1000 True Fans? Try 100

https://a16z.com/2020/02/06/100-true-fans/

by tonicb • 6 years ago

512 217 6 years ago

hi5eyes• 6 years ago

Here’s how it works: A creator can cultivate a large, free audience on horizontal social platforms or through an email list. He or she can then convert some of those users to patrons and subscribers. The creator can then leverage some of those buyers to higher-value purchases, such as extra content, exclusive access, or direct interaction with the creator.

having a couple blogs/influencer pages with 20k+ followers are actually most useful (IMO) when starting new brands on new platforms and slowly monetizing (ala gary v's Jab, Jab, Jab, Right Hook as corny as he is it works)

As the Passion Economy grows, more people are monetizing what they love

it's simply fun growing a brand/discovering new communities/creating one/watching the engagement and metrics

Proziam7• 6 years ago

IIRC the 1k true fans idea was walked back by its original author after they got feedback from industry folks describing how the model was basically impossible to implement in the real world.

This holds 100% true to my experience in influencer marketing and esports. Monetizing fans is really hard on passion alone. You need to create valuable calls to action and continuously produce content in order to maintain their attention. Once you 'lose' a fan (which only means losing their emotional focus, even temporarily) you often can't monetize them at all without significant re-activation effort. [0]Demonstrating this, large influencers lose extraordinary sums of money if they stop producing content for short windows of time.

This is why using influencers in marketing requires genuine strategy, and is the likely culprit behind so much 'hate' for influencer marketing.

[0] https://www.dexerto.com/entertainment/ninja-reveals-shocking...

quaunaut• 6 years ago

Isn't this largely what Patreon is, though? And there's a lot of people who are doing surprisingly well off of Patreon despite low subscriber counts.

I'd think the trick is to find the right niche- if you're too generic, you're up against the big personalities.

nangz• 6 years ago

Yep, I subscribe to a couple of podcast patreons.. for $5 a month for 5-10 hours of good content it's a no-brainer... Patreon.com/redscare It's basically just 2 women mouthing off, it's funny though. They do well out of it.

Proziam7• 6 years ago

Patreon is quite a bit of work and requires constant upkeep to maintain a steady income flow. It's really no different from Twitch subscriptions in that regard. It does a better job of monetizing primarily because of the easily customized tiers, and secondarily because the platform specifically caters to paid content rather than free.

That said, many of patreon's most financially successful users are producing content that isn't suitable for platforms like Twitch and Youtube.

LanceH• 6 years ago

Twitch counts it as a subscription if you use the free "subscription" from Amazon Prime. The thing is that it has to be manually applied every month. So if he's off for a couple days, very few people will resubscribe if they're not on his channel -- because he's off. It's not like 40k cancelled a subscription at once, their gift ran out and most re-upped as soon as he was back on a couple days later.

chongli• 6 years ago

It really is a buyer’s market in the attention economy. Viewers are fickle and it’s easy to jump ship if your preferred personality goes in a different direction.

Same goes for TV and video games. There’s just so much stuff being made constantly. It’s trivial for viewers/players to switch to something else.

GuiA• 6 years ago

It’s a specialist’s market. Want to sell an FPS? Good luck getting noticed. Want to make games that only cater to chess players who are also into LISP programming? With a bit of work you can totally carve a niche for yourself.

Reedx• 6 years ago

Yeah, plus you have to contend with power laws. Most sales or attention is concentrated in the top ~10 and then drops off rapidly with a long skinny tail. You see this with the top selling books, apps, movies, games and things like Twitter followers as well.

Twitch viewership[1] is a realtime example showing this kind of distribution. The top handful always dominate.

1. https://www.twitch.tv/directory

aj-42• 6 years ago

I don't think Ninja is a particularly good example because (1) he is operating at a scale where the normal rules don't apply (2) his rise was equally fast and volatile (3) twitch requires a constant presence more than other content platforms.

Furthermore I read your take, and maybe I'm wrong, as a 1k "fans" and not 1k "true fans"

The "true fans" model is a subset within the larger audience demographic -- they don't care if you stop producing for a while, need their short attention spans pandered too, or the like, this is what makes them "true" fans.

maybe your advice changed their life, or they really resonate with you for some personal reasons -- and again this would only be a sub-set of a creator's total fan base.

At least this is my interpretation of the concept.

krab• 6 years ago

True fans or true Scotsmen? ;-)

Proziam7• 6 years ago

Ninja is the most visible example, but the same pattern holds true at virtually any audience size (within the range of what is typically monetizable). This pattern is actually more extreme on platforms like Patreon because the audience is expecting something for their money. They are closer to a customer than a typical viewer.

The distinction between a 'true' fan and just a 'fan' is a vague one. If a creator has a total audience size of 1 million, you can bet that less than 1% of them are giving the creator any amount of money, even 1 dollar. Does that 1% count as their true fans? The folks with thousands of paying subscribers, or tens of thousands, have audience sizes to match.

Given that less than 1% pay anything, what percent of those do you think pay at least 20x the normal amount ($5 -> 100$)? Many creators make this somewhat visible by highlighting their contributors and the air is quite thin.

To make a long story short, I disagree with the concept because it paints a very rosy picture of the situation and doesn't match reality much, if at all. If you had 1,000 'true' fans you'd probably end up with $2,000 a month after taxes/platform fees/expenses. And of course, that assumes that you're able to consistently monetize through a subscription platform. If you had to sell individual products to get there it would be even worse.

JohnBooty2• 6 years ago

    You need to create valuable calls to action and
    continuously produce content in order to maintain 
    their attention.

Recurring subscription models help with this, as "letting the subscription continue" then becomes the easiest thing to do.

Building a community helps retain people as well. This is easier said than done, since this aspect alone does require some effort and constant monitoring. Simplest examples of this would be subscriber-only Discord servers and/or webforums.

