Welcome, full-time, salary. Hey everybody.
Welcome to volley game room. Thank you for coming and
drinking our drinks and crashing the party and welcome to
everybody. What the fuck?
It up? Austin, Texas.
Tom has the enthusiasm. So I'm Eric new Comer, I run the
newsletter newcomer named after myself.
We are co-hosting the event. This is my have a podcast called
dead cat, with Tom, dote on here.
Hey, what you guys like? That fucking wheel up there,
guess what? I got a quick question.
All the people that were spinning the wheel out there,
who got a free? Who's got free drinks tonight?
Who wants free drinks. You got The Wristband.
Show me your wristbands if you got the wristband, big winners.
All right, I got another question for you guys out there
who got a free subscription to newcomer.
I realize it one in 200 you. Somebody is there somebody got a
free subscription or newcomer. No, gonna grab really, somebody
email you the subscription later come up over here.
You might want to come upstairs for a second.
We got a real winner in the house here and I want him to
understand what he's in for. Hey, Mike.
If it's not all that easy Mike, this is life.
Yeah. Yeah, you know what sucks is
that was next to the unlimited drinks?
I know they set me up, so your by putting it, I know, but I had
it and then everyone was cheering and then it right over
right over the next bankruptcy right there.
Yeah, thank you for that. Thank you.
Okay, so just a quick question here.
So thank you. What's your name, Daniel?
Hey, Daniel, welcome, are you from Texas?
Well, I live here now, but no, I'm not from Texas.
Are you one of those California guys?
I moved out to Texas. Yes.
Okay.
Okay, wait, wait. I'm from the better half of
California, though. So San Jose, not La.
Fuck La. I'm I've lived in both places.
I'm not taking his side. Do you work in Tech?
I do had you heard of newcomer the sub stack that focuses on VC
and other Venture related issues before this.
Tell the truth. Tell her like a sniper here.
If I say, no, no, no. We don't have that budget
marketing here. That is a mighty.
I know. No, I have not.
No. Okay, well, we're going to check
back in with you, in six months, with your free newcomer
subscription. We're gonna find out if it was
worth any of your time. So, thank you so much.
Thank you. Thank you.
Thank you for coming. Thank you, Daniel.
We're going to have a jack Conte.
The patreon co up here in one second.
So we'll be much more legit. I just this event is being held.
Hosted by volley, which is an audio voice chat.
You should play audio voice game.
They have song quiz. I'm watching Max child right
now. Judge my marketing pitch for
him, which as a recursive feedback loop backs.
But yeah, they have a Jeopardy game.
They have a song quiz. You should play their voice
games on Alexa or whatever Google labs.
They got to deal with Jeopardy, they got a deal with Wheel of
Fortune, which you probably saw out on the front.
That was the original. A wheel from Wheel of Fortune.
By the way, you guys were all spinning.
So as a big fucking deal. All right, so we got Jack Conte,
like we said, coming up here later before that.
I feel like this is my first time at South by Southwest.
Yeah, I came pre-pandemic. Sort of several times in the wet
back when apps were still really trying to go viral South by but
after I think absolutely legitimate well, that's
amazingly. The Tech conference was that
people. There was a breakout apps, like
you can Come here, you could like demo your app like Vale and
then it would become the next big thing and then he would say
like oh in the way that ex broke out at South by the next thing
the breakout. Yeah right well I mean Twitter
Twitter Foursquare, where the relapse this sort of did it
right. Right.
So there's Twitter and then like it's a huge drop-off from there
to the rest of the other apps that were sxsw meerkat for a
second. I think people thought like
really break. Can you go through that will go
through that but since we have a couple minutes here before we
get Jack coming up, On stage. I thought it'd be fun to kind of
talk about South by Southwest as a as a tech at the history of
tech at South by because like Eric was saying, I think it was
Twitter that made South by a name like a place you want to
break your app out. But I did a little bit of
research Eric and I are both journalists so you know so we
Google Google old articles. Yeah.
We know how to read from, it's called research and we and we
pulled up some of the old winners at South by Southwest.
And so I'm going to pull it up here.
This is an article that came out.
This was in wired and by the way, I don't want to call out
any other journalists because we all have to file fucking stories
from here. We're here because our companies
paid us to be here and the best we can do is file enough copies
that our editors don't ask us why they sent us out here, but I
want it. I want to read an article from
2008, which was two years after Twitter broke out here and it
was talking about the next breakout app at South by.
So 2006 was was Twitter. I think 2007, With Twitter.
And by the way, the Twitter breakout was not like, oh, we
can conceive of the possibilities with this app or
we can consider this as you know, the next wave and how
democracy will be, you know, that was that was practiced age
of Twitter where you would tweet, like, I'm drinking a
coffee. That was the reason people
fucking use of Twitter at South by was like, I'm at I'm at the
conference, right? The pre politics, I'm here in
Michael Dell talk right now and this is fucking, you know,
crazy. That's what they used it for.
It wasn't about like right. Well forces.
Are invading Kharkov right now. So anyway, so this is from, this
is from a 2008. This is from, this is the
breakout app, two years after Twitter broke out last year.
Twitter was the big winner at South by Southwest in 2008.
It's all about sked dot-org. Every year one web service
captures, all the buzz of the to week-long conference by proving
itself to be an Innovative geek friendly and perhaps most
importantly, insanely useful this year.
A simple calendaring service is the site most plugged into South
by Southwest dike Zeitgeist. So that that was, that was where
things went. We have a lot of people yawn,
sked dot-org, still. Yeah, hardcore users got in how
to the scared. Dot-org.
Founders. Raise your hands.
So I don't know what, you know what could try guys.
We're all were all Just trying here.
No no shade for the scheduled or guys.
But quickly with the comments for me, bring Jack on stage.
I want to run down the other breakout apps that they had at
at South by want to do that. Let me let me bring up an
article. This is from box.
This is written by her friend Kurt Wagner.
By the way, no longer at vaux, you guys know girl back, this is
a tech Insider podcasts real Insider shit.
I see we got Josh constant in the crowd.
Yeah. We love.
We love older. All right, so Twitter, 2007, big
deal. We like that.
