I am not personally a fan of Patreon but this analysis is weird. They took VC instead of a bank loan because they were too risky for a bank to give them a loan. The VCs are demanding higher returns because they have to cover the losses of all the startups that *didn’t* succeed.https://twitter.com/FoldableHuman/status/1092846201374892032 …
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http://transact.io is funded by the founders, and operated as a utility. It's a web-based debit card for digital media that can accept payments as low as one cent. We don't see why our model can't be sustainable.
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Patreon is arguably not a "startup" - no proprietary tech: It's a membership site w/3rd party payment drop-in - no exponential growth potential: its customers are small subsisters, fragmented, expensive to acquire, w/linear income streams (time=income) They should've bootstrapped
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Also, extremely low margin. Payments, even membership platforms, require huge scale since you're making 5-15%. Not enough to cover overhead, marketing, etc. They desperately needed higher margin services, likely B2B.
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I see it playing right into your "locust economy" framing from way back. (ok not quite a perfect fit, but "smells" similar)
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Kickstarter could have gone the same way, but I think the VCs just decided to write it off as marketing expense (even if they won't say that out loud).
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