Rejection, Amtrak, and the Birth of Social News

When Reddit’s co-founders approached seed venture fund Y-Combinator to ask for money, they were unceremoniously dismissed. Half a train-ride later, they re-invented the company and created a social news giant.
  • Transcript


Question: How did the idea for Reddit initially come up?

Alexis Ohanian: Steve Huffman and I came up during our Spring Break, senior year at UVA.  We came up to Cambridge, Massachusetts to hear a talk by a guy named Paul Graham.  The talk was called, “How to Start a Start-up.”  

We came up there on a train, a very long train ride, mind you, to hear him talk and then chat with him afterward.  We had had this start-up idea we had wanted to do for months.  We incorporated a company, we were ready to pitch and we just wanted to hear Paul’s opinion on it.  And I caught up with him after the talk and I said, “Mr. Graham,” or Dr. Graham, “It totally would be worth the cost of buying you a drink to get your opinion on this start-up.  We came all the way up from Virginia and we wanted to hear.”  And he interrupts me and he’s like, “You came all the way up from Virginia to hear this?”  I guess, I don’t know if he just didn’t think Virginia was capable of having mass transport, at least capable of getting us so far as Boston, but we convinced him for whatever reason to come have drinks with us, and we actually got coffee that evening.  

He liked the idea, he liked it a lot and it wasn’t long thereafter that he announced Y Combinator.  So it kind of made sense for us to apply then to Y Combinator, the seed stage venture firm.  And we applied; we were called in for interviews.  We thought we gave a pretty solid interview, but ultimately we were rejected, which sucked.  We ended up spending that night drinking a lot of Coronas and then going home back to Virginia the next morning, hung over, on a very long train ride.  

And somewhere in Connecticut, he called my cell, Paul did.  I picked up and he said, “Listen, we like you guys, we don’t like the idea.  If you come back now, let’s try to come up with something and as long as you don’t do that idea, we’ll let you in Y Combinator.  And we’d been telling ourselves, “Oh, you know what, we don’t need him.  We don’t need him; we’re going to prove him wrong.”  But as soon as Paul called back, both Steve and I just leapt.  I think Steve actually literally leapt at the opportunity.  He jumped over me to find out when the next stop was.  

And we headed back up.  And during that discussion Paul basically said, “Listen guys, you wanted to do a mobile food ordering thing.”  I won’t go into that, but I’ve written about it if you want to Google it.  Hope someone does it, mind you, “but you should think of something in a browser.  Think of a web app and think of something that solves a problem that you all have.”  And we were basically just bored a lot of the time, whether it was starting our day.  And we wanted somewhere to go to find what Paul had encapsulated really well as the front page of the web.  And we really liked that idea and it was something that Paul had crystallized in those few words that really summed up what we wanted to work on.  

And at the time, Paul had turned us on to this site called Delicious, which is a social bookmarking site, Joshua Schachter started it.  And it basically means that you can store your bookmarks instead of on your browser, on the internet.  So whether you’re at work or at home, you can find your same favorite websites to revisit.  And a byproduct of this, of having people bookmark all their favorite stuff and post it to the web was this Delicious/Popular page, which showed in fairly real time what the most popular bookmarks were.  

And this hit an interesting note because it showed what people were interested in saving for later.  Good reference material, but it never actually really conveyed what was new and interesting of the moment; it never captured the more ephemeral things that are really what is new, what is news.  And we wanted to do that with reddit.  And so we thought, ‘all right, here something that Joshua has hit on sort of inadvertently.  Let’s really try and focus on finding a way for people to discover and submit and discuss, eventually, the most interesting links of the day.