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No matter how you look at this Spez fucked up.
The protest is hurting ad dollars, some amount of users have migrated away and Reddit has received a ton of negative press.
Spez admits that the top two API users are no longer going to be selling their product. He doesn’t speak about this like he regrets it. If he were serious about selling API access, he literally lost his two largest customers by refusing to work with them and slandering them.
Apollo said that they quoted him $20M/yr and he said in further interviews that the reason he couldn’t make it work is because he sold the app to people for up to a year license and the cost he sold them to would be too low to cover his costs. If Reddit was willing to work with him on timeframe or costs he could have implemented a solution that would have let the users pay the fee (like $2/mo) and enough profit for him to continue working. Instead Spez provided no flexibility on price or timeline. He torpedoed his largest customer costing Reddit upwards of $20M/yr in revenue. The same with RIF.
Reddit is getting $0/mo from them when they were not unwilling to work with Reddit on the pricing. They just needed flexibility that Spez wouldn’t provide.
He fucked this up royally.
Spez admits that the top two API users are no longer going to be selling their product. He doesn’t speak about this like he regrets it. If he were serious about selling API access, he literally lost his two largest customers by refusing to work with them and slandering them.
That’s because he doesn’t view them as “API users selling their product” or “potential customers”, he views them as “competitors”. He also has frequently referred to Reddit, the business, as an “app”. He’s been petulant that other apps show a profit while Reddit doesn’t, ignoring the fact that the Reddit app is really not that good at anything but serving adds.
He should be viewing RIF and Apollo as alternate paths to solicit content that he can sell ads around. But he doesn’t.
Yeah, investors will have major problems with these businesses decisions.
You don’t just walk about from tens of millions in revenue because you have some vision about how things may one day be in the future. You build a bridge from what is to what can be and you make as much money as possible in the meantime. Spez is behaving like a child and not a CEO. He wants thing to be one way and he’s just digging his heels in when there is pushback. He isn’t working in the best interest of Reddit, he’s making this personal and it is costing Reddit.
The could have worked out an agreement with Apollo and RIF and been earning money while also improving their app. Instead they lost out of a huge amount of money without improvement in the app. The difference in quality between the current apps and Reddt’s app is so big people will just refuse to swap and then they’re lost as users.
Now they’re doubling down and still refusing to negotiate with the community to the point where they’re threatening mods and other shady tactics to end the protest. It’s starting to affect regular users, you see them complaining hard because they’re stuck in the middle of the battle between Reddit and the people that make it work.
I’m sure they’ll start seeing negative user growth before too long. It would be trivial to open a dialog and be good stewards of the Reddit community. Instead Spez is committed to having things exactly how he wants them. When the IPO happens it is certain that this story will be fresh in everybody’s mind. Who knows how Spez will waste the company’s IPO money if he’s already shown a habit of making bad decisions.