There are moral considerations to each of those strategies, of course. Canceling a recurring subscription shouldn't involve jumping through hoops. And "ostracizing/shunning lapsed members" is more or less a How To Run A Cult For Dummies tactic, so ask yourself if your subscribers-only community is operating like that.

gowld3• 6 years ago

The walkbalk was discussed on HN this week, which is almost certainly why this a18z blog post was written.

oska2• 6 years ago

Monetizing fans is really hard on passion alone.
... you often can't monetize them at all without significant re-activation effort

I find talk of monetising people extremely off-putting. Also (not meant as a personal attack), I do not want to be around or associate with people who talk like this.

Proziam7• 6 years ago

What would you prefer it to be called? We can change the words around to suit our social sensibilities but at the end of the day, we're still talking about convincing people to spend some money. Nobody bats an eye if you ask for more money from your boss, but many people are under a lot of pressure not to try to be compensated fairly for consumer-facing work.

Making good content consistently is hard work, I personally have no moral qualms about a creator trying to make a living doing it.

acd10j• 6 years ago

Taking this to extreme :) 100 True Fans ? try 1 Internet has enabled visibility so you need to only find one true fan who is willing to sponsor you 100,000 per year.

oefrha• 6 years ago

Aka your employer.

js4• 6 years ago

Rofl

anonytrary2• 6 years ago

Funny, but this is not wrong either. It turns out anyone who has a good job is already building something one entity really wants -- themselves. The only difference is that they pay with their time.

Iv• 6 years ago

Also called "a job"

nottorp7• 6 years ago

Actually that's how art has worked for a looong time. Most pre 19th century artists that we remember now had a rich patron who put food on their table (and possibly influenced what they did).

kbenson• 6 years ago

On Patreon, the average initial pledge amount has increased 22 percent over the past two years.

22% is not the same as 10,000%. Nowhere near it.

Since 2017, the share of new patrons paying more than $100 per month—or $1,200 per year—has grown 21 percent.

Is this a statistics fail? My bet is that this is either $100 over all subscriptions (I pay about $30/mo for 7 or 8 creators on patreon, most in the $1 to $5 range), or the increase is from a number previously so small as to be almost inconsequential, meaning it's still almost inconsequential.

Twitch, on the other hand, I can believe. There's a much more immediate feedback loop there, and creators responding to your pledges directly.

hnick• 6 years ago

It's of course easy to prove if you define the nebulous 'true fans' as 'fan enough so that $X from each of them support me financially'.

I'm not against the idea but I know some creatives who operate in spaces where asking $1k a year is a tough sell. I don't think many people are paying that for knitting or gardening lessons even from the best but hey, maybe I'm wrong.

It makes sense for skills that can be monetised into a career. A cake decorator I know said the risk is that you're training your replacements (but she also said you might as well, or someone else will).

sytelus2• 6 years ago

While this is well written, I would urge people to NOT to follow this advice. Subscriber churn is a real thing and losing $1000/yr subscriber hurts way more than losing $100/yr subscriber. Additionally, it takes an order of magnitude more effort for conversion and your product has to almost match the utility of a smartphone produced by $1T company to even demand that kind of automated recurring payments. The vast majority of fun creative content won't qualify for this anyway.

However, my bigger beef is with the subscriber model itself which somehow every person wants to impose for their next product. The fact is that it is much easier to convince me to pay $10 to get a new release instead of forcing on me $10/yr subscription. The subscription should be optional merely provided as a convenience to the customers who find themselves paying you again and again, not as requirement to use your product. This is a true customer-obsessed point of view. If you have something good to sell, make at least part of it free so people know the value to expect. Rest make it one-time fee and create your upgrades/releases appealing enough so people buy them recurringly!

busterarm• 6 years ago

Do both instead. Do something where you can offer tiers. Group lessons (100/yr subscribers) vs Individualized (1000/yr).

sytelus2• 6 years ago

I'd suggest not doing tiers. Segmentation is repulsive. Why do I ever want to be a bronze-level customer in your product world? It perhaps makes sense for products that have monopolized or established firmly or where costs are truely substantial as feature/utilization is increased. However, most likely is often the side effect of throwing in the MBA part of your brain to squeeze in that last bit of revenue juice without you having to improve the tech. In essence, just luring in customers with "low starting from..." prices and then telling them they are fools to expect those prices. I tend to distrust products that rely on segmentation to inflate revenues and I think they are often ripe for disruption. At least, for creative/educational products please don't tell your customers that they are 3rd class citizens in your world unless they allow you to completely squeeze them out.

modo_mario• 6 years ago

The fact is that it is much easier to convince me to pay $10 to get a new release instead of forcing on me $10/yr subscription.

For the average person this is not the case assuming you as a creator are trying to extract similar value. That means you're pushing out a new release every year. That either means the new release invalidates the old one or is so enticing every time that people keep buying it without skipping releases as they think about it or are reminded unlike a subscription which can be automated.

mikro2nd2• 6 years ago

I didn't read the article as advice, rather as pointing up/sharpening the differences between two variants of online subscription model.

factsaresacred• 6 years ago

The 1000 fans concept is mostly about gratitude - 'thanks, keep doing what you're doing'.

The 100 fans idea seems to be mostly about expectation - 'I gave you money, now deliver this'.

The article describes customers not fans. The VC'ing of 1000 true fans.

Nevertheless it's great to see an Internet where growing numbers of people are willing to pay individuals for value and have the means to do so.

dav432• 6 years ago

God these guys live in a bubble

fxtentacle3• 6 years ago

My thoughts, exactly.

And then they present the idea of selling what your customers want to buy as new ^_^

dang4• 6 years ago

"Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something."

