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The product of Patreon

Patreon EC-1 Part 2: Patreon's platform holds unique product and design insights for turning creators into businesses

Eric Cohen-Peckham 5 years

Patreon is aggressively pursuing a new three-year product vision that is, in the words of SVP of Product Wyatt Jenkins, to build “the world’s best membership SaaS product for creators.” With about 90 engineers and product managers, the company sees an opportunity to own a particular niche that’s not well served by other B2B software and is also a growing market.

In this section of the Patreon EC-1, I dive into Patreon’s product strategy, analyzing its history and current approach.

Reading time for this article is about 18 minutes. It is part of the Extra Crunch EC-1 on Patreon. Feature illustration by Bryce Durbin / TechCrunch.

Business software for artists

The six-year-old startup enables independent content creators to finance their pursuits by converting their most dedicated fans to monthly memberships. Those memberships provide special perks to the fans — like exclusive content, access to private discussion groups, first dibs on tickets, etc. — and stable, recurring revenue to the creator. (Patreon makes its money by taking a cut of that revenue.)

Patreon is building business software distinct to the fan-artist relationship. Creators have a base of superfans who want to support them and get special access. Creators are their business — their fans specifically want them and the content they create. This is why creators often get a manager or agent to handle their business when they find success, whereas a small business owner would normally do the opposite (become a manager and delegate product creation and customer interaction).

Creators need business tools for non-business people. As a result, Patreon’s core product includes a CRM, CMS, analytics, and payments platform with a lot of proactive guidance on what to do (like telling creators in a step-by-step manner when to, say, message certain patrons in order to reduce their risk of churning). 

This is what SVP of Product Wyatt Jenkins calls “a lean-forward CRM.” It is simplified for non-technical users to navigate (lacking a lot of the flexibility other businesses want), which results in an ongoing challenge to make it more advanced without making it more complicated.

Patreon acts a bit like a business partner, not just a tech platform. In terms of human interaction, it goes beyond technical support to provide advice on business strategy, both on a creator-by-creator basis and in a scalable way through educational webinars, articles, and events. The business model of earning a commission rather than charging a monthly subscription, like normal SaaS companies do, also fits the particular dynamics of media and entertainment, where it is standard for a creator’s business partners (talent manager, agent, business manager, lawyer) to get paid on commission. 

“We’re not here to help them do art. They don’t need help doing art,” explained Jenkins, “We’re here to be their hard-core business manager friend who is like ‘no no no, you need to do this.’” He added that there’s an emotional element that is distinct in working with artists as well: “We deal with a constituency for whom price creates anxiety…it’s all wrapped up in their self-worth. So it’s part of our job in that onboarding funnel to give them the confidence to say ‘the thing you do is real and valuable…you should be okay charging for that.’”

The early product development of Patreon

For the majority of Patreon’s life, its platform has been — to varying degrees — a social marketplace with creator profiles requesting funding and featuring content, patron profiles showing the creators they support, and discovery features for patrons to find new creators. 

An early screenshot of the Patreon platform, here showing CEO Jack Conte’s profile page.

Modeled as a recurring Kickstarter, the “ask” on each creator’s profile when Patreon first launched was to commit to funding them at a set dollar amount for each creation (video, song, cartoon, etc.) they released. The creator would keep posting their content online for free, but incentivized potential patrons with perks for committing to certain donation tiers ($1, $3, $10, etc.). Fans entered a dollar amount to contribute and set a cap for the maximum they could be charged per month.

In the original conception of Patreon, patrons would pay per piece of content that a creator made.

Co-founder and CEO Jack Conte was the first creator on the platform and explained the concept to his fans in the video below.

During the first two months of Patreon, the team noticed many creators were trying to “hack” its model of paying per creation to offer a flat per month payment option, so they added that functionality. By 2015, roughly 80 percent of creators were using the per-month payment model that now defines Patreon’s membership business model, according to CTO Sam Yam. Per-month payment was made the default setting for creator benefit tiers and later the option for new creators on the platform to choose the per-creation model was removed.

In 2014, Patreon redesigned its platform to emphasize content consumption rather than creator profiles. It was a move to become more like a media platform for consumers, with the discovery and crowdfunding of creators happening as a natural byproduct. At the time, Conte told TechCrunch’s John Biggs, “Think about why people love and share something online. It’s because of the content. We wanted to showcase what the artists were doing instead.”

