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Alexis Ohanian: I Read it on Reddit
Making the world suck less.
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Alexis Ohanian is a multi-time startup founder, most notably as the the co-founder of Reddit. He is also one of the most accomplished investors of the last decade. Formerly as a partner Y-Combinator and Initialized Capital, currently as partner at 776 Ventures.
In his first year at The University of Virginia, Alexis Ohanian was asked why he wanted to be here [UVA]. His Answer? He wanted to make the world suck less.
The story of Reddit is a tail of pivots, tough decisions, and perseverance.
It also perfectly coincides with another fixture of modern day internet startup culture - My Mobile Menu.
Wait not that, Y Combinator.
Ohanian’s Reddit co-founder Steve Huffman came up with the idea for Reddit’s predecessor, My Mobile Menu, while sitting outside his car pumping gas. He wished he could use his cellphone to order the food being prepared inside. He took the idea, which would allow users to use SMS to order food, to Ohanian who agreed to work with him on it. On the spring break of their senior year, the pair took this idea to Cambridge, Massachusetts where technologist/entrepreneur Paul Graham was giving a lecture called “How to Start a Startup.” Steve Huffman really just wanted Graham to sign his book on programming in Lisp but Ohanian took the chance to ask him if he would meet the two for coffee. Somehow he agreed and gave the two a chance to pitch him the startup. Graham was enthralled with the idea for My Mobile Menu, proclaiming it “the end of lines.”
Huffman emailed Graham to thank him for the meeting. Graham replied with an invite to apply to his new startup accelerator - Y-Combinator (YC).
The two came back to Boston to pitch My Mobile Menu to YC. Later that night Paul Graham called them to let them know they were denied.
Wait Paul, you just spent two hours telling us how much you loved the idea!?
Disheartened, the two took a train back to The University of Virginia to continue their work on My Mobile Menu and to finish up their senior year. However, before they could make it back to campus, Paul Graham called them to explain that while they didn’t like the idea, they liked them. He told them that if they come back with a better idea they will fund it. At that moment, Huffman and Ohanian made the decision to throw away the last year of work spent on My Mobile Menu and head back to Boston with a fresh slate.
Graham advised them to avoid mobile phones, as this was pre smartphone, pre-app store, and to focus on building a web app. At that time, in 2005, the internet was a jumbled mess. The two determined it needed a new “front page” to distill it down to its most useful morsels. This idea spawned Reddit, the first company to launch from YC.
Following their gradation from Y-Combinator, Huffman and Ohanian continued to build Reddit.
The initial product may of been bare bones but at least it was functional. At first there wasn’t even enough user submitted content to fill out the website. This required Ohanian and Huffman to submit content on behalf of fake accounts, giving the impression that the site had more people on it.
Slowly more and more contributors began to trickle in and the site was finally functioning on its own. Initially Reddit users could only post links and then up or downvote those links. This simple use case slowly evolved to bring on the features for which we are familiar with, like sub-Reddits and comments. However, a few months into founding the company, Ohanian’s mother was diagnosed with terminal cancer.
Grief stricken, 16 months after launch, Ohanian and co. sold Reddit, a company now worth billions, to Conde Nast for $10 million dollars.
At the time of the deal this was more money than Ohanian’s parents made their entire lives. After Reddit sold to Conde Nast, Ohanian, then 23 years old, stayed on for three more years.
One of Reddit’s most unique abilities, as demonstrated by the famed WallStreetBets GameStop short squeeze, is to provide a platform for communities to quickly and efficiently connect and rally around an initiative. This may of hit the world stage in January of 2021, however, that wasn’t the first time, and won’t be the last.
During Ohanian’s first act at Reddit, groups were able to coordinate massive positive actions like raising $65,000 for an orphanage in Africa in 24 hours or over $20,000 for a girl with Huntington's Disease being bullied by her neighbors.
Ohanian also coordinated a Reddit community to vote on the name of a Humpback Whale to be called Mr. Splashy Pants. He gave a TED talk about it.
Ohanian left Reddit in 2010 but had already made the world suck less.
After working in Armenian micro-finance and helping Huffman launch travel search website Hipmunk, Ohanian came back to YC, this time as an advisor and partner. He also launched the venture capital firm Initialized Capital, making seed investments in Instacart, Zenefits, Opendoor, and Cruise.
About a year after Ohanian’s departure, in 2011, Reddit became operationally independent from Conde Nast. In 2012, Ohanian came back onboard Reddit’s cap-table, leading their Series A with Initialized.
In 2015, after five years away, Ohanian and his former co-founder Steve Huffman saw an opportunity to regain leadership of the company that they prematurely sold nearly a decade earlier. Huffman returned as the company’s CEO while Ohanian became executive chairman. Over the next 5 years, the two pushed for a complete redesign of the website away from what Huffman called ”a dystopian Craigslist.” They also raised $200 million on a $1.8B valuation.
Huffman remains Reddits CEO to this day but Ohanian left the company entirely in 2020.
He now runs the venture capital firm 776 Ventures….and is married to tennis star Serena Williams.
Don’t fall victim to the sunk-cost fallacy. Ohanian and Huffman spent a year working on My Mobile Menu and had to decide to abandon it in a split decision.
Surround yourself with advisors you trust. With the proper advisors, Ohanian and Huffman probably would not of prematurely sold Reddit.
Enjoy the journey. 15 years past between Reddit’s founding and Ohanian’s final exit.