RedditGifts Aims to Change Utah's Startup Culture

If we can tell the world why they should care about Utah, the world will care about Utah.

By Clint Betts on March 3, 2014

In a presentation at Cambridge Universtiy in 2011, Harvard Business School professor Michael Norton rejected the notion that money can't buy happiness.

"If you think money can't buy happiness, you're not spending it right," said Norton.

According to Norton, the best way to spend money is on others.

"The specific way that you spend on other people isn't nearly as important as the fact that you spend on other people in order to make yourself happy," said Norton. "You don't have to do amazing things with your money to make yourself happy; you can do small, trivial things, and yet still get these benefits."

Dan McComas, founder of RedditGifts, is trying to make the world happy by providing people with the opportunity to spend money on others in a unique, community-building way.

In an extensive interview with Beehive Startups at RedditGifts' headquarters in Downtown Salt Lake City, McComas provided some insight on the idea behind the company, what it was like to get acquired by Reddit, and how RedditGifts ended up in Utah. We also managed to get his thoughts on improving the Beehive State's budding startup ecosystem.

Santa Claus Comes To The Front Page Of The Internet

"In November of 2009, I had this idea to do a Secret Santa on Reddit," said McComas. "I was just a Reddit user and I thought it would be fun. After I proposed it to the community within the next couple of hours I was trying to think through what it would actually take to do this. I had not thought about it."

After his idea was overwhelmingly validated by the Reddit community, McComas' programming prowess kicked into high gear to figure out how to make it work.

"I just started mapping it out. It was clear that there was no way we could run it on Reddit with the tools that they provide. So I was like, okay, we've got to make a website for it; so I went out and started getting people to help: can you write this bit of code? Can you do this bit of design? Then the domain name. I had no time, we had to launch this in the next couple of days if we were going to have people getting presents by Christmas, so I just picked the domain name. I didn’t ask for permission or anything. Reddit was owned by Advance Publications at the time — Condé Nast — but the developers there, the people running it were acquaintances, kind of friends of mine, and they didn’t care. They just wanted to build a great community," said McComas.

McComas delivered a TEDx Talk on RedditGifts at DePaul University last year. We would encourage you to watch his presentation to learn more about how McComas built RedditGifts into something special.

 

For those of you who didn't watch the video (why do you hate happiness?), here's how McComas explained the RedditGifts journey to Beehive Startups:

The original idea was just to do a Secret Santa. We would have people sign-up on RedditGifts, they’d give us their address, and then at some date in the future we’d close signups and would basically pick names out of a hat. We would just run on the honor system. People would sign-up, we’d give them two weeks to shop for a gift, and then they’d come to our site and tell us ‘I shipped this gift; here’s the tracking number.’ And when you receive your gift you come to our site and post pictures of what you receive. That was the basic idea.

We did our first secret Santa in 2009 with 4,500 participants. It was cool and then we took a step back in the beginning of the next year. It was a lot of work, a lot of emotions involved. We had full time jobs already, but we decided there was too much awesomeness there to just let it die. We decided to try and see if it would work in other times of the year as well, so we reached out to the Reddit community and said, ‘We want to do this again, but we want to do it midway between Christmases. It’s a new holiday for Reddit and what do you guys want to it be called?’ Reddit decided we’d call it Arbitrary Day. So June 25th — halfway between Christmases — is Arbitrary Day and that’s when we did our second Secret Santa. There were less people, 3,500 or something.

Then the next Christmas came around. We started Secret Santa, and there were almost 20,000 people that signed up. The next year we wanted to see if we could do more exchanges so we started doing themed gift exchanges. Book exchanges — I think we did a snack exchange. And then we got acquired, and the next Secret Santa came around and it was 40,000. Then this last year we did 50 different gift exchanges: Dr Who, cooking, and then we had 120,000 Secret Santas participating. Then the celebrities are coming: Bill Gates, Arnold Schwarzenegger, and Shaquille O’Neal — all the celebrities, Jimmy Fallon, everyone’s getting involved.

When Reddit acquired RedditGifts in 2011, the company was still owned and operated by Advance Publications. Reddit has since been spun out into its own corporation.

"They took an interesting approach in that they left us completely autonomous," said McComas. "When we were brought into Reddit we were working remote in Alameda, California; we had our own office there, and were left to do what we wanted to do with it. They really didn’t give us any feedback other than keep growing, keep being successful."

