This unusual rags to riches entrepreneurial success story goes all the way back to 2005 when two twenty-somethings Alexis Ohanian and his co-founder Steve Huffman kicked off Reddit for just USD 12,000. Incredibly, Ohanian and his co-founder managed to turn the power of free speech into a billion-dollar empire.
13 years later, he’s stepped down from Reddit (although remaining on the board) and is now looking to put his learnings back into a whole new generation of hungry startups with his investment firm Initialized Capital. With a baby in tow and one of the world’s most famous individuals by his side, Serena Williams. He’s ready for chapter two of his life. In this exclusive chat with Alexis, we discuss the early days of Reddit, life in Silicon Valley, the tribulations of being in a high profile couple and why he’s so keen to give back to the tech world.
“The hardest part early on was probably just getting anyone to care.”
I know you wanted to be an immigration lawyer and that initially, you wanted to help people.
Now we see the return of a different kind of immigration policy with Trump and his presidency. If you were an immigration lawyer today, how would you be responding?
If I were an immigration lawyer today, I would like to think I’d be helping to reunite these families down at the border and hopefully do some work to undo some of the traumatic stuff that ICE has been doing to separate these families. I’d probably be getting some sensible immigration policy back into this country.
But to be honest, I don’t know. I’m trying to apply how I think about solving problems with thirteen years of experience working with startups in technology. I would like to believe that whatever it is I’d be doing was in some way trying to help.
To me, it feels like a church and state division is happening in America in relation to technology and government. You have Donald Trump inviting leaders of Silicon Valley like Elon Musk and Peter Thiel to join his economic advisory team and then leaving. Were you asked to be a part of that? And if not, would you join it?
I was not asked. Would I have joined? It’s easy for me to sit here and say absolutely not. I think I would have considered it because, at the time, I’d already spoken out in advance of the Trump election, so I know that’s why I would never have been asked to be on the board, but I think there was a sense of, well look, we need to at least have a voice in the room. Friends of mine did join and that was their attitude. But yeah I can pretty safely say I would not have participated. Nor was I ever going to get invited to join.
Are you quite collegial with those people? The ones that I mentioned? Do you have discussions about Trump with those types of people?
No. Definitely not collegial. I’m a remarkably antisocial Silicon Valley executive. I try to spend most of my time working with founders. I can learn a lot more about the future and do my job better as an investor by talking to them than folks who are already established and have made it because their mindset is just different. They’re thinking about preservation and expansion, not about creating something new.
How is Reddit viewed in Silicon Valley?
I think even to this day people believe that Condé Nast owns the company. That’s a common misconception. The latest round of funding at the end of last year probably helped most people realise that we’re an independent company. They can see we’ve just raised this billion dollar valuation from outside investors.
But I think my sense would be that this is a core part of the internet that was out in the wilderness for like half a decade when there was no advancement or improvement, and the product hadn’t changed.
Now in the last few years it has turned around and gone from 50 to 400 employees, and we’ve built a business, improved the product, shipped a mobile app and done some pretty obvious things. But yeah I think the best perspective on that might be from other people.
"I’m a remarkably antisocial Silicon Valley executive."
So talking about Reddit itself, I want to understand a bit more about the early period. During the incubation period, what was the hardest part about building Reddit? And at what point did you know you were onto something that would be a global success?
The hardest part early on was probably getting anyone to care. In 2005 social media did not exist. The only way to build an audience was to email bloggers and hope that they would write about what we were working on. In my case, I had a web forum in college and had maybe 500 members, so I emailed them and said, “hey we just built this new thing, you should try it out.”
The advantage, of course, was that there was much less competition for people’s attention back in 2005. But because of that, it was harder to grow organically like you can today, where you know one of these companies here is going to post on Product Hunt tomorrow and immediately have 5000 users.
We submitted the links ourselves for the first few weeks because there wasn’t anyone else. You tell all your friends at school to try your new app, and two of them do. Once it had a critical mass where we wouldn’t need to post every day, or even at all, that was also around the time that we thought, OK we’re not wasting our time. This crazy idea seems to be working.
There’s this kind of romantic idea about Silicon Valley. You start in a garage or bedroom, and then you scale up to IPO, that journey has become mythologised. What do you want to dispel about that myth? A lot of that is not true for a lot of startups.
Innovation is not limited to a zip code. We started Reddit in Boston, in a little apartment there outside of Cambridge.
But Cambridge is a hotspot for that activity?