Patreon moved to emphasize content instead of profiles in order to draw in patrons

Patreon soon faced a tension in its burgeoning marketplace. To increase engagement, it wanted to help patrons discover more creators. Yet, many patrons were coming in on the recommendation of a creator, and so Patreon was essentially taking that superfan and awkwardly directing that user to other creators — possibly even competitors. So the product shifted its focus back to the pages of individual creators, which were the primary landing pages for new patrons.

One year ago, the company launched Patreon Lens, a copycat of Snapchat Stories and Instagram Stories enabling creators to share daily behind-the-scenes video exclusively with their patrons. It was the last major product release in pursuit of the vision that Patreon should be a daily destination for content consumption — competing with YouTube, Instagram, Snapchat, and other dominant social platforms — in order to help creators convert and retain patrons. 

A screenshot of Patreon’s app Patreon Lens, which allowed users to view behind-the-scenes content from creators

Patreon’s transformation into a membership management system

During 2018, the company’s leadership determined that it is in fact not necessary for Patreon to be an end-user destination. There are already so many platforms on which creators can get discovered and post content, each of them better on that front than Patreon and offering higher traffic from consumers than Patreon could.

Instead, Patreon solves a major pain point for creators with established fan bases, which is developing a recurring revenue business by better managing relationships with their superfans. It decided that the biggest market opening rests in focusing on infrastructure and business support for such creators.

Comparing it to Zuora’s rise as the “Subscription Relationship Management (SRM)” software for companies (of all industries) shifting to subscription models over the last decade, I think of the new vision for Patreon’s product a “membership management system.” This is a software suite for creators who want to develop a membership business model with their core fans, even if they still generate income from ad revenue on online videos or podcasts, ticket sales from live events, royalties from books or albums, etc.

This membership management system is the nucleus of a membership business: it’s their CRM, payments processor, and business manager plus a basic CMS for sharing updates and messages with patrons. These core features have long been part of Patreon, but its framework for thinking about them and further product development has changed. Rather than trying to be the destination for every type of content and conversation, it will instead integrate into other services that are already used by creators and their fans (like Reddit and Discord). In SVP of Product Wyatt Jenkins’ words:

“We’re not gonna be better than YouTube or Vimeo. We’re going to connect to wherever your content is. We’re not gonna be great at community; we’re gonna connect to wherever your community is.”

Patreon has already removed most of the functionality for creator discovery. It no longer recommends other creators and the Patreon.com homepage has been transformed into a sales pitch to creators, not a destination for consumers. The team has tossed media-centric OKRs like monthly active users and is firmly focused on two metrics: the number of creators on the platform earning $1,000+ per month and the total amount of money those $1,000+ per month creators are collectively bringing in each month.

This shift reframed how they think about user engagement: according to Jenkins, they’re now building a product that a creator will log into a couple of times per month, not daily.

In its three-year product roadmap, Patreon has identified five “pillars” that guide its strategy:

  1. Tools to turns fans into patrons
    Patreon earns a commission on creator revenue, so it is working on features that will help creators optimize their sales funnel and incentivize patrons to upgrade benefit tiers. It rolled out “Special Offers” as a marketing tool in November, enabling creators to run time-limited sales and bonuses for fans who become patrons (or patrons who increase their pledge to a higher tier). In the initial pilot of the feature with a small group of creators last year, it drove up new member revenue by 288 percent according to the company. “It’s not rocket science that sales work,” says Jenkins, who adds that they hope it’s a tool creators use “quarterly or twice a year just to give a nice swift kick in the ass to their membership and drive some new membership.”
  2. Payments/finance
    Patreon is improving its ability to automatically fight fraud, handle disputed transactions, provide creators with analytics on their finances, and help them track their tax obligations. According to Conte, patrons from every country except two can now send money to creators in 100 countries. Patreon only offers payments today in USD, but it is working to become multi-currency and multilingual and handle all the legal compliance of international expansion.
  3. Onboarding
    Jenkins explained that his team is focused on improving tools to recommend the types of benefits a creator should offer based on their category (YouTuber, podcaster, etc.), the number of benefit tiers they should have, and the pricing of those tiers. It is all with the intention of making it easier for creators to join, encouraging them not to undervalue what their fans are willing to pay, and helping them avoid mistakes (“a lot of creators do things like try to make 20 tiers,” he said with a laugh).
  4. Benefit tools
    Patreon is adding more ways for creators to offer benefits to their patrons and more automated tools that guide them on best practices, like understanding which benefits to put in which tier. Patreon is working on two major initiatives to expand how creators deliver benefits: API integrations with other platforms and a feature to order and deliver merchandise through partner companies. More on these below.
  5. CRM analytics and tracking
    There are more features to build in making the Patreon CRM (which they refer to as a Patron Relationship Manager or PRM) more advanced. Creators currently have a dashboard with insights about their patrons plus the ability to search and group them by certain characteristics. Look for Patreon to provide a whole lot more data on patron behavior as a result of the growing number of API integrations it is working on.

