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0:28

Those things happening on Reddit that

0:32

I thought were bad for business, bad

0:35

for morale, and

0:38

bad for the world. And

0:42

so that's when we had to start wrestling with

0:44

hard decisions. We couldn't say,

0:46

hey, just everything goes. I

0:49

was watching it die. Like we were

0:51

there watching it eat itself.

0:54

This was 2015. Steve

0:56

Huffman, one of Reddit's co-founders, had

0:59

just returned as CEO after watching

1:01

the site he built from scratch

1:03

struggle to survive. When

1:06

I came back to the company, employees, they

1:08

wouldn't wear a swag in public because they

1:11

didn't like what was going on and what

1:13

was being written about Reddit. But then

1:15

I would ask them, he's like, okay, if

1:17

this is so difficult for you, why

1:19

are you here? Like, why do you

1:21

work here? And they'd say, because I

1:23

love Reddit, because I love what it does

1:25

for people, because I know that 99%

1:27

of Reddit is amazing and there's nothing

1:29

else like it. And Reddit has changed

1:31

my life. And

1:34

that's what I'm fighting to protect. I was

1:37

like, great, then

1:40

let's protect that. And

1:43

so that's what we got to work on. Steve

1:48

Huffman co-founded Reddit with his college roommate when

1:51

he was just 21 years old.

1:54

In the nearly two decades since, he and

1:56

the site have both grown up a lot.

1:58

Earlier this year, Reddit... often referred

2:00

to as the front page of the internet,

2:02

had its IPO. It was valued

2:05

at $6.5 billion. You've

2:08

got to

2:11

have incredible talent at every position. There are fires burning when you're going

2:13

out. Can

2:16

you believe it? Such

2:19

an idiot. And then you go back to,

2:21

this is totally going to be amazing. There are so many easy ways. I

2:25

have no idea what to do. Sorry, you made a mistake.

2:27

But you have to time it right. Oops.

2:32

It just seems absolutely nutballed ten

2:34

years later. Well, that's just

2:36

how you do it. We haven't made just how

2:38

you do it. This

2:42

is Masters of Scale. I'm

2:47

Reid Hoffman, your host. I was eager to talk

2:49

to Steve Hoffman about

2:53

Reddit's unconventional business, but first I wanted

2:55

to talk to him about the scale

2:57

of Reddit's impact on our digital culture.

3:01

Steve, I've been looking forward to this for months.

3:03

Welcome to Masters of Scale. Thank you.

3:06

I'm excited and honored to be here. How

3:09

do you think about Reddit's role on the

3:11

internet and the online ecosystem? And

3:14

what are the things that it's for and is

3:16

an essential part of and part of the internet

3:18

treasure of and what is it not for? The

3:22

saying I say a lot is that Reddit is people. The

3:25

idea of Reddit is that it both

3:27

reveals people and empowers

3:30

people. And that

3:32

was one of the important ideas that was

3:34

in our mind back in 2005

3:36

when we started Reddit. And

3:38

it's still one of the ideas we

3:40

come back to often. We

3:43

start from a principle of free

3:45

expression or free speech, but

3:48

there's I think also a parallel principle,

3:50

which I think is really important, which is this

3:52

kind of idea of decorum. How

3:54

are you speaking? How are you treating others? Separating

3:58

behavior and beliefs. And

4:00

so we try to spend a lot more time on

4:03

behavior than we do on beliefs. And

4:05

so that gets us into our content policy. So when we

4:08

started writing 2005, there basically was no content policy. You know,

4:10

we thought everything should be allowed. Like who are we to

4:12

say what's not allowed? Easy to take

4:14

a position like that when, you

4:16

know, this really wasn't any bad behavior on the platform. You

4:18

know, maybe some spam here or there, but we just didn't

4:20

have difficult decisions to make. Now

4:23

our policy is much more

4:25

robust and constantly evolving.

4:27

So no hate, harassment, bullying,

4:29

no spam, nothing illegal, no

4:31

inciting or glorifying violence, no

4:35

involuntary sexualization, nothing involving kids. And

4:38

there's a lot of kind of sub rules and things like that.

