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Picture yourself paying $20 million for an API

Diving into Reddit's new API changes and the history of API rug pulls.

gm creators!

Hope all of you are having a great Friday and have had a productive week 😎

I'm excited for the weekend - headed to Banff today for a week! If anyone has been, please reply with any must-do recs :) I'm still shocked that Lake Louise looks this beautiful and clean in the pics.

Lake Louise, Alberta 2023 - Tripadvisor

Today is day 1️⃣6️⃣ of my 30 day challenge - start of the second innings!

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Today's Takeaway💡

  1. Reddit announced that they'll be updating their API to a paid model. The rate they set would effectively kill third party apps.

  2. The Reddit community protested this week by doing a "subreddit blackout". The Reddit management hasn't really budged and believes this protest will eventually fade away.

  3. This isn't the first time nor will this be the last time that a tech company changes their terms & services in an unfair manner. The centralized model for these companies doesn't make sense. We're not there yet in terms of infrastructure, but it's essential people continue to join and build for a decentralized, open garden web3.

    Crypto prices are down. Morale in the web3 ecosystem is at an all time low. The media mocks us. Overall, things aren't looking too hot from a birds eye view.

    However, what happened with Reddit this week reminded me why I joined the space in the first place and why it's so essential that we actively work to make the internet an open & fair playground.


Tea Time ☕

This past week, there's been some drama in the Reddit world. If you haven't been keeping up, don't worry I got you covered. There's a series of posts on Reddit explaining the situation - I went through all of them and summed it up below.

Basically, there's this app called Apollo that was built 8 years ago by a former Apple employee named Christian Selig. He built the app using the Reddit API, which Reddit has provided for free since 2008. Over the years, 50,000 subreddit moderators have ended up subscribing and paying for Apollo ($10 / month) as it has been super helpful for them to use the app's robust UI.

On April 18th, Reddit announced that it would be making changes to their API and would be moving to a paid model for third-party apps. However, they didn't mention the exact pricing and what the changes would look like. Most third party developers thought it was totally fair to help offload some of the costs as the service has been free for so long. Also, the Reddit team had even mentioned that they are not trying to do what Twitter did and make it absurdly expensive.

r/Reddit

6 weeks later, the Reddit team had a call with Christian to discuss pricing. Here's how it went:

The price they gave was $0.24 for 1,000 API calls. I quickly inputted this in my app, and saw that it was not far off Twitter's outstandingly high API prices, at $12,000, and with my current usage would cost almost $2 million dollars per month, or over $20 million per year. That is not an exaggeration, that is just multiplying the 7 billion requests Apollo made last month by the price per request.

No API expenses for 15 years and then, boom....$2 million / month to use the API

And the craziest part of the whole thing? All third party apps such as Apollo, Reddit is Fun, Narwhal, etc. only have 30 days to prepare for the changes! In fact, Christian even mentioned that if he got more time, he could possibly figure out a way to reconfigure his code base, but a single month is just insanity.


But wait...it gets juicier 👀

After a month of some back and forth with the Reddit team, Christian ended up realizing that there was no way he could figure out a sustainable plan for the business and would have to shut it down.

r/ApolloApp

The post is extremely well written and gives a detailed rundown of everything that happened. He gives answers to different questions people may have such as "did you ask for more time?" and even links to his open source code to show that he doesn't scrape data and purely relies on API calls. In fact, he even posts the recordings of his calls with CEO Steve Huffman (note: one party consent recording is legal in Canada). In it, he suggests the company to just buy Apollo as it would save them a ton of hassle and would quiet down the API usage. Huffman takes it as a threat initially but immediately apologizes.

The screenshot below was one of the top comments from a Reddit employee on the post. "The reason reddit is doing this because their investors want full control over what their users see and what they can do on Reddit".

At this point, the Reddit community is rightfully furious! They post an open letter for Reddit's management asking them to find a compromise. It's worth noting that reddit moderators, who keep the platform alive and engaging, do their work completely for free. Reddit gains a ton of value out of it as their core platform value is community management.

A few days later, r/ModCord subreddit decides to organize a peaceful protest by starting a blackout on June 12th. Meaning users won't be able to read or make posts during the blackout unless a moderator approves. Subreddits can choose whether they want to participate or not.