"Don't be snarky."

https://news.ycombinator.com/newsguidelines.html

nottorp7• 6 years ago

Well it is a good critical comment but the HN readers are part of the same bubble and don't realize it :)

dav432• 6 years ago

i can see my response may have needed a few extra words, however I think referring to my comment in such a fashion is slightly misleading.

I’d hate to think that in this forum, just because a comment is short and succinct - what I thought to be a daily clear response, meaning “the authors live in a bubble of experience and expectations” - it is somehow lesser value that a comment that is long winded and without a clear opinion.

TLDR. I hope HN doesn’t confuse clear and succinct with snarky and sarcastic.

the_watcher2• 6 years ago

This thesis seems like 1000 True Fans hired patio11.

jv22222• 6 years ago

I was wondering if it was written by patio11. It’s just like his writing style.

WA• 6 years ago

What? Not at all imho. He writes very different. He likes to construct more complex sentences. This reads like your average journalist, which is okay, but not particular distinguishable.

marknadal• 6 years ago

The _Future_ of the Internet, a post-scarce good, is not going to be a Profit Model Powered by The Extraction Economy.

It needs a fundamentally different economic model, that measures the gain in value added to the network, not the transaction (rebalance, distribution, etc.) of it: http://free.eco .

dragonwriter• 6 years ago

a post-scarce good

There is no such thing.

fxtentacle3• 6 years ago

TLDR: Sell what your customers want to buy.

But let's call the customers fans and rebrand the whole thing not as Capitalism but as "Passion Economy", which sounds a lot more noble than "overcharging random strangers on the internet".

I'm also surprised that "whales" went from a mean joke to mock those with more money than friends into an actual description that they use as a positive term here.

numlock86• 6 years ago

TL;DR (1000 * 100) == (100 * 1000)

AJRF• 6 years ago

Guys what if... You had 200 fans each paying 500 a year?

Amazing right? 500 is less than 1000 and 200 isn’t that much more than 100.

Feel free to take down the OP and put this comment up instead

fxtentacle3• 6 years ago

Have you considered 123.5 fans? ;) The 0.5 is a half-broke student only paying attention sometimes.

bnonim• 6 years ago

Here is a model for the author:

give money to things not to people, people should have enough to live. Food, safe place to stay etc.

i dont want to pay for people to become rich just necause he/she produced a thing I enjoyed.. I dont have to be responsible for artists, creaters being alive, safe etc. I am just a person expects same comfort as creater... creater might have a chance to accomplish his/her passion position in life but most of us should/must do the ugly things... that doesnt mean that people create something are always good at what they do... actually they are not most of the time...

prize tag is for goods not for people...

wtracy• 6 years ago

I'm having trouble envisioning very many markets where a "fan" is going to consistently spend $1k/year.

The article mentions professional training and education, which makes sense.

I can also see certain people spending that kind of money on physical goods (mechanical keyboards, audiophile equipment, one-of-a-kind art pieces) but $1k of revenue from physical goods is very different from $1k of income.

Other than that, the only things I can think of would be direct access to a celebrity or some form of conspicuous consumption. ("That game you play all day? I personally cover 40% of its operating costs.")

I don't see how the average webcomic artist or food blogger can achieve anything like what is described here.

arkitaip• 6 years ago

This is a "think piece" and not based on any research or data. In reality, I'm seeing lots of relatively small entertainers do the 1000 Fans Thing on Twitch and it really works because each subscriber pays 5 USD per month.

onion2k• 6 years ago

The incredibly annoying thing about this is that there's a really obvious case - software tools. There should be so many cases of people who have written a useful tool and have 100 businesses who pay $1000/year because that tool is the backbone of their $1000 * xxx profit.

The fact this doesn't happen very often is a significant failure of the tech industry.

auggierose• 6 years ago

I think there are plenty of cases. Just sell your software instead of giving it away.

sokoloff• 6 years ago

This seems to me like it does happen fairly often. It’s the entire model of JetBrains, RedGate, Sublime, Atlassian, etc.

tomnipotent• 6 years ago

The fact this doesn't happen very often is a significant failure of the tech industry.

It's happens considerably more than you could imagine, but most of these businesses don't market the way Twilio does. Many create niche tools you're probably just not running across (Palisades Monte Carlo Simulation for Excel, Minitab stats workbench, the legion of paid Magento/WordPress/Platform X companion tools).

Not unlike how a vast majority of professional programmers don't work for FAANG, but we pretty much only hear about FAANG.

shanecleveland• 6 years ago

I agree that this can be very attainable as a B2B developer. The main challenges are both knowing and understanding the problem and solution and then attracting the audience. It's doable and is being done. We hear more about the unicorns. But there is still a lot of room for the little guys.

pyrale2• 6 years ago

Cults are where people live off "fans".

Replacing customers with people emotionally engaged to support you is an exploitative process, involving the takeover of people's mindshare, in a way that can be compared to indoctrination.

People rationalizing the means of this indoctrination is deeply disturbing.

reidjs2• 6 years ago

Just because you can draw a parallel between the two doesn’t necessarily make it exploitative. Most of the time I’m sure both sides win, the creator gets to follow their passion, the viewer gets to feel they had a part in it by paying some money. There is certainly a potential for exploitation and indoctrination, but that’s really only in extreme cases.

mnsc2• 6 years ago

Well when I was young I spent about $1k/year on little thingamajigs called cd's. That was perhaps "stupid" in a pure economic sense but I did it. And if I were young these days I can't say I wouldn't give that amount to some random "content creator" who could give me the same joy as we 80's kids got from sitting quiet and listening actively to music albums from beginning to end.