4:40

But we've, I think had to

4:42

adapt as we look at like, how are

4:44

people using the platform maybe in ways we

4:46

didn't intend in adapting that while still trying

4:48

to preserve the core idea that people should

4:50

be able to converse and debate and argue

4:52

and talk about more or less whatever they'd

4:55

like. I think, you know, probably

4:57

the most common brand for

5:00

internet discourse is it's uncivil. You

5:03

know, that there's a lot of polarization, you

5:05

know, hate speech, et cetera. What other

5:07

things you do to try to

5:09

encourage the positive aspirations of

5:11

human discourse? Okay, it's

5:13

a great question. And I think I have

5:16

a couple of ways of thinking about it. So

5:19

first is the general way when

5:22

we think about people and how people behave. When

5:25

two people are

5:27

together in person, they

5:30

generally get along. Even

5:32

the far left and the far right, like to

5:34

take extremes in the United States right now, chances

5:37

are in their day-to-day life,

5:39

the vast majority of what they're going through or

5:42

would talk about, they have in common. Right, maybe

5:44

their parents, maybe their sports fans, maybe they watch

5:46

the same TV shows or movies. That's

5:48

just one, I think, just fact. It's like

5:50

people generally get along when

5:52

they're together in person. So on

5:55

Reddit, every conversation you have is in the

5:57

context of a community. You're

5:59

not just... yelling into the ether. Communities

6:01

have rules. They have written rules. They have

6:04

unwritten rules. So this kind of idea of

6:06

decorum. There's a social

6:09

pressure to behave according to

6:11

the rules of that community. If

6:14

you don't, you'll be downvoted and you'll

6:16

be silenced by your peers, which

6:18

by the way, getting feedback from

6:20

your peers like that is way more

6:22

powerful than getting feedback

6:24

from the company or the man.

6:27

When your friends tell you, hey, you're being

6:29

rude, that's very different from your

6:31

parents telling you being rude or the

6:34

government, right? What things would you suggest

6:37

as things to do to

6:39

improve online interaction

6:43

culture? I think

6:45

a lot of it comes down to incentives.

6:50

If you look at the incentives of social

6:52

media, a lot of

6:55

it is about there's a strong attachment

6:57

to your real world identity and status.

7:00

And so people are saying things, I

7:03

think, not necessarily because they believe them,

7:06

but because they want to be perceived

7:08

as believing them in the real world.

7:11

And they want to be accepted by

7:13

other people who they perceive to

7:15

believe these things. There's

7:18

a kind of a showmanship or

7:20

performative aspect to it. And

7:22

I think what happens

7:26

is there's this kind of

7:28

drift to the extremes, Reddit

7:30

has the upvote, Reddit also has

7:32

the downvote. And so that's where community can

7:35

reject behaviors or whatever they

7:37

don't like. I think this is really

7:39

powerful because if you're extreme or polarizing, chances

7:42

are you'll get just as many downs as you

7:44

do ups. And so it kind of cancels out.

7:48

Whereas I think elsewhere on the internet, you just get a

7:50

lot of ups because it

7:52

can be more attention grabbing

7:54

or emotional or whatever. And so

7:57

on Reddit, the controversial

7:59

stuff. sits at

8:01

zero points, right, ups minus downs.

8:03

And so we get a kind of a

8:05

better outcome there. It's humans behaving more humanly.

8:08

I think that's really powerful and

8:10

they don't get credit for it. The only thing they get

8:12

is a little bit of karma on Reddit, which,

8:15

you know, I guess is worth more than zero, but you

8:17

can't take it with you. You

8:21

know, as CEO, what do you look

8:23

at as like a dashboard for, you

8:26

know, what's going on with Reddit? I mean,

8:28

obviously there's questions around, you

8:31

know, revenue and engagement, all kinds of stuff.

8:33

And, you know, that's interesting too, but I

8:35

was kind of, I'm curious if there's anything

8:37

else that's kind of very Reddit-ish about your

8:39

dashboard. Oh, that's interesting.

8:41

So look, there are dashboards with,

8:44

you know, revenue and users. And

8:47

of course there's another layer of metrics that we

8:49

really care about, you know, number of advertisers

8:52

from this company's and retention, you

8:54

know, customer retention and new user retention, all these things. But

8:57

for better or for worse, I

9:00

use the Reddit app a lot. And

9:03

so I've been working on Reddit for 19

9:05

years. A

9:08

lot of how I think about Reddit comes not

9:10

from the numbers, but from the feel of using

9:12

the app. I

9:14

feel like I am, my

9:17

intuition is constantly being refined and

9:20

that's what I take to the team. It's like,

9:22

hey, I think I see an issue here. And

9:24

so from a kind of product

9:28

development point of view, I

9:30

think we went through a phase at Reddit, which I think a

9:32

lot of startups go through where

9:34

they actually put their intuition aside and

9:37

they only look at numbers. I

9:39

think it's really hard, if not

9:42

impossible, to run any company or system from

9:44

a spreadsheet. And I think there's a

9:46

little bit of this kind of false

9:49

ideal about what we're gonna be so scientific

9:51

and disciplined, you know, put metrics on everything.

9:55

And test everything. But you lose

9:57

some of the most important information, which is

9:59

like... Is it working? Is

10:01

it good? How does it feel? Like, do

10:04

I enjoy this? Do I see other people enjoying it? And

10:06

so for the last couple of years, I've actually been

10:09

working really hard to give the

10:11

team permission to listen

10:14

to their gut more. Honestly,

10:16

I think the company is getting much better at it, but that has

10:18

been a real piece of work over the last couple

10:20

of years. No, I couldn't

10:23

agree more that it's kind of a combination of,

10:25

it's kind of like combination art and science, combination

10:27

of intuition and data, you know,

10:30

and hitting both is what's

10:32

actually in fact very important. Right.