Blackout List

One after the other, almost all of the subreddits ended up joining. Some communities have even planned to do this indefinitely. The numbers below reminded me of January 2021, when all of r/WSB (Wall Street Bets) took down Melvin Capital in the Game Stop short squeeze. Moments like these are rare but underscore the fact that digital communities have the power to come together and fight against unfair leadership.

Steve Huffman, Reddit's CEO, came out with a response and basically said this is just a hiccup and that it will go away just like past community disagreements.

Landed Gentry

The Reddit management response included a few things

  • Reddit threatens to remove moderators that continue blackouts

  • Huffman claims that the protest is led by a minority of moderators

  • Reddit was never designed to support third party apps

  • It's time Reddit behaves like an "adult company"

At this point, it seems as though the war is continuing. However, the community has a limited war chest and is fighting with one arm behind their backs. At any point, users can be kicked off for not following the rules. The reality is that Huffman's statements have some truth to them. There's only a certain amount of time the blackout can last and eventually life will have to move on for most.

But! There's no doubt that damage has been done by Reddit management. Many long time Reddit users are frustrated and overall feel that it's always the users that have to suffer in the end.

Comment from Reddit User

So what can we learn from this? Has it happened before? Why does it matter?

As a developer myself, this wasn't the first time I've seen a API rug pull like this. There's been many instances in the last decade.

To better understand the learning lessons from this, let's revisit how APIs even got started and other controversial changes from the past.


A quick trip down memory lane

Before I take us back 80 years in history, I think it's worth defining what an API is and why it's crucial to the development of all the software we use today.

APIs allow developers to leverage existing technology, services, and data, rather than having to build everything from scratch. This not only saves time and resources, but also allows for faster innovation as developers can build on top of what's already been created.

Because of APIs, we don't have to reinvent the wheel.

Here's a quick, fun example chatGPT provided me:

Imagine you're at a fast-food restaurant, and you're really hungry for a cheeseburger, fries, and a soda. The problem is, you can't just walk into the kitchen and make it yourself. You need someone who knows how to work the fryer, the grill, and the soda fountain, and who has the permission to do so. So, what do you do? You go to the counter and place your order with the cashier. The cashier is sort of like a messenger. They take your order, or "request", to the kitchen, or the "system", which can do all those fancy things. Then the kitchen makes your food and gives it back to the cashier, who then hands it over to you. In this scenario, the cashier is like an API or an "Application Programming Interface".

APIs before APIs

The origins of the API concept can be traced back to the 1940s when three British computer scientists, Maurice Wilkes, David Wheeler, and Stanley Gill (the godfathers of programming) stored the subroutines of their software library in a filing cabinet 🤯 The library was a bunch of notes about each program and instructions on how to use them "in the form of perforated paper"

For this reason Maurice Wilkes and David Wheeler are sometimes considered API precursors, but it is not entirely clear to whom exactly the merit for the invention of API can be credited. It is worth mentioning that these two did not call their interface the term “API” then, because the official API as a term of the application programming interface appeared a little later in the 60s and 70s of the 20th century.

Wilkes

Then a few years later, in 1974, the acronym "API" was introduced in a paper covering databases. At this point, the Application Programming Interface (API) term had officially become part of the CS nerd lingo. This moment was crucial to the way programmers from the last three decades have developed and shipped software.

The Relational & Network Approaches

Modern Day APIs

The first API that resembles what we use today was launched by Salesforce in 2000 at the IDG conference! Love to hear it as a Salesforce alum 🤝 They developed their sales force automation as a "internet as a service".

Salesforce identified that customers needed to share data across their different business applications, and APIs were the way to do this.

Then, a few months later, in November 2020, eBay launched eBay API along with their developers program. By offering public APIs, eBay opened up its massive online marketplace to third-party developers. This strategic move allowed the creation of diverse applications that utilized eBay's platform, significantly expanding its reach and functionality.

And then, in 2002, Jeff Bezos issued a company wide API mandate that required all internal software teams to only communicate with each other through APIs. And the APIs had to be designed as if they were for external customers.

Check out #6..."Anyone who doesn't do this will be fired"...don't mess with this mfer

The following years, pretty much all tech companies hopped onto the API wave. It wasn't really an option to be honest. If they didn't, competition would beat them. APIs are a natural part of software and essential to the growth of any ecosystem. Here are some examples of other APIs you probably directly or indirectly interact with on a daily basis:

  • Weather snippets

  • Google Maps

  • Login with "x"

  • Twitter Bots

  • Travel booking

Top API Examples

Silicon Valley Rug Pulls

Okay, so it's clear that APIs are important right? Let's recap: companies make APIs -> developers in the ecosystem build apps using APIs -> community & functionality grows -> flywheel gets larger and larger.

