Reddit grows up on its way to an IPO

Where (almost) everyone has a say
Where (almost) everyone has a say
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Reddit has traditionally taken a laissez-faire approach to policing content on its platform. The company hosts a loose federation of old-school internet forums, known as subreddits, which are each overseen by a team of volunteer moderators. Reddit sets certain baseline rules banning things like child porn, drug sales, and (as of 2015) harassment. But the rest is up to the users in each subreddit, who set their own community-specific norms and empower unpaid moderators to enforce them.

This is a starkly different moderation approach from Facebook and Twitter, which each set clear, granular, top-down rules in their terms of service and employ armies of contract workers and far-reaching algorithms to weed out noxious content. Reddit’s decentralized policy has become a liability in recent years, and may become even more of a drag as the company eyes an IPO. (Reddit recently hired Drew Vollero, who helped Snapchat go public in 2017, as its first-ever CFO to help prepare for the company’s debut on the stock market.)

Slowly but surely, Reddit has begun exerting more control over content, in lockstep with efforts to burnish its revenue figures and make its business model look more like its dominant social media peers. But that hasn’t been easy. Reddit users have gone into full-on revolt over policy decisions they disagree with. At various points, the powerful moderators of the site’s most popular subreddits have locked their forums in protest, effectively taking large portions of the site offline.

Reddit CEO and co-founder Steve Huffman hopes to quash these rebellions, standardize moderation to a greater extent across the platform, and present a more polished image to potential advertisers and investors. But like the unruly feudal lords of yore, Reddit’s volunteer moderators still hold plenty of power to make trouble for their centralizing king.

By the digits

52 million: Daily active users on Reddit (about a third of Twitter’s total and less than 3% of Facebook’s)

19: Reddit’s current ranking on the list of the world’s top websites by engagement

100,000+: Active subreddits (out of a total of 2,620,000)

~$170 million: Reddit’s ad revenue in 2020

74,260: Estimated number of volunteer moderators looking after the roughly 35,000 subreddits with at least 500 users in 2017

18.4%: Of subreddits with at least 500 users, proportion that are dedicated to porn

Fighting harassment on Reddit

“In my eight months as Reddit’s CEO, I’ve seen the good, the bad, and the ugly on Reddit. The good has been off-the-wall inspiring, and the ugly made me doubt humanity.” —Interim CEO Ellen Pao, in a resignation post at the end of her short, tumultuous tenure

During her 2014-2015 stint as CEO, Pao pushed Reddit to adopt its first anti-harassment policy and take down five of its most overtly hateful subreddits. She also took the brunt of the blame for firing a Reddit community liaison popular among moderators. Moderators knocked several popular subreddits offline to protest the firing and trolls launched a harassment campaign targeting Pao. A Change.org petition calling for her ouster garnered more than 200,000 signatures. Eventually, Pao stepped down and was replaced by Huffman, the current CEO.

Ellen Pao speaks to the media after losing her high profile gender discrimination lawsuit against venture capital firm Kleiner, Perkins, Caufield and Byers in San Francisco, California March 27, 2015.
Image: Ellen Pao | Photo via Reuters/Beck Diefenbach

Brief history

2005: University of Virginia roommates Steve Huffman and Alexis Ohanian launch Reddit with $100,000 in seed funding from Y Combinator.

2006: Glossy magazine publisher Conde Nast buys Reddit for $20 million. That year, the top subreddit is “NSFW” (not safe for work, i.e. porn), followed by “Programming” and “Science.”

2009: Huffman and Ohanian leave Reddit to launch their own ventures.

2011: Reddit splits from Conde Nast as the site hits 1 billion page views per month. Also, the company is forced to shutter the “Jailbait” subreddit, dedicated to sharing sexualized images of teens, after massive public outcry.

2014: Reddit raises a $50 million funding round that includes Marc Andreessen, Peter Thiel, and Snoop Dogg. The site is embroiled in scandal after users spread hacked celebrity nudes on a subreddit called “TheFappening.”

2015: CEO Ellen Pao introduces the site’s first anti-harassment policy before resigning amid massive pushback from users and moderators. Co-founders Ohanian and Huffman return as executive chairman and CEO, respectively.

2016: Reddit introduces a block button to curb harassment.

2017: Reddit raises a $200 million funding round at a $1.8 billion valuation.

2019: Reddit raises a $300 million funding round valuing the company at $3 billion.

2020: Amid anti-racist protests, Ohanian resigns from Reddit’s board and asks that his seat go to a Black candidate. Reddit updates its policies to ban “hate based on identity or vulnerability,” and the site takes down 2,000 subreddits. Also, Reddit raises $250 million at a $6 billion valuation.

2021: Reddit hires CFO Drew Vollero in preparation to go public.


GameStonk’s wild ride

In a now-infamous episode, members of the investment-focused WallStreetBets subreddit inflated the share price of video game retailer GameStop in an act of elaborate vengeance against short-sellers, hedge funds, and the financial establishment. The stock has been on a strange, volatile journey ever since.

Closing price of GameStop over time.

It’s difficult to prove that the redditors’ market manipulation was illegal. But along with the rise of no-cost retail trading apps like Robinhood, groups like WallStreetBets have helped turn stock trading into a game for uninformed small-time investors—with potentially grave consequences for the economy.


Dive in

Looking for an online community? Here are some subreddits you can try:

👶  r/explainitlikeimfive: Complicated concepts, explained simply.

💡  r/todayilearned: Users share fascinating factoids.

📈  r/dataisbeautiful: Data geeks (and the occasional Quartz reporter) share gorgeous charts, maps, and other visualizations.

🖼️  r/photoshopbattles: One user posts an image. The rest compete to photoshop it in the most creative way possible.

📜  r/100yearsago: History buffs post things that happened exactly 100 years earlier.

🤺  r/theocho: A collection of posts about obscure sports from around the world.


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