10:34

Looking solely at data, I think at best

10:37

you can optimize to a local maximum. To

10:40

do something new, you have to have some vision

10:43

for the future. And

10:46

then you have to take a few swings at it. Of

10:48

course you'll be wrong along the way,

10:53

but to get there, you have to make

10:55

a few leaps. Now, and

10:58

then there's the other side of that, which

11:00

is you do want to test your intuition

11:03

and see, okay, I have this belief, this

11:06

hypothesis. If we build this, it this way, users

11:08

will like it. And

11:10

so we build it. And then you

11:12

have to wait a little bit to see, do they like

11:14

it? And there's a really important step, I think in there,

11:16

which is do I like it? And

11:19

I know we've built stuff at Reddit over the years where we

11:22

didn't like it, but

11:25

we pressed on. And so like, for

11:27

example, we used to be very aggressive on

11:30

mobile web when you come from search,

11:32

external search, about getting you to like

11:34

log in. And it's like, yeah, it

11:36

made the numbers work, but we all hated it. And then our

11:38

users hated it. Even our investors hated

11:40

it. And so it didn't pass the first

11:43

test, which is like, we didn't like it. How

11:46

do we build

11:49

better towards a shared context where

11:52

we have increased trust

11:55

in information, in

11:57

kind of like, you

12:00

know, what is the state of the world?

12:02

What is something we should, you know, build

12:04

bridges versus polarization? What do you think the

12:06

techniques we should do to

12:08

try to build in that direction? The

12:12

mistake I think

12:14

we continue to make is

12:17

at kind of all different

12:19

levels. I see people do

12:21

it, I see companies do it, I see the media do

12:23

it, I see government do it, is

12:26

they keep trying to take more

12:28

control. I don't

12:30

like what people are saying or I don't like what

12:32

I'm hearing or I don't like the way this conversation

12:35

is going. Therefore, I

12:37

need to take more control, hold

12:39

on even tighter. I

12:41

think the solution is to

12:44

resist that urge because

12:46

that control, that manicuring the message,

12:49

kind of pushing people into

12:51

the desired outcome is

12:53

what creates that sense of distrust, that

12:56

sense of I am being manipulated, I

12:58

am being controlled, I am being constrained.

13:03

You know, I'm thinking around the discourse

13:06

that's had around, you know,

13:08

vaccines, which, you know, frequently got

13:10

idiotic, you know, or things, some

13:13

online discourse, you know,

13:15

QAnon, et cetera. What are

13:18

the things you think are key for

13:21

making those approaches that still, that aren't

13:24

exerting control, but are building trust in

13:26

shared reality? Transparency.

13:30

I think in that era,

13:32

and honestly, we still do, I think, like

13:35

we lacked transparency. I think broadly, I think

13:37

for a leader to be credible, they

13:40

have to share the bad news along with the good news

13:43

because anytime somebody

13:45

is telling you only good news, you

13:48

know there's something missing because there's always

13:50

trade-offs. And I think as

13:52

a general rule of thumb, the more kind

13:55

of emotional they are, the

13:57

more suspect. the

14:00

message should be. But I

14:03

sense there's always this fear and this is one of the things that drives

14:05

me nuts is this

14:07

distrust of people. People

14:10

can't handle the truth. That

14:12

creates more distrust. Yeah,

14:15

no, you have to give trust in order to get

14:17

it. Which that structure

14:19

of that sentence I think is

14:22

really important. You have to

14:24

give trust to get it. If you want people to

14:26

behave like adults, you have to treat them like adults.

14:29

If you want to have good friends, you have to be a good friend.

14:32

That sentence structure is just, I just

14:35

clued onto it because it's just one

14:37

of the things I use a lot in my

14:40

day-to-day life. Reddit

14:43

is not a generative AI company, but

14:46

Reddit's name does come up a lot

14:48

in conversations about the business of AI.

14:51

That's because it's such a rich and

14:53

dynamic trove of data, so many human

14:55

interactions that could be used to train

14:57

large language models. And indeed,

14:59

Reddit has struck deals with Google

15:01

and open AI. So I

15:04

wanted to talk to Steve about both

15:06

the opportunities and threats to his business

15:08

from generative AI. At

15:13

the minimum, I think we can all agree, large

15:16

language models are incredible

15:19

at text and words. So

15:21

I think LLMs across

15:23

the board are going to

15:26

revolutionize and hopefully reduce the

15:28

amount of time we spend

15:30

doing this drudgery, like word

15:32

processing. So that's very exciting.