That worked out 2009 Foursquare. I mean that's basically an ad
tech company right now. I think that right sleeve You do
right? They utilize their location data
and sell it to things. Kind of fell off a bit.
From being the mayor of like you know, Franklin's Barbecue, 2012
was highlight, the app was highlight.
Big break out at you as member highlight.
Do you really do you guys remember highlight?
I don't remember. It was about like it was
location-based. It was like you could find out
if your friends were nearby, it was the founder of Clubhouse.
Yeah. I mean it was he the meerkat guy
to or no? That's a different guy.
Yeah. All right, there are a lot of
social apps meerkat, which several months after South by
Southwest had to Pivot to house party, right?
Which is no longer a thing and that's it.
That's the end of the article. That is the that is the full
extent of the breakout asked by side by side.
All right, let's get Jack. I'm here.
Jack Conte to see you at patreon.
Also a musician, his company was recently valued at four billion
dollars. He is an expert on the Creator
economy. Jack thanks.
Thanks so much for being here. Ah thanks for having me psyched
to be here. Yeah, you missed live.
Audiences your musician. So and it's been obviously two
years since we've had. I mean it's at where else.
Can you get drunk and talk about trust and safety and content?
Palestine Free Speech. Right?
Right. How have you I was asking this
away. I have you done, many, have you
performed Itself by or what's your history with my wife?
My wife has and I've always, you know, I've probably been to like
two or three of these. So not not a ton really.
Yeah, what? And by the way, the name of your
band, you've got a couple, right, you've got a couple of
outfits and when people probably know the most is pomplamoose,
pomplamoosemusic a high pockets. Yep, okay, but never performed
here at South by. Nope, never performs out that we
actually don't both bands are interesting.
We own our masters. Okay, and so touring and live,
isn't like the primary income stream for the band's.
So we kind of, you know, we like cell songs, we have memberships
through patreon. We like sell merch, other stuff
like that, but we don't do a ton of live stuff.
Really interesting. Yeah, what's the reason why it
just doesn't fit with the vibe or you just would rather keep
everything Studio based or what's we're completely
independent? Okay, we we again on our masters
so like our money comes from streaming and and other things
where, you know, Like we that we do with our fans.
I just wanted we're going on sound, right?
You all here is great. Make sure to let's keep the mics
close. Oh and friends are showing up.
Sorry to cut you off. I just knows mine.
It's important that they hear us you know it's one of the thing
here you. Yeah.
So by the way I mean live performing is so let's actually
for the audience here that doesn't know what patreon is.
We can probably just give that run down before use that as a
launching pad for the rest of gravitation.
So why don't you give the the elevator for For B now, for
billion dollar company patreon. Sure.
Yeah, it's a membership platform that helps creators, run
subscriptions, and in exchange, for exclusive content and
Community with their fans. This is a way that a lot of
craters have been kind of running businesses and building
that that die-hard fan base and getting paid for it.
Yeah. What like podcaster number one
or what sort of, in terms of people running real like
membership, businesses and generating revenue for you guys
like what are sort of the greatest hits or and Is and then
specific. So it's a lot of video, a lot of
podcasting is a lot of visual artists and web comics but it's
pretty Diversified. I mean it's folks across all
types of categories at the end of the day it's like do you love
your fans and do your fans love you back.
Those are the creators that are crushing it and and you know
doing a really good job. Yeah.
I mean let's go back to the origins of patreon because I
think I you and I kind of cross pass along like 2014, which is a
very early days for patreon because we're just getting off
the ground. So what was the?
The inspiration for the app. Why did it need to exist?
As far as you were concerned and what problem were you
addressing? Yeah, I was solving a problem
for myself, right? I had just finished like three
months of working on this music video that cost me 10 grand.
I trained my savings account to do this video.
Well, I'm maxed out to credit cards.
I built a replica of a man named Falcon cockpit in my studio.
I work with this, like the video involved, this animatronic head
and this 3D printed hexapod, robot.
Like I went all out on this video.
It's like Like, okay, go Aero. Yes music videos, right.
It was like, remember that a feat of heroics, right?
And and it's a video up on YouTube, can we find is up on
YouTube and has over 2 million views?
Like it was a thing that I knew was going to like reach my
community. Like, people would be psyched
about an excited about it. And I knew I'd upload this video
and I get paid 150 dollars in ad revenue, and I was like, right,
fuck this. I cannot keep doing this, right,
right? So you're going to get 2 million
views on YouTube and then, excellent.
Okay. You can do, it has about.
I think it was like, Tune into like sorry, sorry.
Yeah, there's always number inflation.
But yeah, it's getting $200, Instagram.
Yeah, I think that, like over the lifetime of the video now,
it's maybe like, maybe like, 800 bucks or 900 bucks, something
like that. Right?
And what saying, what year was this?
This was 2013, okay? So like the YouTuber Creator
economy was you know getting off the ground in a big way back
then right? Like YouTube is trying to kind
of cultivate these groups of people.
They have the Creator program they were trying to make it
happen. Yeah but it is.
It clearly wasn't enough like why didn't you tubes own
efforts? Give you the revenue and
business that you thought you should have gotten.
I think it's a matter of the business model on on YouTube.
If I'm a fan of a Creator and suppose, I'm a die-hard fan of a
crater suppose, I have all the shirts.
I go to all the shows. I watch every single video.
I follow them on Instagram. I'm like die hard fan of that
crater when I watch that crater is video.
Under the ad model. I'm essentially transferring
1/1000 of a CPM to that Creator in value, which is maybe pennies
or less, even though I'm a DOT. Like I love this person and
their video might change. My life doesn't fucking matter.
It's 1/1000, you know, of a CPM that business model sucks.
Right for individual creators. Yeah, turns out.
It has some pretty big problems with Society at large as well,
right? But for creators, it's not in
the mediations. Yeah, it's not an efficient like
economic engine to fuel their creativity, right?
Yeah. And so when you actually start
paid how soon after this YouTube video is patreon exist in some
form. So, it's funny, I was working on
the video leading up to patreon and it was before I posted the
video that I was like, had this dark realization is like, this
is the best thing I've ever made in my life.
