Reddit administration thinks the site is too big to fail. Lemmy isn’t a real competitor to them because the decentralization of federation means that joining an instance and trying to navigate the fediverse is a bit too complex for most people. The reason why massively populated social media sites took off is because people like having everything in one place where everyone else is.

What I could see happening is a well-funded startup creates a fork of Lemmy that they use as the basis for their instance and they can customize and develop as they see fit. This instance would be accessible to everyone already on Lemmy, but they could offer one centralized alternative to Reddit where new users don’t have to think about what they need to do to join.

I’m sure that if Lemmy picks up critical mass, it could lower the bar for most people to be willing to jump through the extra hoops. Ultimately federation solves the chicken and egg problem that any social media startup has.