Salt Lake City Is The Right Place

At 39, McComas has been involved in the tech and startup scene in Silicon Valley since the early '90s. McComas and his wife are from the Bay Area, but shortly after being acquired by Reddit they began to seriously think about moving RedditGifts to Salt Lake City.

"My parents live in Kaysville. My mom grew up in Layton, and my dad was from Southern California. They raised us in Southern California, but when they retired they moved back up to Kaysville," said McComas.

McComas would bring his wife and kids to Utah to visit his parents, which is where the idea to move RedditGifts to Salt Lake City originated.

"We would visit Salt Lake and we’re like, 'Salt Lake is actually pretty awesome.' And we would schedule a Reddit meetup and meet other Redditors here and come away thinking, 'These people are super nice, there’s good food here, the houses are affordable, there’s all this cool stuff to do here, there’s Sundance and we love movies.' It just worked out really well," said McComas.

Six months after getting acquired, McComas approached Reddit about moving to Salt Lake City.

"I was talking to them about it and I’m like, 'Would you have any problem if we moved to Salt Lake?' And they’re like, 'No, just do it.' We looked into it, looked at houses, and just came out," said McComas.

In our interview, McComas revealed Reddit plans to invest heavily in Salt Lake City over the next three to five years. According to McComas, RedditGifts will triple in size (from eight to approximately 26 employees) by the end of the year.

"It’s really exciting," said McComas. "We want to stay in Salt Lake City. I’m really tied to Salt Lake City; I don’t want to go anywhere else."

McComas wants RedditGifts to remain in Salt Lake City because he believes it provides him with an opportunity to attract top talent from outside of Utah.

"We want to attract talent from outside of the state and I don’t think you can attract talent very easily to anywhere else other than Salt Lake City in Utah," said McComas. "I think it’s unfortunate that a lot of the startups are going to Sandy, or places in Utah Valley. I feel like the hub of Utah really needs to be Salt Lake City. That’s how I feel about it.

"Coming from San Francisco where I’ve worked for the last 20 years, and knowing the day-to-day lives of great developers, of businesspeople, it just did not make any sense to me when I came here and saw where the startups were. I saw where people are working and what they’re doing at work, and what these startups are asking their employees to do in the locations they’re in does not make sense.

"You need to be able to walk to coffee shops, to bars, to restaurants, to transportation, to hotels, to all these things. It’s really super important. If I was going to bring in somebody from the outside and take them to the Fusion-io headquarters it’s a total bummer. I can’t attract talent there. And not to say that we don’t have talent here in Utah, because we do. Working at a company like Reddit, we’re able to attract talent from all over the country and world, but developers want to be in a cool place and Salt Lake City’s actually really cool. People don’t understand that."

While most of the major startups in Utah (Domo, Qualtrics, AtTask, Hirevue, Vivint, Ancestry.com, etc.) are located south of Salt Lake City, McComas believes Utah's largest city should also be its largest startup hub.

"Provo’s one end of the spectrum. Provo’s down there: you’ve got fast internet, you’ve got a college town, so that makes sense to me. Salt Lake City makes sense to me. Ogden, in some respects, makes sense to me. This is like Oakland, San Francisco, and San Jose; the three hubs and it’s okay that companies live there. But you don’t see companies starting on Treasure Island, which is halfway between Oakland and San Francisco, just because they’re halfway in between so people feel it’s going to be somehow more convenient for their employees. That’s not actually the case.

"I spend more time here at the office than I spend with my children. By far. That’s how everybody is, and when we’re burned out and want to go out for a drink or coffee or food, we can walk to all the cool places in town here and then just walk back.

"When you set up shop in Sandy, what you’re basically telling your employees is that this is a nine-to-five job. You come here at nine and you leave at five — go back to your home and family. Maybe that’s the kind of culture you want, but it’s not a startup culture, that’s for sure. That’s one of the big mistakes I see happening here. I think it will start to shift as more companies like us are able to prove that we can attract talent from other companies and from other states and from other countries to come and live here and be really happy here."

Because of his extensive experience working with and for startups in Silicon Valley, McComas believes Utah is still trying to catch up in terms of attracting and developing talent.

"It’s a lot different. Having come through Silicon Valley, through the first bust and then the rebuilding of it, I’ve been there the whole time and I’ve watched the different cycles that companies are taking with their development methodologies and what not," said McComas. "I’ve seen the whole progression to where we are now. Coming here I’m seeing that companies here are making all the same mistakes we made 10 years ago. There’s no need to do that. We’ve already learned a lot. What I am finding is that it’s really easy for me to go to any company here and attract talent from any company here.

