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Patreon lays off 13% of workforce

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Re: Patreon lays off 13% of workforce

#51

Post by Apocryphon »

wpietri wrote: post #33
tempsy wrote: post #4

This company never made sense to me from a “venture scale” perspective. It’s big, sure, but are the financials really ever going to be strong enough to go public? I guess I don’t see it. Also annoying to basically admit that layoffs were basically avoidable given the “strong cash position” but made anyway to give the company a little more runway. Doesn’t look too great.

I also think there's a fundamental conflict in their business model. Their nominal goal is to deliver maximum financial support to independent artists, etc. But especially as they go for IPO, their interest is using platform leverage to extract maximum cash from those same independent artists. Personally, I've been using them to support creators for more than 5 years now, so I really believe in the model. But neither…

Previously: Patreon is about to eat itself

https://news.ycombinator.com/item?id=19091955

Re: Patreon lays off 13% of workforce

#52

Post by rtpg »

slg wrote: post #13
tempsy wrote: post #4

This company never made sense to me from a “venture scale” perspective. It’s big, sure, but are the financials really ever going to be strong enough to go public? I guess I don’t see it. Also annoying to basically admit that layoffs were basically avoidable given the “strong cash position” but made anyway to give the company a little more runway. Doesn’t look too great.

>This company never made sense to me from a “venture scale” perspective. It’s big, sure, but are the financials really ever going to be strong enough to go public? I guess I don’t see it. It looks like the company's biggest creator brings roughly $5k a month for Patreon and only one other creator has their financials public and brings in even 40% of that [1]. There is certainly money to be made in that business, but…

That's not really representative. If you sort by publically available earnings, you can see 100 Patreons pulling in $10k/month, another 100 making $5k/month, then another making $3/month. the rest are private.

Assuming this is a representative distribution of the top 1000 (and I bet it's actually higher!):

- $10k/month * 300 + $5k/month * 300 + $3k/month * 400

- ~$285k/month for Patron just from the official cut

On top of this, Patreon probably has revenue sharing with the card processors for a small percentage of the fees (let's say even 0.1%), which adds a couple k.

Now people in the high-paying pro plans that get you the 5% rate (the lower end is 12% platform fees!) will pay $300/month.

that alone doubles their revenue, adding $300k/month _for just these first thousand patrons_.

So you're already at $600k/month in MRR. Hell of a lot more than a lot of "serious venture scale" B2B CRMs that are trying to be the next Salesforce or whatever but utterly failing at providing the value add needed to make big billings.

You might not need 300 people for it. And yeah it would be a lot better to make a lot of money. But they're being pretty successful at getting money here. And this is just assuming that they only have 1000 patrons (which is just false)

Re: Patreon lays off 13% of workforce

#53

Post by tialaramex »

0xy wrote: post #27
icelancer wrote: post #7

Earlier quoted context omitted.

Really wish archive.is and Cloudflare could get over their problems, since I use cloudflare's DNS resolver, none of these links work. Oh well.

Saying this as a Cloudflare investor, CF is in the wrong here and not spec compliant.

Choosing not to supply Client Subnet is entirely valid. Most services don't. But archive.is doesn't block those other services only Cloudflare. How "strange".

Re: Patreon lays off 13% of workforce

#54

Post by geofft »

hateMyIdeas wrote: post #32
0xy wrote: post #31

Given the purging of creators for arbitrary and political reasons, I can't say I feel sympathy for this company's collapse. Ideally it'd go out of business entirely. Creators should be cutting out the middleman anyway.

I don't really understand pateron when I have a donate button..but I imagine people who use pateron are doing better.. Gamification?

I've got my Patreon set up to pay some folks I like monthly, and I can't even tell you who they are off the top of my head, but I decided that I wanted to budget $x towards supporting cool people and it's been charging me in the background ever since. Meanwhile, I can barely remember to pay my voice teacher every week and I go there in person (well, not anymore) and sing for an hour.

Re: Patreon lays off 13% of workforce

#56

Post by baddox »

geofft wrote: post #54
hateMyIdeas wrote: post #32

Earlier quoted context omitted.

I don't really understand pateron when I have a donate button..but I imagine people who use pateron are doing better.. Gamification?

I've got my Patreon set up to pay some folks I like monthly, and I can't even tell you who they are off the top of my head, but I decided that I wanted to budget $x towards supporting cool people and it's been charging me in the background ever since. Meanwhile, I can barely remember to pay my voice teacher every week and I go there in person (well, not anymore) and sing for an hour.

For 10 years I’ve had an automatic $2 monthly PayPal payment sent to a podcast I enjoy.

Re: Patreon lays off 13% of workforce

#57

Post by LargeWu »

0xy wrote: post #31

Given the purging of creators for arbitrary and political reasons, I can't say I feel sympathy for this company's collapse. Ideally it'd go out of business entirely. Creators should be cutting out the middleman anyway.

Discoverability is a huge deal. Looking for new, interesting projects? You know where to go.

It's the reason Etsy is very popular. Could sellers open their own Shopify stores in order to have more control over their storefronts? Of course, but they lose out on the search feature that Etsy provides, as well as the trust that buyers associate with these larger platforms.

Re: Patreon lays off 13% of workforce

#58

Post by pcurve »

doctoboggan wrote: post #42
mdorazio wrote: post #17

This is interesting given that, like the article suggests, patron contributions were still growing last month. Seems like they either wanted an excuse to "right-size" and this is a great opportunity, or they're expecting a significant hit to patron contributions on the back of mass unemployment, which would make the rest of the year rather painful.

They basically said just that in their statement: > This decision was not made lightly and consisted of several other factors beyond the financial ones. Prior to the pandemic, we had completed an in-depth performance review cycle and deployed a new company strategy – both exercises highlighted the need for different skill sets moving forward. It was this combination of economic uncertainty, performance reviews and a…

Many companies are using covid as opportunity to trim staff. Since everyone is doing it they are less likely to get scrutiny and coverage.

Re: Patreon lays off 13% of workforce

#59

Post by SpicyLemonZest »

0xy wrote: post #31

Given the purging of creators for arbitrary and political reasons, I can't say I feel sympathy for this company's collapse. Ideally it'd go out of business entirely. Creators should be cutting out the middleman anyway.

Small-time niche creators largely can't cut out the middleman, because consumers are (quite understandably) reluctant to give payment information to some random person with no real reputation.

Re: Patreon lays off 13% of workforce

#60

Post by flashman »

rtpg wrote: post #52
slg wrote: post #13

Earlier quoted context omitted.

>This company never made sense to me from a “venture scale” perspective. It’s big, sure, but are the financials really ever going to be strong enough to go public? I guess I don’t see it. It looks like the company's biggest creator brings roughly $5k a month for Patreon and only one other creator has their financials public and brings in even 40% of that [1]. There is certainly money to be made in that business, but…

That's not really representative. If you sort by publically available earnings, you can see 100 Patreons pulling in $10k/month, another 100 making $5k/month, then another making $3/month. the rest are private. Assuming this is a representative distribution of the top 1000 (and I bet it's actually higher!): - $10k/month * 300 + $5k/month * 300 + $3k/month * 400 - ~$285k/month for Patron just from the official cut On t…

Patreon makes more sense as a medium-sized business than an epic-scale corporation. Unfortunately reliable recurring revenue is a tough pill for "To The Moon!" investors to swallow.
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