15:35

So I think a tremendous amount of opportunity

15:37

there. The other interesting dynamic with

15:39

Reddit is of course, our corpus has been used

15:41

as a training set for all of

15:44

the major LLMs. We're getting closer

15:46

to with our permission part. That's

15:49

been a little bit of a journey. But

15:52

I'd say taking the business relationships

15:54

out of it or the IP

15:56

conversation out of it, I'm very

15:58

proud that Reddit at it has

16:01

played a role in the development of

16:03

these technologies. That's

16:06

part of our validation of our belief in the

16:08

open internet, which is we'd

16:10

like these things to be accessible and used

16:12

to advance the state of the art.

16:15

That part is interesting. Now, of course, part that I

16:17

think is general across IP

16:19

holders is we

16:22

can't give it away for free because

16:25

that undermines the IP

16:28

creation incentives, the

16:30

IP creation business. Whether

16:32

you're talking about content on Reddit or

16:34

newspapers or books or music or

16:36

movies, there's a lot of

16:38

human thought and work went into the creation of that

16:41

IP. AI,

16:45

one of the things we've learned with these models is they need

16:47

to be continually training, absorbing

16:50

new human intelligence. You can't have

16:52

artificial intelligence without human intelligence. I

16:55

think practically there's an ecosystem,

16:57

there's a balance here that's really

16:59

important, which is if

17:02

the human intelligence isn't compensated fairly,

17:04

then the AI will eventually lose

17:06

access to it. It'll

17:08

dry up. There'll be no incentive to create new

17:11

art, music, words, whatever it is. I

17:14

do think there needs to be a balance

17:18

there. That's a big picture, small

17:20

picture or much easier to explain, which

17:22

is, hey, you're building these huge for-profit

17:24

companies. You are enriching yourself. What

17:27

world is it fair to basically take or

17:29

steal resources from somebody else to enrich yourself

17:33

with no compensation? That

17:36

is an issue and I think that's probably

17:38

those two aspects of are

17:40

you eliminating human creativity and are you

17:44

committing business malpractice by

17:46

just taking all of the content you can

17:48

find without permission and using

17:50

it to enrich yourselves? Now,

17:52

there's another aspect of it for Reddit, which

17:54

is let's say we answer

17:57

the business questions which we have with a

17:59

couple of folks. Google and OpenAI

18:01

being the two big ones. We

18:03

still have other constraints, which

18:06

is protecting user privacy, right?

18:08

Deletions, right? You can delete stuff off of Reddit. You

18:11

know, we want to make sure those requests are forwarded on. We

18:14

don't want any company to use

18:16

Reddit content to reverse engineer

18:18

the identity of our users, or to use it

18:20

to better target ads against them. That's

18:22

not what we're trying to do. So again,

18:25

that's kind of like the business thing, which is like, can

18:27

you use Reddit data to, you

18:29

know, make search engines better, and make search experience better,

18:32

but continue, for example, to send traffic to Reddit,

18:34

which has been the balance, or kind of the relationship

18:37

between us and search engines for a very long

18:39

time. So, you know, I think we're getting

18:41

there. Certainly we've got there with a couple, and I think

18:43

we're in a good place, and we'll kind

18:45

of see where things, you know, land with everybody else. Still

18:49

ahead, I talk with Steve about Reddit's

18:51

scale journey, and how becoming a public

18:54

company has changed things. We had

18:58

just had our first $10 million a year.

19:02

We had all these incredible projects, but

19:05

we were tight on cashflow. We were

19:07

covering millions of dollars on clients' behalf.

19:10

That's Shannon Jones, co-founder of

19:12

VIRB, a brand experience agency.

19:15

VIRB helps create wow moments for

19:17

huge companies. The Fresh Prince House,

19:20

the Up House, the Barbie Dream House.

19:22

But they often fronted costs, which led

19:25

to major growing pains. Here's VIRB's

19:27

other co-founder, Yadira Harrison. We

19:29

had these pivotal pop culture moments, but

19:32

we were feeling defeated, knocking

19:34

our heads against the wall with massive growth year

19:36

over year. We've always said that we break our

19:38

company. Every time we feel like we put it

19:40

together and we break it again. Just

19:42

when Yadira and Shannon were feeling truly

19:45

stuck, they happened to win an award

19:47

for VIRB's rapid growth, the

19:49

irony. But at the award ceremony,

19:51

they met a Capital One business representative

19:53

who helped steer them toward a cashflow

19:55

solution. When you grow exponentially, you might

19:57

need a cash bridge. We didn't even know what a cash

19:59

flow is. was. Not

20:01

only did he break it down, but

20:03

from a personal standpoint, even saying he

20:05

has entrepreneurs in his family, they run

20:07

into the same problem. It automatically became

20:09

a we. We were in this together.