But me now is like "why the hell would I give that kind of money to some rando on the internet that stream games?". My patreon career is limited at giving a podcast creator $10/month and that was hard to justify for myself.

nottorp7• 6 years ago

Spending 1k per years on cd's was sponsoring what, 50 different creators @20 each? Not the same thing.

klunger• 6 years ago

My first thought was how ridiculously out of touch with the economic reality of the 99% this author was. Even if you love an artist and are willing to spend some amount of money to support them, that amount is not going to be anywhere near 1k. This author is deeply ensconced in her elite Bay Area bubble. It is embarrassing, tbh.

GrayTextIsTruth• 6 years ago

My thoughts exactly. I doubt she has fans paying her, it’s just her VC theory that isn’t realistic.

bob33212• 6 years ago

It needs to be direct engagement at that price point. No one is going to pay Rachel Ray 1000/year for blog access. Someone may pay her 1000/year for access to Skype cooking lessons. High end prostitutes are a nontech example of where they should focus on a small number of Whales. Also people who get paid to do keynote speaches at 20-50k a pop could have long term engagements with 100 fans paying 2k/year.

dpcan• 6 years ago

A fan can be a lot of things.

You can sell software development services, and your fan may be a graphic designer who uses you every time to build out the back-end for the beautiful designs they make. You do a good job, you're their go-to person, they are your "fan".

CryoLogic• 6 years ago

We actually see a similar pattern on https://www.anim8.io

A couple animators on our platform have extremely dedicated fans making up the majority of the donation revenue.

robinduckett2• 6 years ago

What I got from this post:

Network economy matches userland economy.

We should henceforth refer to billionaires as "whales".

TheSpiceIsLife• 6 years ago

Is this what trickle down to economy looks like?

robinduckett2• 6 years ago

I'd like to see what a ring based economy would look like

bambax2• 6 years ago

1. The article shows a pyramid and it's important. In order to get a few "true fans" (people prepared to pay dearly for what you produce), you need a large amount of "distant fans" (people who like what you do, as long as it's free). The key word is conversion, and, regrettably, it's not present once in the post [0]. It's probably in the 1 to 0.1% range.

[0] Edit: In fact it is (convert). However in the next paragraph the concept is somehow replaced with "whaling", which means that a few paying customers help support a large group of free riders, or conversion in reverse. This is misleading. The large group needs to be there first.

2. At the $1000/year price point, it's not an artistic production anymore. Most examples are about "courses", about teaching something to a specific audience. Some of the topics are questionable and sound a little scammy (physiotherapy?), may be preying on people's vulnerabilities (private coding classes for kids?) or playing on vanity (having a celebrity streamer play along with you). This is Goop territory. Is this the future we want?

beAbU• 6 years ago

Although I agree with all you are saying and your general sentiment, I just want to understand why you state that Physiotherapy is scammy?

lultimouomo• 6 years ago

I don't think that he meant physiotherapy is scammy, just the concept of teaching it through online courses.

If you take it a few steps further, e.g. online abdominal surgery courses, the point becomes more clear.

mnsc2• 6 years ago

Ctrl-f "convert" gives me two hits?

bambax2• 6 years ago

You're right. I had searched for conversion. Post updated.

simonh• 6 years ago

The phrasing and contextualising in the article is all over the place. It's referred to as a 'shift', but also shows how the basic business models for 100 x $1000 and 1000 x $100 are completely different. They are examining a new different type of business using similar platforms, not a general trend of existing relationships changing in character.

Those trainers selling courses aren’t selling their $1000 courses to the same dedicated group of 100 course crazy training junkies every month, year in year out. Maybe someone will sign up for a series, or for special 1-1 sessions for a while, but then they will have got what they wanted and leave. That’s got very little in common with my long term relationship with a handful of people on Patreon for a few dollars each a month. There might be a very few, very wealthy patrons that do support a guru for large amounts every month, but that's yet another business model again and also has little similarity with the actual relationship people like me have with the people we support. Wealthy people supporting gurus has been a thing ever since there have been wealthy people.

toxik2• 6 years ago

Interesting point with the pyramid, a podcaster (Sam Harris) recently turned his free podcast into a "freemium" model where you get half of each episode for free. I imagine this is going to completely kill his following, as it did for me.

Freemium is actually being charitable, it's more like shareware.

pbhjpbhj2• 6 years ago

completely kill his following, //

You think people who currently pay will stop paying?

Like, it's some sort of virtue signalling?

If he's changed to that model presumably he doesn't care about his following but instead wants to make a living (or make himself rich, depending how things are for him).

sacado2• 6 years ago

It's going to kill his following among people who want to follow him for free, but by definition they don't bring him any money. If you have enough paying users, meaning your business gained momentum, you don't really care about free users anymore.

alexpetralia• 6 years ago

In fairness, he does continue to support a charity model as well. He clarifies very often that if you can't support the podcast due to financial reasons, you can simply email his team and get free access, no questions asked.

mattferderer• 6 years ago

I just listened to Darknet Diaries for the 1st time. Awesome podcast, especially the Xbox Underground series.

I noticed they mentioned an extra special interview at the end for paid subscribers. Seemed like a fair thing to do to me.

krick• 6 years ago

It's basically (wel... literally) previews for paid content. Has nothing to do with "freemium" indeed.

test1235• 6 years ago

What is "Goop"?

lotsofpulp• 6 years ago

An organization that sells snake oil.

https://en.wikipedia.org/wiki/Snake_oil

https://en.wikipedia.org/wiki/Goop_(company)

dreamcompiler2• 6 years ago

Overpriced pseudoscientific junk products sold to gullible people and hyped by a minor celebrity obsessed with her vagina.

