everyone knows about it but is reddit really that far behind? My mom isnt using it yet but has probably been linked to it via twitter and facebook over the last year. Not to sound pretentious but there has been a huge shift in the site as it's grown over the last couple of years. Most of the popular subreddits are just pointing out silly behavior on other websites or asking for the hivemind to weigh in on their personal life.
Is that still a thing? I get that with like 4chan (and allllll of the up-front, in your face porn there), but with super mainstream sites like reddit? Is that still a thing?
stripe, airbnb, doordash, and instacart make sense because they offer a service people pour money through, and they can take their commission for facilitating the transaction. i would expect valuations to treat those companies better than ad driven link aggregation and message board hosting.
The fact that they offer a paid service is also their weakness in potential valuation, since they have significant marginal costs unlike Reddit. (Stripe is a bit different but I’m referring to Doordash etc.)
Have you been on Reddit lately? Beyond the most mainstream posts, most subs (and their participants) are full of toxicity. I've tried posting helpful comments on there to my detriment.
Python is also strongly represented, but zero started with back-ends on Java, .Net. PHP, or other more broadly popular options.
This is strong evidence that the startup world is dramatically different from that of enterprises and businesses where tech is ancillary (which dominate total numbers in popularly shared statistics). In many ways it's a vindication of PG's old essays. Though we're not all using Lisp, startups lean towards it.
How much of this can be attributed to the efficiency or superiority of Ruby as a language vs most of these now maturing start ups being founded during the peak Rails era? If we look at new Unicorns founded today in 8-10 years we'll probably see slightly different stacks based on what is popular and new today, although to be fair I think a lot of the biggest "tech" unicorns IPOing the 2030s won't be traditional web applications.
As far as I remember, Ruby has been dumped by half the engineering community on almost since its inception. Not only that, but when Ruby came out, there were plenty of other options to choose from. The fact that those options were not chosen over Ruby should say something.
Alas, with most non-Ruby devs it is nearly impossible to compliment that brilliant, wonderful language (and Rails). It's become popular to look for a reason to hate a language you don't write in, and usually tech stacks are sold by putting down other stacks, like when NodeJS came out.
While this is not completely incorrect, it should be pointed out that they would have dumped e. g. python just as well, since the primary complaint is about speed.
Also, "dumped" is the wrong word, because you insinuate here that they stopped using ruby altogether. That is not the case; the percentage usage declined in relative terms, but I do not know of any of these companies to have gone down to zero percent in regards to ruby. Which is typical - big companies use all sorts of different languages.
> Alas, with most non-Ruby devs it is nearly impossible to compliment that
> brilliant, wonderful language (and Rails). It's become popular to look for a
> reason to hate a language you don't write in, and usually tech stacks are sold
> by putting down other stacks, like when NodeJS came out.
When it comes to speed, they have a point - there is just no contest between C and C++, when comparing it to ruby or python.
In my opinion, though, most of these who critisized ruby and python, are actually also people who are VERY very bad in either of these two languages. Some of them are still stuck with C and perl, too old to learn anything new. And no, the "I'm gonna learn a new language every week" crowd does not count - I have seen too much atrocious coding pattern by these people.
JavaScript is also a partial reason simply because of how important the www became - look at PHP's decline, which is a LOT due to JavaScript.
And of course, everyone understands the speed argument. But that has already been settled. Speed matters when speed is very important. I've seen people
recommend that I stop using Python and learn Rust to create a medium sized API. The average response times for the API that I had already completed was 30ms. That's a fraction of a second. I haven't used Rust yet, so I don't know what the performance difference would be, but why on earth should someone rewrite an application to save themselves a unit of time indiscernible to both the developer and the customer? Even if my load times increased a fair amount, nothing would be lost.
