Alexis Ohanian describes himself as a "start-up guy with the aim of making the world suck less." The 30-year-old entrepreneur and investor is the co-founder of Reddit, a vocal supporter of open Internet initiatives, and author of the just-released book Without Their Permission: How the 21st Century Will Be Made, Not Managed.
Ohanian sits down with Brendan Byrnes to talk about his new book, which he described on Reddit as "a blueprint and a rallying cry for the open Internet and entrepreneurship." He also offers advice to young entrepreneurs and shares his thoughts on what it means to be a start-up among the giants of today's Internet.
Brendan Byrnes: Hey Fools, I'm Brendan Byrnes and I'm joined today by Alexis Ohanian. He is the author of Without Their Permission, and also one of the founders of Reddit. Thank you for your time. Thanks for being here.
Alexis Ohanian: Thank you for having me.
Byrnes: I wonder if we can go back in time to 2005, when you started Reddit. Could you walk me through the thought process there, and whether you thought Reddit would be this gigantic site -- I think 81 million unique visitors last month?
Did it start as kind of just a fun project for you, or did you see this maybe as becoming one of the biggest sites on the web?
Ohanian: You know, every founder has to delude themselves into thinking, "Yes, it's going to be big. It's going to take over the world." Steve and I, we had just graduated from UVA, and we were like, "Let's just try to live like college students for as long as we can."
I think one of the best assets we had was a certain amount of ... just kind of ignorance. We just wanted to be able to keep making stuff we liked, and be able to have pizza and beer in the fridge. That was a huge asset.
Some of the best stories I'll have to save for the book, but I'll tell you the coolest thing was now seeing, we had the President of the United States last year do an AMA from Charlottesville, so it all kind of came full circle.
I can assure you, when we were in C-ville coming up -- I was drawing the Reddit alien while I was bored in marketing class -- never could have expected what would happen, like eight years later.
Byrnes: Wow. And the book, called Without Their Permission. What do you mean by that, and why did you decide to title the book that way?
Ohanian: It is a riff off of permissionless innovation, which is a phrase that we talk about all the time in tech. It's one of the virtues of the Internet. It is, as a communication platform and a learning platform, unparalleled because whether you want to learn something or share something, it's simply a few clicks away.
What that does is, it doesn't just mean great things for entrepreneurs -- like me and Steve, who can start companies from our dorm rooms for almost nothing -- but it also means artists can now use this platform, using things like Kickstarter to raise money to get their art made. Philanthropists can use it to raise incredible amounts of money and do incredible amounts of good.
And we're only starting to see the beginning of it. I don't know where it's headed, but the people who are going to be succeeding are not going to be waiting around for anyone's permission.
Byrnes: Yeah. One of your aims, which I love, is to make the world "suck less."
Byrnes: Could you talk about in what context you mean that, and how do you go about making the world suck less?
Ohanian: Sure. That actually came up while I was an undergrad. It was a business class, and they asked us all why we wanted to get into business, why we were studying business. Back then, if you remember, a lot of people were interested in getting into finance. That was a lot more popular back then.
When it came to me, though, I just simply said, "I want to make the world suck less." Whether it's through business, whether it's through that kind of innovation, whether it's through philanthropy, whether it's through art ...
There is obviously a certain amount of suck in the world. It doesn't take too long to realize all kinds of things we'd like to change. So instead of making the world a better place, which is just a little too "beauty pageant" for me ...
Ohanian: Yeah. I'd rather just make it suck less. If we can all just sort of aim for that, I think we can accomplish a lot.
Byrnes: What's the best way to make it suck less? In your world -- maybe start-ups, or innovation? How do we do that?
Ohanian: You know, the thing that I see time and time again, the reason we're going to 75 universities for the tour, is because people are now getting to basically live up to their maximum potential for awesome.
It really is ... if you imagine Maslow's hierarchy of needs, if you can get all those requirements checked off and have all those amazing things that we need to just live lives, but actually get to do the thing that you're really passionate about ...