SuoDuanDao2• 6 years ago

Gwynneth Paltrow's personal online store. People get annoyed because she's into alternative health stuff but it's really just a store for people who have the same taste as Gwynneth Paltrow.

circlefavshape• 6 years ago

I get so many ads for courses on how to run ads for courses

projectramo2• 6 years ago

You should try my new course about how to avoid ads for new courses.

gadders2• 6 years ago

From the article it sounds like part of it is going after the same sort of business as Ramit Sethi [1] [2] He seems to mainly sell courses on how to create and sell courses. I don't know how comfortable I would feel doing that. Maybe that's just me.

[1] https://www.iwillteachyoutoberich.com/about/about-ramit/

[2] https://en.wikipedia.org/wiki/Ramit_Sethi

tablethnuser• 6 years ago

Good points. Based on my experience with whales in f2p games you will get outsized income from 0.1% of whale users, reliable income from 20% of hobby users, and one-off spend here and there from the rest.

When I think of someone paying me $1000 for art that others may pay only $20 or $5 for, first of all it still feels like charity from the whales. I think you could meaningfully create $20 and $5 tiers for any digital art. But what do you sell to raise the value two magnitudes other than status? Selling status to whales relies on a huge "commons" population for them to feel superior to. Nobody whales in a vacuum.

Second issue is whale rarity. Just to find your first $1000 whale you already need 1000 fans. The rest of them are only paying you $20 x 200 = $4,000 and $5 x 799 = $3,995 per year. That's $10k/yr.

The idea that you could only cultivate a stable of whales with artistic output is ridiculous. You somehow need to make the whales believe that the general population is their commons and then sell them status over gen pop, which is probably why the article hones in on wellness as the only vehicle in town.

xchaotic• 6 years ago

I quite like and agree with the numbers here - you could be getting 10k / year before your first whale, so it does not make much economic sense to only focus on a 100 biggest fans.

holri• 6 years ago

You described the business model of Ludwig van Beethoven. One of the first independent artist in his profession. He had a few whales which gained status through personal inscription of his works and paid him to stay in Vienna. But he was massively popular in Vienna before he gained whales.

elwell• 6 years ago

may be preying on people's vulnerabilities (private coding classes for kids?)

Having trouble understanding how "private coding classes for kids" is preying on people's vulnerabilities...?

giantrobot2• 6 years ago

Who in the hell is going to pay another individual $1000 a year to make content? That's more than a year's subscriptions to Disney+, Amazon Prime, and Netflix!

One of the root ideas in the True Fans essay was a fan would be willing to spend a day's wage for a year's worth of content from a creator. A large portion of the population at large can pay a day's wage for say 52 hours (a creator spitting out and hour of content a week) of entertainment. Out of that population, argues the essay, a creator needs to only find a thousand True Fans out of the population that can afford the $100 in order to make a living.

That's not only workable math but something that's doable. The market can support the model, it won't always and in every situation but it can. At the reasonable "day's wage" level many people can afford to support multiple creators. Spending $200 a year for content is still in the affordability range of a large portion of the populace.

A far far smaller portion of the population at large can afford $1k for 52 hours of entertainment. It's definitely not a tenth of the $100 population, it's more likely a fraction of a percent. So any given creator isn't likely to find 100 True Rich Fans, they're going to find maybe one if they're lucky. The market isn't going to support a model where a few dozen hours of entertainment costs a thousand dollars. A thousand dollars will get you a game console, a TV, subscriptions to a bunch of streaming services, and a ton of games. Even fewer of these whales could support multiple creators so very few creators could ever possibly survive of the whale model.

rorykoehler• 6 years ago

How expensive can a banana really be? $10?

anonytrary2• 6 years ago

Who in the hell is going to pay another individual $1000 a year to make content? That's more than a year's subscriptions to Disney+, Amazon Prime, and Netflix!

The same people who pay thousands of dollars for self-help seminars and MLM schemes. You're missing why people are buying a product. All of the video streaming services out there combined won't help people get better at love or their career. That's why they're not willing to drop $1k on streaming services.

But a charismatic YouTuber who shows you how to bodybuild and gets you motivated? People will drop $1k on that per year.

biztos• 6 years ago

I pay $75 per week to my personal trainer and where I live trainers are cheap. People routinely pay hundreds per week in places like LA.

I’m not sure I’d pay that for an online trainer but if there are probably things a step or two away from workouts where I would pay for an internet mitigated version.

But that’s not being a fan, that’s buying a service.

fouc• 6 years ago

But you know, $1000 a year is only $84/mo, which is less than $4 per day. It's the price of a fancy starbucks coffee probably.

nottorp7• 6 years ago

Ah, the starbucks coffee analogy.

Problem is, you can only drink so many fancy starbucks coffees per day. There are many more content creators around.

What will the customers do when everyone wants a starbucks coffee per day? Pay one? Pay no one?

Also don't forget that not everyone is living in the HN well paid tech ivory tower. Even in the US, there should be a lot of people who can't afford a starbucks coffee per day...

arexxbifs4• 6 years ago

$84 is more than I pay monthly for Spotify, Netflix, the local newspaper, my broadband connection and occasional magazine buys combined. $1000 is more than I spend yearly on my biggest hobby - and that includes air travel and hotel fares. I have a really hard time coming up with any kind of content that'd be worth that much money.

justaguyhere• 6 years ago

So this is the problem with "starbucks coffee daily" argument - you are assuming people spend money logically/rationally, most people don't. That is why folks don't have any problem dropping $4 every single day at Starbucks (their coffee isn't even that good), but they won't spend $5 per month for something as important as email and depend on free email like GMail.

ageofwant• 6 years ago

At this moment I'm paying GPBBD https://www.youtube.com/channel/UC3CBOpT2-NRvoc2ecFMDCsA $600/year. Wintergatan https://www.youtube.com/channel/UCcXhhVwCT6_WqjkEniejRJQ gets $120

And its a steal.

Traster• 6 years ago

So what you're saying is this is just a restatement of the original article, but by someone who actually does earn $1k in a single day and so doesn't realise that's not a reasonable amount to spend.