Things are good, people are happy, technology is being built.

But then! One day, out of nowhere, mfers that look like this walk in to the company meeting room and claim that the business they invested in isn't making enough money or that Wall Street is unhappy about x, y, and z or that they needed to kill related apps being built.

Succession Recap | The Guardian

And of course, the c-suite has to be nice and agree. They drop some meetings on the calendar and a few weeks later make an announcement that they will restrict API usage or limit capabilities or increase fees or all of the above. This wrecks the developers, entrepreneurs, etc. in the ecosystem and leaves them with no choice but to quit their business, fire employees, and start something else from scratch. A few that are lucky are able to find a workaround.

The sad part is that sometimes the companies they do it because they think it's the right business move rather than investor pressure. Here are some other examples when Silicon Valley pulled the rug on builders by changing API terms:

  1. Twitter

    • API Released: 2006

    • Usage: By 2010, 75% of Twitter's traffic was coming from third-party applications built on their API.

    • Change: In 2012, Twitter significantly restricted their API's use. These changes included requiring developers to authenticate every API request, limiting the number of user tokens an app could have, and more stringent rules on how data from the API could be displayed.

    • Reason for Change: Twitter cited control over the user experience and ensuring that their ecosystem "remains healthy and vibrant" as the main reasons for the changes.

  2. LinkedIn

    • API Released: 2009

    • Usage: Services used LinkedIn's API for features like importing contacts, posting updates, and more.

    • Change: In 2015, LinkedIn significantly restricted access to its API, limiting it to a small set of approved partners.

    • Reason for Change: LinkedIn stated that the changes were made to ensure the best possible experience for members and control over LinkedIn's core assets.

  3. Facebook

    • API Released: 2006

    • Usage: For a variety of applications. Games, marketing tools, etc.

    • Change: In 2014, Facebook made significant changes to its API, reducing the data that third-party applications could access. And then doubled down in 2018 post Cambridge Analytica.

    • Reason for Change: Facebook stated that the changes were made to improve user privacy and security.

So do users just have to accept that this is the way it's going to be?

Is there an alternative? Hmmm....🤔


Open Garden

Okay look, I'm not going to sit here and shill crypto. Anyone reading this right now is probably in the crypto space or at least knows that the core value of web3 is decentralization.

But I think it's worth just reiterating, especially in the deep winter of the crypto bear market, that the work being done in the ecosystem is not just cool but rather essential for the future of the internet.

In the last two decades, we've seen countless kings enter the digital space and build their forts. The few, yet incredibly talented, that got lucky with their empires (i.e. FAANG), gained too much power too quickly. American corporate structure is set up in a way that not only promotes, but requires companies to operate competitively and profitably. You're either in the fort...or you're not.

Reddit and the other rug pulls I discussed above highlight the potential pitfalls of relying too heavily on third-party APIs. While they provide powerful tools and opportunities for developers, they are ultimately under the control of the providing company, which can change or restrict access as they see fit.

I'm not sure what the future is going to look like, but I'm sure as hell going to fight for a system that thinks of the internet as an open garden, promotes composability, embraces interoperability, and most importantly has a structure that is actually for the people and by the people.

With that being said, I'll end this post with one of my favorite video clips from the TV show Silicon Valley

Watch till the end if you haven't seen this, it's amazing:


Posts since my last e-mail ✍️

Wednesday: "Picture your book inspiring the next big thing" - I dive into the importance of content creators and how they have inspired the start of companies that have generated hundreds of billions of dollars.

If we choose to share what we make, our work can recirculate and become source material for others. - Rick Rubin

Thursday: "Picture yourself having a cultural tutor" - I do an analysis on one of the fastest growing creators on Twitter. The Cultural Tutor is easily one of my favorite non-tech follows. My key takeaway after writing this post is that everyone is a sucker for good storytelling. In fact, I would even say that in most cases the subject/topic is irrelevant. If a creator knows how to authentically tell a fun & insightful story, people will enjoy it.


That's all for today's post!

Hope you all have a great weekend :)

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