The Patreon-like subscription platform that XOXO and Kickstarter were collaborating on has been canceled, due to being unable to find a way to make it a sustainable business
It's so weird they kept it invite only for as long as they did. No shit it wasn't sustainable like that. :/ I was really hoping Drip would pan out, especially since Patreon doesn't seem to be able...
It's so weird they kept it invite only for as long as they did. No shit it wasn't sustainable like that. :/
I was really hoping Drip would pan out, especially since Patreon doesn't seem to be able to get it together and somehow still isn't profitable either despite basically just being a financial transaction facilitator.
It stayed invite-only because they were abandoning Drip and building an entirely new platform to replace it, but they're saying that they couldn't figure out any way to ever make that new platform...
It stayed invite-only because they were abandoning Drip and building an entirely new platform to replace it, but they're saying that they couldn't figure out any way to ever make that new platform sustainable, even once it was opened up.
Patreon's been saying their business isn't sustainable either. A lot of that's probably because they've taken so much VC that their goal can't be just making a respectable profit any more, but part of the issue is that the XOXO/Kickstarter platform would have to compete directly with Patreon doing unsustainable things with all of their VC money. If Patreon's only taking a 5% fee but the new platform figured they'd need to take a 20% cut to be sustainable, nobody's going to switch.
Ah, I didn't realize they decided to rebuild it all from scratch once they took it over from Kickstarter. And yeah, all that VC money in play definitely seems to taint the well, since it allows...
Ah, I didn't realize they decided to rebuild it all from scratch once they took it over from Kickstarter. And yeah, all that VC money in play definitely seems to taint the well, since it allows unsustainable models to undercut their competition (unless they similarly choose to rely on VC). It seems like a vicious cycle and I really hope the bubble pops soon so we can finally get some actually sustainable businesses competing in the web/tech sector again.
And in Patreon's case regarding sustainability, IMO their inability to achieve it is also largely due to VC debt + a San Fran HQ + an excessively large staff... basically the exact same issues as reddit has. Although Patreon relying on other payment processors to handle the transactions, instead of creating their own, certainly hasn't helped either. And now that I think about it, I'm actually surprised none of the major payment processors have tried to get into the social crowdfunding market themselves yet.
Two of these problems are easily solvable. They can slash staff down to essentials and they can pack up shop and move to Montana. What’s stopping them? Is the VC money that keen on trying to push...
And in Patreon's case regarding sustainability, IMO their inability to achieve it is also largely due to VC debt + a San Fran HQ + an excessively large staff... basically the exact same issues as reddit has.
Two of these problems are easily solvable. They can slash staff down to essentials and they can pack up shop and move to Montana. What’s stopping them? Is the VC money that keen on trying to push them towards a course that will only serve to obliterate their own long-term stakeholder value?
I think a lot of these increasingly common issues with VC funded "startups" stem from some twisted sense of prestige. And also, by having a huge staff and HQ in the highest cost of living city in...
I think a lot of these increasingly common issues with VC funded "startups" stem from some twisted sense of prestige. And also, by having a huge staff and HQ in the highest cost of living city in the US they are potentially more likely to be taken seriously when it comes time for an IPO or acquisition. So, sure nothing is technically stopping them from firing most of the dead weight and moving to a low cost of living area, but unfortunately it's probably pretty damn unlikely any will ever do that, especially since institutional momentum is a hard thing to reverse.
Montana’s an extreme example, but I seriously doubt you can’t find good enough coders anywhere outside of the most expensive cost of living market in the country right now. Minneapolis? Durham?...
Montana’s an extreme example, but I seriously doubt you can’t find good enough coders anywhere outside of the most expensive cost of living market in the country right now. Minneapolis? Durham? Austin? They can’t find decent talent anywhere?
And even if they did go to Montana, why not? Lots of dudes in SF love to cosplay like they’re lumberjack anyway. Or they can just poach people from the university.
Yes, they mostly can't find decent talent anywhere else. There's a few interconnected problems: When you're starting a tech business, you're probably already living in the Bay Area. You've been...
Yes, they mostly can't find decent talent anywhere else. There's a few interconnected problems:
When you're starting a tech business, you're probably already living in the Bay Area. You've been working for one of the bigger names and decide to put out your own shingle. Your social network is here, the friends you might be able to convince to join you for equity, the people who made it big in the prior IPOs who might invest in you, everyone who's everyone in their business world.
When you're small, easy facetime with venture capitalists has been shown to drastically increase the likelihood of getting funding. Since this is where the potential investors are, starting a tech business in the Bay Area and getting the funding to grow is just easier.
Once you're growing, you have a bunch of staff who would be more inclined to switch jobs than follow you to someplace remote. Those people have institutional knowledge, the experience working with your product. If you plan to continue operations, you can't just fire everyone but a skeleton staff and rebuild somewhere else. You'd lose basically every bit of momentum your company had.
If you do move to a place without existing tech companies, there's not likely to be many programmers there. This means you're going to have to either train your own new staff, pay for people to move there to work at your company , or make do with the small local pool of talent. Each of these choices have their own costs, and eat away at a lower cost of operating.
