June 21, 2023
Reddit CEO Steve Huffman has admitted that his company’s plan to increase the price of API access was inspired by Elon Musk’s takeover of Twitter.
In an interview with NBC News, Huffman said that he was “reaffirmed” by Musk’s success in turning Twitter into a profitable business. He also said that he believes Reddit can do the same, despite being a smaller company.
Huffman’s comments have been met with criticism from some Reddit users, who argue that the price increase will make it more difficult for third-party apps to operate. However, Huffman has defended the decision, saying that it is necessary for Reddit to become a more sustainable business.
As a smaller company generating revenue below $1 billion, Huffman wondered why Twitter struggled to turn a profit despite earning $5.1 billion in 2021. He pondered the aspects of Twitter’s business model that remained elusive and emphasized Reddit’s ability to achieve financial stability within the same revenue range.
Huffman also highlighted Elon Musk’s ability to operate a company with a massive user base and break even with fewer employees. He recognized that Twitter had undergone significant changes to reach its current state. Hence, the need for Reddit to do the same.
The sources for this piece include an article in TheRegister.