To actually be able to start out something as a humble Etsy store, and then three years later be able to turn that into your full-time business, and then a year after that open a brick and mortar store in downtown St. Louis -- that's not a hypothetical; it's happening right now all across the country -- and that is so cool.
Because I think we are a better and a more efficient society when people actually get to do the things that they really are passionate about, and really are amazing at, because it's going to mean better stuff for us, too.
Byrnes: I think one of the great parts of the book is there's a lot of advice for entrepreneurs that might be coming up, especially in the Internet space. What do you tell them when they ask you for advice and -- I think just as importantly -- what's one of the biggest things that they do wrong, and they can fix?
Ohanian: Yeah. You know, the first step, and the thing that everyone has to do right on the Internet is make something people want.
It seems really obvious, but the Internet is such a tough marketplace because everyone is a click away from going back to a cat photo, or going back to whatever else they were doing. You have to win them over, and do it quickly, and do it by making something people actually want.
You can throw -- and we've seen plenty of these kinds of companies -- millions of dollars in advertising for a website or a service, and in the end if it's not useful no one's going to use it. At the end of the day, how many ads did it take to convince you to use Facebook or Twitter? It wasn't marketing or advertising that convinced you to use these services. It was their value.
The other thing that I just can't do enough of is encourage founders to actually launch, to actually go ... I try to help founders as much as I can, but so many of us we won't even take meetings with people who still just have an idea, because everyone has an idea.
We all have great ideas. No one ever says, "I've got this terrible idea." No, everyone has great ideas, but what makes a difference, especially online, or just in life, is actually doing it; getting that first version out there.
We have a screenshot of the first version of Reddit. Literally, the first version of Reddit in the book, and it is awful looking. I mean, I could argue Reddit's still not the prettiest website at the party, but it was embarrassingly bad. But that's OK, because no one's looking. So launch.
Byrnes: You're saying that ... I think a lot of people struggle with the, "I have this idea, but I don't know whether to go for it or go all-in." I guess your message is you don't necessarily have to go all-in.
Byrnes: Just at least try something small and make a little bet there and go for it.
Ohanian: There are so many side hustles going on right now. Again, because the cost is so low -- the cost of starting an Etsy store is zero. It's a little bit of time. It's a few photos with a nice camera, and the stuff you were making anyway -- that we're seeing more and more people dabble.
Then especially for college students; we have so much invested in those four years. We spend a lot of money, student loan debt continues to increase, so unfortunately there are not many ... I actually haven't even found a curriculum in the country that is really preparing people for this 21st century world.
I'd love to see founders -- along with going to football games, and watching your team get beaten, in my case -- do that. But also be doing stuff. Launch your first Kickstarter. Raise $500 for a thing you care about because you actually get the experience of taking an idea and actually doing it. There are fewer and fewer excuses not to.
Byrnes: Yeah. You guys started Reddit in 2005. How do you think the Internet has changed since 2005, either from an overall perspective, or from the perspective of maybe an entrepreneur trying to get in the game?
Ohanian: It has gotten so much better, and I've seen the difference firsthand, because launching Hipmunk in 2010 I got to use all those social media tools that didn't exist in 2005.
Ohanian: Right? So Facebook was already out. Twitter wouldn't come for another couple of years after we launched Reddit. Here we are talking about their IPO now. Amazing.
For a little while there, Twitter was just this joke of a start-up in San Francisco, that could never keep their servers up, and look at it now.
These things, it is amazing to see how much value can be created from such humble beginnings, and there is just no other industry where you can see such a simple start grow into a multi-billion dollar company.
Byrnes: I think a lot of people look back and they'll say, "Oh, wow. Late '90s Amazon, of course we'd need some kind of delivery service," or "Facebook, of course we'd want to connect with our friends." When you look back, it's easier in hindsight to say that.
Ohanian: It is.
Byrnes: You don't buy the argument, I'm assuming, that we've reached such a peak of ideas, there are so many people out there trying to do this ... there's always something new to do, right?
Ohanian: Yeah. Well, OK, let me be clear. I don't even think I've had a totally original idea, ever. Everything is derivative. Everything is a remix, and we all stand on the shoulders of giants -- a great phrase.