Yeah, the university’s helpful. I think you need some raw materials in a startup community. It would be tough to do it if you don’t have a university nearby. That’s not to be ageist but universities are continually bringing together a bunch of people with different points of view at a point when they’re starting to learn.
Maybe the university model will change over time; I’m sure it will. But you at least need that. If you don’t have that, you need density. It is tough and lonely to start a company in the middle of nowhere. But there are a lot of places that are not the middle of nowhere where you have density or universities and yeah, you can open a laptop and get started. I’m fond of telling people you don’t need to open a factory anymore, you just need to open a laptop.
That’s a compelling idea, and the rise especially in the last couple of years in particular, of international startup hubs is undeniable. Crypto is its own exciting thing because by its nature those companies are decentralised, but we see more and more of them that are not only entirely decentralised workforces, living all over the world but they’re also internationally based. If there is a headquarters, it tends not to be in the United States.
Alexis Ohanian and Serena Williams appearing at the MET Gala, 2017
Image: Getty Images for Entertainment Weekly
What’s your opinion on universal basic income?
I intellectually love it ever since I first read about it on the futurology subreddit. I still haven’t seen a model that shows sustainability, and at least in the United States, there’s a lot of political stuff to get over.
We have to get the left to be interested in cutting existing entitlements and then convince the right that, yes this is an entitlement, but you’re letting people have the autonomy to make decisions for themselves, so it’s better than telling them they have to spend it a certain way.
I think it’s the responsibility of a modern developed society to be able to make sure that even the poorest can at least have a decent standard of living and quality of life. I think that’s a reasonable goal for a modern society.
So I think, OK, if we get to the point where universal based income can tell you, here’s your money, this is enough for you to do what you need to live a respectful life. And if you want to get high and watch video games all the time I’m OK with that, because you could take that money and decide you want to be an awesome dad, and raise your three kids.
And don’t even get me started on parental leave. We don’t even have that.
So there’s a reason why I’m asking you, firstly, are you still the “the mayor of the internet”?
I’ll take it. Thanks, Forbes. I never really liked it in the first place.
Do you think it’s condescending or a bit silly?
I think it’s silly. I think Forbes had the best of intentions when they wrote it. This was right after we defeated SOPA and they were just like, OK this guy is looking after the internet.
But I think it’s silly because the internet works because it doesn’t have a hierarchy. It works because it ostensibly should not have a hierarchy, but I know technically without net neutrality certain traffic is prioritised. But an ideal internet does not have a hierarchy.
The reason I was asking about UBI is that I feel as though there’s a lot of disparity in the mindset of Silicon Valley today. They vouch for the idea, but they also inhabit a type of testosterone-fuelled capitalism. It’s all about impact, growth, profit. Everything that you can do but times ten.
Do you think UBI can still allow people to be motivated?
I can’t speak for everyone in Silicon Valley, but for me, I reconcile it because I don’t think it demotivates people who want to create something. There’s enough of a track record of people who have plenty in their bank accounts but still feel excited to create something because they can’t live without it. The reason it appeals to me is that I want to ensure that everyone has that minimum, and can at least take care of themselves, and we can all buy into this idea that everyone should at least be able to do that.
What has Reddit taught you about human behaviour?
I have only gotten more positive about humanity in the last thirteen years because I have seen at scale how the vast majority of people think and act when the only thing tied to them is a made up name: their Reddit name.
That decency is all of the smallest gestures, the smallest things that never make the headlines because they’re not that interesting.
When I’m sitting on a subway, I feel closer to more people than I did thirteen years ago because I know the things they’re not talking about, the things they’re not posting on Instagram are one and the same, the same shared Insecurities we all have.
So while it has brought perspectives together that I in my bubble didn’t encounter before, the vast majority of them are still positive. Those are the things that give me hope.
We’re all trying to understand the Trump phenomenon, and one of the best quotes I’ve heard about him is, “Trump is the product of all the comment boards of the world coming to life.”
Some people have said that Reddit might have been a contributing influence on legitimising fringe views and giving a safe space for specific groups to feel emboldened. Do you think that argument has any weight?
I do think that they had platforms before. We have a pretty straightforward content policy about things that are banned, around harassment. But there are going to be communities, The Donald (link), is the one, in particular, I think you’re referring to.
They are a Reddit community of supporters behind the president. I think the reality that we are coming to terms with is that there were a lot of people who felt left out of the conversation, who did not feel they had a voice, and while I personally disagree with what they’re saying, they still have a view that we have to acknowledge at least is a view.
