Productizing Reddit Communities
What came first, Robinhood the stock trading app or r/wallstreetbets?
Reddit has tens of thousands of active communities. Many communities form around existing companies and their products. Here is one for my favorite note taking app Bear and here is one for Wyze — a company that develops inexpensive smart home hardware like cameras, motion sensors, light bulbs. Any product that has a fan base probably has a Reddit community.
What about the inverse? Companies forming around Reddit communities? Public.com - the investing social network — seems to be a product aiming to to siphon users off Reddit — from discussion forums like r/wallstreetbets into a purpose built mobile app. Further, they are doing the same thing on Twitter. I’m excited to see more and more users have their needs and desires met as companies form around their Reddit community.
The r/personalfinance Reddit community is ripe for a company to productize the fairly consistent advice — to help make basic, smart personal finance management even easier. I don’t just mean make setting up an HSA or Roth IRA a one-click activity — I mean a personalized game plan based on your age, income, employer (i.e. their specific benefits), your immediate financial needs and long term plans. All of this is just too hard and people are missing out on relatively well understood ways to better save for their future, save for a rainy day, or save for a big purchase. The millennial generation knows that social security isn’t going to work for us — yet we struggle to take the necessary actions required for retirement.
Being an Amazon Seller in 2020; Year in Review
Read it here: https://www.molsonhart.com/blog/being-an-amazon-seller-in-2020-year-in-review
Amazon’s fees are eye-watering and show the extreme leverage and control they have over their sellers. Reading further, Amazon has clearly expanded their cut from sellers while likely further reducing their internal costs. A few quotes:
This is a giant plush tiger we sell. We ship it from our warehouse in Texas. Whenever we sell one for $150, here is what we pay Amazon:
15% commission on the price, $22.50
Advertising to appear in search results, $17.58
In this case, Amazon takes a lower percentage of the total price of the product, 27%, compared to the 53% taken when fulfilled by an Amazon warehouse. However that is 27% of the total price taken by Amazon when all they did was host the product on their website.
We designed, manufactured, imported, stored, shipped the item, and then we did customer service. Amazon hosted some images, swiped a credit card, and got $40.
In 2013 [for this seller], Amazon’s expenses as a percent of Amazon sales were 33.16%. In 2018 They were 49.70%. In 2020 they were 51.75%. Meanwhile our sales on the platform have gone up 370x.
This is Ben Thompson’s Aggregation Theory in practice.
Assume Self-Driving
There’s an old saying that the first fifty years of the car industry were about creating car companies and working out what cars should look like, and the second fifty years were about what happened once everyone had a car - they were about McDonalds and Walmart, suburbs and the remaking of the world around the car, for good and of course bad. The innovation in cars became everything /around/ the car.
Source: https://www.ben-evans.com/benedictevans/2020/12/13/what-comes-after-smartphones
What happens when we remake the world assuming self-driving cars?
Garages get reclaimed and become livable space (or home offices).
Self Driving = you don’t own a car. No car = No need for a garage.
Instead of going to the restaurant — the restaurant is mobile and comes to you. Not just delivery — the whole restaurant experience.
Groceries come to you - by robot (not Instacart shoppers / Amazon Prime pickers)
Homes are re-designed to allow for unattended deliveries and deliveries that require refrigeration.
Farmers’ market comes to your neighborhood or even your door
Starbucks re-invents itself — leaning in on the “3rd space” concept (a place to gather) even more heavily or is disrupted by roving coffee trucks that dispense made to order coffee/frappuccino/lattes.
What else? What will happen to the school bus? Parents driving kids to practice and school? This is an ongoing thought experiment attempting to understand how our day to day lives will transform over the next 10-20 years.
The Perfect Store: Inside eBay by Adam Cohen
Notes:
Fun, light read. Read it if you are looking for a fast paced, quick history of eBay with plenty of fun quirky/eBay-sian stories.
eBay focused on the community - this the major part of what set them apart from the many competitors - some much better funded OR with better distribution (Yahoo, Amazon). By building and nurturing a community via message boards, they built a loyal and very opinionated following — a set of fans that proselytized eBay in their own online communities (think stamp collectors sharing a link to an auction on the stamp forum, or coin collectors, or Elvis fanatics) and acted as free customer service for new eBay users trying to learn how best to use eBay.
eBay won by having the most bidders. This kickstarted the virtuous cycle of bidders bringing in sellers, which brings more bidders. Sellers were willing to move to any auction platform (and often did switch when incentivized) but at the end of the day sellers wanted to be where the bidders/buyers were — so in eBay establishing themselves as the place to find stuff for buyers — they established their moat.
One can also think of how eBay onboarded individual communities one at a time as the key to their success. By creating a category, for example “Stamps” — they created the space for the sellers and bidders to meet and it was quickly filled by sellers finally having a scalable way to reach the online stamp collecting community. eBay only created a category when they knew they had found an online community ready to start bidding — so no category on eBay felt like a ghost town.
eBay acquired local (US) and international (e.g. German) clones — but only those that really focused on community. Note the infamous Samwer brothers were the ones to clone eBay for the German market and sell it to eBay.
The book focuses on the advertising partnerships that eBay made with AOL and others — I cannot tell if this was critical to eBay’s success or not. Specifically, eBay paid AOL to advertise eBay on AOL — and then later amended their relationship with AOL to pay them to not enter the auction space (I question how this was this legal — but too late now). The AOL deals certainly generated a significant number of new users — but very unclear to me if this was necessary.
eBay’s website went down for ~ 1 day and they weren’t sure they could ever get it back up (without losing the data). They didn’t have a disaster recovery plan. Amazing. However, even today, big companies have significant and impactful downtime (Slack went down two weeks ago for ~4-5 hours). More interestingly, eBay called Sun Microsystems and had them send over tens of engineers to help figure out what was wrong. Sun Microsystems built the servers eBay used.
The book really tells the story of finding incredible product market fit. eBay’s first hire, a part-time hire, was someone to open mail. Mail filled with checks and cash from sellers paying eBay on the honor system. Think about that, so much mail was coming in that Pierre had to hire someone to open it and take the money. This is just one example of the strength of the demand for eBay.
FUN: Experimenting with Live Broadcast Sports: NFL Slime!
Thank you Claire for clueing me in!
FUN: 72’ Saildrone - A Self-driving boat mapping the ocean
Source: https://www.saildrone.com/news/saildrone-launches-72-foot-surveyor-ocean-mapping