KaoruAoiShiho• 6 years ago

I kinda hate the current media though. I would definitely pay $1000 for the content that I want, content that caters to me.

el_cujo2• 6 years ago

I have seen people drop over $1000 dollars in gifted subscriptions/coins over the course of a single stream where a guy is just playing a video game. I'll admit that this kind of thing isn't common, and you definitely aren't going to find 100 people with that level of disposable income for your following, but there are plenty of people who blow what seems like an unreasonable amount of money just so a stranger on the other side of a screen will notice them.

johnchristopher• 6 years ago

This strategy is closely related to the concept of “whales” in gaming, in which 1 to 2 percent of users drive 80 percent of gaming companies’ revenue

Last time I heard of that term - `whale` - it was a reference to a mom whose child was making in-app purchase without her mother's consent and/or knowing. Unethical behavior cursor to the max.

JohnBooty2• 6 years ago

Everybody should think deeply about ethics and act morally. Exploiting human beings is not okay.

But the idea of "whales" is nearly universal in all lines of business, and there's nothing unethical about it unless your business is already operating in some kind of ethical gray area.

If you are lucky enough to have customers at all, you will have some that spend 10x or 100x as others.

The most obvious example would be a neighborhood restaurant or food truck. Most people in your town might visit once or twice per year, if at all. But then you have your regular customers that you see a few times per week. Somebody who stops by twice a week is spending 100x as somebody who visits once a year.

Same with a department store. Most people buy nothing, some just want a pair of socks, and some will drop $2,000 on a new business wardrobe.

Something worth considering: if your business is one that inspires passionate fans, do you have any options for these folks to spend more? If not, are you kinda leaving a bunch of money on the table and hamstringing your fledgling business? Probably. Of course, this is something that takes ethical consideration and good judgement.

nottorp7• 6 years ago

Your examples aren't really of whales, because there's an upper limit on how much food/clothes you can get.

The whale term was invented by casinos wasn't it? Where there's no upper limit to how much you can lose.

scoutt• 6 years ago

Maybe for a kid paying for school or saving it could be OK, but 100-fans-income is quite volatile. And the end of the day these people are living out from tips, pity and the grace of 1st world country donors (I am saying this while trying not to be controversial).

Most fans may be kids (under 25?) and thus volatile, in the way that the creator is off for 1 day and they'll replace him/her with whatever else is out there, and that's 1 percent per lost fan. Or PayPal can decide that your niche is not convenient to them and cut you out, or a fan loses interest, or... countless reasons.

Very risky for making a living, IMO.

tempthrow2222• 6 years ago

Next up: 1 true fan.

Matheus28• 6 years ago

Also called: your employer

anentropic• 6 years ago

LOL yes, and in return you have to produce exactly what they ask for

weinzierl• 6 years ago

The fewer "fans" you have and the more they pay the more power they will have over you and the more demanding they will become. In other words: Your fans turn into patrons and will have a major influence on your work.

Also their demand might drive you in a corner you may not be able to easily escape. As with everything, focus is good but too much focus can be a risk as well.

dvanduzer• 6 years ago

$ whois a1.6z.com

mouzogu• 6 years ago

But finding those 100 people who care enough to pay for whatever it is you're producing must have a cost.

There are more ways to reach people now but considering the amount of noise out there it's like finding a needle in a haystack or perhaps worse as it's more likely, at least for an artistic project that they would need to find you.

That's without considering the fragility of a business that depends on 100 people. I just find something hokey and fake about this idea of having 100 or 1000 true fans to support you. It's especially grating coming from a VC firm whose basis for existence is growth, growth and more growth and then capitalising on that growth in the most ruthless and efficient way possible.

paulpauper• 6 years ago

the cost is immense. Look at how much money Jeb Bush spent in 2015 to get fans. Like finding a needle in a silo. Some people can do it much easier, but it's random. there is no rule or strategy to reliably get fans quickly.

al_form2000• 6 years ago

Tl;dr: "Sell your customers what they want, make them pay what you say, be sure they're rich enough."

Best paradigm busting advice in business after "If you can secure just 0.1% of the chinese market, you'll have 5 milion customers" and "Always remember: profit is revenue minus expense".

armitron• 6 years ago

The "passion economy" is flooding the Internet with low SNR material and making it harder and harder to get to high quality information.

Creators create not to meet some sort of quota or "monetize" but because they need to create. It's the same for artists. True art exists because it has to come out no matter what. Monetization doesn't come into it at all. This is an important point that the passion economy vultures don't seem to grasp. What we see today is monetization becoming THE purpose and overriding everything else.

TheOtherHobbes• 6 years ago

Monetisation is a cult in its own right.

The idea that everything has to be about the hustle is toxic and entirely insane.

shakermakr• 6 years ago

The No Agenda podcast from Adam Curry and John C Dvorak have seemingly successfully worked this model. No adverts, but donation only. Of course many listen to free, but creating producers out of those who donate and giving them credits and shout outs has built an interesting community.

What doesn’t work is to cut your prime value out just to those who pay. Then you can’t build momentum and the large fan base.

scandox• 6 years ago

As the Passion Economy grows, more people are monetizing what they love.

As a sentence this just fills me with dread. And it's hard to say why because I know, for example, that a writer making a living from selling their books could be said to be "monetizing what they love" OR engaging in the "Passion Economy".

But if I was to try and get to the heart of it it's simply that I don't want to monetize what I love. I want it to be the one part of my existence not dominated by money. And I don't want an actual passion (awful word really) to form part of an economy.

AmericanChopper4• 6 years ago

An economy is just a group of people all making resource allocation decisions. I have no idea why you’d want to exclude passion from the decision making process of the worlds billions of economic actors.

pbhjpbhj2• 6 years ago

Isn't an economy specifically about optimising resource allocation. The more general term being a financial system.

