🤌 How to Build an Online Empire

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What do Reddit and Serena Williams have in common?

Both have made a major impact in their fields, with Alexis Ohanian standing by their side. 

While marrying the tennis champion may be Ohanian’s better accomplishment, today’s focus is on his other great success: co-founding Reddit.

When Reddit first appeared in 2005, few could have predicted it would become the “front page of the internet.”

Today, Reddit dominates online discussion forums, boasting 1.2B monthly users. Its closest competitor, Quora.com, has just 400M.

Reddit is so influential that its users have a name: Redditors. 

So how did Reddit grow so large? And how can you use its power for your own business?

Here’s what we got for ya:

  • 📈 Where it Began

  • 💪 Reddit’s Secret Power

  • 🔮 The Future of Reddit

Read Time: 4 min 55 sec

📈 Where it Began

Alexis Ohanian was just like any other college student, unsure about what to do with his life.

He started at the University of Virginia as a computer science major, but switched to pre-law after realizing he wasn’t as tech-savvy as he thought. 

Halfway through his LSAT, Alexis decided law might not be his thing either. So he got up, left, and headed straight to the nearest Waffle House.

Now, there are really only two good reasons to go to Waffle House. (Redditors might have more opinions...)

  1. You’re a bored teenager at 2 am with nothing better to do.

  2. You’re in the middle of a crisis.

Alexis back at Waffle House years later…

For Alexis, it was clearly the latter. Realizing his last three years in college were a waste if he didn’t figure out his next steps soon, Alexis was desperate for a sign.

As he stared down at his plate, he knew he didn’t want his life to be as mediocre as his waffle. He wanted to be the boss, build his own company, and make a real impact in the world. (Don’t we all?)

So he talked to his friend Steve Huffman about his situation, and Steve said that he might just have the million-dollar idea Alexis needed…

The concept was MyMobileMenu, a mobile food ordering website. Although common today, it was unheard of in the early 2000s.

They pitched the idea to Y Combinator, a company that funds startups, but it was rejected. Most restaurants didn’t have websites at the time, and the infrastructure just wasn’t there. 

However, Y Combinator saw potential in Alexis and Steve, and they encouraged them to come back with a better idea fit for the web. 

2005 was a life-changing year for the two college seniors…

Their new idea would become the front page of the internet and one of the most influential websites: Reddit. 

The name is a play on words so that we can say, “I read it on Reddit.”

When Reddit first launched, Alexis and Steve made hundreds of fake accounts just to get content on the site. But their dedication paid off.

Today, Reddit boasts 430M active monthly users.

The largest subreddit, r/funny, has almost 60M members. 

Many people turn to Reddit before scrolling through Google.

r/ThePowerOfReddit

What does this power mean for Reddit?

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💪 Reddit’s Secret Power

Redditors have influence over hundreds of millions of users.

With over 130,000 different subreddits, you can find r/AlmostAnything… literally.

For example, r/AmItheAsshole lets Redditors serve as moral judges in users' dramatic and entertaining stories. 

And in 2021, Redditors in r/wallstreetbets made GameStop’s stock soar from $3 to $483, causing several large hedge funds to lose billions of dollars while a few Redditors became millionaires.

So how can you harness Reddit’s power for your benefit?

Reddit offers two unique things for business owners:

#1- Advice. Reddit has subreddits like r/BusinessIdeas where people share advice on all things business, including different business ventures and how to start them. If you are having a problem with your business, someone has probably already shared the solution on Reddit. And you can also ask your own questions.

#2- Customers. If you have a product that could solve problems for Redditors, find a relevant subreddit to promote it. For instance, if you sell sea turtle bracelets, find a subreddit focused on sea turtles, and share your product. But be warned, Redditors can be vicious! Make sure to be authentic or you will get backlash…

Reddit is a huge community, connecting people all over the world, to talk about all kinds of topics.

How does Reddit use this power? And what’s up with their revenue? 

More on this:

🔮 The Future of Reddit

Reddit is valued at $6.5B.

In 2023, they made $810M in revenue. But in its almost 20-year history, it’s never been profitable…

Their business has stayed afloat from the $1.6B in funding they’ve raised from over 60 different investors. 

But without that funding, they would be in the weeds. 

In 2023, Reddit had a net loss of $90M.

But things may be changing soon…

The company’s losses are decreasing and they have plans to become profitable.

Here are 3 things they can do:

#1- Sell data. Reddit just signed a $60M per year deal to allow Google to use Reddit’s data to train its AI. This could be a big part of Reddit’s future revenue.

#2- Targeted ads. Reddit has had pushback in the past for increasing ads.  Right now, there is usually just 1 ad for every 10 posts. But if Reddit strategically caters its ads to each post and uses affiliate links when people mention products, it could generate significant revenue. 

“And so, Reddit is all about context and interests. So, literally, every brand’s customers are on Reddit somewhere.”

CEO Steve Huffman

#3- Learn from users. Redditors give Reddit many suggestions on how the company should make money: r/HowCanRedditMakeMoney. Who better to listen to than your customers themselves?

So while Reddit has not yet mastered profitability, there is a lot to learn from what they will do. 

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