And I'm going to be paid less than $200.
I won't do that. And that's when I simultaneously
started working on the idea for patreon.
I sketched out the ID on 14 pieces of printer paper.
I sent it to my freshman year roommate in college.
He looked at it was super inspired thought we should do
this. I said great, let's do it right?
And then he started basically engineering the first version of
patreon. He's so he started you know?
Riding the. He's listening to you by CTL.
Yeah, okay. And and then we launched patreon
with that video. That was the video where I post
it on YouTube at the end of it. I put a little Vlog.
I said, Everybody trying this thing.
I think it could help a lot of people like you know, join me.
How many members did you get you remember?
Yes, within two weeks. I was making six figures as an
artist. Wow.
Which like you know right. I mean yeah like I didn't change
my music through the monthly subscription.
You like a shit. Exactly.
Do you know, have you tried to see if any of those people are
still giving you their money? Or did you cut it off or they're
still? No.
I have a date. Job now.
So I don't post much on that account anymore.
Actually, I haven't posted in like seven years on that
account. Ironically, I built this thing
to help me be a Creator and then I had to stop posting but I
popped loose in scary pockets are very, very prolific, you
know, so I'm actually making like a hundred music videos a
year between those two bands but just not for my solo stuff.
I don't have a team around. Those are on patreon like those
are people that can sign up for ya the shit.
Those are ya both bands. Have memberships and both bands
are, you know, it's have active communities and are releasing
weekly. And Elite Daily, both bands are
releasing daily. Yeah, did you know that you
wanted to go down the like the vent?
Like raising through Venture Capital route?
Because theoretically this is a business.
You guys take. What is it?
10 percent. We have three tiers of pricing
5. 8 and 12 5-12. Yeah.
So, theoretically from day one you guys were producing Revenue
like this was a real big boy business.
Yeah, I mean, within a month, the company was profitable,
right? Because it was, it was making
money and Sam and I weren't taking salaries.
And so yeah. And then there came a point
where we were getting so much in Found so many emails.
You know, we realized we needed to hire a team to kind of help
with the operations of the business and that's when we
started looking at options and trying to figure out, you know,
do we need to raise money? Do we just hire people?
Do we try and bootstrap it and yeah what?
I mean, you really emphasize membership.
Right. What distinction are you drawing
there? I, you know, I'm in sort of the
newsletter business, which is, you know, related to Media
companies and there's much more of like They say subscription
and you know, there's this sense that it's very clearly tied to
like a recurring product, I don't know, what do you see is
sort of the membership subscription lying?
I think it's an emotional component that makes it
different. A subscription is very
transactional. Now there can be subscriptions
that you deeply care about organizations that have missions
that you really care about your voting with your dollars.
You want to support them. But I think what distinguishes a
membership is that it is deeply emotional.
I'm paying Not just for exclusive content and Community.
But I'm paying because this is something that I want more of in
the world. It's a beacon of my identity.
It's like a I'm a super fan of this thing.
And I think the other the other component of it that's different
is it allows structured tiered benefits that a crater can offer
to their fans, right? So Creator can have three or
four tiers of membership. Whereas the subscription is kind
of just one thing for the exclusive content or you know,
the box in the mail or whatever it is whereas membership is
more. Holistic more about the
community more about the emotion.
You have tears of newcomer, right?
You've embraced that model as well have monthly annual and
then I have founding, which is just sort of you have a lot of
money with water to give its right?
Yeah. Yeah, that's cool.
What do you call that validated? No sir.
I got founding. It smelled a just like it is it
is it is a surprise like oh wow, that's a little touch.
Oh my God, I think I should be even more.
Like, that's just funding your therapy at that.
Right? You're on your own.
I mean when you guys got going there was sort of like there was
like the I feel like there's a lot of hype around like the
kickstarter like crowdfunding thing right.
And that's much more go. Go did towards like the Creator
economy or the idea that these is actually people's jobs and
less like one off. I mean have you how Have you
actually seen a shift in like the mix of type?
The types of projects you're doing or you feel like you're
always on sort of that the Creator economy side rather than
this? Because I'm sorry too.
But I'll let you answer but like I have a cousin who created like
a comic book and that was sort of like you know almost he did
on patreon but it had sort of to me that sort of like Kickstarter
feeling this like a one-off. I'm supporting him.
Wasn't his main business. I don't know.
How do you sort of? There are a lot of Trends there,
you know, we hear less, I think about crowd.
Any relatives or Creator economy now?
Yeah, I think crowdfunding kind of had its day and it works for
some things, but at the end of the day, it's a very different
thing than what we're doing. You know.
Crowdfunding is like I have this thing I want to do but I can't
do it until I get funding. Whereas membership is like, hey,
I'm doing this thing, it's working its media.
And this is now an economic engine for media, and it's a
subscription engine and a community engine, like all these
things, whereas, you know, something like Kickstarter.
Like I have this idea for a project and I need funding for
it and it's this one off chunk and it allows me to do this
other thing. It's just like a very different
type of business model than like, I'm a crater, outputting
regular stuff, and I'd like to be paid for that.
And I'd like to build a business around that that's a little bit
more, like something like the guardian or like New York Times
subscription business and a little bit less like, you know,
I need money to put on a play and I have this idea for a play
happen. Do you think the crowdfunding?
I don't hear as much about it. You know, I mean, for a time
like in I used to cover media and there was a real thought or
argument on the part of these companies that this was going to
supplant, you know, big media companies because why couldn't
it Creator, why do they need to go to Sony or Paramount or you
know, Disney to say, give me money to make this thing.
I want to do versus the audience that I already have.
That might be excited about this idea.
I mean, what, what happened to that?
If you don't think it, you know, has Merit anymore, why not?
Yeah, it's such a good question. I think there's actually not a
ton of interest in most craters that I've talked to for
crowdfunding it feels a little bit like Please help me.
It feels a little bit like I can't do this unless I get
funding, it's a little needy. I don't know, guarantee really
that you're going to get it right?
I mean honestly I don't think it's a scam but it's a real.
I mean, it's an investment essentially which is not.
