I don't understand. Isn't Patreon basically just a payments portal? Donors pay money to Patreon, and Patreon passes that money on to the intended recipients - while scraping a fee off on the way...
I don't understand. Isn't Patreon basically just a payments portal? Donors pay money to Patreon, and Patreon passes that money on to the intended recipients - while scraping a fee off on the way through. It's like PayPal, but with a specific focus on content creators. How is that not sustainable? The larger it grows, the more payments it processes, and the more fees it collects. I don't see the problem.
The problem is—as always—that they took a lot of venture capital. Most recently, $60M in September 2017, taking them to a total of $107M in venture capital. So now instead of just needing to build...
The problem is—as always—that they took a lot of venture capital. Most recently, $60M in September 2017, taking them to a total of $107M in venture capital.
So now instead of just needing to build a profitable, sustainable business like you described, they need to find a way to make the site worth several billion dollars to get those VCs the returns they expect.
It won't. There's two ways to run your infrastructure. Bare metal on a fat pipe for a couple hundred a month, maybe as high as $2k a month if you go insane and stuff 200U of computers into a cage...
It won't.
There's two ways to run your infrastructure.
Bare metal on a fat pipe for a couple hundred a month, maybe as high as $2k a month if you go insane and stuff 200U of computers into a cage with unlimited multi-gigabit speeds - and on that you should be able to run anything, period.
Cloud services and ever increasing rent that just keeps on eating away at your profit margins. Great for your small business that has five employees, suicide for any proper large business that needs a real IT infrastructure.
Voat chose option #2, which is why they find themselves paying $7k a month for hosting. Tildes chose option #1, which is why it's costing a couple hundred - and the server can probably handle a couple hundred thousand users before that's no longer enough. Factor in Deimos having a solid salary and even then it's still cheaper than Voat.
Rejoice, for the unix school of thought is still alive and well out there. Those who don't understand unix are doomed to reinvent it - badly. One does not have to pay the cloud tax to play the internet game. I've heard it said that the lottery is a tax for people who are bad at math. Maybe it's fair to say that hosting costs are a tax for people who are bad at tech. :P
I meant... I hope that any shenanigans at Patreon won't affect Deimos' ability to collect funds from us. It doesn't matter whether he needs $100 per month or $100,000 per month if we can't send...
I meant... I hope that any shenanigans at Patreon won't affect Deimos' ability to collect funds from us. It doesn't matter whether he needs $100 per month or $100,000 per month if we can't send money to him.
Eh, there are plenty of options out there and if Patreon goes up in smoke, someone else will come along and fill that market niche in short order. Eventually one of them is bound to get the...
Eh, there are plenty of options out there and if Patreon goes up in smoke, someone else will come along and fill that market niche in short order. Eventually one of them is bound to get the business model right, someday. I'd like it best if Tildes had its own, honestly. I look at the donations as the user's ability to keep the org honest and focused on what the users want.
Any chance you could elaborate a little on this? It's currently a moot point for me, but in the past (admittedly a few years back) I haven't seen a vast difference between VPS and dedicated server...
Any chance you could elaborate a little on this? It's currently a moot point for me, but in the past (admittedly a few years back) I haven't seen a vast difference between VPS and dedicated server pricing for most use cases (particularly if accounting for extra DevOps time). The only significant win I recall for dedicated was data transfer, as they tend to come with 24/7 usage at a given speed, rather than a per GB charge - valuable, but only in the situation that it's not handed off to a CDN.
It's something that'll no doubt be relevant again for me in the future, so I'd appreciate the perspective.
It's not the VPS - renting VMs is hardly different from bare metal. For the cost of renting a cage, though, you could run thousands of VMs for the same price. Last company I worked for was paying...
It's not the VPS - renting VMs is hardly different from bare metal. For the cost of renting a cage, though, you could run thousands of VMs for the same price. Last company I worked for was paying about $750/month for gigabit speeds and we had four 42U racks set up in a T4 datacenter, each one part of a virtual cluster. Even factoring the cost of the hardware in over the years that price wouldn't break $2k a month. Of course, then there was the salary of the sysadmins, but it only took two of us to manage it all. It's really not that hard.