I assume you're being purposefully terse, but just in case ... can you see how one might want to do an activity without considering 'could I charge people [more] to enjoy this with me, could I end this activity with less opportunity cost lost' and instead just be generous with something one loves and free with ones use of time when having fun?

claudiawerner5• 6 years ago

That is the definition of an economy in abstract - it is ignorant of the historical factors which have created this particular global economy, and it is ignorant of the large and small scale social dynamics influencing the economy and influenced by it. It is ignorant of the necessary rights, as they are formed today, to sustain the economy. It is ignorant of commodity fetishism and alienation, and the fact that an economy must reproduce itself daily, hourly.

There are many criticisms of this economy that we currently have, and the creeping monetization of the last vestige of private life in which we don't need to currently sell, those hours after work and before sleep.

"Why exclude this?", as you ask, simply shows you think that there is no space to resist the totality (I would sometimes go as far as to say tolatitarianism) of "the economy". No space is free, because we have given up resisting it.

mikorym• 6 years ago

I share your sentiment. In some way I think eventually you make some compromise between income and passions.

If the thing you truly love can make a lot of money then I would say one should do that but reflect on how not to start hating it. Even hobbies require discipline, but you don't see them as forced on you.

Career choices to me are more a process of elimination than choosing, especially if you have many things that you are interested in.

gligorot• 6 years ago

Career choices to me are more a process of elimination than choosing, especially if you have many things that you are interested in.

I didn't see it this way until now, but when I rewind this is exactly how I came to study CS. Thanks for the insight.

arexxbifs4• 6 years ago

I agree, and I also think that the sentiment that turning a passion into a job is somehow beneficial because "you will never work a day in your life" is untrue. As soon as your livelihood depends on something, you will at some point either have to make sacrifices and trade-offs, or you will starve. Creative passion can only blossom when you can do everything exactly the way you want without compromise, which is unlikely to happen as soon as someone else's expectations come into the mix.

You can have a better, more rewarding and fulfilling career, sure. But never expect it not to feel like a chore a lot of the time.

OmarShehata• 6 years ago

I used to agree this, but this leads to what I think is a pernicious belief stated differently: that you can only make "true art" if you're giving it away for free.

This comes up a lot when making indie games. That your work is somehow less pure or you had to compromise on your creative vision because you had to monetize it. As a creator you have to make a ton of tradeoffs all the time anyway, since you have a finite amount of time and resources. What if monetizing it actually allows you to achieve the vision you had in mind? Or it helped you understand what your audience cares about and make something more relatable or moving (or go the other direction, disturbing or meant to role them up etc) Why isn't monetizing just another trade-off? What's so special about it?

The answer to me: culturally monetizing/greed in art has been seen as making art impure and it's a stigma we need to get over.

gadders2• 6 years ago

Apart from the practicality of the business process, I would say if your content is in any way "edgy" or skirts close to the edge of the Overton Window [1] I would try and self-host as much as possible. It would be all too easy for a twitter-storm to get you kicked off social media, twitch, patreon, cloudflare, stripe, paypal etc and then your business disappears overnight.

[1] https://en.wikipedia.org/wiki/Overton_window

bernardlunn• 6 years ago

The real business that A16Z wants is aggregating millions of passion projects. Must have been pitched by something like that

JackPoach• 6 years ago

Is it just me or Passion Economy is a totally empty marketing BS term that doesn't really mean anything?

keiferski4• 6 years ago

The problem with the "passion economy", which was alluded to in another comment, is that it strengthens the already too-prevalent assumption that everything can and should be monetizable. Markets are useful but they don't need to be involved in every aspect of existence.

Sure, you don’t need to participate in Patreon to make stuff, but the trend seems to be toward relying on consumer market forces to fund culture. Tying the livelihoods of creators to the approval of their fans will lead them to censor themselves and consequently you aren't going to get anything that really pisses people off or challenges them in a countercultural way, at least enough to stop buying your stuff.

The idea of basic income seems like a better path forward, in terms of preserving artistic integrity (i.e. not "make money" or "please your fans" as the motive for making things). Everyone will get enough money to survive, no matter how much your ideas go against the zeitgeist.

subpixel• 6 years ago

I just looked at Kajabi for the first time and feel similarly. A bunch of 'coaches' selling courses to other coaches, etc.

tartoran2• 6 years ago

Yeah, this is a tragic outcome for culture in general but free content isn’t sustainable either, people need to pay for rent, food, and other expenses. Im still waiting for the micropayments system to spring into existence..

marcusverus4• 6 years ago

I cannot think of a more trivial reason to fundamentally restructure the economy.

keiferski4• 6 years ago

To allow people to focus on meaningful pursuits rather than work largely superfluous jobs to survive?

Yeah, sounds really trivial.

projectramo2• 6 years ago

The logical conclusion of this trend has already been reached: Adam Neumann only needed 1 true fan.

sebastianconcpt• 6 years ago

I do now think 1K/year is something that will sustain in time. Passion wears out.

HoustonRefugee• 6 years ago

I would like to see some stats from youtube and other platforms actually auditing those sub counts. I really have a hard time believing some youtube channels actually have 10,000 subs, let alone a million. While I agree with the article and the tier system, patreon is basically an e-begging platform. I understand that probably isn't popular to say but that is how I see it.

el_cujo2• 6 years ago

patreon is basically an e-begging platform

This is more true for some people than others. A decent number of YouTubers I know have their patreons set up to only charge customers after they put out a video, so if several months go by without any new content they aren't just pulling a salary from patrons. This model is only really relevant to YouTubers who put effort into fewer videos released farther apart, rather than those with weekly or even daily releases of vlog content, but still it feels like a fair way of doing things where they are essentially being paid for releasing something and not like begging.