You might be able to find people for your particular company, but programmers, like other professionals in the current job market, mostly only stay at a job for a few years. At that point, you don't need a single company there, you need a number of them so that there are other places to work so that you don't have to keep doing it that way. You want a large pool of potential employees locally so that you can obtain the people you need without compromising too much at a price that doesn't involve luring them away from their jobs several states away.
Unfortunately, if there's a good business environment for tech businesses and a large pool of existing programmers, the costs aren't likely to actually be low enough to make the cost difference worthwhile.
Honestly Patreon is little more than a payment processor with some account management on top of it. Companies from Raleigh to Austin to NYC to the DC metro area do this stuff for clients from the...
Honestly Patreon is little more than a payment processor with some account management on top of it. Companies from Raleigh to Austin to NYC to the DC metro area do this stuff for clients from the utility industry to the government to the healthcare sector. Finding folks willing to shift it over to a B2C direction cannot possibly be that insurmountable. It really just sounds like there is some myopia about what talent looks like and how technical some technical skills actually are.
We’ve already established that they have excessive staff, so they could probably do a quality of life trade off for their remaining staff by not saddling them with absurd living expenses.
Edit: Forgot to include that we’ve already established that they’re not profitable with the business model they are in, and it’s due to payroll costs. So it’s not as if they’ve hit upon a working business model here. It has all the markings of a bubble.
Yeah, I'm not questioning that they're unsustainable, I'm just saying that the statement that they can just pick up and move to Montana and programmers would follow them because some "dudes in SF...
Yeah, I'm not questioning that they're unsustainable, I'm just saying that the statement that they can just pick up and move to Montana and programmers would follow them because some "dudes in SF love to cosplay like they’re lumberjack anyway" is incredibly dismissive of the operational challenges of such a move.
I wonder how much talent you need to build something like Patreon. I am sure a single experienced dev can do the whole thing with the help of a sysadmin.
I wonder how much talent you need to build something like Patreon. I am sure a single experienced dev can do the whole thing with the help of a sysadmin.
It's becoming obvious that purely ad-based monetization isn't sustainable, not for quality content. I don't know how exactly Drip was supposed to work (apparently, it didn't), but it sounds like...
It's becoming obvious that purely ad-based monetization isn't sustainable, not for quality content. I don't know how exactly Drip was supposed to work (apparently, it didn't), but it sounds like it was a step into the right direction. There must be a way to figure out how to get people on the internet to actually pay for good content.
I’d probably part with a lot more of my money if there was a universal payment processing standard that didn’t require me to get out my credit card for each and every transaction (or trust it to...
I’d probably part with a lot more of my money if there was a universal payment processing standard that didn’t require me to get out my credit card for each and every transaction (or trust it to every dodgy website out there).
Apple Pay type payments systems can probably do it, but it’s really not practical to handle micropayments this way. The transaction fee cut that credit cards take means nobody wants to offer anything for less than, like, $5. And that’s too high for most people.
I don't think Drip works that way but I've long been thinking that a flat rate style system is probably the only one that makes sense. Netflix, Spotify,... it's what's everything is moving towards...
I don't think Drip works that way but I've long been thinking that a flat rate style system is probably the only one that makes sense. Netflix, Spotify,... it's what's everything is moving towards and I can see why. For content like articles or youtube videos, this is a bit more difficult since it spans such a wide range. I think there's a few services that try this but I don't think any of them has truly taken off. Basically, think paying $15 a month and gain access to a hundred high quality news websites, youtube channels, etc. The problem is that this would have to be financed through volume (or some other, maybe problematic metric where websites get a bigger share based on user rating or view numbers) because it would be spread out a lot.
It's so weird they kept it invite only for as long as they did. No shit it wasn't sustainable like that. :/
I was really hoping Drip would pan out, especially since Patreon doesn't seem to be able to get it together and somehow still isn't profitable either despite basically just being a financial transaction facilitator.
It stayed invite-only because they were abandoning Drip and building an entirely new platform to replace it, but they're saying that they couldn't figure out any way to ever make that new platform sustainable, even once it was opened up.
Patreon's been saying their business isn't sustainable either. A lot of that's probably because they've taken so much VC that their goal can't be just making a respectable profit any more, but part of the issue is that the XOXO/Kickstarter platform would have to compete directly with Patreon doing unsustainable things with all of their VC money. If Patreon's only taking a 5% fee but the new platform figured they'd need to take a 20% cut to be sustainable, nobody's going to switch.
Ah, I didn't realize they decided to rebuild it all from scratch once they took it over from Kickstarter. And yeah, all that VC money in play definitely seems to taint the well, since it allows unsustainable models to undercut their competition (unless they similarly choose to rely on VC). It seems like a vicious cycle and I really hope the bubble pops soon so we can finally get some actually sustainable businesses competing in the web/tech sector again.
And in Patreon's case regarding sustainability, IMO their inability to achieve it is also largely due to VC debt + a San Fran HQ + an excessively large staff... basically the exact same issues as reddit has. Although Patreon relying on other payment processors to handle the transactions, instead of creating their own, certainly hasn't helped either. And now that I think about it, I'm actually surprised none of the major payment processors have tried to get into the social crowdfunding market themselves yet.