It's not quite as clear cut an investment.
I would assume like enough people did kick starters where
they didn't pan out and stuff that there was a burnout from
the funder where it's like, Oh, The Upfront model is dangerous
where a patreon or any sort of Subscriptions.
More tied to recurring output. Yeah, and I mean, I think the
other thing about it is it's like a really heavy lift.
Like I know a lot of creators who did these campaigns and then
for three years afterwards, they were fulfilling physical, right?
You get all the horny up front and then you're like, oh now I'm
committed to this thing forever, that, and you assume a lot of
risk in doing that. Like like to, I know craters who
like two years later, they were getting like slips.
German Customs saying like your package didn't go through like
and then they're like, I have this person German, right?
You're saying like Adidas, see like a company.
And you have to scale instantly with no infrastructure.
It's like it's a very difficult problem.
Yeah. So I want to ask a question.
I think everyone out here has probably been dying for me to
ask this whole time. Which was why didn't you tube
supplant patreon as a model, right?
I mean what you guys the the reason that I think everybody is
dying, my God. Yeah, yeah, yeah.
I was gonna get you. Yeah, but I mean, like, the
question was like, you know, when you're a platform business,
especially when it was YouTube related, people would have
assumed that they were just going to build that
functionality into YouTube itself and they were going to
crush you guys. I think I really like 50
articles about that in 2014. Yeah, I kind of want to do the
mean answer because I've had a beer and so what do the mean
answer? The mean answer is they listen
to two types of feedback lawsuits and competition and
that's not exactly true. That's the mean answer.
They actually have a really great product team.
I mean, at the end of the day they do, it's just a matter of
prioritization for them, and I understand why they didn't build
this. I didn't understand, you know,
before I started a product company, you know, now I
actually do understand, I understand because the vast
majority of their business comes from ads and this was not a
priority for them, it's not there.
Mission. Their mission is not to make
sure creators make a living like that's not the mission of the
company. They thought it was for a bit,
right? I mean I think back to like I
don't want to 12 the Creator spaces.
I mean the hundred million investment in all the different
channels. Yeah.
But those are all means to an end.
You know those are they were and I don't mean to talk shit about
YouTube like it's a great company.
I would not have a band or distribution or anything.
I guess, I'm just offering that, like, all of those things were
efforts to increase. Watch time.
And right, like the primary kpi for the company was watch, time
is watch time. That is what they're trying to
do, right? So like look at the kpis and
then you get a sense of like, how are they prioritizing?
And what matters. And if you want to know,
ultimately, if you really want to know a company's priorities,
just look at the allocation of R&D.
In the organization, just look at where their Engineers are
working and in YouTube's case, they're working on ads, they're
working on, watch time they're working on things,
personalization recommendations algorithms.
That's what they're trying to do.
Do and I get it, I just and it makes sense.
I think it's the right thing for them to do, it's their business.
But I think you know, the problem still needs to be solved
and somebody's got to solve it. I mean, you can look at patreon
from so many different lenses. One is like this sort of Insider
like yeah YouTube versus patreon versus some staggering.
But there's also just I've heard you talk about this before.
I mean, zooming way out. We have these assumptions about
like bands selling CDs or like the Types of business models
that fuel creatives. Like, I don't know.
Do you like, do you think we take too much for granted like,
this is the way like you run a band right now.
Yeah, yeah yeah. We're convinced all that shit is
bullshit is bullshit like nobody, nobody knows.
Nobody knows that there's so many interesting new innovative
business models around media right now, if you think about
what's actually happened like the last 20 years, Art creation,
Global art creation has shifted from The Real World into the
digital world. You talking about NF, TS I know
it makes me want to know your NF TV.
Let him finish this. That I'm talking about the fact
that like we used to like, make a living digitally, right?
Like I said, the live performance aspect.
This excluded is like, it's a minority of how we engage with
our audience. Yes.
And like now our art is infinitely replica.
And no longer scarce, and that's why you're seeing things like NF
teas and why you're seeing all these other like, you know,
technological innovations. Because everybody's trying to
figure out how does art survive in the day and age of of
infinite replicability and infinite, like creation, right?
So each infinite and reach infinite, reach and
distribution, and the economics are still being figured out,
right? That's why I like, people are
excited about the crater. Economy is because Cuz it's
there's finally a movement that's like raising their hand
and saying, no ads are not good enough by themselves, that is
not the answer. We need to figure this out as a
species, do you worry? I mean, any new business model,
has it could raise revenue a lot for the top creators, it could
create more opportunity for a long tail.
Yeah, I mean there's certainly resentment from some podcasters,
you know like oh the best leftist comedy podcast gets like
a ton of chopo choor. Coughs or whatever, you know,
and then all the other sort of the long tail, it's just much
harder. Same shit with sub stack to,
right? I mean, they're not even
claiming that like sub stack is a scam because you can look at
Matt Iglesias, right? There's enough Edibles or are a
newcomer the biggest create a newcomer like business do you.
But I mean, do you think there's more of a using?
There is more of a long tail with this new model, or do you
think it's don't think so? I know.
So I know so because I've seen the data looked at patreons,
distribution of earnings by Creator and Um creators who were
previously making a few hundred bucks on YouTube under the old
model are now literally, making thousands of dollars in some
cases tens of thousands of dollars and hiring executive
teams and leasing office, space and building Studios.
And the way I would describe it as the long tail as much longer
and much taller. In other words, the the
democratization efforts to empower and enrich creators have
applied. To now hundreds of millions of
people globally, and it's working.
Now, will there be creators? Who haven't found content Market
fit yet? Or only have, you know, a
thousand fans or whatever it is and can't quite figure out the
economics. That will always be the case and
it's not that actually. Like I am very sympathetic to
those craters. I was one of those craters for a
very long time. I was trying to find fit and
trying to find an audience and felt like I was speaking to
avoid. And that Fucking sucks sucks,
but it's hard for me to imagine a company that can solve that, I
don't know that that can be solved.
I think there will always be creative people who want to find
an audience and can't seem to do that.
Do you feel like it is patreons responsibility in any way to
help with distribution and discoverability?
