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Behind the Scenes of ‘Dumb Money’ from a Reddit Perspective
Stakeholder Labs CEO Matt Joanou shares his experience leading up to the 'meme stock' phenomenon
The Stakeholder Labs team has been in NYC this week, where we met up with a group of our fintech colleagues to attend the premiere of 'Dumb Money'. Adapted from Ben Mezrich's book ‘Antisocial Network’, the film brilliantly captures the narrative, key figures, and culture behind GameStop's stock surge and the subsequent trading controversy. Having worked at Reddit during the 'meme stock' frenzy, the film strongly resonated with my first-hand experience, reconnecting me with the passion and energy of that period that has continued to shape my professional journey.
In 2016, I arrived at Reddit after a five year stint at Google to help rebuild the advertising business from the ground up. We were preaching the power of self-organized, online communities to top global brands in an industry addicted to Facebook scale and price efficiency. I remember brand and agency execs scoffing at the idea that Reddit could compete with the top platforms of those days - small communities couldn’t compete with mass-reach.
To illustrate the power of these communities, we were constantly on the lookout for examples of fast-growing subreddits of fans and/or consumers. The faster the communities grew around a product, service, or brand, the stronger the correlation to commercial success. Mostly, we would showcase gaming or technology subreddits, like r/Overwatch or r/Android, to the media buyers and agencies of top brands. Reddit was evangelizing the idea that engaging with these self-organized individuals that actually care about something can have much higher leverage than reaching millions of disinterested eyeballs. Sound familiar?
In 2018, we started to see an uptick in our financial communities. r/Wallstreetbets in particular started to show subscriber velocity and engagement that was worth tracking. Simultaneously, there had been an explosion in the fintech sector and we saw the opportunity to entice advertisers with our highly-engaged finance communities. What we didn’t realize at the time was that the combined growth of the sector and subreddits had the power to move markets.
Finance, at its core, has always been a potent cocktail of logic and emotion. It's about the black and white numbers, but it's also about dreams, aspirations, and the fears of losing hard-earned money. This duality has made it a ripe topic for passionate, fervent discussions in the digital realm. Reddit provided a platform where seasoned analysts rubbed virtual shoulders with amateur investors, and where complex financial jargon met layman’s interpretations. The platform provided a democratized space where everyone had a voice, every opinion mattered, and the best or most intriguing ideas naturally rose to prominence.
But 2020 brought with it a cataclysmic shift. The pandemic wasn’t just a health crisis; it created a socio-cultural phenomenon. With lockdowns confining people to their homes, the world turned inwards, and many found solace, community, and purpose online. r/Wallstreetbets and its kin were no longer just discussion forums, they became theaters of collective action.
In the midst of this digital transformation, certain stocks began to take on a life larger than their market valuations. Symbols like $GME and $AMC transformed from mere ticker symbols to rallying cries of a larger movement. These weren’t just investment opportunities, retail investors thought of themselves as digital Davids facing the institutional Goliath. 'Meme stocks', as they were coined, weren't just about profits or financial strategies; they were about sending a message.
While the frenzied peaks of the 'meme stock' phenomenon have subsided along with many other social movements of that time period, their echoes are still profoundly felt. Millions who had previously never dabbled in stocks are now active participants in the market and there is a new popular culture of investing. This isn't just a change in numbers—it's a shift in the market's very ethos. The Wall Street old guard now operates alongside a younger, more digitally-native, and community-driven investor base. This new generation isn't solely motivated by profits. Their investments are intertwined with their identities, their values, and their communities.
Despite being at Reddit and witnessing the potent force of these self-organized communities, I realized a digital chasm existed. Companies struggled to grasp, engage with, and harness the power of their digital stakeholders. It is reminiscent of those early days at Reddit, where the paradigm-shifting power of engaged communities was underestimated.
This realization led to the inception of Stakeholder Labs. Drawing from my experiences at Reddit, we’re building tools that empower businesses in this new age, where digital communities aren’t just important, but central to a brand's narrative and financial success.
Now, as the CEO of Stakeholder Labs, I look back at my journey with immense gratitude. The challenges faced at Reddit provided the very foundation for this venture. Every dismissal, every skeptical remark from executives on the other side of the table reinforced my belief in the power of communities.