20:12

One tool they started using, the Capital

20:14

One Spark Cash Plus card, a business

20:16

card with no preset spending limit. The

20:19

Spark card in particular in terms

20:21

of how our credit limit adjusts

20:23

as we grow with the company

20:26

over time has been immeasurably valuable

20:28

for us. To learn

20:30

more, go to capitalone.com/business slash

20:32

cashback cards. Welcome

20:36

back to Masters of Scale. You can

20:38

find this conversation and more at our

20:40

YouTube channel. All right,

20:42

so let's go to the Reddit scale

20:44

story. Let's start with the origin story. So

20:47

Alexis, my co-founder, college roommate at the

20:49

time, he and I

20:52

applied to Y Combinator. Y

20:55

Combinator is an incubator for startups

20:57

that's been the starting point for

20:59

many successful companies. This

21:02

was the first batch of Y Combinator in 2005.

21:05

We applied with a different idea. It was ordering

21:07

food from cell phones. Good

21:09

idea, I think. Would we have

21:11

made it successful? Probably not. Probably

21:13

a little ahead of our times and probably a little ahead of our

21:15

skills. But Paul

21:17

and Jessica, so Paul Graham and Jessica Livingston

21:20

at Y Combinator liked us. So

21:22

after rejecting us on the food idea, they basically

21:25

invited us back to work on something else. Paul

21:29

had half this idea, which is he

21:31

really liked Delicious. Delicious was

21:33

a just a website back then, social

21:35

bookmarking. And

21:37

he liked the dynamic. There's this kind of side effect

21:39

on Delicious where if people were bookmarking the same page

21:42

over and over, you could see what were the

21:44

most popular things bookmark on Delicious. It's called Delicious

21:46

slash popular. And then I had the

21:49

other half of the idea, which was slash dot. I

21:52

loved slash dot. Slash dot still around slash dot

21:54

org. It was kind of headlines on the surface.

21:57

Chosen by editors though. But what was

21:59

really amazing about Slashdot was the community

22:02

that existed in the comments about

22:04

any particular headline. And

22:07

Slashdot's constrained to tech. What if there was no

22:09

editors and it wasn't constrained to tech? And

22:12

so it was kind of a delicious

22:14

slash dot, but make both of them

22:16

better. That was the idea for Reddit.

22:19

Honestly, I think we, I mean, that's pretty

22:21

much what we built. But for 19 years, we've

22:23

been iterating on this and tweaking

22:26

it and kind of following our users and

22:28

adding features. Like for example, the most important

22:30

feature we ever built was for users to

22:32

create their own communities. We didn't

22:34

build that until 2008, almost three

22:36

years later. And then there was

22:39

a sale to Conde Nast. What

22:41

will happen there? Conde

22:43

Nast or Advance. Advance is really the

22:46

parent company. I helped use those words

22:48

interchangeably. When they came along wanting

22:50

to buy Reddit, they're kind of scratching

22:54

a couple of itches. One was I felt

22:57

like as well, that's fulfilling the prophecy. Like

22:59

that was supposed to happen. We build this thing and now we get

23:01

to sell it. And then two, we

23:05

are a really small team in that

23:07

era. And I mean,

23:09

that's all I could do to keep the site online. It

23:11

felt like the bottom could fall out any minute. Now

23:14

that was incorrect. I

23:17

just didn't know what product market fit looked like.

23:20

The fact that this thing was growing, despite

23:24

us hanging on by our fingernails, the

23:27

thing was actually probably far more powerful than

23:29

I realized. But I was like, well, we

23:31

better find safety

23:33

before we run out of a runway here.

23:37

That said, Advance

23:40

were really great

23:42

owners. They never

23:44

really meddled. The powers that be at

23:46

Advance who did the acquisition, who are still

23:49

involved with Reddit today, like

23:51

they love Reddit. And so we

23:54

got to continue working on Reddit, continue to

23:56

evolve it, continue to evolve it, kind

23:58

of following our own intuition. and I

24:01

and Alexis and some others would end

24:03

up leaving when our

24:05

acquisition contracts expired. But

24:08

kind of asked for great stewards of Reddit and then

24:10

they eventually realized that Reddit needs

24:13

to be independent, so they spun it out.

24:15

And so, you know,

24:18

all things considered, I

24:20

think this, I mean, how can I say different at

24:22

this from where I'm sitting today? Things worked out really

24:24

well. But

24:27

I think as with many decisions, we were

24:30

very much living kind of in the present in that

24:32

era. So, you know,

24:34

as part of the kind of the

24:37

Steve narrative hero

24:39

journey, you know, you

24:41

kind of covered a little bit of why you

24:43

left. What's the return look like? Yeah,

24:46

so I left. I

24:49

left because I wanted to run my own company. And

24:51

so I no longer owned Reddit as an employee. So

24:54

I started a different company, Hipmunk, with another friend,

24:56

Adam Goldstein. Fun company, fun

24:58

product, bad business. Hipmunk

25:02

was a travel focus search tool Steve started

25:05

in 2010. Was

25:10

a great product, by the way. You

25:12

know, if we had just built

25:14

that product, we built a product in the

25:16

summer. We had just built that product and

25:18

run it as a small company and then

25:21

maybe sold that or licensed that, that

25:23

would have been a good business. Instead, you

25:25

know, raised a bunch of money,

25:27

raised a bunch more money, that's not that.