The idea of having your entire infrastructure built up piecemeal like legos where you pay rent for each block, and have no control over each block, and share your data with every vendor seems like crazytown to me. I remain unconvinced the vast majority of these services provide any real value or will last any real length of time. Every time one fails, or is bought, changed, and folded into something else by another company, it's a strike against the infrastructure you're building for your own business if it happens to one you're using. I can't understand why companies are so willing to abdicate control over their environments and their data.
Got it - in that case, I'm pretty much totally with you. I was thinking of "cloud" more in terms of someone else's (probably virtual) machines vs. own (probably physical) machines - but yeah, when...
Got it - in that case, I'm pretty much totally with you. I was thinking of "cloud" more in terms of someone else's (probably virtual) machines vs. own (probably physical) machines - but yeah, when it comes to proprietary services it just doesn't seem like a wise way run a business.
My biggest issue with VMs is simply that your provider has access to your data. There are encryption options (including homomorphic processing) that make it possible to avoid that and keep it...
My biggest issue with VMs is simply that your provider has access to your data. There are encryption options (including homomorphic processing) that make it possible to avoid that and keep it private, though you're bricked if you lose your keys. :P
I get that what you said is somewhat in jest, but you can certainly run things in the cloud and not be bad at it, and you can certainly bankrupt yourself with sys admin overhead. One way isn't...
I get that what you said is somewhat in jest, but you can certainly run things in the cloud and not be bad at it, and you can certainly bankrupt yourself with sys admin overhead. One way isn't better, it is just a matter of using the right tools in the right way.
I haven't built them myself, but I've seen services built with option #1, with the ability to spin up some docker containers on one or more cloud services during periods of unexpectedly heavy...
I haven't built them myself, but I've seen services built with option #1, with the ability to spin up some docker containers on one or more cloud services during periods of unexpectedly heavy load. The logistics of load balancing between AWS, Azure, and self-hosted machines sounds like a nightmare to figure out though.
Obviously this wouldn't be for everyone, but such a solution could have saved Voat a ton of money while still giving them the flexibility they wanted from "the cloud". Then again, maybe it's a good thing Voat screwed themselves over.
Part of the value of those cloud services is that they do make that sort of thing dirt simple/easy to do. That's kinda the point - your company doesn't need to maintain the level of expertise if...
Part of the value of those cloud services is that they do make that sort of thing dirt simple/easy to do. That's kinda the point - your company doesn't need to maintain the level of expertise if your IT lives in a world of pretty little check boxes that do the fancy stuff for you. I think of it like Fischer-Price IT - cheap plastic toys. I know that's fairly condescending - humor me, I was a lowly MCSE who eventually made the journey into the world of unix and I don't like the idea of going back. :P
My distaste for it all is definitely more philosophical than technological. If I were setting up a small business with basic IT (email, website, doc sharing, collab software, marketing, small data analysis) I'd probably do it with cloud services because for a small business that's a money saver. Later on in life when that business isn't so small anymore, that's when the rent starts to hurt. By then you're locked into your vendors and if they decide to arbitrarily raise your rent by a few zeroes for a month because you got hit with the slashdot effect one day, there's fuck all you can do about it. You can't just back out and change your infrastructure on a whim.
There's nothing more permanent in IT than a temporary solution. That's a lesson every sysadmin and developer gets to learn the hard way at some point in their careers. ;)
There are multiple other options for donations: https://docs.tildes.net/donate Patreon is currently the only one that lets you set up a recurring donation easily though. I should probably try to...
Patreon is currently the only one that lets you set up a recurring donation easily though. I should probably try to set up some alternatives, I think Stripe makes it quite easy to do a recurring donation now.
I did start setting up a Liberapay account at one point too, but I think it was during the weird transitional time when they were getting kicked off MangoPay, and I wasn't sure if it would be a good idea to start using them. I'll have to look into it again eventually.
Ah right, thanks. I remember that now that you mention it, and I think it's very strange. Their blog post explaining it was submitted to Tildes, and I made a comment on it about the mismatch...
Ah right, thanks. I remember that now that you mention it, and I think it's very strange.
Their blog post explaining it was submitted to Tildes, and I made a comment on it about the mismatch between how people expect recurring donations to work and their new system (just duplicating it here for convenience):
It's good that they've figured out a way to keep going while changing payment processors, but I get the impression that they're getting into a state now where there's probably an "expectations mismatch" between what people expect to be doing when they set up a recurring donation compared to how Liberapay actually works.