If you look now, more than ever new entrants, new upstarts, are able to grow so much faster than they could before.
I mean, case in point, Instagram. The reason Facebook spent a billion dollars on that is because they came out of nowhere in like 18 months -- just a little bit longer than Steve and I were at Reddit before we got acquired -- and were drinking so much of their milkshake, in terms of photo sharing and viewing, that Facebook saw it as a legitimate threat.
When a new service launches -- I guess Frontback is the one these days that everyone is excited about, or Snapchat would be the one before that -- they can benefit from the fact that there are already millions of people plugged into Facebook, plugged into Twitter, which will jump-start their user base.
Yes, it is easy to feel like, "All right, well everyone's doing it." It's like the new "Everyone's in a band." But the reality is, there's still so much we haven't yet figured out. There's still so much stuff that has not been made more, frankly, efficient.
You look at Airbnb, one of the stars of Y-Combinator. We always had space, and people always needed space, and it took three RISD graduates to actually say, "Hold on. There's a market here. People have extra space. Let's connect them with people who need it, and meet supply and demand."
More of these kinds of companies are going to emerge where we don't expect it, and then in hindsight we're going to look back and be like, "Of course Airbnb was going to happen."
Byrnes: Speaking of some of the big boys -- Google, Facebook, Twitter, etcetera -- how do you view them? Are they a positive or negative overall?
Obviously they have the ability, and they do sometimes, to squash some of the smaller companies, or maybe come and take some aspects of an idea and implement it at their massive scale. How do you think, overall, when it comes to the Internet space? Positive or negative?
Ohanian: You know I -- and I warn people -- this is the start of a chapter. Do not be scared of the incumbents. We've seen hundreds of YC companies now, because I was in the first round and I've been an advisor since.
Hundreds of these companies I've seen since the beginning stages -- including Dropbox and Airbnb -- one of them has actually been crushed by an incumbent. The Googles, the Twitters, the Facebooks, they might be someone to acquire you, which is not necessarily a bad position to be in.
And oftentimes -- nearly always -- they are so busy, so focused on whatever it is they're doing, they can't be concerned with whatever you're doing. To the point where, for instance, when Google stepped up their travel search game a lot of folks looked at us at Hipmunk and were like, "Are you guys worried?"
It's like, "No, of course not. Google's an advertising company that makes their money on search. We can engineer a much better solution for travel search, than they can. With all their smart people, it's really ...
Frankly, I think from an ecosystem standpoint it's almost an asset, too, because they can help recruit and get people excited about tech, and then they work at Google for a year or two, get bored, and then we can hire them for a start-up, or they go off and stat their own.
Byrnes: Taking the opposite view of it, there are a lot of big tech companies that have gotten taken out by smaller upstarts. Do you view it as maybe Facebook, Google ... look at MySpace, for example, came in and got disrupted.
Ohanian: Ooh, yeah.
Byrnes: Is it a negative to be the top dog and have people gunning for you, or does it totally depend on the specific company? How does the tech space move as far as Internet innovation?
Ohanian: You know, you look at a company like Google, which clearly is still just printing money. Then you look at others; Groupon's had a rather turbulent time. Obviously much shorter timespans have gone by, but clearly there are companies that establish themselves -- Google in search, for instance -- and can build enough of a beachhead that they are very, very profitable and do really, really well.
There are others -- and I'll pick on Groupon -- that catch onto something that is clearly booming and doing really well in terms of those sales, and it's not enough. It's not a long-term thing. We're seeing Fab now, trying to become more of a retail destination. It really varies.
I don't have a crystal ball, but if you can ever put yourself in a situation where you are indispensable -- where you aren't part of what looks like a fad, but you actually are a company, a brand that people trust and go to -- at this point, you could put some of the mainstays of tech on anything, right? Google wants to make self-driving cars? Why not? OK.
That's the difference, and time is going to tell, but really it is hard not to get excited because I want to be in an industry where the upstarts can grow and displace the incumbents, because that's why there's so much innovation.
