Reddit’s Steve Huffman: A Conversation at the WSJ’s Tech Live Conference
Steve Huffman is the co-founder and CEO of social media platform Reddit Inc., which earlier this year was at the center of a stock market craze in which individual investors in one of its online communities gathered to buy stocks such as like GameStop Corp.
In an interview with the Wall Street Journal’s Tech Live conference, Mr. Huffman spoke with tech reporter Deepa Seetharaman about the frenzy around the WallStreetBets forum and the possibility of Reddit going public.
Edited excerpts follow.
MRS. SEETHARAMAN: Earlier this year, you were in the news for the WallStreetBets subreddit, where many different users were urging people to buy heavily shorted stocks like GameStop. It has been several months. What do you think of this situation with the advantage of time?
SIR. HUFFMAN: At that point, as everything swirled around, the series of decisions we were making was: what’s going on here? Is there a problem here? Is there an area where we need to step in or do something?
And we’ve come to the conclusion that it’s actually very important that this community stays online. There is, of course, external pressure, and then we saw our own internal challenges with the influx of traffic and attention straining our systems.
Looking back, I’m proud of the way we’ve articulated what’s important in this community because it’s so complex. There are a lot of nuances there, and the broader theme of community power. And seeing a window into this community of retail investors, how they think, what’s going on, was really valuable.
MRS. SEETHARAMAN: So you still think that’s a good thing? That it was a big development?
SIR. HUFFMAN: Overwhelmingly.
MRS. SEETHARAMAN: Regulators have looked into whether this increase broke the law. Have you been involved in these conversations?
SIR. HUFFMAN: Our statements on this point roughly match my previous answer, that people are allowed to talk about stocks. In fact, it’s important that people talk about stocks.
MRS. SEETHARAMAN: How do you determine if you have market manipulation compared to a simple grassroots movement talking about these stocks?
SIR. HUFFMAN: This is an excellent question. Manipulation is not allowed on Reddit. In fact, manipulation is one of the most important areas in our type of anti-evil effort. Ranging from trolls that are larger in volume than their numbers should allow, or maybe even a savvy marketer trying to get the best out of Reddit to promote their products, or spammers – I guess the latter two are really the same – this is where we have put a lot of effort for over a decade now.
MRS. SEETHARAMAN: Did you say anti-evil efforts?
SIR. HUFFMAN: Yes, anti-evil is our name for our security team. They help write our policies and the tools to enforce those policies at scale.
MRS. SEETHARAMAN: We have long been talking about content moderation in the Valley. How do you see your progress since the 2016 election in terms of cleaning up your platform and security?
SIR. HUFFMAN: We have made a lot of progress. Now, I always follow that up with, “And there’s more work to be done.” We have changed our policies several times. We have also improved our ability to articulate these policies, which I think is very important, and our ability to apply them on a large scale.
What’s unique about Reddit is empowering our communities. Every post and comment on Reddit has both up and down arrows. And that’s really our first line of defense and probably the most effective because people create these communities on Reddit for themselves. They want to have beautiful spaces. They want to be free from interference. They want to talk about their interests and their passions. And so their ability to reject behaviors and content that doesn’t match their communities is very powerful.
MRS. SEETHARAMAN: Last year you took down “The Donald,” a forum used by supporters of Donald Trump, but not before you had all kinds of toxic behavior. Do you think you were too slow to do this?
SIR. HUFFMAN: “The Donald,” like many of our decisions that live in the gray area, was complex. There isn’t a hard decision I’ve made that hasn’t also thought, “Well, if I had understood it as I understand it now, we would have done things differently.” “
But it was a journey to get there. This community, among many things, was very good for living in the gray zone. That was kind of the problem. Community ethics, among other things, was based on being a pain in the ass, wasting our time.
MRS. SEETHARAMAN: Former Reddit CEO Ellen Pao tweeted a year ago that Reddit had become a haven for white supremacists and that bringing down “The Donald” was not enough. Do you agree with this characterization?
SIR. HUFFMAN: I do not. When I came back to Reddit in 2015, it was partly to fix this problem. And one of the first things the team and I did was change our policies and ban some of the worst communities of this nature that were created and thrived under my predecessor’s watch.
Reasoning through these things and articulating them on a large scale and applying them on a large scale is never easy. But I am proud of the progress we have made.
MRS. SEETHARAMAN: When you step back and look at the business as it has evolved over the past five years, do you think Reddit is ready to go public? What do you think ?
SIR. HUFFMAN: We are getting there. I’m excited to be a public company because, among other reasons, I want the ownership that our users feel about their communities on Reddit to have the option of being associated with actual ownership.
MRS. SEETHARAMAN: What is your sense of timing?
SIR. HUFFMAN: No commitment yet. But we are at work.
MRS. SEETHARAMAN: Are you considering a direct listing, a SPAC or a direct IPO?
SIR. HUFFMAN: No decision there either. But the market is changing. I think there are things we can do now that maybe weren’t options even a few years ago.
MRS. SEETHARAMAN: Like what?
SIR. HUFFMAN: For example, retail participation. Now you have platforms like Robinhood and SoFi where they can actually get their clients to participate in the IPO. Historically, this has not been the case. Retail investors are usually the last to come in and probably at the worst price. The way the market is moving there to be fairer is really exciting.
MRS. SEETHARAMAN: Why is it important to involve many retail investors?
SIR. HUFFMAN: Well, let’s just start with, “Why is it more important to be fairer?” And maybe that’s kind of the foundation. I think we spend a lot of time in the United States talking about wealth inequality and fairness. And these are important conversations. I think even in these times it is important that people can participate on an equal footing.
MRS. SEETHARAMAN: One thing investors, private or not, will want to know is how you are going to make money. If you think of digital advertising, it’s a market that’s almost completely absorbed by Facebook and Google. How do you compete?
SIR. HUFFMAN: Well somehow we managed to grow. I think we are up 190% year over year.
MRS. SEETHARAMAN: On what basis?
SIR. HUFFMAN: We are not the size of Facebook, but we are growing. I think we can safely say that we are a real business now. I don’t think I would have said that five years ago. There are big, big players in this space, but the market is changing.
Our pitch has been community and interests, and for our advertising clients, it is: “Come and establish a relationship with your clients. They are talking about your product here.
Ms. Seetharaman is a reporter for the Wall Street Journal in San Francisco. Email him at [email protected]
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