Reddit and its initial copied idea | Product Stories #1

Welcome to the first edition of Product Stories. Product Stories is a weekly newsletter where I send out 1 well-researched mail every week about a popular product and it's early history. If finding out the initial DAU/MAU ratio of Reddit or pivots of Slack or initial growth hacks of Tinder sound interesting to you, then you might want to check out Product Stories here. 

The first product that I have chosen is Reddit - a company that thousands of startups have tried to emulate but always failed to do so. Let’s look at why that is and what’s so special about Reddit.

Did you know that the idea for Reddit was not conceived by its cofounders?

Did you know that almost all of Reddit was just porn shortly after its first year?

Did you know that it did not have any traffic for the first month of its launch?

Well, I didn’t. And here is my attempt at retelling Reddit’s early history in as brief/accurate as I can.

What’s Product Stories?

• “Best product people are historians of their industry” - Jeff Morris Jr

“Product Stories” is my attempt to write about origin stories of some popular products and cover some of the less covered aspects of startup products like their metrics when they had just started, how long did it take to finally take off, how fast or slow were they in launching v1 of their product, initial target market and how they stumbled upon it, their failed experiments, etc.

How the “Reddit” idea was born 

This product story starts with a “rejection”. Reddit was officially started when Paul Graham (co-founder of Y Combinator) rejected Alexis and Steve’s idea for investment as part of Y Combinator’s first batch. Instead, he showed them Slashdot (a social news website then) and asked them to build something similar and he would give them $10k for the summer to work on it.

This part of Reddit’s journey is interesting because this is one dilemma that a lot of founders face - go with their own conviction/idea or change direction and choose an idea someone else suggested. Even more interesting is that Steve and Alexis had not even started work on their “food ordering app” idea. Without even trying their own idea, they chose the idea Paul gave them. This probably made the choice easier as unless you start working on an idea, you never really get the conviction.

I wonder what would have happened if Alexis and Steve had applied after 1 or 2 months of working on their original idea (and seeing some initial user validation).

A lot of people generally advise founders to follow their own convictions and not listen to VCs who give certain “trending” ideas. Well, here is one example of where the opposite happened and worked out well.

Another point of wondering is, what would have happened if Alexis and Steve would have stuck to their original idea of “food ordering app” and worked on it a couple of years only to realize it was early. Probably they would have been too burnt to start another company then. Lots of startup journeys end up this way because of the founder’s chose the wrong market for them. Luckily for both of them, they had Paul Graham guide them to the right market/idea.

Even though the idea was a copy of an existing product, they did not blindly copy it. They took the idea from Slashdot/Delicious but realized early on that it would be the recommendation system (the upvote/downvote mechanism in their case) that would be key. The lesson here, it’s okay to copy as long as it’s mindfully done. Especially since building a consumer tech company is catching lightning in a bottle and if you try to be original all the time in all your features, you might be in for a tough ride. It’s easier to copy things that work and try to deliver the most value to your user with your use case. Another case in point, Instagram taking “Stories” feature from Snapchat, and then using to enable the next wave of content creation on Instagram.

Idea to MVP: No users after the first month of launch

Steve and Alexis built the prototype and launched it within 20 days. 20 days is really fast even by today’s standards (when a lot of standard libraries exist and development time has drastically reduced).

To do it back in 2005, is really a splendid task. One really needs to internalise the “Launch fast and iterate” philosophy of building products in order to do that. Apparently, Paul Graham used to mail them twice a day “checking in” for progress, which made them push harder to launch (a fine line to walk for an investor, but alright!). Reddit would be a classic example of “launch fast and iterate” model of building products.

This is what it looked like after the first 5 minutes of launch:

Notice that there were no subreddits and no commenting. But they did have Karma points (Reddit’s gamification mechanism where users get points for submitting content to the site) from the very beginning. Often products launch gamification as an afterthought to increase their retention/engagement, but here is an example of a successful company that did it from the start. I am sure it helped in building “the community” that eventually became their differentiator.

This is how Reddit looks now:

Reddit now has subreddits as a way to group content/people, threads, upvoting/downvoting on comments, moderator control features, karma points, Reddit Gold and so many more features. But they started it all with just a mechanism to submit links and earn Karma points. 

Another point to note is that they did not have any major traffic for a month after launch. (crazy by today’s standards but it was 2005. Simpler times!).

Early metrics

Reddit got their first couple of hundred users after a month of releasing it when Paul Graham posted Reddit’s link on his blog. But the first couple of hundred users that Reddit got, were not just any users. They were all the internet’s power users (because that was the audience of Paul’s essays).

Reddit reached 1mn monthly readers(MAU) and 70,000 daily readers(DAU) 16 months after it was launched (7% DAU/MAU; which is terrible considering today’s standards for a consumer startup but thankfully Reddit persevered).

This is interesting as when Reddit was started, metrics such as DAU/MAU were not very popular. Retention was not the most important thing every consumer founder looked at. Analytics tools for measuring these metrics also did not exist. This ignorance I think turned out to be bliss for Reddit as well some of the other less instantly viral products of the time.

Too much focus on metrics in the early days of a startup leads to a lot of self-doubt in founders. Partly because founders compare their crappy metrics (which are always crappy as it is early days of their product) with metrics of successful products. It might more productive to look at subjective user feedback instead of chasing metrics during the early days. There is still merit in looking at metrics and being aware of it, but optimizing too much of them early on might not be the best strategy for all.

On this slightly confusing note, I will conclude this article.

We will talk about part 2 of Reddit’s journey in the next edition where we will talk about

• When Reddit achieved its PMF
• How they solved for the chicken and egg problem of marketplaces
• How Reddit was almost porn in the first year

So please, do subscribe here to receive the next edition.