Get us the hardest thing. Right?
It's like I know what I'm doing is great.
Yeah, I know an audience out there exists that wants to pay
for it, but I don't know how to react them.
Yeah. By the way, it's so funny.
Like talking product strategy in this context, isn't it?
Was like a really fun. All right, let's let's talk
product strategy. Yeah, so you ask me if it's
patrons, responsibility, do you feel present work on Discovery?
So here's how I would frame it patreon, set out to solve a very
specific problem. The specific problem we're
solving was, there are creators, who are getting millions of
views. Jurors who have incredible
reach, but they're being undervalued by Society.
Society was looking at this craters and saying, you're
getting a million views. Here's a couple hundred dollars
that's fucked up. Our responsibility is to fix
that problem, because no one else was fixing that seven eight
years ago. Now, there's turns out there's
other companies that are trying to fix that as well, but our
focus and our mission was to solve that problem.
Here's where it gets interesting.
Suppose we were to say, okay, we're actually not just going to
solve that problem. We're going to try and help
creators find audiences to begin with.
That actually puts us in competition with YouTube.
That puts us in competition with Facebook.
That puts us in competition with Twitter.
At the same time, I actually don't know that.
That's a war that we would win. Like those businesses are solid
businesses, they have moats, they have Network effects that
make it very difficult to break into those worlds.
I think patreons. Best bet at solving.
This problem of crater payments is focusing very specifically on
the problem of Creator payments and it's slightly different
problem than audience and reach and so An effort to like Define
the category and get into market and help creative people.
We were very narrow and targeted with our focus on what problem
we're solving. It's super interesting, you
know, having my own newsletter sub stack, clearly has a can get
hit from either side, right? If they take 10%, I'm and they
don't give me distribution. I'm sort of resentful.
Yeah, that they're taking so much right.
On the flip side, we just saw. They launched an app and now
it's like, oh, you're trying to sort of move me into Or Walled
Garden a little bit. You know, then turn it smartly
is that promising distribution at all.
Like, yeah, the app you know it's much easier to read other
newsletters when you're in it. You know, there is sort of and
it's much more like will upsell You from One crater to the
other. I mean, yeah.
You see some stack is a competitor.
I mean you're seeing more sort of we're going to sort of carve
off part of your thing and try. And I don't know, it's call ins
too small. But like David Sackett said
their podcast apps or I don't know what what do you think?
Sort of the so it's marketization.
Yeah, it's the transition of a company from essentially being
like a SAS company, to being a Marketplace company, right?
It's like, I'm an enablement tool for individual sellers to
sell things to their audiences, which is like a Shopify, but,
like, look, what you would shopify's doing with the shop
app, right? It's they're like, well, now we
have all these sellers and we have all these products.
We may as well build a Marketplace, and build, some
demand, gen into our Engine for our own audiences, right?
Like that's Shopify. That's what they're doing with
the shop app and like sub stack is essentially doing a very
similar thing. Just like look, our go-to-market
like the, our wedge into the market, was solving this
newsletter problem, but now we're going to build a
Marketplace company that's going to help creators find new
audiences and it's going to have Network effects for sub stack.
I mean, I don't know this. I'm just, I'm guessing that
that's probably what it is and it helps them build a moat and
helps them build a fence ability.
And so, I mean, I understand the move I think it's like a very
smart move for the company. What about, what about?
Oh, let me get the audience involved here.
What about only fans? Yeah, I mean, what do you what
do you for talking about porn now?
Everything now, you guys, not only fans, you guys have your
only fan setup. You don't have to tell me, I
already pay. I mean, like they, by the way,
charge less than you guys do right there fee.
Is I think five percent know, they charge way more.
It's 20%. That's what sorry.
Yeah, I'm really off the beat well edit that out.
So, only fan storage is 20%, Which is slightly.
More than you guys charge. Oh, that's interesting.
Yeah. Did they really charge 20%?
Yeah, which is, you know, strategically is it gunshot?
They charge less? I thought I was like 5 years.
I read that somewhere, but it was corrected.
Okay, interesting. So, you know, at that percentage
level, you know, they're obviously going not
intentionally, they claim to they'll go after anyone.
But yeah, you know, 20% they feel like that's worth it for
their audiences, it just because they're going after a group of
people largely, you know, sex workers who you guys make a
point of not allowing for on Patreon.
Yeah, gosh. I think I'm in like default
empathy mode or something right now, but I'm like trying to like
understand why they do that. And I actually do understand why
they do that. Yeah, I think it's like look,
these are this is high risk content.
It's expensive to process the payment processing fees on that
type of content are much more expensive.
Now they have a great business with like awesome margins and
they're growing and it's that's awesome but it doesn't like I
don't know that they could go much lower on that and still
have a healthy business and they can trace your Capital.
It seems like yes, they've had it probably have Runway so to
speak. And again, I don't know, like
I'm not into tried personally. So I don't know any of these
things, I'm just talking out of my ass but like, yeah, I think
at the end of the day, the risk is, why you don't allow why, why
don't you allow that type of pants?
So, When we make decisions like we've never allowed porn from
from day one. Uh-huh.
And it's like it's not a values decision.
Like we have no problem with pornography.
In fact, I'm really grateful that only fans exists as a
company. Like this is a category of
underserved people that need help and their industry fucking
sucks. And their industry is unsafe.
And it's abusive, right? And they need something like
this so that they can like shift power and control.
From these institutions toward these individuals sex.
Workers who need this? I'm so glad that only fans
exist. Now it has problems of course
but like I don't know I'm hopeful that those problems will
be solved in these people will be helped so why didn't we do
that? And it's a really good question.
We didn't do that because two reasons, not values-based
reasons, we don't have problems with porn.
It's that at the end of the day, it's much higher processing
fees. It affects the like the type of
business that we can run and how much we have to charge for it.
We want to keep our prices super low.
We don't want to take a ton of money for a taxi for like credit
card companies, charge higher for products that are in that
Arena. So it's at the end of the day,
it's like category of processing, like what type of
like gambling pornography. Like there's a whole category of
the risks or yes, there's a whole category processing types.
