reddit has more than $50MM in the bank, which will last many many years.
At some point the business needs to be profitable. Monetizing AMAs does not seem like the right way to do it to me, but again, Steve's call. Ads will work but it'd be great to figure out something better that actually makes reddit better.
What worries me is the trend of Silicon Valley darlings like Reddit, Uber and AirBnB that aren't profitable but still in business.
From a monetization point of view Reddit isn't going to be different than any other news channel out there. It's not a question of quality and never really have been. Not enough people pay for quality content. Yet newspapers and VCs keep this illusion alive.
It seems like lots of VCs trying to milk companies that aren't making any money.
There is probably something I am not understanding but it seems like the emperor gas no clothes and it's only a question about when the boy is going to say the obvious.
Amazon could easily be profitable if it wanted to be. If you're gunning for "the Walmart of the Internet", it's reasonable to take your time and get it right. It took decades for Walmart to perfect the formula.
They're not the same company as Amazon, and that wasn't my claim. My point is just that being the Walmart of ${some big sector} is a prize worth waiting for. In fact: we still don't know how big a prize it is, because Walmart is still expanding.
For Amazon maybe maybe not, for the consumer sure. But I am beginning to doubt whether this is a good thing for society in general. Something is not adding up.
Yes I understand the Amazon strategy of replacing growth with profit and it has kept them alive for a long time now. I do question whether they can maintain this forever though and I do question whether their venture into delivery is the right one as they seem to be loosing more and more there.
Think about that valuation, think about Uber that makes 400m a year and looses the same. How many years do they have to be in business to make those money back and ever honor that valuation?
It's completely absurd IMO, but as I said there might be something I am not understanding.
They can be profitable and still be in a position where they can convert investment dollars into new market share. If you've got a machine that you can pour money into and get even more money out, why wouldn't you use it? Especially in 2015, when money for companies like Airbnb is cheap.
It's not whether I would use it, the problem is that it seems like you are foced to do that to stay in business even without have an actual business that has the revenue to support the valuations.
It reminds me more of a game than anything, and maybe thats what these kind of business have turned into. A big game with no need to ever make any proper money. Just a giant "pyramid" scheme to milk money out of the late comers, just like the housing market.
I perceive the same thing, but when you choose Airbnb to illustrate the phenomenon, you have to back it up. Airbnb is a weird choice, since it's so clear where their revenue comes from.
What i react to with Airbnb is that their current postions and current revenue after all this time and looking at how successful they are still isn't enough for them to support their own growth.
I understand how the market work but I am not sure I understand why this is a good strategy unless as a business who want to be around. There will always be competitors always be someone biting them in the behind just like with Amazon btw.
If thats what it takes to be in business thats what it takes but it's hard for me to get my head around why this is healthy or normal.
I'm not sure if "their competitive dynamics are similar to Amazon's" is helping your argument, since one of the last things I'd ever want to do is compete head-on with Amazon in one of their core areas.
I am not making an argument I am not trying to convince you of anything. I am trying to understand whats going on and so far I haven't heard anything that changed my feeling that somethings gotta give in all this.
But you have to turn this around and ask why is Amazon feeling like they have to grow when they can be profitable if it's not that they are afraid to be outcompeted at one point.
You can be raining money but if you spend more than what you're making, you're not profitable. Of course, it is not a bad thing to be unprofitable for a period of time. In AirBnb's case, it is almost certainly better for them to NOT be profitable and instead to spend ever potentially profitable dollar on getting more marketshare.
In a world where crowd sourced moderation is the norm, why they don't hire some dependable, low-paid college kids to help triage that amount of communication is so very strange to me. You do realize these people work for near "resume boost" only, right?
I suppose the biggest issue isn't in a 20-something intern being able to field thousands of words a day, but rather in trusting them not to leak anything or generally tow the line.
Personally, I hope voat.co focuses more on the community rather than the sum of a few corporate-bound individuals.
On a meta note, I'm curious what parameters are ideal for AMA's. I say this as Sam's AMA has been up for 3 hrs, has ~1k comments, yet you have to scroll past a drove of noisy, repetitive posts. Forgive me for overgeneralizing, but I seem to get turned away as the audience for these things increase.
Does anybody else find it weird that he kept asking about an android app when there are many reddit android apps that work just fine? I'd like to know what he's looking for in an android app that he hasn't seen yet. I personally use 'reddit is fun'.
These guidelines are rarely followed anymore. I've been seeing/feeling negativity over here for a long enough time now. Don't know when, but I'll surely quit HN soon. It's like a habit that I have to get out of.
Didn't downvote you, but as he didn't post it here, it's probably not the right idea to set an expectation that he will, and HNers love etiquette as much as they love computers.
What worries me is the trend of Silicon Valley darlings like Reddit, Uber and AirBnB that aren't profitable but still in business.
From a monetization point of view Reddit isn't going to be different than any other news channel out there. It's not a question of quality and never really have been. Not enough people pay for quality content. Yet newspapers and VCs keep this illusion alive.
It seems like lots of VCs trying to milk companies that aren't making any money.
There is probably something I am not understanding but it seems like the emperor gas no clothes and it's only a question about when the boy is going to say the obvious.
Whats going on?