Competing with Patreon

Back in the early ‘00s we spent a lot of time talking about “microtransactions”. This was during the same era we started using phrases like “the long tail.” There was obviously a missing business model somewhere between “selling books” and “subscribing to a newspaper” where people would spend small amounts of money for small things; the example I used to use was we were trying to find the web equivalent of putting 50 cents into a vending machine.

But no one could ever quite figure out how to make it work. Too much friction of too many kinds, and the web fell back on default capitalism model—“free” with ads. And then we know how that turned out, as more VC showed up, we started hearing about growth over everything else, and the business models in the tech world got stranger and stranger.

I don’t personally make money being creative on the web, but I know people who do, or at least used to, and from the outside, Patreon seems like it’s a solid swing at that missing piece we were looking for 20 years ago, a reasonably frictionless way to spend small amounts of money directly to the person making something. But from the outside, it’s notable that two things seem true: 1) everyone uses Patreon because it’s the only game in town for that set of features, and 2) everyone who uses Patreon seems to hate it.

I was therefore absolutely fascinated by Sibylla Bostoniensis’ How to Compete with Patreon. (Via jwz.)

It’s a through description of everything Patreon does and does not do well, written from the perspective of how to build a better system.

The whole thing was eye-opening, but three things really jumped out at me:

First, Credit card fees. I had no idea that Patreon had found a way to essentially round transaction fees to zero, and then… stopped? Like everyone else, I’d love to know what happened there. I’ve worked on more than one project where a features were scrapped once we realized the processor fees would make it unviable, and it’s crazy that someone figured it out and then gave it up. From my position of no inside knowlede, that sure sounds like there was a pile of VC subsidizing the effort that got used up. (How much of the economy of the last two decades was fueled by VC giving away free money rather than any actual coherent economics?)

Second, The techstack. I feel this one in my bones. Modern web frontend javascript frameworks are incredibly heavy, and have a huge list of tradeoffs that need to be carefully considered before you make the plunge into thick client Single Page Apps or the like. Which many many people fail to do, and go with “how it’s done now.” And that would be okay, but so much of “how things are done” come from either Google or Facebook, and just, no one else operates at that scale—nor are they willing to staff at that level.

I’ve had this argument more than one—Sure, Google does it “that way,” but they have a team of 15, and we have 2. Plus, they can pull the plug on any of those features at any moment, because they get all of their revenue from ads, and I guarantee the ad server doesn’t run angular.

And the angle that heavy client-side websites are inherently limiting to your potential audience is a great point that should be made more often.

Third, the cultural mismatch. Not everything is a store! There are business models other than selling a widget at a price (or free with ads.). So many tech bro types don’t have any experience with the worlds where those exist, and want everything to be a neat tidy transition. The description of the conflict over having, essentially, a “pay me now” button is fascinating; if people actually try to defraud their patrons via patreon, that’ll work itself out real, real fast without needing a built in system to guarantee that a package was delivered.

I hope someone takes this description and runs with it. Much like BackerKit realized they were already doing all the hard parts for Kickstarter, so they might as well do the rest of it, I hope someone leans into the space and builds a patreon competitor.