Two of these problems are easily solvable. They can slash staff down to essentials and they can pack up shop and move to Montana. What’s stopping them? Is the VC money that keen on trying to push them towards a course that will only serve to obliterate their own long-term stakeholder value?
I think a lot of these increasingly common issues with VC funded "startups" stem from some twisted sense of prestige. And also, by having a huge staff and HQ in the highest cost of living city in the US they are potentially more likely to be taken seriously when it comes time for an IPO or acquisition. So, sure nothing is technically stopping them from firing most of the dead weight and moving to a low cost of living area, but unfortunately it's probably pretty damn unlikely any will ever do that, especially since institutional momentum is a hard thing to reverse.
What's stopping them is the difficulty of finding programmers who are willing to live in Montana.
Montana’s an extreme example, but I seriously doubt you can’t find good enough coders anywhere outside of the most expensive cost of living market in the country right now. Minneapolis? Durham? Austin? They can’t find decent talent anywhere?
And even if they did go to Montana, why not? Lots of dudes in SF love to cosplay like they’re lumberjack anyway. Or they can just poach people from the university.
Yes, they mostly can't find decent talent anywhere else. There's a few interconnected problems:
When you're starting a tech business, you're probably already living in the Bay Area. You've been working for one of the bigger names and decide to put out your own shingle. Your social network is here, the friends you might be able to convince to join you for equity, the people who made it big in the prior IPOs who might invest in you, everyone who's everyone in their business world.
When you're small, easy facetime with venture capitalists has been shown to drastically increase the likelihood of getting funding. Since this is where the potential investors are, starting a tech business in the Bay Area and getting the funding to grow is just easier.
Once you're growing, you have a bunch of staff who would be more inclined to switch jobs than follow you to someplace remote. Those people have institutional knowledge, the experience working with your product. If you plan to continue operations, you can't just fire everyone but a skeleton staff and rebuild somewhere else. You'd lose basically every bit of momentum your company had.
If you do move to a place without existing tech companies, there's not likely to be many programmers there. This means you're going to have to either train your own new staff, pay for people to move there to work at your company , or make do with the small local pool of talent. Each of these choices have their own costs, and eat away at a lower cost of operating.
You might be able to find people for your particular company, but programmers, like other professionals in the current job market, mostly only stay at a job for a few years. At that point, you don't need a single company there, you need a number of them so that there are other places to work so that you don't have to keep doing it that way. You want a large pool of potential employees locally so that you can obtain the people you need without compromising too much at a price that doesn't involve luring them away from their jobs several states away.
Unfortunately, if there's a good business environment for tech businesses and a large pool of existing programmers, the costs aren't likely to actually be low enough to make the cost difference worthwhile.
Honestly Patreon is little more than a payment processor with some account management on top of it. Companies from Raleigh to Austin to NYC to the DC metro area do this stuff for clients from the utility industry to the government to the healthcare sector. Finding folks willing to shift it over to a B2C direction cannot possibly be that insurmountable. It really just sounds like there is some myopia about what talent looks like and how technical some technical skills actually are.
We’ve already established that they have excessive staff, so they could probably do a quality of life trade off for their remaining staff by not saddling them with absurd living expenses.
Edit: Forgot to include that we’ve already established that they’re not profitable with the business model they are in, and it’s due to payroll costs. So it’s not as if they’ve hit upon a working business model here. It has all the markings of a bubble.
Yeah, I'm not questioning that they're unsustainable, I'm just saying that the statement that they can just pick up and move to Montana and programmers would follow them because some "dudes in SF love to cosplay like they’re lumberjack anyway" is incredibly dismissive of the operational challenges of such a move.
I wonder how much talent you need to build something like Patreon. I am sure a single experienced dev can do the whole thing with the help of a sysadmin.
I am very sure you're underestimating the amount of work required to run a company and maintain a service like Patreon.
It's becoming obvious that purely ad-based monetization isn't sustainable, not for quality content. I don't know how exactly Drip was supposed to work (apparently, it didn't), but it sounds like it was a step into the right direction. There must be a way to figure out how to get people on the internet to actually pay for good content.
I’d probably part with a lot more of my money if there was a universal payment processing standard that didn’t require me to get out my credit card for each and every transaction (or trust it to every dodgy website out there).
Apple Pay type payments systems can probably do it, but it’s really not practical to handle micropayments this way. The transaction fee cut that credit cards take means nobody wants to offer anything for less than, like, $5. And that’s too high for most people.
I don't think Drip works that way but I've long been thinking that a flat rate style system is probably the only one that makes sense. Netflix, Spotify,... it's what's everything is moving towards and I can see why. For content like articles or youtube videos, this is a bit more difficult since it spans such a wide range. I think there's a few services that try this but I don't think any of them has truly taken off. Basically, think paying $15 a month and gain access to a hundred high quality news websites, youtube channels, etc. The problem is that this would have to be financed through volume (or some other, maybe problematic metric where websites get a bigger share based on user rating or view numbers) because it would be spread out a lot.