I think the reason Trump got elected was that he spoke to a part of the population that felt like no one was talking to them in traditional media, and certainly not in politics, and had a message that they could rally behind because he was genuine. It was unapologetic, and I think we can point our fingers at everything from social media to reality television.
I’ll give you some data on this. The engagement level on the Trump community on Reddit dwarfed the engagement numbers of the Hillary subreddit.
The Sanders for President subreddit engagement dwarfed the Trump one until he lost the primary. I mean the numbers were jarring, how much more engaged Sanders supporters were than Trump’s.
Even at peak Trump, Sanders during the primaries was more engaged. So there’s not a lot of data to support what you’re presuming. If Sanders had won the nomination and become president, would this be a thing?
"People will see me and her, and they might recognise her but then they'll look at me and be like, “no that can’t be her.”
Alexis Ohanian on being in a high profile couple
So let’s talk about your role as an investor and someone who fosters companies that sometimes succeed and sometimes fail.
Yeah, half of all startups will fail.
Really? I thought it was even higher.
I mean for our portfolio. But yeah the mortality rate is high for sure.
One of the reasons you said you wanted to continue being an investor was so that you don’t have to live with the same soul-crushing existential threat of being a founder. Can you elaborate on what that means and how that leads into Initialized?
I technically did co-found Initialize with Garry [Tan], but it’s very different from running a startup. That soul-crushing existential threat is that you do feel responsible for everyone on your team, and all of your customers. If you raise the funding, you certainly feel responsible to your investors and you’re very keenly aware of your burn rate. There’s usually a number of months, on a dashboard somewhere, telling you how long you have until you’re out of money.
And that’s in any business, but raising venture money highlights it. I’m grateful for the time I spent doing it, but I got all of my grey hairs from it. I think if it’s the right person doing it, maybe it’s just a part of it. Perhaps we’re all broken enough in the same way that it’s actually part of the appeal too, but it doesn’t leave you.
You’re always thinking about it. It’s the last thing you think about before going to bed and the first thing you think about when you wake up. I’m grateful I was able to do it, but I’m very happy not to have that same kind of pressure anymore.
Imagine you’re working at Initialized Capital and Reddit came to you. Would you have taken them on?
I would hope so. Would I have invested in myself? Yes. How else would I answer that? Of course, I would.
Yeah, I’m just wondering if you can separate that and look at Reddit with fresh eyes? Because now you’ve got 15 years of founder experience behind you and you’re a seasoned VC.
Yeah, I’d like to think I would have done. It’s hard because 13 years ago the bar was a lot lower. We didn’t have a prototype for Reddit; we had a prototype for this other company that they rejected, rightly so.
So I would have been pitching myself just an idea. I would have had no track record. Web apps barely existed at that point. Whereas today any founder should at least have been building something because it’s so easy to make something.
You have an active portfolio of more than 100 startups, you’ve created more than 20 billion in market value, so what is the end goal for Initialized Capital?
Garry and I want to be the early stage investors we wish we had had.
I believe there is a viable way to scale myself and that’s something I’d like to do. I’d be very happy to spend this next decade being able to take the experiences I’ve had, and the lessons I’ve learned, and get them into the heads of as many founders as possible.
I’d be particularly interested in trends in niche tech markets such as gov tech and urban tech/data science” — Cassie DeWitt (@Cassie_DeWitt) July 2, 2018
We have invested in a few startups, but they’re tough to sell.
I want to see government and data come together and I think we have a good opportunity. I think it’s so needed because if we can bring more accountability to the government then people will be less cynical about it, and I believe better software can help. I think that will go a long way towards increasing more confidence in it. But we’re still a long way away from it sadly.
You’re here with Serena. What has it been like being a high profile couple? Do you feel the more public you both become, the more private you become?
I don’t feel like it’s changed too much. My wife’s been high profile for a very long time, I have been rather newly high profile, but I’ve spent the last 13 years as the face of a company, so I’ve always had to be mindful of my behaviour in public.
So I think it’s dovetailed pretty nicely for us to the point where we’re about as public as we want to be. It’s an exciting world we live in now because neither one of us needs attention for us to do our jobs better.
It’s not like we’re in an industry where that’s valuable. So I think we’ve got the freedom to be as public as we want to be and I don’t think it’s changed too much. Actually, I’m still a pretty good antidote for my wife when we’re out in public because people will see her and me, and they might recognise her, but then they’ll look at me and be like, “no that can’t be her”. So we’re pretty unaccosted.