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If you're a content creator, you're a tiny startup (you just don’t know it yet)

All of the following terms from Silicon Valley startup culture have direct analogues in the content-creation game. In the examples below, I’ll discuss a blogger or video producer who earns income via Patreon, but the principles generalize much more widely.

Product-Market Fit

Product-market fit is when it becomes clear that a few of your random blog posts get more traction than all the rest — and that these few have something in common. Or when a set of your Youtube videos start earning a lot of positive comments revolving around a particular theme — and this set of videos has that theme in common. In short, it’s when you learn from data where your own autonomous creative tendencies (all your “product features”) intersect (fit) what people want (market). As with startups, this is one of the most crucial turning points in the lifecycle of a creative/intellectual endeavor on the internet. It’s not where amateur dabbling necessarily turns pro, but it is where amateur dabbling has an opportunity to turn pro.

Cost of Acquisition

Cost of acquisition (CAC) is the amount of effort/time it takes you to get a new patron. Consider the following example.

You publish one Youtube video per week.

You spend about 5 hours recording, editing, and posting each video

You gain one new patron per month

The cost of acquiring one customer — your CAC — is 4 x 5 = 20 hours. What is the value of your time? Estimate the highest hourly wage you could currently obtain from an employer. If the most you could earn per hour is $20, then you are effectively spending 20 x 20 = $400 to obtain one customer. Is that good or bad? Depends on how much you earn from a customer, and how much you value money relative to the intrinsic rewards of doing your work.

Churn Rate

Churn is the rate at which your patrons cancel their pledges. Every content creator has some sense of how frequently they pick up new patrons, because picking up a patron is delightful (and Patreon sends you an email). But many content creators pay zero attention to how frequently patrons disappear. Losing patrons is sad, so we’d rather not pay too much attention (and Patreon does not send you an email). But if you are serious about succeeding as a content creator, you need to be as aware of your churn as you are currently aware of your rate of acquisition.

Simply put, if your churn is too high, you will never be able to go full time (at least not via Patreon). Churn rate is also a useful signal in the short-term because it tells you if your subscribed patrons are content with what you’re putting out and how you’re putting it out. If churn is uncomfortably high, that means it will be worth it to allocate time and effort to improving what you post exclusively for patrons, how often, etc. If churn is low, don’t waste time revamping Patreon and rather focus on public content that will acquire new patrons. There are surprisingly many ways to calculate churn. Here is the one that makes the most sense for content creators. To calculate your churn rate, take the total dollar value of all cancelled and decreased pledges in the previous calendar month, and divide it by the total value of all your pledges at the beginning of that month. For example, assume the following.

Between Sept. 1 and Sept. 30, two $10 patrons canceled and one $50 patron decreased their pledge to $25. That’s a total of $45 exiting your recurring revenue stream.

On September 1, you had $800 in pledges.

Your churn rate is 45 / 800 = 0.06. Multiply by 100 for a nice percentage figure: 6%.

You could do this for a few of the most recent months and average across them for a more robust sense of your churn.

Communications from Patreon staff suggest that the average churn rate is about 5%. (They say that’s a “healthy rate,” which I’m assuming means “average.”) You might therefore decide that a churn rate higher than 5% deserves your attention and effort, whereas a churn rate at 5% or lower does not warrant any increased effort on Patreon management.

If it’s not obvious, your growth rate has to be higher than your churn rate to succeed in the long-run.

Lifetime Value

The lifetime value (LTV) of a patron is the size of their pledge multiplied by the number of months they stay subscribed. If the average patron gives $5, and continues to give for 6 months, the average LTV is 5 x 6 = $30. This hypothetical content creator is not a promising startup.

However, this basic formula somewhat underestimates LTV if you plan to sell additional products or services outside of Patreon, such as books or courses. You might assume a 2-3% conversion rate, such that 2 or 3% of patrons will buy whatever additional products you sell later. If you make 3 courses for $500 each, and every patron has a 2-3% chance of buying, then you can add to each patron’s LTV 1500 x .025 = 38. In this example, your average LTV is really more like 68.

Communications from Patreon staff suggest the average amount of time a patron remains a patron is about three months.

The ultimate benefit of understanding and calculating these metrics is to gain an honest, objective picture of your project’s financial viability. Adding these numbers to your understanding might produce some somber insights about your project at first, but they all suggest viable solutions and even tell you how to prioritize and sequence your next steps: increase your planned products outside of Patreon, shift effort from retaining to acquiring patrons, etc.

Was this helpful? You should let me know because I’m not sure how many of my readers are interested in this stuff. If you are, I could say much more on this…

You can’t be smarter than you are

This might sound obvious, but it’s not: You are only as smart as you are. People get stuck because they aspire to be smarter than they are. People refuse to produce until they are as smart as they want to be, but the only way to become as smart as one wants to be, is to start producing work at one’s current stupidity level. If you feel that you are dumber than you wish to be, the only way to become smarter is to produce smarter work, but the only way to do that is to start now producing whatever you are currently capable of producing. The reason is that you have to become possessed by a real, living, breathing, passionate agenda. It’s a trajectory, a process, where one idea or question or puzzle is what propels you into the next.