As the blog post mentions, now you can say "I want to donate $5/month" and you put in $60 to cover a year, but you have to pay that full $60 immediately, and the recipient also receives the whole $60 (minus fees) right away as well. After that point, there's not really any way for the donator to change their mind and stop donating after a few months, so it's more like a one-time donation with a reminder but still being presented as a smaller recurring one.
I think the problem is that overall it will end up encouraging people to make smaller donations for shorter time periods because they won't necessarily want to commit for many months or years' worth up-front. Then that means that they have to be sent reminders to re-donate more often, which feels more annoying and will probably result in people just letting their donations lapse more often than repeatedly renewing them.
I think it's important to note that regular users are not really Patreon's target market, they are looking at creators as their users. An up an coming artist would feel a quite a bit of pressure...
(...) Patreon doesn't have the kind of lock-in effect that most really profitable things VCs invest in have.
I think it's important to note that regular users are not really Patreon's target market, they are looking at creators as their users. An up an coming artist would feel a quite a bit of pressure to use the same platform as everyone else to make it as frictionless as possible for their followers to donate. I wonder what the numbers are on Patreaon donors who support multiple creators at once but I'm certain that is the key to it's success.
Impossible to say, they would have had to run the company in a much different way. They wouldn't have been able to hire so many employees, and would probably have to do a lot of things...
Impossible to say, they would have had to run the company in a much different way. They wouldn't have been able to hire so many employees, and would probably have to do a lot of things differently. Venture capital can absolutely help in the short term, that's exactly why it's so tempting. But it completely changes the "goal" of your company, and will almost certainly do damage over the long term.
I quote it often, but it's still one of my favorite descriptions:
A venture-capital funded startup is a temporary company that has to convince enough people into using their platform so that they can make good on the exit they promised their investors at the very beginning. It is the opposite of a long-term, sustainable business.
There are other ways to ensure the continued existence of a company than to invite outside investors to provide more capital. One could look at the business model of the company, and ensure that...
There are other ways to ensure the continued existence of a company than to invite outside investors to provide more capital.
One could look at the business model of the company, and ensure that its incomings and outgoings are properly aligned, in order to make a profit on each transaction. One could economise and reduce the expenses of the company. One could increase the prices of one's products and/or services. One could borrow money from a financial institution.
There are lots of other things one can try before resorting to bringing in more investors to dictate how the company should be run.
i would guess this is because venture capital and investors don't seem to be thinking in stability terms, but profitability terms. "sustainability" is nice, but it clearly means fuck all over...
How is that not sustainable? The larger it grows, the more payments it processes, and the more fees it collects. I don't see the problem.
i would guess this is because venture capital and investors don't seem to be thinking in stability terms, but profitability terms. "sustainability" is nice, but it clearly means fuck all over making the most amount of money possible in the shortest possible time even if it completely fucks over everybody using the service and maintaining it. as long as that's the case you can bet your ass that this is going to happen over, and over, and over again.
Because Patreon went the now-standard tech route of venture capitol investment. This means that, even if Patreon consistently makes money and can pay all its employees and server costs, it doesn't...
Because Patreon went the now-standard tech route of venture capitol investment. This means that, even if Patreon consistently makes money and can pay all its employees and server costs, it doesn't matter. All that matters is getting the VC funders their value. They will strangle the company to death if they think doing so will give them 1% more return on investment.
They also host content. Most Patreons offer some kind of deliverable in exchange for your support such as early access to videos, software, source code, what have you. I don't think that is enough...
They also host content. Most Patreons offer some kind of deliverable in exchange for your support such as early access to videos, software, source code, what have you. I don't think that is enough to make their business model difficult, but it does throw in a few wrenches you don't get with just a dumb payment processor.
it's been about two weeks now since this little story dropped to the mild alarm of some people, and i still have no idea what exactly patreon intends to do here other than try and pointlessly...
it's been about two weeks now since this little story dropped to the mild alarm of some people, and i still have no idea what exactly patreon intends to do here other than try and pointlessly expand in the name of venture capital's demands and the same insane, irrational hope that has gripped everybody else that nothing but growth is acceptable and if you're not growing, your business model doesn't work.