As far as people who don't mind learning another language, I can understand why that's fun, because it is. But when you have work that needs to get done and needs to be done with assurance, you don't have time to learn another language and figure out its quirks, shortcomings, and strengths all while trying to build that feature. My belief is that you should be able to write a language like a member of its community. If you don't have the intention of doing that, then you shouldn't really be messing with it. (for example, don't write Python like it's Ruby)
It has been my experience in New York City that people who criticize Ruby and Python tend to come from languages that are strongly typed and use them at work. It is cool to hate on a language because if you do, then you get to feel better about yourself just by subscribing to another community and hiding underneath that umbrella. You don't have to contribute to open source, answer questions online, or give talks at your local meetup. You get to call yourself a better engineer just by subscribing.
Anyway, I got way off topic. But the point is that when Ruby came out, there were plenty of options. People went with Ruby and Rails probably because it's a lot of fun to finish your work. I know that I really enjoy finishing my work.
Oh man, I just realized that my super-sensitive trackpad reorderd my words again. I was trying to say that Ruby gets "dumped on" by other developers. Not "dumped" as in swapped out.
There has never been a "Rails era" in which Ruby represented 60% of the back-end server market share, or even 10% of the share of the languages I listed.
I'm aware of that. My comment was more about new startups at the time choosing Rails (and getting Ruby with it) with it being the reason why many startups in the list are built with Ruby, rather than an inherent strength of Ruby as a language. Rails did (does?) seem like a superior environment for quickly prototyping and launching web applications, and it's entirely possible nothing has supplanted it. My comment about future unicorns is mainly that Python might be dominant in AI or biotech focused startups, C# might be dominant in AR/VR startups, and more web applications are SPAs built mostly or entirely in JavaScript, so Ruby might have had it's day as people are building early tech in new fields.
> My comment about future unicorns is mainly that
> Python might be dominant in AI or biotech focused
> startups
That's rubbish. Why should python excel here in biotech
related aspects but ruby not?
Note: I am a molecular biologist by trade who went
into using ruby primarily. I also use python a lot.
I remember the old HUGO project; lots of that code was
written in perl. So why exactly would ruby be unfit here
but python would? Please give your EXACT reasons.
> so Ruby might have had it's day as people are
> building early tech in new fields.
I partially agree in regards to javascript; I disagree
that there ought to be a hype-buzzword trend. The whole
fake AI field ticks me off - they don't understand why
they can never achieve true intelligence, yet they keep
on claiming it. And people parrot how python will be
DOMINATING in the fake AI field. So many fakers.
How many of you guys actually even understand neurobiology?
Having worked at a few of the top ones, many of them are now investing huge $$$ to rearchitect their tech platform to Java and services. I understand that Ruby allowed them to grow fast, but I am wondering if starting with Java to begin with would have allowed them to avoid massive investment to address tech debt at the expense of growth and profitability at a late stage.
You only get to have the problem of rearchitecting for scale if you're successful. You can't worry about that too much when you're still trying to find product/market fit.
Perhaps they should switch over to Elixir instead. It's somewhat similar to Ruby, but the performance of the Erlang VM (BEAM) is second to one for multithreaded and multiprocessed workflows, as is usually the case for many clients on a server for a web app. Of course, Elixir is not as fast as say Rust or perhaps even Java for raw computational work, but I'd say the tradeoff is worth it.
This is why languages such as D and Nim are interesting. They support both styles of development. You can always use the RAD style to get to something people like, optimize the fast paths, and still use RAD style on experimental features.
The prebuilt libraries are the main advantage Ruby and Python have. A converter for them to new languages would negate that, though.
Types, among the most performant garbage collected languages out there, very mature dev tooling that can speed you up in many ways, large library set, history of being more open than C#. Also many data libraries are made with it and interface well with it, such as kafka, hadoop, etc.
And there are many good engineers who are well versed with the language.
Scala has bad build times and a compiler that people have a hard time understanding AFAIK, so it's future development is more suspect. And it has as reputation of large companies moving away from using it: https://en.wikipedia.org/wiki/Scala_(programming_language)#C...
While something like kotlin has a small learning curve and gives you a lot of the benefits of scala. And it's backed by google, jetbrains & the investment that goes into android. Most people understand ADTs, nullable types, lambdas and data classes fairly readily.
