The Story of Reddit 🧡

Alexis Ohanian needed a plan, and he needed it fast. His senior year of college was approaching, and he had no clue what he wanted to do with his life.

Luckily, his best friend, Steve Huffman, came to him with what sounded like a million-dollar business idea. And then that business totally crashed and burned.

So, how did two broke college kids with a failed business end up creating one of the most popular websites ever? And what really happened to Reddit’s forgotten founder, who nobody talks about?

Reddit’s history is filled with scandals, lies, money, and death. As Reddit has been involved in countless controversies - including its own users turning against the site.

Welcome to the insane story of Reddit 🧡

Alexis Ohanian was relentlessly bullied as a child for his weight and his “girl name.” But he found an escape on the internet in the late '90s. Teaching himself to program, he built websites for nonprofits from his parent's basement.

In 2001, he enrolled in the University of Virginia to study computer science. However, his life changed when he met Steve Huffman, a fellow self-taught programmer. They bonded over video games, but Alexis soon felt not good enough as a programmer compared to his peers.

Because he was scared of disappointing his family, Alexis switched his major and aimed for a safe career as a lawyer. But when the time finally came, and Alexis sat down to take the law exam he’d spent months preparing for, his mind began racing with visions of his future life as a lawyer – a plain suit, a boring desk, a demanding boss, and mind-numbing contracts.

Alexis began to realize he might regret going down this path, as clearly, law wasn’t something he actually cared about. So, at that moment, he did something no one expected: He literally walked out in the middle of the exam and kept walking until he reached the local Waffle House.

Over breakfast, he dreamed of building his own company and making a real impact on the world. He was excited but had no plan where to start.

Alexis told Steve “I don’t wanna have a job I hate, we need an idea”. But luckily, Steve was already way ahead of him. While Alexis had been working towards law school, Steve had already come up with a business idea. One day while refueling his car, Steve stood at the pump thinking about what food he wanted to order inside the store that was attached to the gas station. But then he thought to himself: what if he could use his cell phone to place the order while he was standing at the pump?

The idea could work for any restaurant—rather than waiting in a queue when you get there, just order from your phone when you’re nearby, so the food is ready by the time you arrive. When Steve explained this idea to Alexis, he loved it. And Alexis even came up with the name—MyMobileMenu, or Mmm…

(Actually, I had the exact same idea in 2017 when traveling to the US and seeing the line in front of In-N-Out Burgers😅)

And so in 2004, the pair partnered up and spent their senior year of university working tirelessly on their new startup.

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However, back then, this was the most advanced phone on the market👇

And so Steve struggled to figure out a way to build the technology they needed for their mobile food-ordering tool. This was before we had smartphones with internet connection or the app store, and thus they had to rely on SMS. As a result, connecting to the existing ordering systems that stores and restaurants used was a very hard technical problem to solve.

Meanwhile, Alexis tried to pitch MyMobileMenu to local restaurants. Many restaurants at the time didn’t even have websites, and the owners couldn’t understand the vision. In many ways, their food ordering idea was simply ahead of its time.

During spring break of their senior year, Alexis and Steve skipped the usual beach parties and drove 500 miles to Cambridge to hear Paul Graham's talk at Harvard about “How to Start a Startup.” Afterward, they asked him for a coffee chat to pitch him MyMobileMenu. Paul was impressed and agreed to listen. He liked their idea and said it could eliminate waiting in line for food.

So just a few weeks later, Paul emailed to say he was launching a new initiative called Y Combinator, an accelerator program designed to provide funding and mentorship to startups. Alexis and Steve were thrilled to be invited to join the first class of Y Combinator in 2005. They’d still have to pitch their idea to a panel, but since Paul had personally invited them, they felt confident they would get accepted.

Ultimately, the panel of investors just couldn’t see how Alexis and Steve could build a mobile food ordering tool with the technology available at the time. They were also worried that Alexis and Steve—two college kids—wouldn’t have enough connections in the restaurant industry to make MyMobileMenu work.

So their Y Combinator pitch was rejected, and while they were traveling back, Paul actually called them and explained just how little the investors believed in their idea…

However, Paul also had some good news. Although the investors didn’t think MyMobileMenu would work, they really liked Alexis and Steve. Paul told them they could be part of Y Combinator under one condition: they had to come up with a better idea. 

Alexis and Steve literally got off the train at the very next stop, went right back to Boston to see Paul, and began brainstorming a new idea instead.

And whilst they didn’t know it at the time, that next idea, was going to change everything.

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Alexis and Steve officially dropped their mobile food ordering idea. Paul Graham said that mobile tech wasn't ready yet and suggested they focus on something for web browsers since more people could use it. His advice was: build something that solves your problem every morning.

By 2005, tons of content was popping up online, and Alexis and Steve saw the need to gather it all in one spot. Some sites were already doing this, like Slashdot for news and Delicious for bookmarking links, but they had issues like random moderators or were too different from what they envisioned.

They wanted a site where anyone could share any content, with users voting up or down to pick the best stuff. Basically, it would be the internet's front page.

They played around with names like 'Oobaloo,' 'Snoo,' and '360scope' before settling on 'Reddit' so people could say, 'I read it on Reddit.'

In spring 2005, after graduation, armed with $12,000 from Y Combinator, they moved to Massachusetts to work full-time on Reddit, barely leaving their place and working nonstop.

