Patreon: Jack Conte and Sam Yam

As part of the band Pomplamoose, musician Jack Conte had a sizeable fan base in the late 2000s and was making thousands of dollars a month from iTunes sales. But when streaming services like Spotify took over the music scene, Jack's income dwindled. So he called up his college roommate Sam Yam, who had spent his post-college years launching startup after startup. Together, Sam and Jack created Patreon, a platform where artists' most passionate fans can sponsor them for just a few dollars a month. Following a Covid-era surge in new members, Patreon is now valued at over a billion dollars and supports over 200,000 musicians, artists, and content creators. Order the How I Built This book at: https://smarturl.it/HowIBuiltThisSee Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Guy Raz?

  We get support from US Bank. A question I love asking founders. What's the one decision you almost didn't make? The one that changed everything? Because it's never the obvious stuff. It's never, I decided to start a company. It's the small, boring, Tuesday afternoon decision you barely remember making until you realize it's the reason everything after it either worked or didn't. Say you're 18 months in. Business is growing. You've got expenses coming from six directions. Gas for the van, office supplies, your phone bill, team lunches that are actually client meetings, and you're putting it all on whatever card you grabbed in year one. You're not thinking about it. Why would you? You've got bigger problems.

• 0:45Guy Raz?

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• 1:30Guy Raz?

  based on one small decision. Visit usbank.com/business to learn more. The creditor and issuer of this card is US Bank National Association, pursuant to a license from Visa USA, Inc. Some restrictions apply. Our presenting sponsor today is Anthropic, the team behind Claude. Every founder on this show started with a hard question. Not the marketing plan, the 2:00 AM kind. Is this idea any good? Am I the one to build it? Should I quit my job? Anthropic got built the same way. A public benefit corporation founded on one Hard question. How do we make sure AI goes well for people?

• 2:14Guy Raz?

  So they asked over 100,000 people their hopes and their fears and are publishing what they find, even the uncomfortable parts. Me? I've got my own hard question about AI. Here it is. If everyone has access to something that can help them write the business plan, build the prototype, analyze the market, maybe even come up with the idea. What separates the people who actually build something from everyone else? I don't have a clean answer yet, so I've been sitting with it with Claude. There's hope in hard questions. Ask yours at claude.ai/hibt.

• 2:54Guy Raz?

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• 3:36Guy Raz?

  The agents bring speed and scale and people bring taste, judgment and control. Learn how you can get more out of your site from a Framer specialist or get started building for free today at framer.com/built for 30% off a Framer Pro annual plan. That's framer.com/built. Rules and restrictions may apply. AI isn't just opening new business opportunities, it's changing the way businesses get work done. The questions they ask, the decisions they make, the routine tasks they can hand off. That's the idea behind NetSuite Next, the next generation of NetSuite with AI woven into the tools your business already relies on.

• 4:21Guy Raz?

  NetSuite Next surfaces insights exactly when you need them, puts agents to work on routine tasks and problems, and lets you ask complex questions in plain language, like talking to a knowledgeable colleague. But technology is only part of the story. AI is also reshaping how people and teams work together, and that shift is already underway. That's why NetSuite wants to put a new, expert-created business guide in your hands today. It's called Aligning for the Agentic Era: How AI is Changing Everyday Work. And right now, it's yours, absolutely free. Inside, you'll discover how AI could reshape work across your entire organization, and how to position your business to prosper from it.

• 5:06Guy Raz?

  If your revenues are at least in the seven figures, get NetSuite's free business guide, Aligning for the Agentic Era: How AI is Changing Everyday Work, at netsuite.com/built. The guide is free to you at netsuite.com/built. netsuite.com/built.

• 5:27Guy Raz?

  So how much did it cost you to make that music video?

• 5:30Speaker 01

  It ended up costing 10 grand. If I had known that, I wouldn't have done it. And it wasn't until about February that I kind of... It almost felt like waking up after a dream and watching my savings account go down basically to zero. And I was like, I'm gonna upload this video to YouTube. It's gonna get a million views. And I knew that that video would bring in maybe 100 bucks.

• 6:05Guy Raz?

  From NPR, it's How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built. I'm Guy Raz, and on the show today, how Jack Conti's frustration with the music business led him to launch Patreon, a crowdfunding platform where fans can support and connect with creators for just a few dollars a month.

• 6:30Speaker 02

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• 7:03Speaker 03

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• 8:04Speaker 05

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• 8:39Guy Raz?

  At some point, you might get tired of hearing me say that every great business idea often starts as a problem in need of a solution. But one reason I keep coming back to this is the sheer, almost stupid simplicity of it. Like, it's an equation you could explain to a six-year-old. Frustration equals idea equals action equals solution. Think about Jamie Simonoff, who worked out of his garage. He needed to see who was at the front door when the doorbell rang to decide whether to get up and open the door or stay put. So he built a video doorbell for himself. And then he turned it into a business called Ring.

• 9:23Guy Raz?

  Melissa Butler couldn't find bold and bright lipstick colors, so she created her own and then turned that idea into a business called The Lip Bar. Mike Radenbaugh had to bike 17 miles to high school, so to make that journey easier, he turned his bike into an electric bike. And that idea eventually became Rad Power Bikes. And Jack Conti's problem? It was a problem that, at first glance, doesn't seem that problematic. Back in 2009, he and his then-girlfriend, now-wife Natalie, formed a band called Pomplamoose. And in September of that year, they released a cover version of Beyoncé's "Single Ladies",

• 10:07Guy Raz?

  and they made a video to go with it.

• 10:17Guy Raz?

  This video got millions of views, and their YouTube channel blew up. They were doing media interviews and selling some of their music on iTunes. So you're probably wondering, what was the problem? Well, having lots of followers and viewers doesn't necessarily translate into a sustainable business, especially after all the middlemen take their cut. So Jack set out to solve this problem, and he wondered, is there a way for artists to make their art in a sustainable way without a big record label or publisher or studio backing them? And the answer he came up with is Patreon.

• 10:59Guy Raz?

  Patreon is a platform that connects artists with their most passionate fans, fans who willingly pay a monthly subscription to support their favorite artists. Since its launch in 2013, Patreon has attracted about 200,000 creators, including some names that you might know, like YouTuber Jackson Bird, or the musician Beady Man, or the podcast Chapo Trap House. But mostly, Patreon helps support people you've never heard of: ukulele teachers, graphic artists, film reviewers, science fiction writers, fantasy footballers. And that's sort of how its creators, Jack Conti and Sam Yam, envisioned it.

• 11:42Guy Raz?

  For starters, both Sam and Jack had creative instincts from very early on. Jack grew up in the Bay Area, where he was fascinated with puppetry and loved making his own animations. Sam grew up in Pittsburgh, where he worked as a waiter at his parents' Chinese restaurant and actually really loved programming his calculator. And from a young age, both of them were also really into music. Sam played classical piano, and Jack started out playing jazz. In fact, their mutual love of music might be why they were paired up as roommates when they started their freshman year at Stanford in 2002. Here's Jack.

• 12:23Speaker 01

  I think it was just one of those relationships that was relatively-- I mean, at least, Sam, my recollection, it was like, easy. Like, it doesn't-- it didn't take a lot of work. It just kind of-- it just kind of worked.

• 12:35Speaker 06

  Yeah. I think we also sort of had a very easygoing humor, too, to us, that we found maybe some of the same macabre-type things funny, and the same friend groups that you eventually brought over, I think, really resonated with me, too.