I think it basically comes down to a company making a system out of a dynamically typed garbage collected language of either php, javascript, python or ruby, and suffering the perf issues (~8x slower than C/C++) and lack of type safety that it gives. Also those languages typically have ecosystem issues as far as the robustness of their libraries go (like javascript).
A more mature company settles into a typed GC language (Java, C#, Golang) and a typed static language for perf benefits when needed (C++, Rust). Yes there are typed versions of various dynamic languages now, but you don't get the speed benefits that the typing gives you, and a large part of the library ecosystem that you will interact with will still be untyped under the hood.
I think that is inevitable, but the Ruby Rails community is working hard to delay that happening. i.e You should be able to grow longer without thinking of moving languages and backend.
Now that Shopify, Github is ( or going to be ) Taking more hands on approach in Rails development rather than Basecamp, which other web framework have this luxury of billions dollar companies doing live testing for it?
Psyched to see Meesho up there. Ecomm over WhatsApp is huge in India and they've acquired a significant customer base judging from the # of app installs (~10M+). My prediction is, it won't be long before they grow too huge to be acquired or get acquired themselves.
I count three startups from India in YC S19 batch that rely on WhatsApp as an auxillary platform:
1. https://vahan.co does recruitment over WhatsApp for low to medium income jobs.
Another interesting point, I think, is both startups from Zenefits co-founders are in top 100: Rippling and ZeroDown; the latter with just 15 employees.
Of the startups on the list, I personally like what Flexport and RigettiComputing are doing.
Here is a similar list of top companies I stumbled upon a year or so back (not just limited to YC): https://breakoutlist.com
If you look at the diffs between this and the last list, there are def some companies that opted out of listing. Some of them had so much funding that there's no way that they could've just fallen out. For example, Machine Zone, Zenefits, LendUp, Soylent.
Also interesting, are supposedly well-capitalized companies from the 2018 list that shut down: uBiome(with a fair amount of attention) and Meta.
Other fun observations might just be how much money people are raising. Memsql was 40 in 2018, and is 67 in 2019. I'm guessing they didn't raise money in the time between, and a bunch of companies did so in the meanwhile.
Also kind of interesting? CoreOS(2018 #42) was above Heroku (2018 #46), but in this year's list is above them (Heroku #71, CoreOS #73). But both were acquired by the time that the 2018 list was made. I'm not sure what this is about, but maybe it's because the acquisition terms weren't all cash, and there were fluctuations in the intervening time in Salesforce vs RHT(and then, RHT got acquired by IBM so who knows how that factors into the present value of what used to be CoreOS). Fun.
The top 100 list includes 6 other companies from W15 (Equipment Share, RazorPay, Ironclad, GrubMarket, Notable, and Atomwise). So prediction 3) has definitely come true.
I am completely out of the loop so might be my ignorance, but why is Brex worth so much?
The founders are super smart and accomplished, I even know some people that worked at pagar.me which was big success in Brazil and can say the guys are super hard working and smart.
But I fail to understand why Brex is such a wonderful idea, I worked for years on the payments sector and all features listed are fairly common to all major providers.
Because it’s hard for a lot of startups to qualify for traditional corporate charge cards with no personal guarantee even though the venture backed ones have a lot of money in the bank.
Personally I think the fact Stripe launched a competitor will make it hard for them to grow as fast as they might have prior.
Not sure if this is the case in the US, but here in SEA we had an unbelievably hard time getting corporate credit cards.
In my previous company we were actually building credit card authentication systems for banks and schemes, a private company with years of operation. And still - we werent approved for a card! Never-mind being provided a solution for managing them correctly.
In the end, like everyone else, we had to take out personal cards. The problem was, the company was so prompt repaying our personal cards we could never get approved for credit limit increases. Apparently you have to rack up some accruing debt...
PS Obviously not related to valuation (perhaps?) but Brex has the most refreshingly clear description on the list "Brex does corporate credit cards."
Question for YC: How does the list rank companies like Zapier that are growing very fast, but haven't raised in years to set a current valuation? I'd imagine that revenue is factored into play but perhaps not shown.