Paul Graham soon emailed them asking why Reddit hadn’t launched yet and pushing them to get a beta version out ASAP. So they put live a very basic, barebones version of Reddit. Unexpectedly, Paul then linked to Reddit on one of his blog posts, which brought them their first 1000 visitors.

Reddit was now live! 

But whilst they did have a functional site, it was missing something pretty crucial: users. Alexis tried everything—flyers around Boston, asking friends for help, pitching it at Y Combinator—but the problem was that because they didn’t yet have many users, they didn’t have much content.

So Alexis and Steve faked it till they made it by creating hundreds of accounts and posting content themselves. Eventually, real users joined in, and by summer’s end, Reddit had over 12,000 daily users.

Back then, the homepage was just one page of links with popular ones at the top but no categories. This sparked a big debate between Alexis, who wanted tags for organization, and Steve, who thought tags were too subjective and worried that users might never find common ground on how to tag content. They settled on creating separate communities called Subreddits for different topics, which turned out great!

The very first Subreddit was actually the Not Safe For Work Subreddit, but they soon added others like science, programming, and politics. And this proved to be hugely popular. Up until this point, internet forums had been used for niche communities, but now Reddit allowed all these communities to be on one single site. And thus, things were looking bright for Reddit.

And it’s fair to say things got even more interesting when Alexis and Steve got introduced to a guy called Aaron Swartz.

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At 18, Aaron Swartz was an awesome programmer working on Infogami but struggled with funds and support. On his 19th birthday, Paul Graham suggested merging with Reddit to solve his issues. They formed Not a Bug, Inc., giving equal shares to Steve, Alexis, and Aaron. Aaron had some unique habits but his skills improved Reddit greatly. They added comments and karma systems to the site. However, tensions grew because Aaron referred to himself as a co-founder of Reddit, which Steve and Alexis didn't think was fair.

Reddit grabbed the interest of Condé Nast, a huge media company known for magazines like Vogue and Vanity Fair. They were aiming to expand online and had already bought Wired.com, so Reddit seemed like a perfect addition.

Despite being only a year old, Reddit was growing fast, and since users created all the content, Condé Nast wouldn’t need to hire writers. The founders didn’t plan to sell, but at 23, 22, and 19 years old, getting an offer worth millions was hard to ignore.

On Halloween 2006, the deal closed for around $10 million. They became millionaires but had to stay with Reddit for three more years. Condé Nast promised them freedom and more resources to grow Reddit faster.

Everyone was giving their all to make Reddit awesome and impress their new bosses... except for Aaron. Aaron thought Reddit should be a platform for the people to stand up to big corporations and governments.

So, Aaron felt like a big company owning Reddit just didn't fit. He hardly ever showed up at the office and even blogged about how much he hated it, saying the new office had 'Gray walls, gray desks, gray noise.'

On his first day there, he locked himself in a bathroom stall and cried at lunch. Eventually, Alexis, Steve, and Condé Nast's leadership got fed up with Aaron and fired him in January 2007.

In 2011, Reddit was bought back from Conde Nast through a spin-out and subsequent fundraising. Sam Altman, an investor with an 8% stake in Reddit, even briefly served as interim CEO.

In March 2012, Yishan Wong, who was once part of the PayPal Mafia, became the CEO of Reddit. The site was getting billions of views each month and was becoming more popular. Even President Barack Obama participated in an “Ask Me Anything” on the platform.

However, this growth led to some issues for Reddit. The ability for anyone to create a subreddit meant there were some disturbing communities, like those about watching people die and cannibalism. Because Reddit is more anonymous than other social media, it faced more abuse. This included extremist groups, hate speech, and controversial posts. 

In 2014, Yishan decided to leave his CEO position after just two years because he didn't get along with the board and found the job super stressful.

Reddit was in crisis mode, and its future seemed bleak. It was time for a new CEO, and Steve Huffman returned in 2015 to take the reins. Alexis soon came back as Executive Chairman as well.

During this time, they thought of 4 ways to make more money:

• Reddit Ads

• Reddit Awards

• Reddit Premium

• Reddit’s API

In April 2023, Reddit decided to charge money for using its API, which lets other apps use Reddit's data. One popular app was Apollo, which let people use Reddit in a different way that many liked. But then Reddit said it would cost 24 cents for every 1000 requests, which would be over $20 million a year for Apollo. They couldn't afford that, so Apollo had to shut down.

This led to a protest in which many subreddits were closed, making parts of Reddit inaccessible. Even though people hoped the protest would change things, Reddit didn't back down, so the changes went through. Reddit said they needed this because they weren't making money (still unprofitable) and third-party apps were costing them too much.

Reddit went public in March 2024 under the ticker symbol “RDDT”, closing its first day of trading at a market cap of $9.5 billion

Reddit is huge, with about 430 million users monthly in 2023. Despite being around for nearly 20 years, it hasn't made a profit. Still, users have done great stuff, like raising money for charity and organizing a giant Secret Santa.

When you Google something, Reddit often has the answers. The best example of Reddit's power was in 2021 when the Wallstreetbets subreddit made Gamestop stock soar from $3 to $483, hitting hedge funds hard and making users rich.

Reddit’s future profitability is unsure, but its users are both an asset and a challenge.

Thank you for taking the time to read the story of Reddit.

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