• 12:52Guy Raz?

  So what were you guys studying in college? Jack, let's start with you.

• 12:55Speaker 01

  I studied music. You know, my whole life, I'd been on the-- Arts had kind of been like the side thing, but I was on the, you know, the science and math kind of track growing up. And I loved physics in high school. I thought I wanted to be a physics major when I got to college. And then I remember getting to this, like, the next level of physics. And I was sitting in a class. And I think movies often show you like one moment of realization. And life is rarely like that. Life is usually like a slow burn. But this was really one moment of realization for me, sitting in this physics class where I was like, this is not what I want to do. And I just, I was just thinking about songs.

• 13:40Speaker 01

  I was thinking about my music theory class. I was thinking about other things. And that's where my brain was going. And I didn't want to do physics. And I remember like sitting on a bench after that physics class for probably 45 minutes. I just sat there and just thought about what that meant for me. Because I was, I was, it was kind of a, one of those moments in college that feels pivotal, you know?

• 14:06Guy Raz?

  So, Jack, you were studying music. And Sam, what were you studying?

• 14:10Speaker 06

  Yeah, I came into Stanford not really knowing, to be honest. Ended up studying computer science. Honestly, I played a lot of video games as a child. And then I was into computers.

• 14:21Guy Raz?

  All right, so you are doing computer science. And Jack, you're doing music. And I'm just curious, did at any point in college, did the two of you sit around and start to kind of mull over the possibility of starting a business together or anything like that? Was that ever a conversation you ever had?

• 14:40Speaker 01

  Never.

• 14:41Guy Raz?

  Never.

• 14:41Speaker 01

  And Sam did start businesses. Sam, you were doing that In-N-Out delivery thing?

• 14:46Guy Raz?

  In-N-Out Burgers?

• 14:47Speaker 06

  I was, I was, yeah, yeah. It was awesome.

• 14:49Guy Raz?

  You were driving In-N-Out Burgers for people?

• 14:51Speaker 06

  I created a website. I was driving burgers around and to campus. This is, that was my senior year in particular.

• 14:57Guy Raz?

  Pre-DoorDash?

• 14:58Speaker 06

  Sure, yeah. That, I would love to take that credit.

• 15:01Guy Raz?

  You would take orders for burgers, drive to the burger place and then deliver them to dorm rooms?

• 15:06Speaker 06

  Yeah, to individuals. It wasn't super well thought out. Again, just, you know, riffing on ideas here.

• 15:12Speaker 01

  Sammy, why are you ashamed of this? This was an awesome business, man. It was so cool. It was a big deal. Like, everybody knew about it. It was one of those things.

• 15:19Guy Raz?

  He just mark up the burgers? I think he's worried he's going to get sued by In-N-Out Burgers for, for what he did in 2004, for whatever, '05. But I will say this, I don't think it's a great idea because a delivered burger is just not, you have to eat a burger right off the grill. Like, once it gets, it's in a car, it's in a box, it gets soggy, you get it to your house, it's not the same thing.

• 15:41Speaker 06

  I totally hear you, yeah. Also, the shock every time, every night, that I would go to In-N-Out and order like 100 burgers or something, and then how they would have to hold up for everyone else in line, not a good feeling, so.

• 15:52Guy Raz?

  Not a good feeling. All right, so you've got this burgeoning entrepreneurial business. And Jack, were you like, was any part of your mind in college about business, or were you really just focused on music?

• 16:04Speaker 01

  No, I don't think I was thinking about business at all. I was, I was a part of the Film Society at school, and so, and I was also, there was a recording studio on campus, and so I was learning how to use a recording studio. And I was also, you know, because I was part of the Film Society, I was making movies. So I would make, you know, a few movies a year. And I would do soundtracks for other people and for myself. So I was, you know, I was a music major, and then, you know, in the, in the cracks, I was doing music and film and all that kind of stuff. I was not building businesses.

• 16:38Guy Raz?

  All right, so you guys both graduate in 2006. And Sam, I guess you go to work for your, like, the first of many startups, and it was called Loop'd. And I guess it was like an early way to share your cell phone's location. What happened to that startup?

• 16:56Speaker 06

  Loop'd ended up getting acquired. I was there for about three years. My takeaway from it, like, early on, I was really interested because of the founders, particularly Sam Altman, who was the CEO there.

• 17:11Guy Raz?

  Oh, wow.

• 17:12Speaker 06

  Later I became president of Y Combinator. And we had a whole bunch of other impressive folks there, and I think just being around that talent felt very energizing.

• 17:19Guy Raz?

  So Sam, you kind of go off into this tech direction, and Jack, I guess you kind of begin to pursue music. You formed a band with your then-girlfriend, who is now actually your wife, I think, right? Natalie?

• 17:33Speaker 01

  Yeah, we started a band called Pomplamoose. And even before then, I had started using YouTube and uploading YouTube, and it kind of, it like, felt like something was working. So I'd put up a video and get a few thousand views.

• 17:50Guy Raz?

  What were the videos of?

• 17:52Speaker 01

  Me in my bedroom, playing instruments. And so I would-

• 17:57Guy Raz?

  Listen, people put videos up, uh, opening baseball card packs today. So, I mean-

• 18:01Speaker 01

  Yeah.

• 18:01Guy Raz?

  Yeah.

• 18:02Speaker 01

  I would, um, I guess what the videos kind of became was the video version of a song. I called them video songs because you use, there were sort of two rules. I was inspired by the sort of dogma filmmaking from the 70s. And like, the, the rules were, if you hear the instrument in the mix, if there's an instrument in the mix, you're going to get to see it.

• 18:21Guy Raz?

  Ah, yeah. You have to play it right.

• 18:22Speaker 01

  Yeah, it's like all direct sound and, yeah, that kind of thing. And I just, I really liked the idea of taking some of the mystery out of audio production because it really feels like magic when you listen to a record. You know, you, there's all these sounds, you have no idea how they're made. It just, you know, it feels like these people are geniuses just creating things. And there's, at least for me, it felt like there was this gap between like where they are and where I am. And, and I just liked, I liked the kind of transparency of YouTube. I liked that it felt like behind the scenes. And I liked the idea of, um, kind of showing people like, hey, this is how sounds are made and here's what it looks like. And it doesn't have to be super glamorous. Like, you can be in your pajama pants on the floor of your bedroom, uh, playing a guitar

• 19:05Speaker 01

  through a shitty amp that you got, you know, on sale at Guitar Center.

• 19:09Guy Raz?

  And what kind of music was it, by the way?

• 19:11Speaker 01

  It was like hardcore, um, rock, like aggressive, intense, like electric rock. Yeah.

• 19:18Guy Raz?

  And people, yeah, there's a market for that.

• 19:20Speaker 01

  Yeah. And so I graduated and started working on music and it, you know, felt like it was working. I would sell a few hundred bucks of MP3s. I used a site called E-Junkie. So I would put up my MP3s for sale on, on this platform.

• 19:32Guy Raz?

  And were people buying them?

