Patreon's growth was fueled by the viral product cycle, as creators spread the word to expand the user base.
Jack Conte's personal YouTube channel played a crucial role in kickstarting Patreon's success, generating over $5,000 per month.
Patreon addressed challenges in developing content policies and revenue models, ensuring community safety while creating a sustainable business.
Deep dives
The Birth of Patreon
Jack Conty and Sam Yam launch Patreon, a crowdfunding platform that allows fans to support artists with monthly subscriptions.
Challenges and Success
Patreon initially struggled to attract creators, but Jack Conty's personal YouTube channel helped kickstart the platform. Within a few weeks, Patreon generated over $5,000 per month.
Viral Product Cycle
Patreon's growth was driven by the viral product cycle, as creators who joined the platform spread the word to their own audiences and expanded the user base.
Business Model and Growth
Patreon's business model involved a 10% fee for platform and payment processing. As more creators joined, Patreon's revenue and user base grew rapidly.
Building the Foundation: From Zero Projections to Raising Capital
The early days of Patreon were characterized by a significant absence of projections, spreadsheets, and financial calculations. The founders focused on creating a platform for artists and fans, driven by the passion and excitement expressed by the artist community. After the launch and initial traction, the founders decided to raise funding, valuing the company at $6 million and securing $2.1 million in the first round. This investment was crucial in hiring staff, scaling operations, and realizing their mission of supporting artists.
Navigating Content Policies and Revenue Model Changes
Patreon faced challenges in developing and refining their content policies and revenue model over time. Addressing controversial content and ensuring community safety emerged as key concerns. Engaging with experienced advisers and drawing from the lessons of other platforms, the founders worked on a rigorous content policy that defined the boundaries for different types of content. Additionally, they introduced a tiered payment plan for creators, providing options and flexibility. Despite initial backlashes and tough decisions, these changes enabled Patreon to create a sustainable and financially healthy business while serving the needs of creators.
As part of the band Pomplamoose, musician Jack Conte had a sizeable fan base in the late 2000s and was making thousands of dollars a month from iTunes sales. But when streaming services like Spotify took over the music scene, Jack's income dwindled. So he called up his college roommate Sam Yam, who had spent his post-college years launching startup after startup. Together, Sam and Jack created Patreon, a platform where artists' most passionate fans can sponsor them for just a few dollars a month. Following a Covid-era surge in new members, Patreon is now valued at over a billion dollars and supports over 200,000 musicians, artists, and content creators.