Building hands-on creator support

There is a human touch to Patreon’s core membership solution beyond its software. It differentiates itself by heavily investing in creator support that includes education on best practices for a membership business and advice on a creator’s particular situation.

There are two divisions of Patreon’s organization in charge of interfacing with creators: Community Happiness and Creator Partnerships. 

Community Happiness provides technical support and answers FAQs about using Patreon effectively; they help any creator or patron or API partner who reaches out. Jack Conte tweeted on February 6th that for a portion of last year, the company responded to an average of 16,000 support messages per month.

The Creator Partnerships division acts as a lightweight business partner for creators, and is comprised of three teams:

  • Creator Success provides scaled account management to creators through educational webinars, publishing an organized library of how-to articles called “Patreon U,” organizing meetups, and hosting the annual PatreCon conference for creators that is equal parts community-building and business education. Since Patreon makes money on commission, Creator Success works to help all creators make smarter business decisions and earn more money.
  • Creator Care is the high-touch strategic account management team for big creators who graduate beyond Creator Success to having a dedicated advisor at Patreon helping them develop their membership business. Creator Care team members work with no more than 40 creators each. Bremner Morris, Head of Creator Partnerships, explained the factors that determine whether a creator qualifies as strategic: “1) earnings potential, 2) whether they increase the diversity of backgrounds among our creators, and 3) whether they are from a content category that is a priority for Patreon.”
  • Creator Partnerships is a six-person team that recruits big creators to join Patreon and builds business relationships across the media and entertainment industry that could result in new corporate partnerships for Patreon or opportunities for certain individual or groups of creators.

What is clear from my conversations with creators is that Patreon has built substantial goodwill through their investment in creator support. I repeatedly heard that creators trust Patreon employees to be genuinely driven to support them. Several creators contrasted their experiences with YouTube, noting YouTube’s creator relations staff is tough to get a hold of unless you’re a major creator.

Given that Patreon is going beyond technical support to provide business advice on how specific creators can better monetize their fan base, how close is it getting to the work of a traditional talent manager? Morris said the company has evolved from “strictly a technology company” to a “creator relations company” that “may make us look more like a talent management agency or something…putting our relationship to our creators first and then figuring out how we use technology to be more helpful and scalable.” In a similar vein, Jenkins said they want any creator who “makes a lot” to have “someone at Patreon’s cell phone.” 

The company clearly sees human-to-human interaction with creators as a core component of its product even as it builds more software tools to guide them at scale.

Building upward and outward

Everything we’ve discussed here — the CRM and payments, the creator support — forms the nucleus of the Patreon product (the membership management system). Many of the additional, more advanced functions that the company is working on to improve these features are likely to be offered within a premium tier of service for those creators willing to upgrade (i.e. pay Patreon a higher percentage of their revenue).

Like Stripe with its Stripe Atlas, Stripe Terminal, and Stripe Issuing product extensions, Patreon is also building what I would call “extensions” off this core membership management system and leveraging it to open new doors for creators and new revenue streams for itself. Patreon is focused on three of these: its API, features for merchandise, and an upmarket alternative to Patreon for creators with more robust needs. I talk about the economics of these extensions in my business analysis, here I want to focus on the product strategy behind each.

