Reddit is a community and forums-based social media company founded by Steve Huffman and Alexis Ohanian when they were in college, at the University of Virginia in 2005. 

In December 2021, Reddit became public with its IPO, which valued the company at $15B, and today, it’s traded in the stock market and is used by 73.1 million users per day worldwide and is the world’s 18th most popular and visited website. 

But how did this one enterprise survive the turbulent nature of startups for almost two decades and become one of the most reputable, stable, and biggest social media platforms? That’s what we will discuss in this story today. 

Early Days: University of Virginia to Y-Combinator

Imagine two friends at the University of Virginia who bonded on their mutual interest in gaming and had another common interest: to build something that they feel excited to work on. 

2005 was the time when these two startup enthusiasts had an idea of building a food ordering or booking app that lets users pre-order their food at any restaurant so they don’t have to wait in lines before picking it up. 

Both of these highly motivated friends, Steve Huffman and Alexis Ohanian, flew to Boston to listen to their icon Paul Graham and attend his “How To Start a Startup” talk. Steve just wanted to get his book signed by him. 

Meanwhile, Steve got Paul’s attention, pursuing him to meet the duo for a drink as they flew all the way from Virginia to attend his talk. Hearing that, Graham agreed to meet for a drink and asked the boys to pitch their ideas to him. 

Paul loved their food-ordering app idea and suggested they apply to Y-Combinator, which, at that time, was just starting. The boys incorporated the company and called it “Redbricks Solutions” and also pitched it at Y-Cominator. 

Unfortunately, their pitch was rejected. The boys, however, took the rejection as motivation. However, while on their way to Virginia, they received a phone call from Paul Graham, saying, “We don’t like your idea, but we like you,” and asked the duo to come up with a different idea, and they will invest that. 

Steve and Alexis immediately got off the train and got back. So, phone technology wasn’t as developed in 2006, and there were no app stores or any other infrastructure for a phone app. So that was quite a risky investment. 

So, the advice was to build a web application, which was right for that time. 

Conceptualizing Reddit to Finding The Startup

Founders Steve Huffman and Alexis Ohanian were inspired by the digital landscape of 2005, recognizing a significant gap: the internet lacked a unified "front page" that could aggregate an increasingly diverse range of content from various sources. 

Their vision was to meld the best aspects of popular sites like Delicious, known for its user-curated link sharing, and Slashdot, celebrated for its quality content curation.

Paul Graham, a key influencer in Reddit’s early days, crystallized this vision during brainstorming sessions, urging the founders to build what he termed the "front page of the web." 

Armed with this mission and a modest $12,000 from Y Combinator, Huffman and Ohanian embarked on their venture in Cambridge. There, they pursued a grueling schedule, coding intensively, with their only respite being escapades into the virtual realm of World of Warcraft.

The urgency to launch was significantly heightened by an email from Paul Graham, which challenged the delay and questioned the founders' competence or apprehension for perfection. 

This spurred them into action, leading to Reddit becoming the first Y Combinator-funded company to go live. Within three weeks of receiving Graham's email, Reddit had a working version ready, marking the start of what would become a central aggregator and discussion site on the internet.

And there it was: a working version of the Internet’s front page, fuelled by the passion of two young founders and the guidance of a startup OG. 

Paul Graham wrote his next essay on his blog linking Reddit to it which got Reddit its first 1000 visitors. 

Reddit: The Growth Phase

Between November 2005 and January 2006, Reddit underwent a significant transformation by merging with Aaron Swartz's company, Infogami. This merger resulted in Swartz becoming an equal partner in the newly formed parent company, Not A Bug. 

Subsequently, Swartz played a pivotal role in overhauling Reddit's software architecture. He utilized web.py, a web framework of his own design, to rewrite the site’s underlying code.

According to a blog post by Swartz titled "Rewriting Reddit," the decision to transition from Lisp to Python, and specifically to adopt the web.py framework, was motivated by a need for greater simplicity, better maintainability, and enhanced performance. 