I have like a lot of chargeback fees and a lot of a lot of risk
associated with the content and the payment processors have to
pay higher fees themselves as a we have to pay our fees and
trickles down to the The Creator.
So that's reason number one. Reason number two is we call it
mission risk. It's like what we're going out
to do is help podcasters and video creators and webcomics and
like all these creative people and the internet has a history
of like when you allow pornography on your website it
suddenly becomes a website for pornography, right?
And like it's not that I don't like like I'm fine with that
existing. It's just like, that's not the
company I want to build. I don't want to build A porn
company. I want to build a company that
helps progress a source of great with only fans, right?
Because I was writing about them in a time where they were really
trying to spread the message to the media that were for a lot
more than that. We're just like in the same way.
You guys are a platform for creators.
Yeah. But that's again totally
aspirational. That was never going to happen
but they were never Beyonce name.
Dropped it in the song like they know.
I mean they yeah but look at the context in which his name
dropped its like I'm gonna start an only.
It's like like it's like sexy. Well, the analogy that they were
using at the time which was interesting and maybe not.
Turret was like Snapchat Snapchat.
Yeah was you know originally for dick pics.
Yeah it was like what people assumed its use case one yes and
then you know the argument that Evan and those guys were making
his life. Well no it's not and most people
aren't using it for that but I think they sort of saw that
similar kind of transition like the dick pic at becomes the
multibillion-dollar. Right?
Messaging. App in the way that only fans,
it's just a platform, right? Why couldn't it work, right?
And in this particular case, I think it I don't want to call it
a lost cause but like past the certain thresholds You know,
even when like safer work quote unquote safer work, creators
launch on only fans. The message is that they get
from all the consumers on the website who have been trained to
solicit for pornography, are sending them inbound messages
saying, like, show us your feet, like, take off your shirt and
these craters are like, know what that someone doing this,
right? And it like it's a
self-fulfilling prophecy to read Comics.
You don't want to see my. Yeah exactly.
Yeah, but so that's why we made the decision that we made and
again It's not, it's not that like our hearts.
Don't go out to those people and it's why I'm very grateful that
only fans exist. It's just not the mission of our
company. I wanted to ask the founders
lever people for newcomer, get to see your feet.
You know, I wanted to ask sort of a, the higher tier.
I mean a recurring theme is sort of you're having empathy for
other like product companies. Obviously you're like a CEO now
your Co you've been a CEO for a while.
You're CEO of a four billion dollar company.
Yeah, I mean used to be like a musician, right?
Where were you whistling? Music.
Yeah, you can start your a lot with two music videos and we.
All right. Yeah.
All right. But like, I don't know.
I'm curious like your own personal transformation.
Yeah. I like doing the business.
Yeah. Big like, were you sort of much
more, skeptical of business? People back back.
When you were mostly a musician or I, or were you always have
sort of? I was standing.
I was and I and not only skeptical, I was angry and I
still am I still am angry? I think.
A lot of companies. Make decisions that make me
angry. And maybe the difference now is
like, I understand why the decision was made, because I've
seen how this works, and I've seen like things that, like, I
just seen it like, oh, we have a product team.
They focus on this Earth at that.
Yeah. And and and so the transition
has been, one of, it's been a humbling transition, like I This
shit is hard. Like I have a lot of empathy for
product managers that YouTube like they're serving 2 billion.
People do not have empathy for you've been incredibly
empathetic this whole conversation.
Where did you go? That's fine.
No, that's not true. I mean, I do, but but also, like
what is happening, is so fucked up and evil and atrocious and it
makes me really angry. And I wouldn't describe my
feelings doesn't pathetic for that.
Well, actually be, I can, I can I can tie this back in because
there was a See a great article that came out the other day
about when all these Western companies cut off support.
Yeah, in Russia, you had, you know, a huge number of craters
on only fans in Russia, right. I had no ability to continue
their business, I mean, they're obviously a victim in a way of
policy on the part of a lot of mere Putin.
But what have you guys done anything in terms of your
creators in Russia? Do you guys feel the need to do
anything other than? Yeah, if you've done anything, I
mean, do you feel responsible for them in any way?
So I mean, yeah. We've We, you know, that there's
been a like, a task force at patreon.
That's been working on this for, you know, weeks and actually
shout out to some patreon teammates who are here, who have
been working on that task force. It's like a very difficult, very
hard thing to be in the middle of and it's our first time as a
company like experiencing a global event like this, you
know, one thing that we did is we like waived fees for our
Ukrainian creators for the next three months, just as an effort
to like help and send more money to those craters and help them
get through this. Not that I'm any creators in
Ukraine. You guys, it's thousands,
thousands of of creators that Ukraine and like including like,
you know, like independent journalism that are like
reporting on the war and and that's important.
And so so yeah there's a team that's working as a team that's
working on, you know, misinformation campaigns and
trying to evaluate if anybody has, you know, but spreading
that on patreon it, did you cut off just brushing creators or
No. So actually a lot of that is
happening regardless of what we're doing, right?
So like a lot of the payment processing relationships and,
you know, Bank relationships are just failing.
Now, regardless of any decisions that patreon is making because
they are, you know, because of sanctions because of banks
pulling out because of processors pulling out.
And so, you know, last month we saw a number of, of those
transactions fail and we're expecting even more.
More this next month because you know, even more companies have
pulled out. Do you guys have creators in
Russia? Yeah I do.
Yeah. Had there been Payment
Processing that was going through I don't know if there
still are would you continue to offer service to them?
Yes we would and we are I don't think individual creators should
have to pay for the misdeeds of their authoritarian leader.
I want to put that on Creative people.
They met They may disagree with the War, I don't want to punish
them for their geographic location and our team doesn't
want to do that either. Like we are a Creator first, I'm
going to push back on that. And I'm very sympathetic to that
idea, but the pushback would just be, you know, it's a
western world like foreign policy sort of agenda item to
create as much trouble for Russia economically as possible.
And that means yeah, if anybody is in, Russia's going to have a
hard time like you just don't want to be part of that sort of
like Crackdown. I mean, if there is a way we
could punish Putin like great, right?
