Lets take the example of Reddit. Reddit could have kept its costs to the minimum and could have run the site with the ad revenue that came in. In fact they could have talked transparently about their opex and asked for a simple donation drive every now and then like Wikipedia. If need be, they could have removed silly GIF replies and other stuff and focused on text alone. However this would not let them become the next Facebook. That’s what they wanted to be. At some point in their story was a choice to be forums 2.0 or get into a race to become a cash grab. Sadly they went for the latter.

It’s the money.

US Fed has raised interest rates, destroying money for the first time in decades in an effort to stop our inflation problem

The knock on effects is that banks literally have less money to lend to companies. Some companies are affected more than others by this environment. Tech was hit hard, extremely hard.

With hundreds of thousands of layoffs, tech industry is contracting. Silicon Valley bank literally evaporated in the span of 3 days. Twitter was losing money and had to sell out. StackOverflow is losing money and is currently selling out.

In this environment, Reddit is about to launch it’s long awaited IPO, the time when the public is allowed to directly buy Reddit stock and invest into the company. That’s what Initial Public Offering means. If Reddit does well, Reddit will pull in lots of money this year through this IPO.

The CEO of Reddit needs to prove Reddit is profitable, or if not profitable… Will eventually be profitable. Stockholders don’t care about Reddit drama for the most part, but most are smart enough to read financial sheets. Reddit needs to show growing revenue, growing profits and cutting costs to attract money.

As such, all of what Reddit’s CEO has done makes sense in the context of the IPO. He is betting that shareholders won’t notice the drop of high quality content creators from Reddit, since that’s not a financial number that’s reported. He can IPO, raising millions, maybe even billions for himself. The golden parachute outta here when everything gets screwed up in a year or two and collapses.

I think today’s investors are smarter though, and the bearish economy and high interest rates means more investors will pay attention to underlying issues.

Late stage capitalism You make a business and it goes well, you make some money everyone is happy.

But with time your profits will plateau or even decline. It’s natural, but businesses don’t understand that it is insane to expect a company to always turn crazy profits when the product does not evolve.

Companies like apple and Microsoft don’t worry as much because they are constantly evolving with new product.

Companies like Twitter, Facebook, reddit, Netflix have hit a wall where there really isn’t anywhere else to go so they start making shareholder centered decisions made by people who aren’t even in touch with the user base of their product.

Running out of VC dollars, now they gotta actually make a profit.

https://medium.com/@mikegrindle/reddit-and-the-enshittification-of-social-media-659d41b5ab73

What were the bad decisions discord is making? Im out of the loop

A lot of these companies have never been profitable and have been running on VC money on speculation alone until they reach critical mass and can turn on the monetization streams.

The VC money is drying up and they’re demanding a return on investment as the world’s economy struggles on at the moment.

Capitalism slowly shits up everything. Even the things it helps create.

I mean this in the most general way possible. Not just platforms. Even if reddit was profitable it would still continue. It’s just part of the cycle of seeking not just profits but ever rising profits.

It’s just more obvious lately on digital platforms because it has been kind of compressed into smaller amounts of time.

That which is free must find a way to cost.

That that makes money must find a way to make more.

And slowly but surely its takes on a fine shine. A glean seen from a distance. But when you get close you realize. “oh, its fucking shit all over it.”

I don’t know honestly, greed probably. But it’s such a shame. It seems like the internet as a whole is heading in a horrible direction, and not enough people care about it for there to be something done about it.

$

Start making alternatives, open source alternatives.

Higher interest rates, less vc money, have to actually start being profitable

Cory Doctorow has some very interesting blogposts on the topic. He call it enshittification. It’s more or less the business model of plattform Capitalism.

This is just what living in late stage capitalism looks like.