Extension 1: the API

The membership business model requires an ability to track which fans are patrons, which patrons are in each benefit tier, and what benefits each tier is entitled to. This starts on Patreon’s own platform but creators need to carry this knowledge elsewhere as well. There are a wide range of creators and fans, and if Patreon is going to be the nucleus of membership business models it needs to offer flexibility to each creator in what perks they can offer and where they can engage their patrons. 

Patreon’s API is going to play a central role in this next phase of the company’s development. The API links a creator’s patron data to a whole roster of third-party platforms. Existing integrations include: Mailchimp for emails; Discord, Discourse, and Reddit for community building; and Wix and Weebly for web hosting. Creators, whether individuals or small media companies, can also add a “Connect with Patreon” login function to their own websites for patrons to access walled content or forums (there’s a WordPress plugin to make this simple).

Longer term, Patreon is likely to build out its own app store to promote creator tools that third-party developers have built off of its open API. Patreon is vying to be the central database that all other tools connect to and that all patron data flows back to.

The biggest challenge here is integrating with the major social media platforms like YouTube, Facebook, Twitter, Snap, etc. For platforms that are purely advertising-based and free for creators and fans to use, the benefits of a Patreon integration seem one-directional. Even more challenging, some of these platforms are launching their own features for fans to pay creators and might view a Patreon API integration as competitive with their own goals.

Extension 2: merchandise

Patreon is getting ready to roll out a merchandise product. It doesn’t want to host e-commerce stores and build out a supply chain to deliver physical goods, but it does want its creators to have an easy way to include physical goods as perks within their benefit tiers. For example, maybe a podcaster will send a branded coffee mug to patrons who stay on their $5/month tier for four months while offering a branded sweatshirt to those on the $10 tier and both items to those on the $15 tier. Or perhaps an illustrator will design a cool new t-shirt every season and automatically send it as a perk for patrons in their top benefit tier.

Patreon — specifically the team in NYC who joined through the acquisition of Kit.com — is testing a product suite for creators to design merch products, then use partner companies to order them in bulk, handle logistics, manage inventory, and carry out fulfillment. Patreon’s API will enable partners to fulfill orders automatically, plus Patreon will handle all customer service calls. For creators who opt-in to a premium pricing tier, the company will also offer design services through a marketplace.

Conte told me that dealing with receiving and mailing merch packages for patrons is the most common pain point creators raise, so addressing this issue can free up a lot of time for those creators to instead spend on content creation.

According to Jenkins, “The business line of our products is not about the unit economics, it’s about the retention of pledges over a longer period of time.” One of the features his team is developing as a result is a calculator that guides creators on how much product they should bulk order, what pricing tiers they should put each product in based on margin, and when patrons should unlock such perks based on lifetime value (LTV). “That prevents the creators from getting in trouble. A lot of creators today are in trouble … our product is designed to create a barrier and make them realize the costs,” explained Jenkins.

Although it is used to bolster creators’ benefit tiers, I consider merchandise a new product offering for the company because it is a fundamentally different operation from online content and communication. Patreon is leaving all the supply chain logistics to other companies, but it is now building software for designing consumer goods and has to create and manage two new operations: a design marketplace and an e-commerce customer service staff. This is a major undertaking for Patreon while there is still much to do in building the next phase of its core product.

Extension 3: Memberful

While I began this article talking about the particular challenge of building business software for creators and making it simple enough for them to take full advantage of, there is obviously a variance in how business-savvy creators are. Some creators want more advanced features and understand the details of running an online business already; many want their membership business to run through their own website and not be cross-branded with the Patreon.com domain. That’s why Patreon acquired Memberful last year.

Memberful is the white-label, do-it-yourself alternative to the core Patreon platform. It is a suite of tools that sits as a layer on top of a WordPress site (or other site) managing the CRM of members, controlling access to member-only content, running payments through Stripe, integrating with Mailchimp to automate membership and payment notifications, and more. For media companies like Quartz and solo creators like Ben Thompson of Stratechery, Memberful provides the flexible backbone on their own domain.

Since Memberful is a DIY offering, its team is working on more advanced features that normal Patreon creators don’t have a big need for, like the ability to sell corporate memberships that give access to every employee at a large company like Microsoft, grouped under one account and being paid for in one lump-sum payment. Expect further development here as some creators grow in scale.

