Reddit's Blackout Drama

From the news: Reddit goes dark

It’s been a week for Reddit. Thousands of mods have protested the upcoming API charges by making their subreddits private. Apollo, the biggest alternative interface, has already announced it's shutting down. Just today, the site is being held ransom by some hackers, looking for money and changes to the proposed charges, which come into effect on June 30.

Regardless, CEO Steve Huffman isn’t backing down.

It’s messy. Reddit’s user base essentially volunteers and provides huge volumes of valuable data and information for free. Third parties, and now A.I. models, have been scraping this data and profiting from it. Huffman was fed up. For Reddit, the move makes business sense - there’s a long-rumored IPO in the pipeline. But the users feel this goes against the community spirit, and they’re worried the third-party tools they use to manage their communities will cease to exist very soon.

It poses the question: How do you charge for something that is perceived to be free? And then, how do you convince your user base to pay up?

From the founder: Growing Codecademy’s revenue to $50M

Dan Layfield led the growth team at Codecademy and helped grow the company to $50M ARR before it sold to Skillsoft for $525M last year.

In this insightful write-up, Layfield shares lessons (and mistakes) for those who have the product-market fit but don’t know how to make money. Some of these insights include:

1. Figure out monetization early — Everything gets more expensive to change the longer you wait.

2. Speed is extra important in subscription businesses — Every missed cohort of users you didn’t monetize is lost forever. The faster you get your strategy running, the more revenue you’ll have to compound.

3. Work from the bottom of the funnel upwards —You’re active paying users are the most valuable to you. Don’t lose them for things that could have been prevented.

4. It’s hard to convince people to pay you money — Find all the dead ends across your products and fix them. Any errors or bugs stop people from paying you (even when they want to!)

If you can get to a place with a strong checkout page, pricing structure, paywall, payment processing and churn appeasements, then you’ll be better than 90% of early-stage companies.

👉️ Set up your basic monetization system here: Giant Mistakes and Successes: Lessons From Growing Revenue From $10M To $50M

Sweet Tweets (Reddit edition)