"The reality is Patreon needs to build new businesses and new services and new revenue lines in order to build a sustainable business," Conte said.
The company does not currently provide contracts, which allows users to retain 100 percent ownership of their work and full control of their brand.
The company plans to provide creators with new "value services," like options for merchandising, to generate new revenue. Creators will be given the opportunity to participate in these services, and it could ultimately reduce Patreon's generous 90 percent pay-out model.
"We will have to re-examine how we charge for new services as we put them out," Conte said.
Conte said with added revenue streams the company will continue to redefine the space of creative content creation and aggregation – currently dominated by YouTube, Spotify and other various subscription services.
He said the "feeling of support and connection with artists" along with the "transactional benefit of membership" encourages users to pay for content that they can otherwise receive for free.
this seems to be in the forefront of patreon-using twitter and breadtube/lefttube twitter right now though, since FoldableHuman put out a thread involving it earlier and doesn't seem particularly enthused by what it implies for the future of the service. we'll see how it goes, i suppose, but given the state of the tech industry i'd guess it's pretty hard to be optimistic about the implications and the possible outcomes here.
update: jack conte actually responded to FoldableHuman's thread on this, so if you are interested to see the man himself explain away patreon's model before the site collapses, there ya go.
update: jack conte actually responded to FoldableHuman's thread on this, so if you are interested to see the man himself explain away patreon's model before the site collapses, there ya go.
The thing is, I don't see Patreon as anything other than me trying to give artists I respect money. In this vein, there should be no reason why they're not massively profitable like a huge...
The thing is, I don't see Patreon as anything other than me trying to give artists I respect money. In this vein, there should be no reason why they're not massively profitable like a huge corporation like Square or Visa. If Patreon tries to diversify by creating new businesses and services, this will only increase their risk of failure. Instead, they should focus on growing, in the following order: 1) patrons actively using the platform to pay artists/etc. 2) bringing more artists with established followings onboard.
There's nothing particularly generous about taking 5% on each donation that goes through them. If they start taking more I think we'll see new platforms emerge.
There's nothing particularly generous about taking 5% on each donation that goes through them.
If they start taking more I think we'll see new platforms emerge.
While we're still waiting for some simple way to give a dollar to a content creator without handing a third of that money to somebody else, these guys are moaning about not actually bringing...
While we're still waiting for some simple way to give a dollar to a content creator without handing a third of that money to somebody else, these guys are moaning about not actually bringing nothing of value to the table and still getting a cut. What is it that you do here, Patreon? Copy and paste code from several APIs and host it? You only have any strategic value because cryptocurrencies are presently a sad disappointment. It's not going to be like that forever.
I don't understand. Isn't Patreon basically just a payments portal? Donors pay money to Patreon, and Patreon passes that money on to the intended recipients - while scraping a fee off on the way through. It's like PayPal, but with a specific focus on content creators. How is that not sustainable? The larger it grows, the more payments it processes, and the more fees it collects. I don't see the problem.
The problem is—as always—that they took a lot of venture capital. Most recently, $60M in September 2017, taking them to a total of $107M in venture capital.
So now instead of just needing to build a profitable, sustainable business like you described, they need to find a way to make the site worth several billion dollars to get those VCs the returns they expect.
Well, that's just silly!
I hope this won't affect Tildes' funding, though.
It won't.
There's two ways to run your infrastructure.
Bare metal on a fat pipe for a couple hundred a month, maybe as high as $2k a month if you go insane and stuff 200U of computers into a cage with unlimited multi-gigabit speeds - and on that you should be able to run anything, period.
Cloud services and ever increasing rent that just keeps on eating away at your profit margins. Great for your small business that has five employees, suicide for any proper large business that needs a real IT infrastructure.
Voat chose option #2, which is why they find themselves paying $7k a month for hosting. Tildes chose option #1, which is why it's costing a couple hundred - and the server can probably handle a couple hundred thousand users before that's no longer enough. Factor in Deimos having a solid salary and even then it's still cheaper than Voat.
Rejoice, for the unix school of thought is still alive and well out there. Those who don't understand unix are doomed to reinvent it - badly. One does not have to pay the cloud tax to play the internet game. I've heard it said that the lottery is a tax for people who are bad at math. Maybe it's fair to say that hosting costs are a tax for people who are bad at tech. :P
I meant... I hope that any shenanigans at Patreon won't affect Deimos' ability to collect funds from us. It doesn't matter whether he needs $100 per month or $100,000 per month if we can't send money to him.