25:29

Anyway, lessons learned. It's hard to be small

25:32

in Silicon Valley. So while I was

25:34

gone, like I still use Reddit every day, still thought

25:36

about Reddit. I could never turn that part of my

25:38

brain off. Reddit spun out, became

25:40

independent, but also started going through crises.

25:45

And what I later learned when I came back

25:47

is the strategy at Reddit was

25:49

don't change anything. But

25:51

I mean, I can see from the outside, it's like,

25:53

right, it's got to change a few things, right? They definitely

25:55

need a content policy. We've got these troll subreddits who

25:57

are just wreaking havoc and the product's not evolved.

26:00

And so, you know, ultimately,

26:02

I came back to the company with

26:05

a mission to help Reddit live

26:08

up to its potential. Are there any

26:10

kind of set of principles that or ways of

26:12

thinking about that or what the lessons of scale

26:14

were there? Oh gosh. So,

26:17

look, I could start with quickly, you

26:20

know, what didn't change. We believed

26:22

in community. We still do.

26:24

They create the content, they rig the

26:26

content, they create the subreddits, they self-organize,

26:29

they set the tone. But then

26:31

we also learned, right, whether,

26:33

but you can't just completely, you can't sit on your hands. I

26:37

talk about free speech as the founding

26:39

principle of this country. And

26:42

for a country, it's essential. Democracy

26:45

cannot exist without

26:48

free speech. And

26:50

I think that's a great place to start, a lot of

26:52

our thinking about how Reddit works, again, we go to the

26:54

real world. And so, a lot of things we look at,

26:56

we look at to democracies, in particular,

26:59

the democracy in the US. And

27:01

federalism is another important aspect of

27:03

like, we have our rules,

27:06

but the subreddits have their own rules. And so separation

27:09

of powers, all these things. But then

27:11

there's other, like one of the big learnings is we

27:13

are not a country. We

27:16

are a community platform.

27:18

And we're also a business. This

27:21

is a place that people have

27:23

to want to be. By

27:26

and large, you don't choose where

27:28

you live on earth, but you

27:30

can choose whether to be on Reddit or not, versus

27:33

something else. And then you can

27:35

choose whether to work at Reddit, but

27:37

you can choose whether to be on Reddit or not, versus

27:40

something else. And then you can

27:42

choose whether to work at Reddit or

27:44

work somewhere else. And

27:46

so, this kind of comes back to the idea of

27:48

decorum. What do we want Reddit

27:50

to be used for? Or what do we want Reddit to

27:52

be not used for? Do we want

27:54

to be proud of our work? Be proud of the

27:57

role that Reddit plays in the world and what it does

27:59

for people in space? So I think just

28:01

bringing some of that common sense and

28:03

practicality and humanity into the company was kind

28:06

of really important in this kind of

28:08

more modern era of Reddit. Yeah,

28:11

totally. Since we're

28:13

on kind of the story of Reddit to scale.

28:16

So, you know, initial public

28:19

offering, you know, that's obviously a huge

28:21

step. How has that changed

28:23

anything at Reddit? How you operate or

28:25

how you present or anything

28:27

else and how are things going? Well,

28:29

so we went out in March. We've

28:32

had two quarters, two good quarters. I

28:34

think if you ask me, so, you know,

28:37

ask me again if we have a bad quarter. Right now

28:39

I feel pretty good. The thing is though, we didn't just go out

28:41

in March. We thought we were gonna

28:43

go out in April, 2022. We

28:48

didn't because April, 2022, we've

28:50

been running the company as a public company.

28:53

So close the books fast, you know,

28:55

no mistakes, do our board meeting, do

28:58

earnings calls with the public company analysts.

29:01

They just weren't public, but we were able

29:03

to kind of just get

29:05

into that rhythm. And so by

29:07

the time we actually got out earlier

29:09

this year, I think we

29:11

were really well practiced, probably

29:14

actually got out earlier this year.

29:17

I think we were really well practiced,

29:21

probably more so than the average, I know

29:24

for sure, more so than the average company who

29:26

IPOs. We got really

29:28

lucky, but now talk to

29:30

any CEO who's thinking about

29:32

going public, I tell them, start doing earnings

29:34

calls, like now, like just

29:37

get into that rhythm, learn

29:39

like what data you can and can't share internally

29:41

and on what timeline. And there's

29:43

just a, there's just kind of a

29:45

little bit of way of working and, you know, get

29:47

your costs in order, order, you know, level up the

29:50

discipline, all these things. And so we did all those.