Because if you start sleeping, if you start getting soft, someone is going to be there with that straw, drinking that milkshake -- and hopefully I'll be an investor in that start-up.
Byrnes: Right. I was about to ask you about that. We have quite a few investors watching right now. You've been invested in dozens of companies. What are some things you look for when you're evaluating a company, and things you like to see overall when you're looking at making an investment?
Ohanian: You know, the stage of investing that I do is seed stage, so it's really early. Here's a pair of founders who maybe have a prototype. They have a little bit of traction, maybe one employee, tops. At that stage, you really, really can only evaluate a company based on those founders and what they've been able to build. It's very, very team driven.
I've got an anecdote in the book about Steve and I applied to Y-Combinator. Long story short, we got rejected on our original idea. We wanted to make a mobile food ordering service called MMM, "My Mobile Menu."
Anyway, we got rejected. Next morning, on the train ride home, Paul called us back and said, "You know what, we like you guys. We don't like the idea. If you change your idea, we'll let you in." So we changed our idea. The thing we changed it into was Reddit, which worked out pretty well.
If I didn't believe in rooting for founders and investing in founders, I'd be a bit of a hypocrite because Paul and Jessica took a chance on me and Steve.
Byrnes: Without Your Permission is the book. You have a very interesting way of promoting it, going around to different colleges. Could you tell me how that came about, and why you decided to go that route?
Ohanian: You know, we had a ... we got a bus last fall. My buddy, Erik Martin, general manager of Reddit and I rented a bus. It was John McCain's old bus, actually, the Straight Talk Express. We took it through the Heartland for about nine days for the Internet 2012 Bus Tour.
We brought journalists, showed off all the amazing innovation throughout the country. I write about a lot of those stories, but this time I thought, "All right, that bus trip was cool. Let's go bigger. Let's do 150 stops. Let's go to 75 universities, and let's spread this gospel of Internet entrepreneurship everywhere we go."
Not only is it a good excuse for a T-shirt cannon, which I am now a proud owner of, it's also a good excuse to rent a bus.
But it's the thing I wish I had when I was at UVA. There are more and more entrepreneurship clubs. Almost every university we've talked to, we've gone through the entrepreneurship club. It's a bunch of young go-getters who are excited to talk about entrepreneurship, and that's a great sign because none of this stuff is part of a curriculum, and this is our way to deliver it.
In a lot of ways, Steve and I got lucky because we heard Paul Graham give a talk in Boston during our senior spring break. We left Virginia to go to Boston to hear this guy give a talk that changed our lives, so you know what? I'm going to bring it to them.
And, bonus, because author readings are silly -- because you can just get the audio book if you want to hear me read my words -- I'm bringing an alum from every one of these schools onstage with me, and I'm going to interview them about the awesome stuff that they have done since they've graduated, using the Internet.
If I'm at the University of Georgia and I can't inspire this room full of students, OK, fine. I'm not going to take it personally. Maybe a little bit, but I'll be all right.
But then when I bring the guy behind Humans of New York, one of the most successful -- this guy's probably the most viewed photographer in the world right now; millions of people see his photos -- started out, University of Georgia graduate, kind of bouncing around jobs, actually was in finance for a bit. Just moved to New York, picked up a camera, started taking photos. Had no business taking photos; never taken a portrait in his life, did not ask for any permission, and now having tremendous success.
I want him onstage with me, and he will be, talking to all of his fellow alums at University of Georgia saying, "Look, I was in those seats five years ago, seven years ago. Let me show you the way. Let me tell you that this can be done." If he can't inspire them, then all right, you know what? They should just leave. Then clearly they're at the wrong talk.
Byrnes: Yeah. Well, it's a fascinating book.
Ohanian: Thank you.
Byrnes: The book is Without Their Permission. Alexis Ohanian, thank you so much for your time.
Ohanian: Thank you. Thank you.
Brendan Byrnes has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Facebook, and Google. The Motley Fool owns shares of Amazon.com, Facebook, and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.