Episode Summary
Executive Summary: The episode centers on the Reddit blackout protesting API pricing changes that effectively kill third-party apps like Apollo, while also spotlighting the power of moderators and the risk Reddit faces as it tries to monetize and prepare for IPO. The conversation then pivots to building a Reddit clone and to broader business lessons from minority investing, international hiring, and podcast/media networks like Turpentine and Shepherd.
Main Topics: Reddit blackout and Apollo API controversy (Priority: 5/5): The hosts explain how Reddit’s steep API pricing changes would force Apollo and similar third-party apps to shut down, triggering a massive subreddit blackout protest. Moderators as Reddit’s unpaid backbone (Priority: 5/5): They argue Reddit underestimated how much power volunteer moderators have and how dependent the platform is on unpaid labor for spam control and content quality. Leaked calls, PR backlash, and narrative control (Priority: 4/5): The transcript details how a recorded call and Reddit’s public framing of Apollo’s founder as 'crazy' fueled the outrage and gave the protest more momentum. Building 'Spezless' as an alternative (Priority: 4/5): The speakers brainstorm a Reddit-like nonprofit clone that keeps the product familiar but removes Steve Huffman ('spez') and redirects value toward communities and moderators. Minority investing in cash-flow businesses (Priority: 5/5): One host shares a post-exit strategy of buying minority stakes in profitable businesses rather than startups, emphasizing recurring cash flow, strong operators, and measurable upside. International hiring and Shepherd investment (Priority: 4/5): They discuss hiring talent in the Philippines and LATAM, then profile Shepherd as a better model for sourcing assistants internationally without ongoing markup, culminating in a personal investment. Turpentine and media-network strategy (Priority: 3/5): The conversation evaluates Eric Torenberg’s Turpentine as a high-quality podcast network play, comparing it to The Ringer and warning that media businesses need careful ownership and labor strategy.
Key Arguments: Reddit’s API pricing change is not just about costs; it also protects data and revenue ahead of IPO, but it alienates the platform’s most important operators. Third-party apps like Apollo succeeded because they served power users and moderators, so Reddit’s move hit the people who keep the site functioning. A 48-hour protest has limited leverage unless it becomes a lasting narrative or an actual exit path for users. A Reddit alternative only works if it feels familiar while changing governance and revenue flow, not if it is radically different. Minority investing is attractive because it can compound capital without the operational burden of full ownership, especially in profitable businesses with clear sales models. Hiring internationally can dramatically reduce costs and improve efficiency, making businesses more profitable without sacrificing talent quality. A better assistant-hiring marketplace should combine vetting with one-time pricing rather than recurring markups, because the long-term economics are more sustainable.
Data Points: Subreddits participating in blackout: 7,240 out of 7,806 - Live tracker cited during the discussion of the Reddit protest. Estimated blackout participation: 93% of subreddits - Calculated in conversation from the live tracker. Reddit annual revenue: $400M-$500M - Approximate yearly revenue mentioned as Reddit remains unprofitable. Apollo paying users: 50,000 - Apollo founder’s stated subscriber base. Apollo annual revenue: $500K - Derived from 50,000 users paying $10/year. Apollo projected monthly cost after API change: $2M/month - Founder’s estimate of new API costs after Reddit’s pricing update. Apollo projected yearly API cost: $20M+ per year - Estimated cost to keep the app running under new pricing. Yearly refund exposure: $250K - Apollo founder noted yearly subscriptions would require refunds if the app shut down. Reported Reddit moderation spend: $200M-$300M/year - Comparison to Facebook’s content moderation costs. Blackout duration: 48 hours - The initial protest window chosen by participating subreddits. Aging Media revenue: $11M-$12M/year - Example of a B2B media business discussed later in the episode. Aging Media profit: $3M-$4M/year - Estimated profitability of the niche media business. Aging Media traffic per site: ~50,000 visits - Per-vertical site traffic noted from SimilarWeb. Milk Road business size: ~$20M revenue this year - One host discussed his e-commerce business as part of explaining international hiring. International assistant cost: $800/month to $3,000/month - Range cited for overseas hires depending on role and skill level. Equivalent U.S. role cost: $80,000-$120,000/year - Compared to hiring skilled workers in the U.S. for similar roles.
Pivotal Quotes: "Small things could turn into big things. That's like part of the beauty of Reddit." — Speaker 1: Explaining why the Apollo/API issue exploded into a platform-wide revolt. "We want to keep going independent, but you guys are saying it's too expensive." — Apollo founder: Describing why the new API pricing would kill the app. "I love Reddit. I just don't like spez." — Speaker 1: The pitch for a potential Reddit alternative that preserves the product but changes the governance.
Implications: The episode shows how fragile platform ecosystems become when unpaid labor is ignored and pricing changes hit core users. It also highlights a broader trend toward niche media, international labor arbitrage, and buying profitable businesses instead of chasing startup lottery tickets.
About My First Million
Sam Parr and Shaan Puri brainstorm new business ideas based on trends & opportunities they see in the market. Sometimes they bring on famous guests to brainstorm with them.