29:52

And so the company is

29:54

immeasurably better than

29:57

we were two years ago. Just so

29:59

much more disciplined. execution is as good as it's

30:01

ever been. We've been able

30:03

to grow revenue and users basically without growing

30:05

the team size, which basically

30:07

means costs have stayed level while we scale the

30:09

rest of the company. Prior

30:12

to going out, we

30:14

already had a bright spotlight on us. So

30:16

we'd been in the press, we

30:18

read things we don't like, or

30:21

I say something silly and it turns into a headline

30:23

or this or that. So we kind

30:25

of had those experiences that kind

30:27

of come with being a public company. So two

30:29

quarters in, I'm enjoying

30:31

life. That's great. Ask me again when

30:33

the wheels fall off, feel great right now. Well,

30:36

hold on, it's only like one wheel gets a little,

30:38

that's great. Ask me again when the wheels fall off,

30:41

feel great right now. Well, hold on, it's

30:43

only like one wheel gets a little low pressure or

30:45

something. I get a little wobbly, but I think, well,

30:47

the other thing that worked out really well is we

30:49

also did all of those things in

30:52

choppy conditions, in

30:54

choppy market conditions. So

30:58

find me a company that's worse run today

31:00

than it was two years ago, that's gonna be hard.

31:02

But everybody had to like really, you

31:05

know, the difficulty level went up. And so I think

31:07

everybody got more disciplined. No, that's

31:09

part of the good thing about if you

31:11

learn well from challenges, you can definitely get

31:13

more robust and strong. All right, so lightning

31:15

round. What's the most

31:18

innovative funding source or strategy

31:20

you've used? Red is

31:22

pretty much always done kind of traditional financings. Though

31:25

I'd say our investors, our largest

31:27

investors, the ones who have worked out the best

31:30

are themselves non-traditional. Folks

31:33

who are really kind

31:35

of true believers in Reddit, in

31:37

the internet, in people, it's

31:39

really hard to see the future through spreadsheets. And

31:42

so both, I think with finding investors and

31:44

hiring people, the strategy

31:47

that I found works really well as I

31:49

keep meeting people until I find that

31:52

kind of values chemistry. And

31:55

you can tell in almost like 10 minutes, it's like, oh, these

31:57

are my people. And

31:59

then, I find deals come together

32:01

really fast, hiring, we don't

32:04

just get them in the door, they end up staying with us for a

32:06

long time. What is the habit

32:08

that has helped you succeed the most?

32:13

I have a mantra that

32:15

I use a lot now, every

32:17

day. The thought is, you

32:20

know, you aren't who you are, you are what you do. So

32:25

if you wanna be somebody who works really hard, you

32:27

have to actually work really hard. If you wanna

32:30

be somebody who goes to the gym, you actually have to go to the

32:32

gym. Wanna be a

32:34

good friend, good spouse, good colleague, you

32:36

have to actually do those things. Yeah,

32:39

it makes you philosophically very

32:41

Aristotelian. So

32:43

you are what you do. When

32:45

you're feeling stuck about a big decision, who do

32:47

you talk to? Probably Jen,

32:49

Jen Wong, our COO.

32:52

So she joined us in 2017 on paper to

32:56

run the business side of Reddit ads and sales.

32:59

But she's really my partner in running Reddit. And

33:01

so we're in near

33:03

constant communication. And

33:06

I was talking before about that values alignment. I

33:08

had that with her instantly. But

33:11

we have completely different backgrounds. She

33:13

came up kind of through the consulting

33:15

media business world and I came

33:18

up as an engineer, product person. And

33:20

there are a couple people like her

33:23

at Reddit, but she's probably the first one that

33:25

I call. I know it sounds like a

33:27

great collaboration and partnership. Your

33:30

life and work is so online. What's

33:33

your favorite way to unplug and

33:35

recharge? I read a lot.

33:38

I love my Kindle, both because it's

33:41

a convenient way to carry on a bunch of books, but

33:43

it's also not online. So

33:46

I read a lot, I've got kids now, play with my

33:48

kids, and I enjoy going to

33:50

the gym. So life is pretty simple. Yes, exactly.

33:52

And I love it. Exactly. What's

33:54

one book that you think everyone should read? Oh

33:58

goodness. man

34:01

searched for meaning, Victor Frankel,

34:04

super famous book, he was

34:06

a concentration camp survivor. And

34:10

surviving a situation like that, you

34:13

have to have a reason to live. And

34:16

so kind of the thesis of the book is you need to

34:18

find a reason to live. And

34:21

it doesn't even matter what it is, but you do need to find

34:24

it and make that your reason for living.