Eh, there are plenty of options out there and if Patreon goes up in smoke, someone else will come along and fill that market niche in short order. Eventually one of them is bound to get the business model right, someday. I'd like it best if Tildes had its own, honestly. I look at the donations as the user's ability to keep the org honest and focused on what the users want.
Any chance you could elaborate a little on this? It's currently a moot point for me, but in the past (admittedly a few years back) I haven't seen a vast difference between VPS and dedicated server pricing for most use cases (particularly if accounting for extra DevOps time). The only significant win I recall for dedicated was data transfer, as they tend to come with 24/7 usage at a given speed, rather than a per GB charge - valuable, but only in the situation that it's not handed off to a CDN.
It's something that'll no doubt be relevant again for me in the future, so I'd appreciate the perspective.
It's not the VPS - renting VMs is hardly different from bare metal. For the cost of renting a cage, though, you could run thousands of VMs for the same price. Last company I worked for was paying about $750/month for gigabit speeds and we had four 42U racks set up in a T4 datacenter, each one part of a virtual cluster. Even factoring the cost of the hardware in over the years that price wouldn't break $2k a month. Of course, then there was the salary of the sysadmins, but it only took two of us to manage it all. It's really not that hard.
What bugs me is this trend to build your infrastructure out of dozens of external components. There's an infographic like this for nearly every market segment.
The idea of having your entire infrastructure built up piecemeal like legos where you pay rent for each block, and have no control over each block, and share your data with every vendor seems like crazytown to me. I remain unconvinced the vast majority of these services provide any real value or will last any real length of time. Every time one fails, or is bought, changed, and folded into something else by another company, it's a strike against the infrastructure you're building for your own business if it happens to one you're using. I can't understand why companies are so willing to abdicate control over their environments and their data.
Got it - in that case, I'm pretty much totally with you. I was thinking of "cloud" more in terms of someone else's (probably virtual) machines vs. own (probably physical) machines - but yeah, when it comes to proprietary services it just doesn't seem like a wise way run a business.
My biggest issue with VMs is simply that your provider has access to your data. There are encryption options (including homomorphic processing) that make it possible to avoid that and keep it private, though you're bricked if you lose your keys. :P
I get that what you said is somewhat in jest, but you can certainly run things in the cloud and not be bad at it, and you can certainly bankrupt yourself with sys admin overhead. One way isn't better, it is just a matter of using the right tools in the right way.
I haven't built them myself, but I've seen services built with option #1, with the ability to spin up some docker containers on one or more cloud services during periods of unexpectedly heavy load. The logistics of load balancing between AWS, Azure, and self-hosted machines sounds like a nightmare to figure out though.
Obviously this wouldn't be for everyone, but such a solution could have saved Voat a ton of money while still giving them the flexibility they wanted from "the cloud". Then again, maybe it's a good thing Voat screwed themselves over.
Part of the value of those cloud services is that they do make that sort of thing dirt simple/easy to do. That's kinda the point - your company doesn't need to maintain the level of expertise if your IT lives in a world of pretty little check boxes that do the fancy stuff for you. I think of it like Fischer-Price IT - cheap plastic toys. I know that's fairly condescending - humor me, I was a lowly MCSE who eventually made the journey into the world of unix and I don't like the idea of going back. :P
My distaste for it all is definitely more philosophical than technological. If I were setting up a small business with basic IT (email, website, doc sharing, collab software, marketing, small data analysis) I'd probably do it with cloud services because for a small business that's a money saver. Later on in life when that business isn't so small anymore, that's when the rent starts to hurt. By then you're locked into your vendors and if they decide to arbitrarily raise your rent by a few zeroes for a month because you got hit with the slashdot effect one day, there's fuck all you can do about it. You can't just back out and change your infrastructure on a whim.
There's nothing more permanent in IT than a temporary solution. That's a lesson every sysadmin and developer gets to learn the hard way at some point in their careers. ;)
Do we have other options to support Tildes, apart from Patreon? Maybe LiberaPay?
