Image credit: Andrew Parker
The Signal: If you’re not already an avid listener of the My First Million podcast, you should be -- it’s idea gold. We created an entire ebook dedicated to business ideas that surface on the pod.
One such golden nugget came from a recent episode on the unbundling of Reddit with Greg Isenberg. Greg explained why he has taken all of his money out of the stock market in favor of starting businesses based on subreddits. He also outlines how he goes about it in his Guide to Unbundling Reddit.
The TL;DR: Any platform that is large enough can be unbundled (e.g., Reddit, ebay, Zillow, Zapier, Facebook groups). This happened with Craigslist over a decade ago, as Andrew Parker outlined in his post about the opportunity to develop niche (vertical) products based on broad (horizontal) networks.
Greg writes, “If you add up the value creation of the vertical companies (Airbnb, Zillow, Stubhub, Etsy, etc.) it is greater than the sum of its parts (Craigslist).”
Source: Andreessen Horowitz
The same is now happening with Reddit. Greg uses Discord as an example: In 2015, the game League of Legends (LoL) started trending. The r/LoL subreddit became a hub for the community, where members complained about how the go-to in-game and out-of-game communication tool at the time (Teamspeak) was outdated.
Discord created a modern tool that became popular with the LoL community, and eventually gamers more generally. Five years later, it is the de facto esports tool with 250m users and a $3.5B valuation.
The Opportunity: Opportunities to capitalize on the unbundling of Reddit and other active online communities will only be accelerated by the coronavirus pandemic -- people are hungry to explore their interests with like-minded individuals without leaving the safety of their homes.
However, the trick here is not to compete with the likes of Reddit and Facebook by creating a niche community, as we explored in this report, but to productize a particular consumer behavior based on a niche interest. You can always build a community around the product later. Some examples of companies that have already done this:
Greg outlines the way he goes about doing this in his post, and built on it during his chat with Shaan and Sam on My First Million:
- Discover which subreddits are popular/trending/gaining traction using websites such as RedditList and Subreddit Stats. Some that are experiencing high growth right now include:
2. Spend time reading posts to fully understand the culture of the community. What’s important to them? What’s trending? Where is the demand?
+ Sam tip: Order the most popular posts by month, year, and all-time -- and read the top 30 from each category.
3. Map out the community ecosystem visually (ideally with a designer), such as the most popular utilities, marketplaces, and social networks that they use outside of Reddit.
4. Spend time interacting with the community by asking open-ended questions (e.g., “What would you change?”).
5. Build rapport with influencers in the community and start building a brand that will resonate with them and other community members.
The Big Picture: The popularity of specific subreddits speaks to certain consumer needs. For example, the r/gifrecipes subreddit has 2.2m members who share recipes in GIF format. One hypothesis: The way that people are currently searching for and consuming recipes (long form, text format), is inefficient.
Source: Subreddit Stats
To play this out one more note: Instagram Stories and TikTok have demonstrated that people prefer to consume information in video story formats. What other information, currently in long form text format, can be converted into bite-sized story format (e.g., recipes, Wikipedia, etc.)?
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