34:27

That one really helped me get through the difficult period

34:29

in my life where I was

34:31

very stressed. And

34:34

I was constantly chasing this idea of like, how do

34:36

I eliminate stress? And

34:38

I think it's impossible to eliminate

34:40

stress. And

34:43

what that book kind of flipped around for me is

34:46

the sort of stress that I have in my life

34:49

is a result of the work that I do

34:51

and the job that I have, which

34:53

is truly a privilege. I

34:56

have a special job, I have my dream job,

34:58

and it's hard. And

35:00

so if I didn't have that stress,

35:03

what's the alternative? I'd be bored. And

35:06

so that book helped me

35:08

basically say thank you that I get

35:10

to be stressed. As

35:12

a result, I felt a

35:15

lot less stressed. You know, it's

35:17

funny how those things work out. So that's

35:19

a big one. Last lightning round

35:21

question. How would you like

35:23

AI to change your future?

35:26

And I just want to acknowledge I've given

35:29

five minute answers to every lightning round question.

35:31

No, it's all good. Actually, they were just

35:33

meant to be kind of a provocation, not

35:35

necessarily, like 42 is the answer. The

35:40

stuff that I want AI to do, AI can do today.

35:44

So I'm just waiting for Apple

35:46

or Google to connect the dots. And I think we're

35:48

so close. I just want

35:50

to add items to

35:52

my to-do list or

35:55

take a thought and organize it by

35:57

speaking. I'm

36:00

constantly going around through my day. I've got my phone

36:02

in my pocket and I'd love to say, remind

36:05

me to do this thing or I have this

36:07

idea. Can you just, I

36:10

wanna just, it's kind of that

36:12

whole getting things done idea of

36:14

like get things out of your head into your system. I

36:17

think AI can get things out

36:21

of my head into the right place much

36:24

more conveniently. The best UI for

36:26

computers is now speaking. And

36:28

that'll be when we're actually there, we're

36:30

like a year away, I feel like. Yeah,

36:32

it's very close. I don't wanna

36:34

ask for much. I just wanna put things on my

36:36

to-do list. Exactly. All

36:39

right, well, it's been a great pleasure and honor. Steve,

36:42

thanks for joining me on Masters of

36:44

Scale. It's really been my pleasure and

36:46

honor. Reed, thank you so much for having me. Steve

36:53

Huffman's Scale story is a good

36:55

reminder that not every unicorn IPO

36:58

is some sort of hyperscaling overnight

37:00

success. It took Reddit

37:02

almost two decades, multiple ownership structures and

37:04

a whole lot of sweat equity to

37:06

get where it is today. And

37:09

all that hard work has given Steve

37:11

a practiced hand for dealing with the

37:13

site's next chapter of challenges from

37:16

navigating AI to an

37:18

increasingly fractured information ecosystem.

37:21

I'm inspired by his unwavering belief

37:23

in people and the meaningful connections

37:25

that conform when the internet is

37:27

at its best. I

37:29

hope he can keep scaling those values too.

37:33

I'm Reed Hoffman, thanks for listening.

37:35

One of the customers tweeted they

37:37

got an insight that said, try

38:00

adding a quiz module onto your website.

38:02

It became one of the most interactive

38:04

module on their site. It was so

38:07

cool to watch. I

38:09

was in Vegas about to go on

38:11

stage to talk about the redesign of

38:13

Clarity and Vaisal this tweet and

38:15

it gave me a little pep to my step. We

38:18

put in a lot of effort to make sure

38:20

we are customer focused. I

38:22

am Priyanka Vaid, a product lead

38:24

at Microsoft Clarity. I'm

38:26

Kiranaz Vaisal. I'm a software engineering

38:28

manager for Clarity front end. Priyanka

38:31

and Kiraz are members of the

38:34

team behind Microsoft Clarity, a free

38:36

tool to analyze user behavior online,

38:38

delivering data and insights. Our

38:40

customers were saying, why don't you have

38:43

this as a mobile app solution? It

38:46

was a big investment, making it

38:48

really visual, really easy, super structured

38:50

so that anyone who wants to

38:52

dice and slice the data, they

38:54

are able to get those insights

38:56

for app experiences. Clarity

38:58

is not only focused on customer

39:00

experience, it's focused on a wide

39:03

range of customers. We want

39:05

to make sure that mom and pop shops,

39:08

a single blogger can come to

39:10

Clarity, get insights and make improvements

39:12

on their sites. It

39:14

may seem small but to even get those

39:16

insights, they're amazed that we are trying to

39:19

make their lives easy. To

39:21

learn more, go to clarity.microsoft.com.

39:25

Masters of Scale is a Wait What

39:27

original. Our executive producer

39:29

is Eve Trowe. Our

39:31

senior producer is Trisha Bobida. The

39:34

production team includes Tucker Legurski, Masha

39:37

Makatunina and Brandon Klein. Additional

39:40

production by Julia Luini. Our

39:43

senior talent executive is Stephanie Stern.

39:45

Mixing and mastering by Aaron Bastinelli

39:48

and Brian Pugh. Original

39:50

music by Ryan Holiday. Our

39:53

head of podcasts is Litaal Mallad. The

39:56

scripted narration of Reid Hoffman used in

39:58

this episode using

40:00

Reese Beecher with full consent and

40:02

permission. Visit

40:04

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