Contrast this with some people I see on twitter who have a patreon... just for tweeting? Occasionally there is a spin put on it about being a minority or disabled and taking donations, but this definitely feels much more like e-begging, even though I guess you could try and make the argument that tweets are just as valid "content" as youtube videos.

nadam• 6 years ago

I call bullshit on this 'passion economy' thing. Masses of people never in history could make a living from what they love, and unfortunatelly there is no sign that it will happen now. Musicans, writers, indie-game creators: most of them do their passion besides a day-job. Long-tail never made much money and with globalisation it is worse than ever. The unfortunate truth is the opposite: not only long tail does not really work, but as Peter Thiel said: money is in monopolies. Non-monopolies 'compete-away' the profit.

As a developer, you are better off to go work for a monopoly: they pay well. (Google, Facebook, etc).

(This does not mean I do not have a passion project ('indie game'), I just know that the chance that it can replace my day-job is quite low.)

atlasunshrugged• 6 years ago

Sure, I totally agree, I think the realistic outcome is that we see a trend in more fields towards the 'rockstars' and 'pro players' but instead of having them behind gatekeepers (teams, agents, etc.) they're on platforms

yters2• 6 years ago

Maybe the passion project can make an impact within the monopoly? E.g. use indie game dev knowledge to improve costumer engagement with the product?

gowld3• 6 years ago

Is that a good thing? "Engagement" is usually toxic Skinner boxing.

logicalskeptic• 6 years ago

If you want irrational amounts of money, you need a monopoly.

But I don't see any problem with 6 figure Engineers working competitively.

Is that not enough money?

rrsmtz• 6 years ago

RE: the appeal to history

Things are different now. People consume much more media, which is much more diverse than ever before. Thank population growth and the iPhone. Today, there are YouTube channels that only write video essays about The Simpsons, webcomics about engineering, blogs about crystal healing, and cartoon porn; you name it, there's probably a significant audience for it these days. The number of audiences and their sizes only get bigger with population growth, whereas an artist only needs a certain number of sponsors to sustain them, whether it's 100 or 1000.

The real obstacle is monetization, which primarily comes down to the business skills of the artist/producer, as well as competition between fungible alternatives (why pay $20 to watch a video when I can watch it on YouTube for free) and other external factors.

giantrobot2• 6 years ago

The 1000 True Fans essay is specifically targeting the small transition region in the long tail graph where the tall head becomes a long tail. The thesis is that most creators aren't going to end up in the tall head (statistically) so they should target that transition region because it offers a good living doing some artistic endeavor.

At the high end of the transition region people can make a good living, at the low end they can significantly augment their day job.

65102• 6 years ago

In my mind the article reduces to: Paywalls are cool, we need moar of them.

claudiulodro• 6 years ago

It looks to me what a16z has just discovered is a service business. A plumber or an SAT tutor or an upholstery shop or whatever basically just needs 100 customers a year paying around $1000.

mcclux• 6 years ago

Call me cynical, but to me the entire post just reads like an advertisment for the companies in the $1000 column that they've invested in...

haileris• 6 years ago

Just watched a MicroConf talk mentioned "1000 fan" theory.

Plough_Jogger2• 6 years ago

This talk covers the origin & debunks the premise of 1000 fans: https://youtu.be/otbnC2zE2rw?t=273

ryanjm33• 6 years ago

s/fan/customer

I feel like the comments here cover the main issues with this article. I kept flip-flopping between appreciating the article and disagreeing with it. The two main issues I have with it are:

1. $1000/year to provide value is a business, not a "passion" in the true sense. 2. Highlighting the outliers of a given platform discredits the concept as something that many people can achieve.

"These fans expect to derive meaningful value and purpose from the product." - yes, that would be a business transaction.

This article could be rewritten to say that if you want to create a life-style business, make sure to generate enough value for someone (or a business) that they would be willing to pay $1000/year for your product. This will make profitability/success much easier.

Yes, the original author of 1,000 True Fans retracted his original views after hearing from musicians, but the general concept/framework doesn't seem to be broken even if the numbers have to be adjusted. The main idea is that you don't need millions of people paying you $1 to have success.

scep12• 6 years ago

I understand what you're getting at but I think the relationship with a 'creator' or artist feels much more personal than that of a business. There's more to this than a simple repeating customer/business transaction.

esch89• 6 years ago

I've seen this work before.

Kalq• 6 years ago

I think there's a bit of confusion here in the way the author frames these 100 people. At this level they are not fans. They're not supporting you out of some sort of emotional attachment. They are giving you $1000 a year because they believe that the service or product you provide is worth that much. They're customers and that's all.

The "whale" archetype is just a modern version of what has always existed with MLM and self-help gurus where they pray on rich and emotionally vulnerable people. It's an absolutely tiny group of people that will never translate to a widespread economy.

Conflating the 1000 true fans concept with this is a mistake in my opinion.

dclusin2• 6 years ago

I feel like these numbers are skewed by the sex workers on Patreon offering subscription pornography. It'd be interesting to see if there's a difference between the numbers adult content creators see vs. everyone else.

octocode• 6 years ago

I don't think people who create adult content should be excluded. It's a valid job which — like streaming, painting, or any other online content creation — just isn't for everyone.

dclusin2• 6 years ago

Yeah I agree. I wasn’t suggesting that it is or should be illegal and banned. I’m just saying that the economics for that business are so different than every other creative and performing art that it really distorts what non-adult content creators can expect to make from their patrons.

Plough_Jogger2• 6 years ago

This talk from MicroConf discusses a similar idea and the origins of the 1000 true fans allegory: https://youtu.be/otbnC2zE2rw?t=273

peter_d_sherman• 6 years ago

Brilliant!

1000 True Fans? Try 100

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