• 19:34Speaker 01

  Yeah. Yeah, I was sell, I was making a couple hundred bucks a month. And I was, I thought like, okay, this could, this could turn into, you know, an income stream and I could do this full time. It was the first time in my life that I felt like that would be possible. I remember, like, going back to that moment in college, you know, when I made the decision to become a music major, it was actually like a very depressing moment for me. Like, I was committing, in my mind, I was committing to a life of poverty. My uncle is a guitar player, a jazz guitar player. And he, you know, when I told him I was gonna do this, he was like, Jack? The thing he said to me was like, "Don't do it." He was like, "You can do anything else in your life. You're a smart guy and, and you can do anything else." He said, "Don't do this. It's crowded at the bottom," is what he said.

• 20:13Guy Raz?

  Wow. But, I mean, you, you have this band going at the time.

• 20:18Speaker 01

  Yeah, we got the band going. When we posted a YouTube video on my channel, at first, we didn't call it a band. We just posted a video on my channel. We said, hey, this is me and Natalie collabing.

• 20:26Guy Raz?

  And what were you, what was the video?

• 20:28Speaker 01

  It was, it was just the two of us with a song that she wrote called Pas Encore. It was mostly in French.

• 20:33Guy Raz?

  Because pomplamousse, of course, is grapefruit in French.

• 20:36Speaker 01

  And that comes from her because she grew up in France and Belgium.

• 20:38Guy Raz?

  I got it. Okay.

• 20:40Speaker 01

  And what was funny was, you know, we kind of tempered each other, like we mitigated each other's extremes. So like she calmed down my kind of industrial screamo side and I kind of upped up some of the softness of it. And the combo was just, it was cool and different. And like, it had some of my aggressive production, but then she has this very soft voice. And I think it was just kind of different sounding and people seemed to really like it. And so, you know, the idea was, let's see if we can make a living out of this. And right around that time iTunes came out. And so we started putting our, our music on iTunes.

• 21:16Guy Raz?

  This is original music?

• 21:17Speaker 01

  Original music. Yep. You know, we knew that that was kind of what we wanted to do. And so we, we just, and YouTube seemed like it was working. So we just started making more and more videos and putting those out.

• 21:26Guy Raz?

  How did you get attention on YouTube?

• 21:29Speaker 01

  Eventually, we produced a record for this singer songwriter named Julia Nunes. And I was super inspired by Julia because she just had this huge presence on YouTube. And I learned that it came from covers originally.

• 21:43Guy Raz?

  Ah.

• 21:44Speaker 01

  And she would put out-

• 21:45Guy Raz?

  From covering, covering big, like, well-known songs?

• 21:47Speaker 01

  Yeah, because-

• 21:48Guy Raz?

  Which, which anybody can do, right?

• 21:49Speaker 01

  Which anybody can do. Yeah. And that's kind of when I learned that YouTube is a search engine. And so people are searching for songs that they know. And if they then see a cool band who is singing that song, but maybe in a completely different way with a completely different sound, and they've ripped out the harmony and put in their own harmony and ripped out the beat and put in their own beat and done it in three, four instead of four, four, or whatever it is, you can kind of get introduced to a new sound because you're coming from search traffic. And that single thing is how we ended up, like, growing the band so quickly.

• 22:22Guy Raz?

  So what was the first cover that you put on YouTube?

• 22:25Speaker 01

  It was, I think the first cover was "My Favorite Things." We ended up doing it in 5.4 and did a cool arrangement of it. But that wasn't the one that hit. The one that hit was when we covered Beyoncé's "Single Ladies."

• 22:41Guy Raz?

  Oh, yes. I remember that well.

• 22:42Speaker 01

  Yeah.

• 22:48Speaker 01

  We happened, we knew that it was gonna have a good shot at the VMAs because it was such a great video and a great song. And she was up for, you know, best music video. And so we covered the song and kind of just in time and put it out that night. And then Kanye did that thing where he got up at the VMAs and-

• 23:10Guy Raz?

  When Taylor Swift won.

• 23:11Speaker 01

  Yes, and interrupted her. And it became this huge, like, internet meme and just got tons of traffic. And the video just exploded.

• 23:18Guy Raz?

  Because people were searching "Single Ladies."

• 23:20Speaker 01

  Yeah.

• 23:25Guy Raz?

  I think that video today has about 11 million views.

• 23:29Speaker 01

  It does, yeah.

• 23:30Guy Raz?

  And you guys, and I've seen the video, obviously. And it's you guys like in like a bedroom, right?

• 23:35Speaker 01

  Yeah, it was my childhood bedroom. Like, that's what it is. It's people in a room playing instruments synced up with the audio. And like, it's funny because in 2020, that's really nothing special. But at the time, nobody was really doing that kind of thing. Like, music videos looked like music videos. They looked like MTV. And to see like humans in their bedroom playing instruments and having it actually sound good was, you know, it was a little, it was different.

• 24:00Guy Raz?

  So that video blows up. And did you start to get contact? I mean, I should say that you were, I know you were on NPR around that time because I was the host of Weekend All Things Considered. And there was a weekend when I wasn't, I was like on vacation. And you guys, sadly, I wasn't able to interview you. But you guys were featured on the show. Did you guys get a lot of calls?

• 24:20Speaker 01

  We did. We, I mean, that was kind of the beginning of when Pomp and PLOD really started to take off. And, you know, we got calls from managers. We got calls from, you know, press. And, you know, that, when we came out with our second, like, big one, that kind of really took off, which was "Telephone" by Lady Gaga. You know, we had a, we released a record. And, you know, at the end of the month, we logged into our bank account. And like, we had sold 30,000 songs. And because we hadn't signed with a label, we owned all our own masters and therefore we owned all the royalties. So we logged in our bank account, had 22,000 bucks in it.

• 24:54Guy Raz?

  Wow.

• 24:54Speaker 01

  Which like coming out of college, like after selling-

• 24:56Guy Raz?

  That's just from iTunes. That's just people paying 99 cents for your song on iTunes.

• 24:59Speaker 01

  Just iTunes. 22,000 bucks in one month. And like, that was when I was like, oh my, like, I thought this, we can do it. Like this, this could be a thing.

• 25:09Guy Raz?

  And did, did you start to get record labels contacting you saying, hey, um, you guys interested in talking to us?

• 25:16Speaker 01

  We did. Yeah. We didn't get like hard offers from anybody, but we started to go down to LA and talk with them. And, um, and we, we basically decided not to do that, but we did, we did talk with them and entertain it. We just didn't want to go that route. I mean, you know, at that point, we're making a living.

• 25:35Speaker 01

  You know, when we started doing label conversations, we were making, you know, thousands and thousands of dollars per month. We were going on tour. We were, you know, reaching millions of people.

• 25:45Guy Raz?

  Where were you, we were performing in front of like big audiences?

• 25:48Speaker 01

  Yeah, 500 to a thousand people.

• 25:50Guy Raz?

  Wow.

• 25:50Speaker 01

  So, I mean, not like, you know, we're not playing Staples Center, but like-

• 25:54Guy Raz?

  That's still pretty great.

• 25:55Speaker 01

  Yeah. I mean, when I grew up, like I, I thought like, maybe one day I'll play for a hundred people. You know, like that was like, that would have been the coolest thing. And then here we are, playing these clubs. You know, for, like, we played Fillmore, you know, in, in San Francisco, which is 1,200 people. It was magic. It was the best thing ever.

• 26:12Guy Raz?

  Sam, while all this was happening with Jack and Natalie, you're grinding away in some tech job. And you're watching these guys become like massive YouTube stars. Was that, was like everyone from your, your year at Stanford, like people you knew, like talking about them? Like, oh my God, did you see Jack? Conti's like got this YouTube video. It's got 11 million views.