"Everybody wants to work for Reddit. It’s a fun company to work for. We want to be progressive, we’re going to make big movements in civil rights this year, and we’re going to be very in the forefront of changing Utah. We are in a really interesting location. And to be in a top 100 internet company in this location, I think is a perfect storm that will really change the world. We’re going to be doing that, we’re going to be growing our company; I would expect us to quadruple over the next couple years and to really change things for Utah. That's my goal."

Something McComas is most eager to change is the outside world's perception of Utah.

"It just drives me crazy," said McComas. "One of the things that I’ve found living here is that there’s a huge stigma involved with Utah. You tell anybody outside of Utah you live and work in Utah and they’re like, 'Why?' I'm like, because it’s super awesome here. We have everything, but they don’t get it. Their vision of Utah is something completely skewed than what it is.

"The weird liquor laws and all the other weird stuff like that just enhances that. It’s like when I bring in employees from San Francisco and take them out to a restaurant it’s like, 'Where the hell’s the bartender?' There’s some skilled bartender back there making good money with a real trade, making craft cocktails, and they’re not allowed to do it in front of people. It’s just insanity. It makes zero sense. I’d much rather see the LDS Church put their efforts into gun control, or God forbid, the air quality. Come on, use your massive power to just make our air 10% better. It would go so much further than this wasted effort with alcohol."

"I Think It Needs A Lot Of Work"

Throughout our interview, McComas was very passionate about his vision for improving Utah's startup community, and he wasn't worried about pulling punches.

"I think it needs a lot of work. Unfortunately what I’m seeing is that the people who are expressing interest in making changes aren’t following through. Specifically, and you can write this, I think the people who started Startup Utah have completely let the ball drop. I went to their first meeting, it was in Sandy, and there was a lot of business people there and a lot of engineers that expressed interest in doing this thing and it’s a good idea. Brad Feld was on Skype and it was interesting. It needs to happen, but unfortunately they’ve had no further events. Every once in a while they’ll post to their website, or post to Facebook, but they have 100% let the ball drop. If you’re going to be the ones to register that domain and organize that first event then you’ve got to keep it going. You can’t just let it wilt," said McComas.

When McComas first came to Salt Lake City, he started hosting cocktail parties at his house in order to meet other members of the startup community.

"We’re still doing it, said McComas. "We’ve gotten busier, but we’re still doing barbeques and cocktail parties, things like that.

"What I know is that there is impetus here to change it and make it great. I think it will happen, but it needs a set of people who are invested in the right reasons to make it happen. And it needs to be done from Salt Lake; it can’t be done from anywhere else. It has to be done here. The meetings can’t be anywhere other than Salt Lake. It’s got to feel right and people need to be invested in the community.

"Nobody here is really invested in the community; people are invested in their startup or whatever. The cliques kind of exist everywhere, but I’m more concerned right now with our company culture and creating a great culture that other organizations here can then take inspiration from. A diverse culture where women are welcome, where LGBT are welcome, where different races are welcome and showing that it can work. We’ll do that over the next couple years."

With the help of Reddit, McComas plans to have a big impact on the future of Utah.

"All of it is going to change," said McComas. "It’s just a matter of how long it’s going to take, and that’s where I think the amount of visibility that we can lend from Reddit can really help to accelerate it. Nobody really knows that Reddit has an office here yet. It’s been pretty stealthy because we’ve just been heads down, just building a business. But I think with the new commitment we have this year from our headquarters, big investment in us and growing with a long term vision, I think it’s got to change now. We need to become an institution here in Utah that is making the right decisions, for us and for Utah in general.

"Reddit is a great place to influence the whole world. Reddit is growing right now between five and 10 million uniques a month, we’re over 100 million uniques. We have a voice that can change the world, and we aim to do that. If we can tell the world why they should care about Utah, the world will care about Utah. We want to figure out how to do that in a good way this year.

"It’s going to be slow, and we’re going to be working with different organizations in Utah who are on the ground making these changes, making sure that what we’re doing is in line with their goals because it’s not our world. My world is not politics, but I do see that we’re in a really important position of power here as a company that’s going to be growing and influencing the local economy, but also as a platform that’s influencing discourse around the world. I think we’re in a great place to bring that all together and change things."


Clint Betts Twitter Google+ Facebook LinkedIn

Clint Betts is the founder and editor in chief of Beehive Startups.

FURTHER READING  

November 20, 2014

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