There are multiple other options for donations: https://docs.tildes.net/donate
Patreon is currently the only one that lets you set up a recurring donation easily though. I should probably try to set up some alternatives, I think Stripe makes it quite easy to do a recurring donation now.
I did start setting up a Liberapay account at one point too, but I think it was during the weird transitional time when they were getting kicked off MangoPay, and I wasn't sure if it would be a good idea to start using them. I'll have to look into it again eventually.
Ah right, thanks. I remember that now that you mention it, and I think it's very strange.
Their blog post explaining it was submitted to Tildes, and I made a comment on it about the mismatch between how people expect recurring donations to work and their new system (just duplicating it here for convenience):
I think it's important to note that regular users are not really Patreon's target market, they are looking at creators as their users. An up an coming artist would feel a quite a bit of pressure to use the same platform as everyone else to make it as frictionless as possible for their followers to donate. I wonder what the numbers are on Patreaon donors who support multiple creators at once but I'm certain that is the key to it's success.
But would they still exist today without that funding?
Impossible to say, they would have had to run the company in a much different way. They wouldn't have been able to hire so many employees, and would probably have to do a lot of things differently. Venture capital can absolutely help in the short term, that's exactly why it's so tempting. But it completely changes the "goal" of your company, and will almost certainly do damage over the long term.
I quote it often, but it's still one of my favorite descriptions:
(from "Ello, goodbye" by Aral Balkan)
There are other ways to ensure the continued existence of a company than to invite outside investors to provide more capital.
One could look at the business model of the company, and ensure that its incomings and outgoings are properly aligned, in order to make a profit on each transaction. One could economise and reduce the expenses of the company. One could increase the prices of one's products and/or services. One could borrow money from a financial institution.
There are lots of other things one can try before resorting to bringing in more investors to dictate how the company should be run.
i would guess this is because venture capital and investors don't seem to be thinking in stability terms, but profitability terms. "sustainability" is nice, but it clearly means fuck all over making the most amount of money possible in the shortest possible time even if it completely fucks over everybody using the service and maintaining it. as long as that's the case you can bet your ass that this is going to happen over, and over, and over again.
Because Patreon went the now-standard tech route of venture capitol investment. This means that, even if Patreon consistently makes money and can pay all its employees and server costs, it doesn't matter. All that matters is getting the VC funders their value. They will strangle the company to death if they think doing so will give them 1% more return on investment.
They also host content. Most Patreons offer some kind of deliverable in exchange for your support such as early access to videos, software, source code, what have you. I don't think that is enough to make their business model difficult, but it does throw in a few wrenches you don't get with just a dumb payment processor.
it's been about two weeks now since this little story dropped to the mild alarm of some people, and i still have no idea what exactly patreon intends to do here other than try and pointlessly expand in the name of venture capital's demands and the same insane, irrational hope that has gripped everybody else that nothing but growth is acceptable and if you're not growing, your business model doesn't work.
this seems to be in the forefront of patreon-using twitter and breadtube/lefttube twitter right now though, since FoldableHuman put out a thread involving it earlier and doesn't seem particularly enthused by what it implies for the future of the service. we'll see how it goes, i suppose, but given the state of the tech industry i'd guess it's pretty hard to be optimistic about the implications and the possible outcomes here.
update: jack conte actually responded to FoldableHuman's thread on this, so if you are interested to see the man himself explain away patreon's model before the site collapses, there ya go.
The thing is, I don't see Patreon as anything other than me trying to give artists I respect money. In this vein, there should be no reason why they're not massively profitable like a huge corporation like Square or Visa. If Patreon tries to diversify by creating new businesses and services, this will only increase their risk of failure. Instead, they should focus on growing, in the following order: 1) patrons actively using the platform to pay artists/etc. 2) bringing more artists with established followings onboard.
I'd imagine their next move is going to be replacing Stripe/Paypal for their site. 4% in fees almost doubles their income, and makes creators happy.
There's nothing particularly generous about taking 5% on each donation that goes through them.
If they start taking more I think we'll see new platforms emerge.
While we're still waiting for some simple way to give a dollar to a content creator without handing a third of that money to somebody else, these guys are moaning about not actually bringing nothing of value to the table and still getting a cut. What is it that you do here, Patreon? Copy and paste code from several APIs and host it? You only have any strategic value because cryptocurrencies are presently a sad disappointment. It's not going to be like that forever.