• 26:30Speaker 06

  I mean, yeah, the, I admired Jack, right? Like the, from my own personal experience, I loved art too. But I could never take on both that risk or even bridge the connection of how I could make that like a livelihood or a part of my life. And so seeing him be so successful down that path was, was so impressive. And I remember every time that we, we would catch up after college, I was just fascinated by what was going on in his life and how things were going on there.

• 26:58Guy Raz?

  Meantime, Sam, you had left, um, you had left your, the first startup you worked for and went on to found your own startup called Admiral. What, what was Admiral?

• 27:12Speaker 06

  Yeah, um, I mean, thinking back on it, a lot of this was was quite boring, but uh, uh, this was during the era when the iPhone was getting really popular and

• 27:22Guy Raz?

  Yep.

• 27:23Speaker 06

  a lot of, yeah, developers were creating their own games and whatnot. And in fact, uh, my co-founder and myself at that time were also making these iPhone games and applications. And there was a lot of good money in advertising in that, uh, I know we created like this virtual pet game that ended up gathering actually millions of users at the time. Uh, and we were seeing a few thousand dollars come through and just, uh, ads being clicked on. And so, uh, AdRoll was just an effective way for these mobile developers to monetize that.

• 27:53Guy Raz?

  So you, from what I've read, you guys basically start this business in early 2009, and by the end of the year, you're acquired by a different company. Is that, I mean, to me, that sounds like a great deal, but I can't even imagine you were up and running that, like, really, by that point, or were you?

• 28:13Speaker 06

  It happened pretty quickly, uh, like just the explosion of even interest in this space, I think. Like, there was a whole flood of developers who, it was almost like a gold rush in a lot of ways, uh, cause you had the iPhone and this new app store and anyone could start making games and get it distributed to millions of users. Um, and so when there was this interest in what we were doing, I think we were also caught off guard in some sense and then also immediately sold the company that same year.

• 28:44Guy Raz?

  Was, did you sell the company because it was just like an offer you couldn't refuse? Like, you were just offered all this money and you were just like, oh my God, we gotta take this?

• 28:51Speaker 06

  It wasn't all this money, but I think it was more than we had made, you know, independently previously than that. So the fact that it was a company that we knew to be very large in this space, it was a company called AdMob, and then literally the month afterwards, we were acquired into Google.

• 29:07Guy Raz?

  Yeah, AdMob was acquired for like $750 million by Google.

• 29:11Speaker 06

  Right, exactly.

• 29:12Guy Raz?

  And to be clear, that was not your money. You did not get $750 million from Google.

• 29:17Speaker 06

  No, we did not get 700. That would be okay if that happened. But we were part of AdMob at the time they were acquired. And so it felt like an appealing opportunity to be part of something that was going to win.

• 29:30Guy Raz?

  All right, so your business was acquired and you moved on. And you actually went to the incubator called Dogpatch Labs, where I guess your goal was presumably to come up with like a new idea.

• 29:43Speaker 06

  Yeah, I mean, I had a few different things. But at this point, I just wanted to start building again. So within those few years, I built a number of things. I think this was sort of enlightening for myself, too. In a lot of ways, I view those years as like the years of struggle. Because I was there at the incubator. I was working across the table from Kevin Systrom, who's building Instagram at that time. And we would come in. I remember actually having a bunch of chats with Mikey and Kevin about what they were thinking about with their business. And all of that's really exciting, I think, as you all feel like you're in this shared suffering together, until, you know, something like Instagram skyrockets. And then you realize that you're in a separate space.

• 30:27Guy Raz?

  No one's suffering. So, all right, so you're trying to come up with a bunch of different ideas. And when you say building things, like just you have an idea and you start to try and build it, like code it?

• 30:41Speaker 06

  Yeah, I would code, design, launch. And this was during the time, too, where TechRunch Disrupt was a thing. So you had this idea that if you got a business through and you could launch on stage, that would be making it. And so I had launched a business in that area. It was a company called Chompon, but we effectively allowed people to create their own Groupon. So it was a white labeling service. And it was interesting, like the whole group buying space was sort of a, coincidentally, a flash in the pan, too, in many ways, although Groupon is still around. And the takeaway for me was just how difficult and how much I should treasure if I ever had the good fortune of landing on a business

• 31:24Speaker 06

  that really resonated with like a community or a group of people. And so most of that, my years during this time, was, as I recall, just full of a lot of loneliness and development by myself in my bedroom.

• 31:41Guy Raz?

  I want to go back to Jack for a moment. So, Jack, just like, I'm trying to understand, while Sam is working in the startup space, you, I mean, you're making music with Pomplamoose, right?

• 31:52Speaker 01

  Yeah.

• 31:53Guy Raz?

  And, and at your peak, I'm just curious, how, like, how much money were you guys making?

• 31:58Speaker 01

  We did about $400,000 in a year off of MP3 sales, basically.

• 32:03Guy Raz?

  Wow.

• 32:03Speaker 01

  And it was, I think that that year in particular, I think it was 2010, most of it was singles, a lot of it was licensing and, and brand deals. And we had a, we had a lawyer that we had brought on very early on, who was, you know, helping us negotiate these deals and work with, you know, work with brands. And we're very, you know, we're, we're both like music nerds and, and artists, but, but we absolutely were thinking about like, turning this into a, you know, sustainable thing. And so we ended up buying a house and we built a recording studio. We used the money to, to build a, a recording studio on the property. And, and then that became kind of like the home base for Pomplamoose for the next few years.

• 32:45Guy Raz?

  I mean, you guys were doing really well, and I, presumably, a lot of that money is, was coming in from iTunes sales. But then I guess, like, around, what, 2010, 2011, Spotify comes along and, and of course, with Spotify, you can stream an unlimited amount of music for free. So what did that do for, for your revenue?

• 33:10Speaker 01

  Yeah, the transition to streaming was really hard on the band. Our streaming revenue was, you know, a, a tiny, tiny fraction of the iTunes revenue, where people are, you know, paying a buck for a song, you know, with a stream, you get, you know, fractions of a penny for one stream. And it just, it wasn't, it wasn't one for one, because the, you know, the, the user base wasn't there on Spotify yet. So we just, it wasn't, the volume wasn't making up for it. And so, you know, the, the, the income started to evaporate, which was very scary, because now, at this point, we had a mortgage.

• 33:44Guy Raz?

  So around that time, like 2011, you know, 2012, how were you making a living?

• 33:51Speaker 01

  Well, what was bizarre about it was, you know, our reach hadn't changed.

• 33:58Guy Raz?

  The reach of your YouTube audience and so on?

• 34:01Speaker 01

  Yeah, like, we were growing. We were getting millions and millions of views and more views. And then, you know, enter Spotify and suddenly, suddenly we're like up a creek in terms of revenue. And what was amazing to me, that, you know, I was watching this unfold over a period of, you know, a couple of years. What blew my mind was like, wait a minute, I'm not doing anything differently as an artist. There is a system changing in front of me with, that I'm not in control of. It's just these changing systems. And my artistry is yielding different results, you know, with regard to my income. And that was like, very frustrating to watch. And I, look, I know businesses have to kind of like pivot and change and be innovative.

• 34:45Speaker 01

  And yet I found myself like having to do all this gymnastics, you know, to keep up with the revenue streams. So I was, you know, selling hats and, and t-shirts and we were selling dongles.