Writing an honest, unpretentious, and stupid blog post today at your current, actual stupidity level will give you something to beat with a slightly less stupid blog post the day after. Writing two stupid blog posts, two days in a row, will boost your internal sense of production potential enough that you’ll allow yourself to generate 5 new blog post ideas, whereas yesterday you never even allowed yourself to have new blog post ideas because you saw yourself as not-yet-smart-enough to even deserve your own blog post ideas! Of those 5 new ideas, 4 will be really stupid but 1 of them will turn out noticeably smarter than both of your first two blog posts. The 4 really dumb blog posts will be ignored and forgotten, but that strong post will get more reads and shares than all of the previous ones combined. And so on… Fast forward 6 months, and the “stupid” version of you who dared to be honestly stupid is now 3x smarter than the version of you who chose to postpone working until you’re finally smart enough.

How the Youtube Algorithm Really Works with Mark Ledwich

Mark Ledwich is an independent data scientist decoding the Youtube recommendation algorithm. Here Mark debunks several myths and we discuss the real underlying political implications of the Youtube algorithm. See Mark's political Youtube network explorer and his Medium articles.

Big thanks to all the patrons who help me keep the lights on.

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Calling all indie thinkers (literally)

Over the past week, I’ve conducted more than ten private Skype interviews with a diverse group of internet intellectuals, “content creators” of the higher-brow variety, cancellation-vulnerable professionals, and lesser-known upstarts aspiring to be one of these…

The reason I organized these Skype calls is that I spent the past month studying all the best practices that have emerged from lean/agile tech-startup culture. After nearly exhausting all the relevant Y Combinator and Indie Hackers content, it became apparent that one of the most important ways to succeed in building something effective and financially sustainable on the internet is to talk with the people for whom you plan to build it.

In my case, all I know is that I seem to find myself at the center of something quite new (conducting a financially sustainable academic career purely on the internet) and a decent quantity of people are now contacting me for various forms of advice. This seems to suggest I am in a position to create something of value for people, but I’ve never seen myself as an entrepreneur or “founder” and I’ve never really had any visionary business ideas.

But I really need to start making money lol. I’m now fully 6 months out from exiting academia and, while Patreon and freelancing odd-jobs are currently enough to pay the bills, it would be nice to put some caviar on my nachos.

So I figured I would learn everything about how and why startups succeed/fail, and then transfer that knowledge to the “content creator” game.

I still don’t know what, exactly, I’m going to build. So I’m just doing the one thing that everyone in-the-know says you should absolutely do first: I’m having one-on-one conversations with people in my orbit about their “pain points” (I know you like that business-speak baby). I’m trying to figure out the problems encountered by other internet-based intellectuals, cancelled or cancellable academics, and higher-brow “content creators,” and then I’ll try to solve them with something that people want to pay for.

I have no idea if this will work. After talking with people, I honestly now feel like I’m starting to see a vision of something that could really work, but entrepreneurs are notorious for their irrational over-confidence. Discounting for that, I feel utterly clueless about whether I’m really onto something.

So I’m just going to keep moving forward, in very small steps, trying to converge on an objectively data-driven idea. I’ll keep you posted, of course.

One positive result that’s already emerged from this exploration is I’ve come upon a possible catch-phrase to summarize this weird, pregnant-but-not-yet-born niche I’ve been theorizing. It’s simple, natural, short, and unpretentious. It is at least 10x better than all the awkward and cringey phrases I’ve been using until now, for lack of any better options. Instead of repeatedly saying things like “internet intellectuals, content creators of the higher-brow variety, and cancellation-vulnerable professionals,” from here on out I’m just going to refer to us all as indie thinkers.

By the way, if you feel this describes you, I’m still conducting interviews. if you’d like to setup a short Skype call. I'll just ask you a few questions about your problems. Who doesn't want to vent about their problems?

The worst that can happen is nothing

If you’re genuinely seeking the truth and you put something crappy into the world, nothing happens. There is no punishment for crappy content. It’s one of the simplest and most profound facts of conducting creative intellectual work on the internet. If you make something good or important, there’s some probability above zero that good things will happen to you. If you make something genuinely stupid, useless, or “cringe” — people ignore it and then forget it.

The fear of some imaginary punishment for failure blocks many unique intellectual trajectories from ever taking off. In almost every case, the fear is completely within the person’s own mind: “If I make content and it’s crappy, people will think I am dumb.” But the truth is they won’t, because “people” will never see it. “People” don’t read or watch anything for more than 3 seconds if they judge it to be crappy. If it’s truly crappy, people won’t pay enough attention to formulate the thought, “this is crappy.” And they certainly won’t bother to share it with disapproval, because crappy content is not worth attacking! Ironically, if someone shares your work to tell others that it’s crappy, this almost certainly means there is at least something good and important hiding within it.

If you search for “Based Deleuze” on Twitter, the overwhelming majority of tweets are making fun of it in some way. Yet it has sold well for a modest fringe philosophy book; I’ve heard a lot of positive feedback privately; it’s on Libgen and Aaaaarg (pirate sites); and many of the people who find it so crappy seem to be actually reading it and sharing their takes with others. Do you know how few people actually read theory books, let alone meme about them? It turns out that people calling your content crappy starts to happen right when you're finally getting real traction.

Having your weaker content ignored and forgotten is not a punishment or cost of failure, it is literally the absence of punishments and costs. As soon as you realize there is no punishment for bad content, your list of content ideas will expand dramatically and suddenly. Your motivation for trying them will increase. Some will be good, most will be bad, but when you experience the results first-hand (instead of taking my word for it), then you’ll really be off to the races.

Our Desert Commune of Monogamous and Poly Edgelords with Geoffrey Miller and Diana Fleischman

Big thanks to all the patrons who help me keep the lights on.

If you'd like to discuss this podcast with me and others, suggest future guests, or read/watch/listen to more content on these themes, request an invitation here.

Click here to download this episode.

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