But like this, the version of this podcast in Russia, like
patreon, ceasing to support that this is.
This podcast is is no. Yes, a clearly that would be a
very important podcast right now.
It but like you see the only voice of reason in Russia right
now you have cats like I believe patreon empowers, the shift from
companies and Regimes to individuals that is the like,
that is a core element of what we do.
So, so like that would send a terrible signal to the world and
it would be the wrong choice for us to remove the livelihoods of
creative people in the middle of like one of the most tumultuous
Global events. Again, I that's just we would,
we would never make that decision and actually, I realize
it may be unpopular as a better than playing a moment
controversial inside your company.
No, it was Because we are. It's such a Creator first
culture. Now, I'll tell you, we did
debate, like, you know, suppose like Artie had had like
distribution or how to funding, you know.
Those are things that we would consider writing State back
media propaganda. Campaigns course that like
that's something that we have to be very careful about but an
individual Creator who's making videos and making money.
That's our mission. That's what we exist to do.
And actually, Ali. I don't feel like being
apologetic about that eating like I'm very proud but that is
our stance and I believe in my heart that it's the right stance
for patreon to take shift, shift, yeah, lighter topic.
Yeah, that I do. I hey, it's very, I'm glad we
hit on that territory. So it's important to talk about
but nft Sort of touched on them before and I mean to some degree
had ties to an earlier and of these in a way are like sort of
the crowdfunding, right thing or like, right?
There's a lot of like projects that seem to get a lot of money
early before they've delivered, you know, it's like the board
apes are popular but a lot of you talk to nft people.
Yeah. Why are they so valuable?
They're like, oh, that's going to be entering entree, into a
great community. And we're gonna have a lot of
things down the road, I don't know.
Do you does do n ft's enter to your Calculus at all?
And I'm sure curious. If you see See the same parallel
to like the crowdfunding days with with some of the crypto
projects. So, two thoughts on this first.
Anything that helps creative people make money is interesting
to us and we are excited about that because I want creative
people to be compensated for their work.
Like, what is happening globally right now is a labor problem.
Like, craters are legitimate members of the workforce.
And they're not being compensated for their
contribution to society. That's unacceptable in my mind.
Anything that addresses that I'm a, I want to learn about.
I want to follow, I want to understand.
And so of course we follow this whe under.
We try to understand, we try to learn about it, we want to be
very curious about these sorts of things that are emerging for
craters. So that's the first thing.
Second thing is with regard to end of TS.
I'm I am excited about use cases.
I am excited about value to creators regardless of the
technology. Now, I think there are some
technologies that are exciting blockchain and at ease etcetera,
but we wouldn't do something for the sake of.
Well, this is an exciting technology.
Let's use it somehow. Let's leverage it, somehow
that's not how we build things. We build things by thinking what
is important for Creative people?
What is valuable for Creative people.
How can we help creative people make money?
And so it may actually be that like some of those things are
things that we evaluate and think about over the coming
years. But we start with the business
use case for Creative people and then we work backwards from
there and art. Like would we consider things
like entities, I think I think actually right now we're so
focused on membership as a category, anything that isn't
membership. We're not really working on.
It's possible that something like And ftes or, or not even
calling it an EFT. He's like, scarcity, I think is
an interesting Concept in the day and age of digital Goods.
But even a more interesting concept is the idea of access.
And so it's interesting to us is like some people are using n FTS
to say. Like, if you have this nft, you
get into my Discord. That's really interesting.
It's like it's not even about money that points about access.
It's about because you have people working on that because I
mean you could see the membership model to my Discord.
That's a big perk. That's a that's a very big part.
That's the thing you guys do a lot of what But had a greater
that's what I mean by like benefits, right?
That's less about the financing mechanism, then arises benefit.
So say I want to discard with only like 100 people.
Yeah, then I could sell if it sells to somebody else, right?
I get like a cut of maybe the transaction, but it also means
that the market in some ways going to solve.
I mean, you're then only going to get your hundred richest
fans, but I don't know yet. Is that so okay, so I think
there's I think there's like three pieces of value to end of
T's right now and I think there will be many more that emerge
but the three pieces of value think first is like, access
people are using that as access that is interesting.
The second is like monetization of digital assets that is also
interesting for like creative people.
It helps them sell a thing. And then I think the third is, I
know, they're not technically Securities, although, maybe that
changes under Biden. Given the - order, but it is, it
is an Essence, behave starting to behave like a security and
that it is something that can grow in value.
Over time, you are almost becoming an equity holder in an,
in an asset. I mean, you are becoming a
holder of an asset that that can grow in value.
And all of those use cases are interesting.
They're not patreons focus. They're not things that we're
building into our product but they are.
Do you have some person? Where are you working on this or
so? I realize it probably sounds
like I'm being very vague. I'm being vague because how we
build things, how we built things that the company is not
starting with a technology. It's starting with use cases.
So, so when we hire people and think about these sorts of
problems, we're going to hire people.
And the charter will be give craters, leverage and control
the charter of the team will be. How do we, how do we give
craters? The ability to sell things to
their fans? How do we give craters the
ability to engage in digital Commerce?
So how do we give craters the ability to own the relationship
with their members? Now the team may or may not
employ NFC technology or blockchain technology as they're
like building those things but we don't start with this is our
Block Chain team, okay? Team figure out how to use
blockchain, you know we can be in Tech world where they're
like, why not? And then ft but there is yeah
they're like Gamers. Who is really repressed?
Oh they're definitely start off a whole like, you know, arm of
the company, doing Lyra like Facebook did, right?
I mean, that's yeah. I mean So that's vase Lira Lira,
right? Libra Libra, fuck movie and then
it got shot. But I'm just saying, there's
definitely a set of people would also be very angry if it says
here at the Italian current. Yeah.
Right. Which would be a great nft.
That's like the opposite of view on any entity.
Crippling personally, I don't really I don't want to have
teeth. Yeah.
Sorry I got us off track with this.
What? Yeah, I wish I was more of an
observation that there. It's not like there's a total,
there is like a very rabid. Crypto Pro camp, but then, I
mean, you have comic book artists and game developers.
