A Product Market Fit Show | Startup Podcast for Founders
00:20:24 · Pablo Srugo, Chris Slowe
[00:20:24] S1: I'm trying to get a sense of magnitude. I know it's a long time ago, but do you remember that first year, that second year, we're talking about 10,000 users a month, 100,000, a million, what scale were you operating at [00:20:37] S0: I looked this up because I figured you were going to ask this question. Let me actually find it. I just was complaining about it somewhere. Okay, so we didn't hit 10 million uniques per month until 2010. We hit about a million a month in mid to late '06, but at that point we also were on a pretty good three to six month doubling curve. If anything, the rate that we were growing was about the same pace where we could actually keep the site perky. When the load's going to be twice as much in three months, it really focuses the mind to like, okay, what's the current bottleneck that we're going to hit and what's the next bottleneck we're going to hit and how do we make sure we're at least a couple bottlenecks away from the actual major outage? [00:21:25] S1: How often were there big outages in those first days, like just didn't work?
00:21:25 · Pablo Srugo, Chris Slowe
[00:21:25] S1: How often were there big outages in those first days, like just didn't work? [00:21:30] S0: I think that the outages were in the early days, very early days, not particularly often and always something that ended up being like we don't know how to use this technology yet. Also, oh man, without failure we would have outages whenever – the team was always very small. If the team decided to go out to dinner collectively, if all four of us were in the same place, somebody's phone was going to go off. It's a guaranteed thing. I remember very clearly being out to dinner and Steve's phone went off and we had to run back to the apartment which doubled as the office, hopped on, and that was the first time we discovered that – We've used PostgreSQL as our database forever, and that was the first time we actually discovered that PostgreSQL had a configuration file we should look at. The tuned version of PostgreSQL back in 2005 was optimized for a 486 with eight megabytes of Ram. It was probably the first time we had an index fall out of memory where it was like, oh wow, we can just add two zeros to this setting and all of a sudden it works. The AI was like, yeah, let's figure out what all these settings do in this particular file, and just that compounded across a bunch of things. By the way, the impression I want to leave here isn't that we didn't know what we were doing. It was like nobody knew what they were doing at that point and we're all discovering it live. [00:22:50] S1: Walk me through, so the acquisition was when, in 2006?
00:22:50 · Pablo Srugo, Chris Slowe
[00:22:50] S1: Walk me through, so the acquisition was when, in 2006? [00:22:53] S0: It was Halloween '06, October 31st. [00:22:56] S1: At that time, Facebook started 2004. I don't know exactly how big they were, but I'm sure things were flying off. I don't know what you guys were looking at if you were comparing yourself to them or other social networks, but I'm curious, what was the logic for taking that exit especially when you had that growth. Those numbers were pretty big, especially back then, right? [00:23:15] S0: Yeah, no, I mean, I think that the breakout successes that were at the same time like, yeah, Facebook was 2004, but Facebook also was still – I think at that point – I can't remember when they rebranded from the Facebook to Facebook. The original domain was even different because it was hard to get facebook.com even then. They were mostly limited to college campuses until a little later. The breakout success summer of '05 was actually YouTube. YouTube came out of nowhere and exploded, and they got bought very quickly that year by Google. I mean, for us it was like – again, this is still at a point where there really wasn't much of an acquisition path available. Companies were still just waking up to the idea of startups again. The pitch at the time from Conde was actually very good, which was Conde is this premium content generator that understands monetization and then we are an engine for getting you to content that doesn't have a monetization path. [00:24:08] S1: Pre-revenue, at the time you guys were making –
00:24:08 · Pablo Srugo, Chris Slowe
[00:24:08] S1: Pre-revenue, at the time you guys were making – [00:24:09] S0: Advertising was a side thought at that point. We barely had advertisement on Reddit. It was one of those pitches that was almost like, with our powers combined, we could take over the world. At that point it's like, what do we know? We're all in our mid to late 20s. It's like somebody comes at you and you're like, "We'd like to buy this for more than you've ever seen, tell me more . It sounds like a good idea." [00:24:36] S1: The world's changed. I think now many first time founders, I mean, honestly at the end of the day, they'd probably take it too but at least they would pretend like they shouldn't. They're going for the unicorn, you know? [00:24:44] S0: Yeah, it was a different funding world. I don't think the word unicorn was coined until at least 10 years later. The idea of talking about series A, B, C, D, that wasn't even really back – it was in the lexicon from the late 90s but it really hadn't come back. It just wasn't really like an offer on the table sounds like a good way to do it and then, hey, we can always go start at their startup. [00:25:12] S1: What was it like after acquisition? Did they let you run things more or less the way you used to or did things get a lot more annoying?
00:25:18 · Chris Slowe
[00:25:18] S0: No, the nice parts about working inside of Conde Nast is they did leave us to our own devices. Actually there was a couple nice parts. A fun fact, Reddit was actually started in Somerville, Massachusetts not too far from where YC was based, which was in Cambridge. A lot of that first summer batch was actually all in Massachusetts, not in California. It wasn't until that winter when YC decided to do a second batch. They decided to do the winter down at Trevor Blackwell's office in Palo Alto, I want to say; definitely down the peninsula, because why would you purposely inflict east coast winters on your startup plus doubles the surface area for like, oh, if you can tap the east coast for some knowledge, you can also tap Stanford in that area. The side effect to that though was that when we got acquired, Conde wasn't sure where to put us and the nearest property they had they could stick us next to was going to be wired which is based in San Francisco. The side effects of getting acquired are like, "And we want you all to move out to California." I'm like, okay. We all moved out; worked out of the wired office for four or five years. If anything, that was probably more fun than anything else was just getting to talk to folks who have been reading their articles for like the last five, 10 years being in the bay where the center of the tech universe even then and just generally being left to own devices because of course Conde's mothership is really in New York.
00:26:43 · Pablo Srugo, Chris Slowe
[00:26:43] S1: I think we were talking about this before, you guys kept the team pretty small even after the acquisition for a while, right? [00:26:50] S0: We never had more than 10 employees up until 2011. I left in 2010; late '10. At that point the company was four engineers and some support. They had one sales person who was actually Conde asked employee. We saw other folks who were on the business side but it was one community manager just to start. [00:27:10] S1: How come? These days, if you're the next clubhouse, you think you're the next clubhouse, let's say, you raise a lot of money and you hire a lot of people. How did you do it with tent?