On October 31, 2006, Huffman and Ohanian sold Reddit to Condé Nast Publications, the parent company of Wired, for an amount reported to be between $10 million and $20 million. Subsequently, the Reddit team relocated to San Francisco. 

Shortly after the acquisition, in November 2006, Aaron Swartz expressed dissatisfaction with the shift to a corporate environment through a blog post where he lamented the productivity levels. By January 2007, Swartz had parted ways with the company under undisclosed circumstances.

Huffman and Ohanian themselves exited Reddit in 2009. Post-Reddit, Huffman co-founded the travel site Hipmunk with Adam Goldstein and later brought on board Ohanian and another Reddit colleague, Slowe, to join the venture.

Managing to Survive & Thrive

Between 2009 and 2014, Reddit saw the leadership of Yishan Wong and Ellen Pao as CEOs, until Ohanian and Huffman made their comeback to Reddit in November 2014. 

After rejoining Reddit as CEO, Huffman revitalized the platform by launching iOS and Android apps, enhancing the mobile website, and introducing A/B testing infrastructure. 

April 2018 saw a major website redesign to make it more user-friendly, described by Huffman as moving away from the "dystopian Craigslist" aesthetics. 

Technological enhancements included new tools to combat online harassment and updated content guidelines to manage offensive material. Reddit's innovation continued with significant funding rounds, notably a $200 million investment in 2017 that valued the company at $1.8 billion, supporting the redesign and emphasizing video content.

In June 2020, in solidarity with the George Floyd protests, co-founder Ohanian resigned from Reddit's board, recommending his replacement by a Black candidate; Michael Seibel of Y Combinator filled the role. 

Late 2020, Reddit announced the acquisition of Dubsmash, integrating its video creation tools. Reddit's growth trajectory aimed towards an IPO was marked by hiring its first CFO, Drew Vollero, in early 2021 following the spotlight from the GameStop trading frenzy, ultimately filing confidentially for an IPO in December 2021.

Despite facing challenges like a significant data breach by the BlackCat hacker gang in 2023 and subsequent layoffs, Reddit continued to expand. 

Collaborations included a $60 million annual deal with Google to license content for AI training, culminating in an ambitious valuation of up to $6.4 billion at its March 2024 IPO. By the close of its first trading day, Reddit's stock price soared, reflecting a market cap of $9.5 billion.

What We Can Learn From Reddit

Reddit has thrived for nearly two decades primarily due to its community-centric approach, where users find and engage in subreddits of diverse interests. The platform's content is democratically curated through a system of upvotes and downvotes, allowing users to control what content is highlighted. 

Anonymity on the site encourages open, honest discussions. Over the years, Reddit has adapted by redesigning its interface and introducing new features, maintaining relevance and enhancing user engagement.

However, content is not the only reason for its success; it’s also the constant evolution and adaptability that the company has shown. It stayed true to its original vision but adapted itself to various changes, whether switching from Lisp to Python, launching its iOS and Android applications, or integrating and stressing video content on the platform. 

It did not pivot too much over the years and kept its community feel alive. These continuous innovations, coupled with a commitment to core values, underscore Reddit’s adaptability. By balancing foundational principles with progressive updates, Reddit has managed to remain a dynamic and influential platform in the evolving digital landscape.

However, Reddit has faced challenges, including controversies over handling sensitive content and inconsistent moderation, which have sometimes tarnished its reputation. 

The platform has also struggled with effective monetization and faced resistance from its community against ads and sponsored content. Technical and security issues further complicate user trust.

Continuing its success will require Reddit to balance fostering its communities, tightening content moderation, and developing sustainable revenue models without compromising the organic user experience. This approach will help maintain Reddit's position as a unique and influential platform in the digital space.

Final Thoughts

For any business to do well, other than passion and commitment, there are so many things that it has to do right. A tech company like Reddit, in particular, has to evolve with time and make itself safe, relevant, and valuable. 

Reddit users are the most loyal users on the internet for all the reasons that we discussed in the previous section. Reddit has a deep understanding of what its users and what the internet in general want, which at the core is a community.