Like, those types of people have fans that might be very angry at
patreon. If you were to sort of dip your
toe, in those Waters. Yeah, there are.
And and, and like, even like I did a podcast, I don't know, 12,
like three months ago or so, And I just talked about and ft's,
like, all I do is talk about Nazis and I didn't even talk
about drove out. The value of n of t, i do.
I asked an investor about NF T's on the podcast.
I didn't even talk about them and it, you know, there's
speculation and concern, along lot of brothers, I've even
realize it. So you've got in the heat.
Yeah, so already, we were yeah, of course.
Yeah. I mean it's yeah, we've only got
a couple minutes left, I think. Yeah.
So I want to get to the maybe like a couple last topics before
we can turn it. Audience, if anybody here has
some questions too. But I want to talk about the
only thing that Eric and I actually care about which is
journalists greater. That's right.
Yeah, we waited till the end, our budget, we're like several
weeks into this endless cycle about whether journalists are
Brands and whether journalists are creators.
Now, you know, what about Taylor?
The rent in, get her to engage with you on Twitter honor, the
topic, the broader topic, we render wait, you said whether
crate, whether journalist Our Brands or create, these are very
small. You probably don't have to
follow this, but Taylor Lorenz basically said my name's, all
right, but she said that you're a lesser Brands and then a bunch
of old schools are like White House.
Maggie Haberman to the world, really like push back on it and
was like you know, because they just don't want to think of
themselves as a brand because it sounds very like Creator.
I don't know. It's just such a like it's a
Flashpoint word. So that's that sort of the fight
that's happening. Sort of in on the journalism
Twitter Wars at the moment relates.
Very much to where you came from and the hole.
Greater economy because it's this question of like, do we
exist as employees as part of larger?
Institutions, do we work for them?
Or can we work this? Quasi independently of it?
That gives us more job security or leverage that if we want to
go off on our own or or create some some kind of income that
exists Beyond just the brand of the New York Times or the post
or Insider, okay? Super interesting concept.
So A couple thoughts on that there, I hear kind of to two
issues there. The first is like can
journalists develop independent followings and of course option,
right? Obviously do journalists need to
be a part of larger institutions and Leverage.
The the reach from those institutions historical, reach
know obviously that is changing but the more interesting part of
I think what you what you just said is like The distinguishing
characteristics between this concept of a brand and the
concept of a Creator. Exactly.
And what I would argue is that those are very fucking different
things, very different. A brand is consistent.
It has Brand values. It builds trust, it has decks of
like its style and it's voice and what it sounds like and if
it were a person, what kind of genes would it wear like That's
what brands are brands are not human beings.
They're not great. I love this.
Yeah, like a journalist creators are fucking people.
They're inconsistent, they're human, they're beautiful,
they're frail, they're smart, they're stupid, they're
strategic, they are impulsive. They're human beings.
And I think what one problem that I think is a pretty big
problem is, we're all trying to behave.
Like Brands today and brands are corporations, like, we don't
have to be marketing, France. Yes, it's crazy to me.
How much that is infected normal conversation?
I mean, I guess I'm a tune to it because I've written about
advertising, it does not need to be a thing that regular people
talk about know. It's a thing.
You used to sell jeans? Yes.
Yeah, and it also frankly, it's only we're content by the way,
it's not yet. It's a terrible content is not
life, right? You know, but but we are, it's
ineffective. Brands have lower trust than
they've had in many many years except for the people that liked
it. What do you mean by that?
Well, I mean, like, the people that ascribe themselves to a
specific brand, they trusted another, I would argue there are
fewer people who do that now. Like, if you look at consumer
trust, it's been dropping for a long time.
And then, you have to ask, why are we all trying to behave like
Brands if brands are losing trust and mass right now?
Like I think about identity, I think people have chosen to
identify the specific brand not brand, right?
Like identity is personal, it's human.
But you could draw a distinction between like authenticity and
like intentionality or something with intentionality.
Yes being closer to a brand and I don't know, I run a media
company there. Like some days I'm like
depressed. I'm like I don't know what I'm
supposed to write. I don't always just like send
that out as an email. I like think like oh what a my
brand is professional. Yes to be the founders to you.
You're so I do feel like there's like a school of the Creator
world that would say you should just be authentic.
Look at the end of the day. It's up.
To a crater to decide what they want to do.
I think there is value to some craters building Brands.
I'm not going to say every Creator should just fucking be
themselves, no matter what, like some people would be like, I
don't want to follow the person. I want to follow this thing.
That is exciting about them. That's like, something that
would be, you know, on the interest graph as opposed to
like a, you know, friends. But I would argue that like, for
me my favorite artists, like my favorite artists are the people
who are unabashedly. It's all of the good, all of the
bad, all of the dark, all of the pessimism, and all of the
optimism. All at once when you watch a
prince music video, that fucking guy is just himself, no matter
what, and I don't want him to behave like Walmart.
I want him to be Prince and like my favorite creators.
I want them to be themselves and I want them to feel human and I
want them to not feel trapped by their brand values.
So like I did get some mistake for everybody to think I need a
personal brand. I need a Creator Brent, like
just be yourself but it's fun. I think that's that's a great
and why? I think I okay.
All right. Thank you.
Let's get a round of applause. Thank you very much Jack for
coming. Thank you for all listening to
us. We really appreciate it.
That was dead cat. You can check out our podcast.
It's distribute on the like And subscribe.
We're Creator us. I wouldn't say we're a brand
after that speaketh, but I do know I'm like, no.
Not a brand-new monetize Buddha. No, it's not, sorry, it's okay
to be a brand. I think some people need Brands
because they're following the thing that the brand cares
about. That's totally legit.
Have you want to get it? Discusses, I have a lot of 30
minutes. It's gonna be fun.
We're gonna have buzzers, we're going to be seized testing their
knowledge about startups and Venture Capital.
So stick around. Thanks buddy.
You guys later. So what comes Sally?
Goodbye, goodbye. Goodbye, goodbye, goodbye,
goodbye. Goodbye.
Goodbye, goodbye. Goodbye, goodbye, goodbye,
goodbye. Goodbye.