This is Kristin O'Brien managing editor at NFX, and this is the founder list. Audible versions of essays from technology's most important leaders selected by the founder community. This is the guide to unbundling Reddit written by Greg Eisenberg, co founder of late checkout, partner at Indicator Fund, and growth advisor at TikTok, previously head of product strategy at WeWork and co founder of Islands and 5 Buy, read by NFX. Every few years, a great unbundling occurs.
In 2010, Andrew Parker wrote a defining post about the unbundling of Craigslist where he outlined the opportunity to carve out niche products from broad horizontal networks like Craigslist. The broad networks are everything to everyone. The niche ones are something special to a certain group. If you add up the value creation of the vertical companions, like airbnbs, Zillow, StubHub, Etcetera, it is greater than the sum of its parts, I e, Craigslist.
It turns out going vertical is pretty profitable. The destiny of every massive social network or marketplace is unbundling. It's not a matter of if, but when? There is startup unicorn status reaching over a $1,000,000,000 valuation, and there is startup unbundling status. Unbundling status looks undesirable on the surface, but it means you're doing lots right. It is one of the rarest clubs around. What is a vertical network?
It's a social network or marketplace for a particular audience usually giving customers or users that warm and fuzzy feeling that the product is for them. Sometimes it starts out as utility and blossoms into a social network or marketplace, Vertical networks could be anything such as games like Roblox or photo sharing apps like Snapchat. Example, poolside FM looks like a Mac from the 19 nineties but it's a popular internet FM radio station or a social network targeting a unique audience.
The great unbundling of Reddit Reddit is being unbundled as we speak. It's largely due to 3 reasons. 1, major social platforms today are noisy. Pete have found refuge in groups like IMessage, Fortnite Worlds, and group chats. If Facebook is Walmart, tools and communities like Discord for gamers or public.com for casual stock traders are boutique stores. 2. There is too much surface area for Reddit to possibly cover within constraints of subreddits.
This creates opportunities for startups to swoop in, create brands and products that really resonate with Pete. And 3, COVID created an unsafe physical world yet people still want to explore their interests. The need is only grown, but the ability to physically experience your interests have become more difficult. The internet provides the safest alternative to be with your people and buy products that earn status, reputation, and major utility.
These reasons compound together to generate terrific thirst for vertical network products worldwide. In 2020, people are particularly willing to try your product download your app and join your wait list. Press is particularly willing to write about you. It reminds me of the same hunger that existed for mobile apps back when the Pete Store launched in 2008. These moments are few and far between. Some examples of subreddits and their startup vertical communities.
R slash medicine created doximity with 1,000,000 plus medical professionals on it. R slash beauty created the app super great, which is backed by benchmark, r slash sports created stadium live with spaces Morgan Z sports fans. R slash streamers created pipeline dot Gigi, top esports streamers community by top esports players snoop at. Note, I think many influencers will launch their own vertical networks and be successful. R slash insert city created next door, which is a unicorn company.
R slash books create a good reads and thousands more. How to find an audience and build the right product. 1. Find opportunities. Understand what subreddits are trending and what are popular subreddits at redditlist.com. A directory of top subreddits. 2, understand the lay of the land. Mapo popular utilities, marketplaces, and social networks for the audience that speaks to you the most.
Ask yourself what's the average week look like in the average r slash law, r slash Bitcoin, or r slash explain like I'm 5 subreddit users. Map out that user journey in-depth. Be confident that there is community founder fit. 3, create a brand people will fall in love with. Branding makes or breaks vertical network products. And 4, build a wait Flint and seed it with the community. Use that wait list time to learn even more about the needs and wants of the community.
Friendship Beller with micro influencers and influencers in the vertical. An example opportunity. R/gift recipes has 2,200,000 members to consume and share recipes in gifts in a vertical, which is cooking. Case study. Discord. Discord is slack for gaming with evaluation of approximately $4,000,000,000, Its humble beginnings are rooted in the process I described above. 1, league of legends is trending around 2015 and gets huge adoption. 2, r/lol turns into the key big hub for the community.
3, the tool many league of legends players use to communicate in game and out of game as teams and feels out of date. 4. The 2015 discord team swoops in and creates a modern tool for that vertical that looks and feels great. 5. Discord spreads from just the LOL community to other gaming subreddits as the de facto esports tool. 6, By 2020, discord counts 250,000,000 registered users. The future is bright.
I'm excited to see what sorts of new behaviors will emerge from this generation of networks, Jim Barksales said there's only 2 ways to make money in business. One is to bundle. The other is unbundle. If you got value out of this substack, someone else might too, so please share. Beller? Greg Eisenberg.
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