• 34:56Guy Raz?

  Like on a website?

• 34:57Speaker 01

  Yeah. And, and like, and then we would, you know, play some shows and I remember like the whole time I was thinking like, is my value to the world like a hat with a logo on it? Like, that's not what I'm good at. That feels.

• 35:08Guy Raz?

  It was merch. You were just selling merch at concerts and stuff.

• 35:10Speaker 01

  Yeah. And, and that, and I didn't, it bugged me that we had to do that because I felt like that's not what makes me special. I just wanted to be paid for, like, I loved iTunes because I could like be paid for my music, which is what, and I was, yeah, that, so.

• 35:24Guy Raz?

  Yeah.

• 35:24Speaker 01

  It was just one of those moments where we kind of realized that everything was changing and that, you know, three or four years from now would be completely different.

• 35:31Guy Raz?

  Meantime, what is Natalie doing? I mean, are you guys, you're still living together. You've got this house. And a mortgage and are you earning enough money to at least pay your bills?

• 35:40Speaker 01

  Yes, we are. But we're also watching, it's coming a lot out of savings, right?

• 35:46Guy Raz?

  So you're not, revenue is not increasing?

• 35:48Speaker 01

  At that point, no, revenue was not increasing. Revenue was decreasing at that point. So, so it was coming out of savings. But our, our roommate, who was living at the house, did this.

• 36:00Speaker 01

  Amazing thing. And she was gonna make an album. And she went on to this new website called Kickstarter and did a 30 day thing. We had never heard of it. And I remember the night that she turned her computer around at the dinner table and showed us, I think she had made $12,000 or $13,000.

• 36:24Guy Raz?

  To make the record.

• 36:25Speaker 01

  To make the record.

• 36:26Guy Raz?

  And that really was what Kickstarter was started out for.

• 36:29Speaker 01

  Yeah.

• 36:29Guy Raz?

  Started for artists. I mean, we had Perry on the show a couple of years ago, Perry Chin. That was the point of Kickstarter. It was to help artists make music or records or whatever it was.

• 36:38Speaker 01

  Yep. And she did that. And she got 13,000 bucks and got a studio and got a mixing engineer and made a record. And what was so cool about it to me was it was her fans. Her fans stepped up and wanted the record and paid her to make the record. And I've just, that just felt right and felt awesome.

• 37:02Guy Raz?

  So I know that you and Natalie did, did some solo projects in addition to the work you did with Pomplamoose. And, and I guess at some point she decides to do a Kickstarter too, right? To, to raise money for her music.

• 37:15Speaker 01

  Yeah. And that, she ended up raising $104,000.

• 37:21Guy Raz?

  Wow. How did she reach that many people?

• 37:24Speaker 01

  Because Pomplamoose had hundreds of thousands of subscribers and we were getting millions of views. And so she-

• 37:30Guy Raz?

  But how did you drive those viewers to the Kickstarter?

• 37:33Speaker 01

  They just uploaded a YouTube video. Hey, everybody, I'm doing a Kickstarter. People went bananas. Like, yeah, over 100,000 bucks.

• 37:39Guy Raz?

  Hundred and four, to make a record.

• 37:41Speaker 01

  To make a record.

• 37:41Guy Raz?

  So, so you're thinking, wow. Your mind's blown there.

• 37:46Speaker 01

  I, I couldn't, I was so happy for her. It was so awesome.

• 37:50Guy Raz?

  And meantime, you're working on, on your own solo music too. And I guess you got interested in EDM and that sort of genre. And I guess you eventually wrote a track that you were really proud of and you wanted to make a video out of it. And this was a track called Pedals.

• 38:07Speaker 01

  Yeah, it was kind of daft punky, like technologic. You know, and I was, I was listing out all of my guitar pedals. That was the lyric, the only lyric in the song was just a list of all the pedals that I used to, to process guitar sounds.

• 38:22Guy Raz?

  Like the brands or the types?

• 38:24Speaker 01

  The make, the models and the makes. So like, the first lyric is hog, pog, vox, wah, octave multiplexer, big man, memory muff, boss chromatic tuner. It was just like a list.

• 38:36Guy Raz?

  Yeah, I like that.

• 38:37Speaker 01

  Just like a list of pedals, yeah.

• 38:46Guy Raz?

  I'm, I'm watching this video right now and you're like, you're like aggressive in this video. You're like really aggressively playing that guitar.

• 38:56Speaker 01

  Yeah, I mean.

• 38:56Guy Raz?

  You look a little scary. Like if my kids saw you, they'd be a little scared of you, Jack.

• 39:01Speaker 01

  Yeah, I'm raging. Yeah, that's what music's about.

• 39:04Guy Raz?

  I should mention to people who aren't familiar with it, there are robots in the video, there's a conveyor belt of, you know, guitar pedals passing by, there's other robots, there's a spider robot, it's like in this kind of laboratory of robots. I imagine this is going to cost you quite a bit of money.

• 39:22Speaker 01

  It ended up costing 10 grand. I didn't know that when I went into, if I had known that, I wouldn't have done it. But I didn't have a budget, I wasn't being strategic. I, at the time, I thought like, if I go deep on the business side, I'm not going to do it. Like, I, because I'll be staring at numbers that don't make sense. And so I'm going to just leave all that behind and I'm just going to do something crazy and creative. And so I decided not to budget, not to think about that and not to deal with any of the kind of constraints there. And so I ended up just spending like, you know, a hundred bucks a day at Home Depot, you know, building the set and building rotating elevators and.

• 39:59Guy Raz?

  Where did you build the set?

• 40:00Speaker 01

  In the studio that Natalie and I had built on the property. And like, I had to, like, I was not a carpenter. So I was like, trying to learn how to frame a wall and like, you know, I was, I had to figure out how to cut wood at angles. I got a miter saw. Like, I was just, I was flailing. I mean, this thing, like, you know, I was just trying to, trying to go and make it. But I was enjoying, like, it was really fun. It was just, you know, I was trying to do it little by little, you know?

• 40:27Guy Raz?

  Did you decide, like, all right, if I'm gonna make this, I'm gonna do this Kickstarter thing. I'm gonna put up a video and, and ask people to contribute to, to my, my project?

• 40:36Speaker 01

  I, I was considering it. The problem with that was, I didn't wanna kind of, you know, the, the sort of, the Kickstarter conceit was like, I'm going to do this big one thing, and I need a bunch of money to pay for it. And that's not, I didn't wanna do that. And I, I didn't, I didn't wanna really force fit it like that.

• 40:54Guy Raz?

  You weren't thinking of this as a one-off. You were thinking, like, I need to steady, like, money to make projects, to do projects.

• 41:03Speaker 01

  Yeah.

• 41:03Guy Raz?

  So how are you gonna do it?

• 41:05Speaker 01

  That was the part of me that decided to not think of, think about that.

• 41:11Speaker 01

  And, and it was terrifying. It was. I, I remember being pretty scared about that. And I also thought, like, look, if I start being logical about this, I'm never gonna make something that's great. It wasn't until about February.

• 41:27Guy Raz?

  Of 2013.

• 41:28Speaker 01

  Of 2013, that I kind of, it almost felt like waking up after a dream. And, and, you know, watching my savings account go down basically to zero, and then maxing out a couple of credit cards, and then feeling like I was almost like, coming out of a dream or something. Wake, yeah, I felt like I was waking up. I was like, suddenly very terrified about like, what was on the other side. And I, the thought that I had in my mind was, I'm gonna upload this video to YouTube. It's gonna get a million views. And I knew that that video would bring in maybe, you know, a hundred bucks.