Historically, I have found that these questions won’t receive a response from anyone with valuation insight at YC. I’m unsure why work isn’t shown when arriving at valuations you’re publicly communicating (even if only relative through ordering, such as in this case). I’m not asking for an S-1 or pro forma financial statements, broad strokes would be fine.
Also, touting how many people your startup employs when it’s in the job destruction business (Cruise and others) seems like an unhelpful metric to put front and center (startups are rarely going to be net job creators, software, automation, all that jazz).
Edit: It’s also odd Docker is #18 when they’re likely about to run out of cash. [1]
Disclaimer: I own equity in a YC startup, but am not currently employed by any companies in YCs portfolio.
Where is valuation? Why isn't it listed? Also, what's up with the weird name "jobs created" for employees? I feel like these details must have been chosen deliberately, but I can't determine why.
The minimum valuation is 150M, and as for the number of employees hired, I would venture to say that they are trying to use it for PR purpose. Employees are a big cost center for a business (a few thousand can cost 100M a year or more) so it sounds like they really want to highlight all the favors they are doing for the world by employing so many people.
> really want to highlight all the favors they are doing for the world by employing so many people
Um, well, yes, in a democracy, jobs created is the most interesting metric for politicians, particularly if those jobs are in their district. Those are their constituents. Do you want policies that are friendly toward tech companies and tech workers alike? Because connecting the jobs with the companies is how you do that.
I still think there are subtle issues with the semantics. Does "jobs created" necessarily imply "careers started" or is the case something else? Where are the boundaries? How much of its personnel contributions are part-time workers or independent contractors?
Nonetheless, I think you have a great point here. There's a subtle positioning difference between "employees" and "jobs created" -- the latter most directly connects a company's economic impact/participation with its contribution to the domestic labor market.
The dominance of San Francisco is mind blowing and flies in the face of the narrative of "decentralizing tech" that I have been hearing over the last decade
Because they're accessible, and remove the burdens/predatory behavior typically associated with relocating to high cost-of-living areas.
More importantly, it speaks wonders about the culture. If a company can be successful without everyone sitting in a single office, it really speaks to their collaboration and communication abilities, which is harder to gauge out of the gate with a traditional co.
Though I would point out that because remote is a "new" style of work, it's probably too early in remote work's history to use this as evidence of remote work's unsuitability in general. This being because there are likely a number of "tricks" to making remote employment work properly that today's remote companies haven't yet mastered, while in contrast physical companies have a significant and long cultural history to pull the best ideas from.
TL;DR: yes, but I think remote work is also at Semver 0.X.Y right now so we should give it some time to grow
Consider that even with a recently lowered valuation, Waymo is valued at around $105B [0]. This list might be using a valuation of Cruise as a division of GM, and I'd bet the valuation is in the tens of billions.
Acquisition is rooted in reality. Valuation is a toss up, see WeWork. DoorDash & Coinbase could be valued for hundreds of billions, but until they exit by going public or get acquired it's all speculation.
It was the first YC company to exit (publicly, there was one from the same batch that was acquired first but wasn't made public). But then it was spun out again and recapitalized a few years later.
I know that social and environmental good organizations historically trend towards the “not as profitable or even profitable” category which makes them less likely to be funded and consequently on this list, but I wish more of the companies on this were driving more important change in the world.
I wish that those types of companies could find ways to generate more revenue and job opportunities and get on lists like this. In the same vein, I think YC has the opportunity and resources to really elevate those types of companies and help them make it big.
Surprised Stripe ranked ahead of Airbnb. But thinking about it makes sense, Stripe eventually will skim a percentage out of every transaction on the internet... Also only one ad-supported consumer internet company, all are either Saas or marketplaces
I'd love to see a list like this sorted by gross revenue (i.e. net GDP contribution) or total paid compensation. Contrasting either of those vs. invested capital would be particularly interesting.
There's a certain irony in a investor (YC) perpetuating the myth of private valuations. Haven't we learned from WeWork and Juul etc that private valuations are mostly meaningless?
