Reddit communities revolt + Brad Gerstner on state of private and public markets in 2023 | E1761 | Summary and Q&A

TL;DR

Reddit moderators strike over API charges, impacting 8,000 subreddits.

Key Insights

• 🔠 Reddit moderators strike due to API charges, affecting 8,000 subreddits.
• 🈶 Evolution from free APIs to charging reflects shifting strategies as platforms grow.
• 👊 AI innovations like Chat GPT and platform disruptions drive modern company decisions.
• 🥺 Productivity gains from AI may lead to dislocation but promise significant benefits.
• 🛟 Essentialism organizing philosophy helps navigate life complexities and prioritize effectively.
• 🥺 Productivity gains from AI and essentialism philosophy can lead to significant societal impacts.
• 🧑‍💻 Striking a balance between innovation, revenue, and community engagement is crucial in tech.

Transcript

all right everybody first up on the show before my spectacular fireside chat with the fifth bestie Brad gerstner I want to talk about this Reddit situation as you may have heard Reddit the most famous and successful Forum or community site ever created in the history of the internet let that sink in is currently dealing with a strike a strike by th... Read More

Questions & Answers

Q: Why are Reddit moderators striking?

Reddit moderators are on strike due to third-party developers revolting after Reddit announced charges for API access, impacting 8,000 subreddits.

Q: How has Reddit's strategy evolved over time regarding API access?

Reddit initially offered free API access to foster innovation but started charging due to platform growth and the need for control.

Q: How do APIs impact third-party developers and Reddit users?

APIs enable third-party developers to create apps, enhancing user experience, but charging for API access can limit innovation and user engagement.

Q: How is the Reddit strike reflecting larger technology trends?

The Reddit strike showcases the tension between innovation, revenue generation, and community engagement in the tech industry, impacting both users and developers.

Summary

In this video, the host discusses the Reddit situation where moderators and community managers are going on strike due to changes in Reddit's API and charging for access to it. The strike has resulted in thousands of subreddits going dark. The host also shares insights on the importance of being outside the consensus when making investment decisions in both public and private markets.

Questions & Answers

Q: Why are Reddit moderators and community managers on strike?

Reddit moderators and community managers are on strike because Reddit announced that they would start charging for access to their API. This has angered third-party developers who previously had free access to the API. The strike has resulted in thousands of subreddits going dark.

Q: What is the background on Reddit's API and why is it causing controversy?

In the early days of the internet, many websites, including Reddit, offered open APIs that allowed developers to build apps and services using their data. However, as Reddit and other platforms grew, they started deprecating these services to control the user experience and generate revenue. Reddit's decision to charge for API access has sparked controversy among third-party developers.

Q: How are subreddits going dark impacting Reddit?

When subreddits go dark, it means they either become private or stop allowing new posts. This significantly impacts Reddit as it removes a large portion of user-generated content and limits user engagement. With thousands of subreddits going dark, it poses a challenge for Reddit to maintain its community and content.

Q: What is the significance of Reddit's IPO in relation to the strike?

Reddit has an upcoming IPO, and the strike by moderators and community managers is happening at a critical time. As Reddit prepares for its IPO, it needs to demonstrate revenue and profitability. However, the strike and the controversy surrounding the API changes may have a negative impact on Reddit's valuation and investor perception.

Q: How do language models factor into the Reddit situation?

Language models, such as large AI models, rely on vast amounts of data for training. Reddit's decision to charge for API access affects developers using Reddit data to train their language models. While Reddit believes this is an opportunity to monetize its data, it has created tension between the platform and developers who rely on the API.

Q: What is the context of third-party apps in relation to Reddit?

Third-party apps have been an integral part of the Reddit ecosystem, especially on mobile devices. Before Reddit launched its own mobile app in 2016, users relied on third-party apps to access and interact with the platform. However, with Reddit's API changes and the associated costs, many popular third-party apps are shutting down or facing financial challenges.

Q: How does the pricing of Reddit's API affect third-party app developers?

Reddit plans to charge around $12,500 for every 50 million API requests, which is a significant cost for third-party app developers. For example, one popular app, Apollo, estimates it would need to pay $1.7 million per month or $20 million per year under the new pricing. This pricing model has led to app closures and opposition from developers.

Q: What suggestions does the host offer for resolving the Reddit strike and API controversy?

The host suggests two possible solutions: Reddit could buy out third-party apps and hire their developers, thereby maintaining control and improving the user experience. Alternatively, Reddit could offer revenue-sharing agreements with third-party apps, allowing them to continue operating officially with Reddit's support. These solutions aim to address the monetization concerns of both Reddit and third-party developers.

Q: How could Reddit support its top moderators during this situation?

The host proposes that Reddit could offer job opportunities to top moderators in mod support or other relevant roles. This would recognize their contributions and create a more symbiotic relationship between Reddit and the moderators. Additionally, Reddit could offer revenue-sharing or subscription models to empower moderators to monetize their subreddits, further strengthening the community.

Q: How does the host relate the Reddit situation to his experiences in public markets?

The host draws parallels between his investment strategies in public markets and the Reddit situation. He explains the importance of being outside the consensus and making non-consensus investment decisions. He shares examples of successful investments he made by going against the consensus, such as with Nvidia and Facebook. He emphasizes the need for deep conviction and research to identify non-consensus opportunities.

Q: What are the key takeaways from the video?

The key takeaways are: (1) Reddit is facing a strike and controversy due to changes in its API and charging for access; (2) Thousands of subreddits have gone dark as a result of the strike, impacting the user experience and content on Reddit; (3) Language models and AI training data are also affected by these changes; (4) The Reddit IPO is at risk due to the strike and controversies; (5) The host suggests potential solutions, such as acquiring third-party apps or offering revenue-sharing agreements; (6) Being outside the consensus and making non-consensus investment decisions can lead to outsized outcomes; (7) The Innovation cycle in the US trumps macro concerns in the long run.

Summary & Key Takeaways

• Reddit moderators are striking over API charges, affecting 8,000 subreddits.

• Reddit's evolution from free APIs to charging for API access causing discontent.

• The strike highlights the importance of innovation, AI, and platform disruptions in modern companies.