Last year, Reddit sharply ascended the racks to becoming the 4th most visited website in the United States. With 330 million users across 217 countries, this 1.8-billion-dollar company featured explosive growth connecting subscribers within 1.2 million subreddit communities.
Simply put, Reddit is an online platform whereby users are able to create, share, and discuss topics of interests, with an organized voting mechanism through which the highest “upvoted” online articles would be featured on the company’s homepage. The Reddit culture is highly dependent on the community’s contribution to evaluating, discussing and promoting interesting online content.
The platform offers users an opportunity to learn about a plethora of topics, sometimes even from experts in those fields. With time Reddit has established a strong sense of community with its user-centric approach, making it the world’s biggest crowdsourcing platform. This multi-sided platform engages a wide audience due to its ability to effectively crowdsource content in unique ways.
How Reddit Works
Often referred to as “the front page of the internet”, Reddit prides itself for its ability to democratize online content through its voting mechanism, and by doing so becomes a self-regulating marketplace for ideas that have been vetted, discussed and deemed worthy of sharing by millions of other Redditors.
While the website’s main page may seem confusing and disorganized for an unfamiliar user, the user interface itself is easy to use and becomes familiar after a few tries. Essentially, a user is provided with an option to either submit a new link or a new text post within an assigned or new “subreddit” which act as communities for Redditors to discuss, share and vote for worthwhile ideas within specific categories. Articles are then provided a score based on the difference between “upvotes” and “downvotes”. The links with the highest scores are then displayed on the website’s front page whereby it is easily accessed by millions of users worldwide. The same rules apply for comments contribution as they do for submitting links and new texts to the website.
It is worth noting that Reddit’s time decay algorithm is set up to give newer posts a higher chance of making it to the front page – thus solving to keep the Reddit community informed with timely and relevant content. Moreover, Reddit has made it easy to sort content through its different filters based on time, controversy or score.
The platform is designed in a way that makes it easy for users to find topics they are interested in discussing and provide feedback. Additionally, by using third-party applications such as rDrafts, users are able to draft a Reddit long-form post, review it and save it for submittal later, thus encouraging people to build on their context in times of inspiration.
What makes Reddit unique is its ability to build communities of subreddits, each with its own user base, lingo, and moderator. While users are able to popularize themselves and be heard through their contribution, their anonymity is maintained which allows for safe and open discussions.
Reddit applies an innovative method to keep users with different levels of contribution engaged. Reddit Karma is an accumulation of goodwill a user receives with their posts or comments get upvoted. While this has very little practical value for the user, it provides credibility within the Reddit community. Not only is this a way for the company to capture value from a user, but also shows other users within the community how much value each person contributes. In this way, Reddit crowdsources and encourages this community in every aspect of the user experience.
The Downside of Crowdsourcing
While the company has been able to benefit from its crowdsourcing business model as well its heavy user-base that contribute around 2.8 million comments daily, it has also faced its fair share of challenges. With over two-theirs of its users being male and more than half of them between the ages of 18-29, there have been some sexism issues that the self-regulating platform has found harder to manage which puts the company in a difficult position as regulation fundamentally goes against the uncensored free-speech concept that Reddit tries hard to promote.
This freedom of expression and self-regulation is also another cause for concern with the company and has affected its ability to capture value from advertisements. Companies concerned about their inability to control their own message on the platform has excluded a fundamental source of potential revenue for the company. While this has in the past caused some issues, by staying true to its fundamental purpose the company is able to attract companies that look for opinionated and passionate customers who care about specific topics or products.
With its built-in user base, Reddit has many opportunities to grow. With initiatives/subreddits like the “Reddit Secret Santa” and “Random Acts of Pizza”, which became the largest online gift exchange in the world, the company can monetize from becoming a platform for donations to pacific causes.
Moreover, since crowdsourcing is such a fundamental part of their business, Reddit should think of other ways to make users stickier through different incentives structures such as awards, recognitions or free swag, where people are able to advertise their value/contribution to the Reddit community.
It will be interesting to see how this company will evolve and how much more its value proposition as an unbiased platform that promotes freedom of speech will play out in an age of fake-news and regulation. The information gathered through this website and its ability to monetize on the pulse of public perception will be of great use to companies and governments alike.