The current vaping-related lung disease crisis, plus alleged sloppy marketing practices at Juul, plus expectations of increased FDA regulatory oversight. They’re still worth something, but Altria’s investment is unlikely to yield a great ROI.
The weird part of this sentence is that "...will be the first to..." has an implied "arrive at" or "develop" after it -- so it could be read as "Helion Energy is breaking the fusion barrier and will be the first to develop* clean, safe, and low-cost commercial electricity."
I think in this case, "clean" is the adjective for electricity. So, "Hello Energy will be the first to clean electricity." It's weird I think because it's easy to read it as a verb, but it's technically grammatically correct.
Is there a slow down trend in the number of successful companies funded more recently, say in the last 4 years?
I know it takes time for startups to become successful. it just seems that the pre 2015 era had more successful startups. That would mirror the broader trend we see in the marketplace of fewer and fewer successful startups.
When was that ever true? Businesses have always improved something that exists. They don't really exist to create "new inventions".
Sometimes they start that way, but those are the exception, not the rule. For example, Xerox (xerography) and Google.
Apple did a lot of inventing, but they also clearly stood on the shoulders of Xerox PARC, which did a lot more inventing.
Every other company I can think of is not based on "inventions", but more "bringing to market". Netscape was a great tech company, but they didn't invent the web, etc.
Sure, lots of the big tech companies used tech invented elsewhere, but still, they were bringing new technologies to market that hadn't been seen before. Internet access through browsers was big and new. Google was a huge step over the competition. Apple iPods and iPhones big and new. Lower down: databases, network hardware, and so on.
Now it seems like a bunch of micro-optimizations, ways to avoid legislation, or lifestyle products. Not new forms of technology entering the market that really do change everything. The 'change everything' technologies, like Musks' ventures, seem to be a bunch of moonshots (or marshots).
Like you, I assume, I'd love to see more remarkable innovation, but the reality of innovation is that it's mostly a slow grind where most of the value is in optimizing the current paradigm until it breaks and we have to figure out a new 10x paradigm.
There are also dynamic effects where incremental innovation makes future radical/disruptive innovation easier.
Since most technologies are combinations of previous technologies, it's rare to find completely new technologies/inventions, and that's ok.
The fact that to reach their potential, innovation must be diffused through society also bounds the pace at which it can go. As that infrastructure develops, standards emerge that allow for innovation to be distributed faster. But then, in turn, as the underlying technologies improve incrementally, they also ossify as an infrastructure, which might delay bigger innovations.
The question of where the disruption/incrementalism equilibrium lies and what its ideal position can be is very interesting and, I find, understudied.
Everyone is trying driving cars and fully doing so is impossible. Supersonic flight already been done with Concorde. Custom microorganisms are potentially interesting but also seem to lack killer app, except killer bugs.
You're trying to have it both ways - self driving is not an invention because they have not done it yet, supersonic is not because it's done already. By that measure nothing would seem to count. Also cheap supersonic has not been done - Concorde was expensive.
I think self driving is a poorly thought out goal, and driven more by the cult of AI than by sound engineering. I don't believe it is actually possible, except in very restricted areas. It's more one of those things that someone took from a sci fi show than a real engineering problem. I'm not a fan of those kinds of technologies. Making Concorde cheaper is just optimizing something.
It's a bit boring, at any rate. But, seems to be a winning formula for PG. And I guess Sam Altman is going to invent the super AI invention machine that will make all human inventions obsolete.
I'd argue the 'easy' inventions are easy in hindsight. It's part of what makes an idea so brilliant is that everyone considers it so obvious once it's been created. However, before that point, it is not even a glimmer on anyone's radar.
It's alexa rank in US social media websites is #2 behind Facebook. Apart form their redesign shenanigans, people actually like the product they offer (in contrast to facebook) and they are still growing.
I wish Reddit stays in the kind of "grey" area where it never gets as "official" as twitter, despite the popularity. If anything, that might be entirely its appeal.
That predicament will eternally present a glass ceiling for reddit's revenue, but as a consumer I'd rather see that than it going the full facebook -> hyper growth above anything else approach.