• 42:08Guy Raz?

  From YouTube ads?

• 42:08Speaker 01

  Yeah. And I actually got like sick. I got like nauseated thinking about like all of this work and energy and time.

• 42:18Guy Raz?

  Yeah.

• 42:19Speaker 01

  The robots, the set, the credit cards, the draining of the savings account, like all of that adding up and thinking like, I'm gonna put this thing out and I'm gonna get paid a hundred dollars. And I was angry, but I was also like, I couldn't believe that that was, that we were all just, that humans were just okay with this. That like, this is the, this is the system that we've designed for artists. Like, yeah, you put up your, your thing that you spend your life on, and then you get paid a hundred dollars in ad revenue, and then you put up your next thing. And I remember like, thinking about, what the hell was going on? Where all these people who make things and put them online, the

• 43:03Speaker 01

  economics of that failed to evolve with the distribution technology. So like, the distribution happened first, and the economic systems to support that didn't keep up. And so we were in this horrible phase where essentially artists are working for free.

• 43:23Guy Raz?

  So what did you start to think about? I mean, this is February of 2013, and you're clearly, like, gears are turning in your head. And what do you, I mean, is there an idea starting to form in your mind about how to solve this?

• 43:37Speaker 01

  Yeah. I sat down at my kitchen table on a Sunday afternoon, and I, and what I was thinking about was like, I like Kickstarter, but I want, I want to be paid every month because I need income. Because I make stuff every month that's valuable to other people. And at the same time, you know, I was seeing other websites start to accept, you know, like, membership organizations, not necessarily websites, but like, membership organizations like SFMOMA, or, you know, KQED would do these pledge drives. And it happened, it wasn't, you know, you could, you had the option in many of those cases to set up a monthly payment.

• 44:18Speaker 01

  And so I was like, great. Like, I just want essentially that system.

• 44:23Guy Raz?

  A pledge drive, like a pledge drive.

• 44:24Speaker 01

  Yeah, exactly. And so I sketched out this like website so that my fans can do this. And then, you know, of course, I was also looking at all these other YouTubers going through the same thing and podcasters and and news and everybody, anybody who makes stuff and puts it online was going through the same thing. I was like, oh, this should just be a, this should be a thing like Kickstarter where anybody can set it up for themselves.

• 44:47Guy Raz?

  Right.

• 44:48Speaker 01

  And so, yeah, I sketched out.

• 44:49Guy Raz?

  You physically sketched out like what the website would look like on paper?

• 44:53Speaker 01

  I took out 14 pieces of printer paper for my printer, actually probably more than that because I didn't know it would be 14 pages. But it ended up being about 14 pages. And essentially, it was a recurring payment between a fan and a creator. And yeah, there was a whole, you know, there's like a content feed and like a, you know, login page and a homepage and the whole thing. It was, it was, I am a terrible designer. And so, you know, looking back.

• 45:20Speaker 06

  I remember these, these pages fondly.

• 45:22Speaker 01

  I mean, it was the worst. It sucked. Yeah, there's no way I could have done that by myself. And so that's when I started like calling various people to see if they could build this for me.

• 45:31Guy Raz?

  Including your former roommate, Sam.

• 45:33Speaker 01

  Yeah, I called him up and I was like, so Sam, I've got this idea. And I'm really excited about it, but I don't, I don't want to tell you, like, do we need to sign an NDA or something?

• 45:43Guy Raz?

  Because you thought, my idea is so good.

• 45:45Speaker 01

  Yeah.

• 45:45Guy Raz?

  I cannot talk to people about this because they're going to steal it from me.

• 45:49Speaker 06

  I remember this too, because this was like over the phone, right? And you didn't tell me the idea over the phone. So from my perspective, I was again, as I know before, I was just excited to catch up with you, Jack. Like every time it was like, oh, I get to meet this celebrity who's, who's just crushing it out on YouTube. So when we had arranged for the meeting, I wasn't so much in the sort of mentality that there would be this amazing idea. And, and this is what I would be dedicated to. I was more like, I'm curious what you're thinking about and what you're up to, Jack.

• 46:17Speaker 01

  Yeah. But wait, but Sam, Sam was like, Jack, nobody cares about your idea. Don't, he was like, we don't need to do an NDA. Nobody cares. Ideas are trash. Ideas are worthless. Like, we don't need to do that. And I was like, oh, okay.

• 46:31Guy Raz?

  He's saying to you what you now know, which is ideas are a dime a dozen. It doesn't mean it's easy to find a good idea. It's not, but they are, it's execution that matters.

• 46:40Speaker 01

  It is only execution. Yeah. There are so many versions of Patreon that, that did not work and they were the same idea.

• 46:47Guy Raz?

  All right, so you go to San Francisco to meet. And you and the idea that you had, Jack, was it to convince Sam to help you with this? Or was it just to kind of bounce the idea off of him?

• 46:59Speaker 01

  Oh, I wanted Sam to build it. I was in like hardcore pitch mode because other people had told me no or just didn't seem interested.

• 47:07Guy Raz?

  Yeah.

• 47:07Speaker 01

  Yeah, I wanted Sam to do it. And he would, he had just, he was right about to launch this new project and he had gotten a TechCrunch article and he was, it was about to come out. So he said like, hey, I can't meet till Thursday because I'm launching this.

• 47:20Guy Raz?

  Wow. What were you launching, Sam?

• 47:22Speaker 06

  This was a photography site that I was working on.

• 47:24Guy Raz?

  This is like your fifth or sixth startup.

• 47:27Speaker 06

  Yeah, I don't know if you can call them all startups, but a new project that I was interested in. And so I was like, hey, Jack, you know, I'm just busy. Maybe we can meet when this article finally comes out because I'll have launched it by that point. And that's what we set the target date for. So I had gone up there, again, just expecting mainly to catch up with Jack. And maybe you said to like, yeah, get some feedback on the idea. That's how you pitched it initially because I remember being surprised when the switch went off and you started selling me on this and you were, you were really good, Jack. I do recall like you just talking about the, both the problem that you and other artists were dealing with today. And especially, you know, that resonated for me because I had seen how successful you had been

• 48:12Speaker 06

  as an artist. I assumed you were already like, you know, dancing away on your yacht, doing fine. So this is, this is really interesting, hearing this from you.

• 48:21Guy Raz?

  And what would he, what do you remember him telling you about it? So you convinced him not to sign, that you didn't have to sign an NDA.

• 48:27Speaker 06

  No, you didn't bring an NDA, did you, Jack? I didn't see one, I remember.

• 48:30Guy Raz?

  No NDA, all right. Yeah, I mean, this is your roommate, Jack. This is the guy you've lived with for three years.

• 48:35Speaker 01

  I know, so much hubris. I'm like so ashamed of that.

• 48:38Guy Raz?

  He's gonna steal this from you?

• 48:39Speaker 01

  I know, it's so dumb.

• 48:41Guy Raz?

  All right, so you are sitting in this coffee house. And what does he say to you, Sam? What is, how does he describe it?

