It's easy to correctly say that they're not using 2000 employees to keep the site running.
I'm sure they've thought of keeping costs low, and I'm sure they could lower costs by a lot and know it. They choose not to.
They're not forced into their current path.
But it makes sense when you look at that VC money. Just being profitable would be a failure. Chase billions of revenue or die trying.
Or to put it a different way, if reddit spent $100M a year on employees and offices and $100M a year on servers, they would have amazing profit margins already.
I don't think you work in large enough company. Everyone always does this type of napkin math, and then hand waves away a lot of the details. I mean, why does Meta need 70K employees to run three apps?
I'm sure the VCs first playbook was to start cracking down on expenses, since it's typically easier to get results from than improving revenue....
Meta is one of the clearest examples of a company that is spending most of their budget outside their main product, so I'm not sure what you're trying to show.
They aren't spending most their budget on VR. What do you think the budget is for the rest of the company? Far as I can tell with a 10 second glance at their financials: 60B year operating expense vs 10B year in their VR spending?
It is easy to say from the outside.. but everyone else seems to make it work.
What makes reddit so special it shouldn't be able to afford to pay for itself? It doesn't make sense. Every social media company with this kind of massive userbase appears to be able to make good money, why not reddit?
Sure, maybe they cant make Facebook levels of cash - but 10th most visited website, with what should be low hosting costs (mostly text), should be more than sufficient. If they can't make it work, they'd need good reason to explain what makes them different, IMO.
They didn’t, in case you aren’t in the industry of VC, they all want to go big or to go bust. There’s no culture of reasonably sustainable business model
