Why is Reddit losing money? Ahead of its IPO, Reddit's spending on research and development amounted to an eye-popping 55% of its revenue.

Reddit kind of anticipates this critique in its investor docs, and argues that it didn’t really start operating as a serious business until 2018 when it finally started “meaningful monetization efforts” — that is, trying to make money for real.

But that’s still six years ago. What has Reddit been doing since then?

One big, obvious answer: It has been hiring a lot of engineers and spending a lot of money on their salaries…

…What am I missing? I asked Reddit comms for comment but they declined, citing the company’s quiet period before the IPO.

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      • AggressivelyPassive@feddit.de
        126·
        9 months ago

        I’m a senior software developer. I know how the industry works. And I also know the incredible arrogance of IT people thinking they’re only millimeters away from being literally gods.

          • AggressivelyPassive@feddit.de
            12·
            9 months ago

            No, it’s not. Other industries have standards. Nobody would try to re-invent bolts for no reason. Software engineers do. All the time.

            And it is related to pay. Or better, willingness to pay. VC funded firms are willing to spend a lot of money on hiring “top talent”, but they let them run relatively free. So instead of using a not 100% fitting solution off the shelf, they build a custom solution, that costs obscene work hours and fits a tiny bit better for 3 weeks. That means, a lot of the work of these very capable engineers gets wasted in the sense that it doesn’t create business value. So the business value they do create gets more expensive to produce.

    • sincle354@kbin.social
      162·
      9 months ago

      From a software engineering view: Lots of rebuilding the wheel, now with Internet Explorer dependencies. Large tech firms are more and more bureaucratic rather than innovative. Startups slurp up VC funding for the next 200 or so unicorn investments. NVIDIA is THE ENTIRE S&P 500 at this rate with SERIOUS “Peak of Inflated Expectations” valuation. Elon Musk.

      All the while the majority of the job is fixing the mistakes of the past, of yourself and of some code monkey in 2003. There’s this theory that code replicates the structure of the design team. When that team spans an entire corporate hierarchy with SCRUM standups every 2.5 milliseconds, you wonder if you could do the equivalent of the ending of Office Space to the codebase.

      I’m sorry, I’m just… anyway, a sage piece of advice. For the love of all that is holy, write requirements BEFORE doing validation for Aerospace applications, and DO NOT OUTSOURCE THE REQUIREMENTS WRITING. That is all.

    • boyi@lemmy.sdf.org
      91·
      9 months ago

      During the initial and development stages, the top tech workers were headhunted and paid a lot to set up good infrastructure. Now that the infrastructure is already there, when there’s not much new development being done, they ended up being considered overpaid with respect to the works being done. These companies will end up getting rid of this ‘overpaid’ workers and replace them with migrant workers that they can get for a lot less.

    • AggressivelyPassive@feddit.de
      1913·
      9 months ago

      Do you really think an engineer at Reddit or anywhere in the Valley generates as much value to society as a doctor?

      I’m not even close to FAANG, and I earn twice as much as a nurse and slightly more than a doctor of my age. That’s great for me, but I’m not worth that much. And tech workers in the USA earn even more relative to regular workers.