• 48:47Speaker 06

  Yeah, so the things that came together for me, and now we're looking at about almost eight years ago, but like, it's kind of how Jack mentioned that Kickstarter was a Thing already and and there are a lot of campaigns that were really successful on Kickstarter. But what resonated here was the idea that uh you were helping to support the individual versus a particular project. And for me, the reason that that resonated, well, first, as someone who cared a lot about art in my past, but could never make it a career. I followed a lot of these people on on YouTube. Um, there were folks at this time that were relatively big. One in particular, I remember that I talked to Jack about uh Kena Granis, who sort of wrote very personal music.

• 49:29Speaker 06

  Um, and and very simple music. And I remember thinking in my head as Jack was pitching this. I would totally just give her money. I would just open my wallet and and give her whatever on an ongoing basis if it allowed her to keep producing her work. And I could just see this emotion um being shared by all these other YouTube audience members. And so that's the idea clicked for me as soon as Jack pitched this to me. Uh, Jack, Jack remembers this too. The the day of, I'm like, we're starting this now and don't tell anyone else about this idea. Don't.

• 50:00Guy Raz?

  So you're saying to him, now make everybody sign an NDA.

• 50:03Speaker 06

  No, no, don't even sign an NDA. Just just keep this to ourselves. This is it. We're gonna do it.

• 50:08Guy Raz?

  We're gonna go dark. We're going dark.

• 50:10Speaker 01

  So I'm staring at the email right now that I sent Sam on March 10th. I just pulled it up, March 10th, 2013. And it's just kind of like a summary of our agreement. And uh, I think that's kind of what I thought it was gonna be. Um, like here's what I'm like, I'll just read one sentence of this. You agree to be, so we're talking about the agreement. Here's what I'm agreeing to. Here's what you're agreeing to. And um, and one of the lines is like, you agree to be co-founder and CTO of Patreon. You agree to build and maintain the site as it is laid out in the wireframes. You will work on all technical and program uh and programming oriented aspects of the company.

• 50:47Speaker 06

  Did you pass this by a lawyer, Jack, or was this just, this was your legalese?

• 50:50Speaker 01

  No, I just was writing you an email. Yeah, I was just like.

• 50:54Guy Raz?

  And and did you guys have a conversation about how you would split the company? Did you say, was it just gonna be 50 50?

• 51:00Speaker 01

  Yeah, it's it's uh, it's in this email. Uh, we agreed to become 50 50 partners in Patreon.

• 51:05Guy Raz?

  So, I mean, win win, right? Because um, I mean, you get a technical co-founder. And Sam, you get this guy who has kind of a pretty big platform already.

• 51:15Speaker 06

  Absolutely, yeah. I was stoked.

• 51:18Speaker 01

  And a friend.

• 51:19Speaker 06

  I think, yeah, that email, which I did read through. I think I just wrote back to you, Jack. What is it, all caps or something?

• 51:26Speaker 01

  So I wrote this like long email at the end. I said, like, I know I said this before, but I just want to stress how important it is that we communicate with each other about all aspects of the business and our relationship. As long as we're not hiding anything from each other, as long as we're telling each other something's wrong, we are greatly reducing the chance of hurting our friendship. I want you to feel 100% OK with talking to me about your, like, the company finances, your interests in the company, your ideas, your feelings, anything you like. This will lead to a strong partnership.

• 51:50Guy Raz?

  That's nice.

• 51:51Speaker 01

  I mean, it's basically like, hey, we're going to, we put our friendship, you know, first here.

• 51:56Guy Raz?

  Yeah.

• 51:56Speaker 01

  You know, it was like this, I thought it was kind of a nice thing. And then Sam writes back, all caps, "Awesome. I agree to all of this. OK, let's go."

• 52:07Guy Raz?

  When we come back in just a moment, how Patreon launched with just three musicians. One of them was Jack and one was Natalie. And then why slowly other artists started to get on board, first by the dozens and then by the thousands. Stay with us. I'm Guy Raz and you're listening to How I Built This from NPR.

• 52:46Guy Raz?

  Hey, welcome back to How I Built This from NPR. I'm Guy Raz. So it's March of 2013, and Jack Conti and his former college roommate, Sam Yam, have decided to launch a new crowdfunding site that will let fans pay a few dollars a month to sustain their favorite budding musicians, podcasters, writers, and artists. And Sam is so excited about Jack's idea that literally the very day they have that first meeting in San Francisco, Sam goes home to work on the coding.

• 53:20Speaker 06

  I started working probably more passionately than ever on any other project. For me, it felt like a race and I was just, I even had this fear, I remember, that if we didn't move fast on this, someone else was going to do it and we were going to regret that.

• 53:36Guy Raz?

  And for people who don't understand how coding works, like, what's the first step? Like, I mean, it's essentially, it's like, if it's like a bunch of Lego bricks, you start to build the base level of the building?

• 53:49Speaker 06

  Yeah. Coding is what you do at some point, but what you're really putting together are a whole bunch of like designs and photo shops and thinking through the psychology of like why a user would do this and that. And so I think the way, at least I approached this particular project, was sort of laying out all the main journeys of users and then painstakingly moving pixels around to get it to a level where you felt, okay, this is an experience that I think is going to work.

• 54:22Guy Raz?

  And it wasn't going to cost a lot of money to get it off the ground?

• 54:25Speaker 06

  No, I mean, I had launched a number of projects before. It was probably going to be a few hundred to $1,000 and I think we were splitting. I think it was in that email too.

• 54:34Guy Raz?

  A few hundred dollars to a thousand, a few thousand dollars, you're saying?

• 54:37Speaker 06

  Yeah.

• 54:38Guy Raz?

  That was it?

• 54:38Speaker 06

  Yeah.

• 54:39Guy Raz?

  Why was it so cheap? Is it because, is it because normally the biggest fees would go towards a software engineer and Sam, you were basically the software engineer?

• 54:48Speaker 06

  I think this was the case. You know, I grew up in the area with startups where you had to rent hardware and set up your servers and co-locations. But by this point, several years after that, you could launch an entire service off in the cloud. And that began with, you know, the Facebook

• 55:05Guy Raz?

  Yeah.

• 55:05Speaker 06

  Yeah, apps and iPhone apps. And so by this era, you could launch very cheaply and then sort of scale up as needed. And for us, you know, our, the dreamland that I had in mind around what we were going to do was Jack obviously had a huge plan to launch to his whole audience. And on top of that, he had this whole network of artists and creators. And we were going to be launching on day one with just millions of fans and artists talking about how you could support them on Patreon. And so I wasn't even thinking about how we needed money.

• 55:40Guy Raz?

  And that was through, that would be Jack through the Pomplamoose YouTube channel, essentially?

• 55:46Speaker 01

  Yeah. In other words, we were gonna, we were gonna, not Pomplamoose, it was gonna be my personal YouTube channel, which was, you know, where I was uploading all that electronic stuff. And so I was, I, yeah, the plan was like, I'll put up a YouTube video on my YouTube channel, send my fans over to Patreon, and that's kind of how we'll start. We also, you know, I did want to launch with a bunch of other artists, as Sam mentioned. So we, we made a list of like 40, 40 or so creators-

• 56:14Guy Raz?

  That you knew.

• 56:15Speaker 01

  To call up.

• 56:16Guy Raz?

  These are not like world famous creators, right? These are just people who have like pretty strong local, small followings.

• 56:22Speaker 01

  Folks who I thought like, hey, you're in the same boat that I'm in right now. And let's like, let's do this. Let's, like, I think this could be valuable to you. And so, yeah, we made an Excel spreadsheet with those folks and I found their contact info and reached out to all 40 of them. And, and all 40 of them said no.