Co-branded vs white-label platform

The addition of a separate, white-label product into the Patreon portfolio highlights a critical question for Patreon’s product vision: with the goal of being “the best membership SaaS product for creators” and less of a destination site for consumers, how should the consumer-facing design of the Patreon platform evolve?

It’s important for Patreon’s brand to still be a small presence on the pages that patrons see in order to maintain the viral acquisition loop I talk about in my business analysis and because patrons need to recognize a Patreon account since the company handles their technical questions and payment issues. Its branding should be secondary to the creator’s, though, like a “Powered by Patreon” icon.

Currently, visiting a creator’s page on Patreon feels like visiting a profile page on Facebook or on Airbnb. Patreon is the primary brand: its logo, menus, footer, and site structure are more dominant than the brand of each creator. Like a social networking platform, patrons still have publicly visible profiles showing who they are and which creators they support.

This doesn’t fit Patreon’s new vision. When I first met with Conte, he said “We look like Etsy but we’re Shopify,” and he noted on another occasion that there are still remnants of the older vision for Patreon in the current product.

In particular, Patreon should create a more flexible design template for creators to customize the layout and aesthetics of their consumer-facing pages. As a premium feature, the platform could let a creator use their custom domain name while still operating on the Patreon platform.

Conte noted that for some creators, being on Patreon gives them credibility, but it has moved on from being a discovery platform and is focused on working with creators who’ve built an initial audience elsewhere. By definition that means those creators already have a base level of credibility.

Patreon’s consumer-facing brand is currently a complicating factor for it anyway. In my conversations with talent managers, entertainment executives, and creators who don’t use it, I heard repeatedly that Patreon is viewed as “too indie” and larger creators worry that it has connotations of “starving artists” asking fans for money due to its origins. In fact, I admit I had those worries myself when several subscribers to my personal media newsletter encouraged me to set up a Patreon account. I also heard wariness of brand association with a platform where many creators (23 percent according to Graphtreon data) are in its NSFW (not safe for work) categories.

Ultimately, personal brand is everything for professional artists. Business people don’t care who else is using Salesforce or Squarespace because there’s no brand association with other users. Making Patreon’s branding secondary to creators’ would clarify its role as infrastructure, helping to minimize these concerns.

Improving creator economics through bundling

Another question in Patreon’s long-term product strategy has to do with bundling. Given that thousands of mid-sized creators operate their membership businesses on the platform, each with their own membership pricing, there is an inherent question of whether it should facilitate some form of bundling across creators.

There’s a huge shift toward subscription models currently underway in media and entertainment. That’s driving more income for creators, but also quickly runs up against a natural limit in how many subscriptions one consumer can afford to have. My TechCrunch colleague Danny Crichton dubbed this “subscription hell.”

Thus we get bundles, just like we have with cable channels, where a portfolio of different offerings are packaged together in one discounted subscription. This benefits each creator in the bundle since it causes more consumers to subscribe and expands the number of core fans each creator has.

Conte said in a Stratechery interview as well as to me that he has no plans for bundling access to multiple creators on Patreon. I agree it wouldn’t make sense to bundle every creator on Patreon into one membership offering like Netflix, but I do think there is a role for enabling creators to flexibly bundle with each other in order to grow their base of patrons and membership income while reducing acquisition costs.

A creator-first product mindset

Patreon aims to be the bedrock from which independent content creators build their businesses and it’s off to a strong start in providing the core infrastructure for superfan memberships. It’s ability to secure API integrations with a long list of the other platforms that creators use is critical for making it the central node of their operations and not just one small component, as is its ability to guide a creator’s business decisions through automated tools more so than human support. I analyze how Patreon’s product stacks up against its competition in another article, but those integrations and the level of guidance are core differentiators in defending against YouTube and Facebook.

Patreon understands the intricacies of building business software for artists, and its underlying advantage is building a product with a creator-first philosophy rather than an advertiser-first philosophy or a mass-consumer-first philosophy. By building the most helpful tools for creators, it enables creators to more fully engage with their fans.

The business of Patreon

Patreon EC-1 Table of Contents

Also check out other EC-1s on Extra Crunch.