• 56:43Guy Raz?

  All 40 of them said no?

• 56:45Speaker 01

  All 40 of them said no.

• 56:46Guy Raz?

  They were like, no, I don't feel comfortable asking people to pay me money.

• 56:49Speaker 01

  Crickets, yeah.

• 56:50Guy Raz?

  Were you surprised?

• 56:51Speaker 01

  I was surprised, but I wasn't, I didn't think it mattered. I thought like, well, let's do it anyway and people will come around, they'll, they'll come around to this. So I wasn't, I wasn't like bummed about it. I just, I thought, okay, let's, let's do it ourselves. Let's launch with me. And, and my roommate also wanted to launch. Lauren O'Connell was one of the first three creators on Patreon. And Natalie wanted to launch too. So the three of us, yeah, my girlfriend at the time. So we, we launched with just the three of us on day one of Patreon.

• 57:24Guy Raz?

  And, and the idea was you would take this, this video for Pedals, this song that you're working on, and that's where you would premiere it. You would premiere this video on YouTube or whatever, get people to- To go to Patreon and support this video?

• 57:40Speaker 01

  Yeah, I, at the end of the Petals video, I put a vlog where I told people about the idea. And I said, hey, I'm building this new thing and I don't think it's just gonna help me. I think it could help a lot of people. And check it out and let me know what you think. And if you're, if you're up for it, join me on this, on this journey here.

• 58:03Guy Raz?

  So from the time that you guys met on March 6, 2013, to the time you launched, how long was that?

• 58:09Speaker 06

  We launched in May, I think, Jack.

• 58:11Guy Raz?

  In May, wow. So really quickly.

• 58:14Speaker 06

  Yeah, we didn't have all the pieces there when we launched, but we had.

• 58:19Guy Raz?

  It was good enough.

• 58:19Speaker 06

  We had enough, yeah. We couldn't, for example, we couldn't process all the payments at that time yet. I hadn't hooked any of that up. We could accept your credit card. And so that would get saved, you know, very securely, by the way, because we were working at Stripe. But we hadn't built any of the logic to actually handle the, the processing of the funds.

• 58:39Guy Raz?

  And, and what did you ask for, Jack? In, in the video, you said, hey, whatever you can do just to, to fund my work, please contribute.

• 58:48Speaker 01

  I think I had four tiers.

• 58:50Guy Raz?

  Yeah.

• 58:51Speaker 01

  A dollar, $5, $10. And then the night before, I thought, screw it, I gotta put up a hundred dollar tier. No one's gonna buy it, but I'll just do that. Where you can kind of do a one-on-one Skype session with me and I'll hang out with you. And a bunch of people signed up for the hundred dollar tier. A bunch of people signed up for the five and the $10 tier. The average payment per patron was around seven bucks, which that really blew my mind. I was thinking, maybe people will give me a dollar for YouTube videos. But the fact that on average, people would give me seven bucks, I, yeah, I couldn't believe that.

• 59:27Guy Raz?

  And what was the, like, what did you offer people? If you gave a dollar a month, you would have access to what? If you gave $5, if you gave 10, if you gave 100, what, what'd you get?

• 59:36Speaker 01

  So at $1, you got access to my patron-only stream. You got first dibs on concert tickets. At $3, you got access to my patron-only stream, first concert, first dibs on concert tickets and video tutorials about audio production. I would just make these little extra tutorials and give folks access to them. And then $10 was a, a Google Hangout once a month with me and all $10 patrons. And then the $100 was the Skype sessions.

• 1:00:04Guy Raz?

  So how much did you get fans to commit to paying you per month?

• 1:00:08Speaker 01

  Within the first couple of weeks, I passed $5,000 a month.

• 1:00:12Guy Raz?

  Wow.

• 1:00:13Speaker 01

  And then soon after that, it was, yeah, it was even more. And at the time, I was making maybe two videos a month. So, you know, suddenly, like very suddenly, within two months, I went from draining my savings account to making over $100,000 a year for my solo career.

• 1:00:27Guy Raz?

  And Jack, did you envision continuing your career as a musician and, you know, continuing making music and building your fan base in addition to doing this? Or were you not quite, was it not quite fully thought through yet?

• 1:00:42Speaker 01

  It was not strategic.

• 1:00:46Speaker 01

  There wasn't a five-year plan. There wasn't a strategy deck. It was just solving a problem. And so I don't know that I, that I had a clear vision about how the next year was going to go. I knew that we needed to build this thing. I knew that it was going to be a way that artists could make money. I did think it could scale and help a lot of folks. I didn't know how much work that was going to be.

• 1:01:12Guy Raz?

  When you had, you know, you reached out to 40 people to sign up and all of a sudden, no. And it's just you, your roommate and your girlfriend, who are the only people on the site. How did you attract other people?

• 1:01:24Speaker 01

  When we launched, and this is how Patreon ended up growing. When we launched, I went on to my YouTube channel. I told all my fans about Patreon. And I said, hey, go to this website. And of course, creators follow creators. So some of the people who watched my video were creators themselves. And when they landed on my Patreon page and they saw this random middle-of-the-road YouTuber making six figures, they had that same mind-blow moment that I had had two years before when Lauren launched her Kickstarter. And they saw a new revenue model for professional creativity. And then those folks launched on Patreon and then they did the same thing. They went on to YouTube and they went on to their podcasts and they went on to, you know, they wrote on their websites. And then that cycle just repeated.

• 1:02:09Speaker 01

  And that's actually responsible for most of Patreon's growth is that viral product cycle.

• 1:02:13Guy Raz?

  And was the business model that you had kind of set in stone from the get-go? Because initially, I think it was like, You would take, Patreon would take 10%, so 5% platform fee and then 5% of payment processing fee. And did you kind of do the math and the financial projections and kind of come to the conclusion that that was the best way for you guys to reach profitability?

• 1:02:37Speaker 06

  Jack, did we do the math?

• 1:02:42Speaker 01

  No, there was zero projections. There was zero.

• 1:02:46Guy Raz?

  No spreadsheets?

• 1:02:47Speaker 01

  No spreadsheets, no math. There was, yeah, there was, there was none of that. I mean, again, it's just very different than it is now. Now it's a, you know, now we have, you know, FPNA and finance teams and we're forecasting out multiple years.

• 1:03:01Guy Raz?

  Right.

• 1:03:01Speaker 01

  But that's, yeah, back then, no, we didn't have any of that. We didn't think about any of that. We were just making this thing.

• 1:03:08Speaker 06

  Our first pitch deck, which I don't even believe we had anymore because I remember building it on a webpage, just had all these emails that we had received from artists and fans about how exciting the idea was. So we weren't really thinking about like the, all the viability of the business at that point still.

• 1:03:25Guy Raz?

  And then I guess a month after you guys launch, you decide, all right, now let's go get some money. And Sam, you had already been through this process. You had already, you'd been through the process of raising some money for your previous startup.

• 1:03:39Speaker 06

  Yeah, I actually was pretty optimistic and excited about this fundraising process. Again, this came back from the emails and the feedback and the creators and the fans in a way that, again, several years of me trying to build things had never seen this sort of passion around a movement or an idea. And so, you know, at the time, again, I'm naive, even looking back, it felt like in the bag. And so we started off and we started pitching to investors.

• 1:04:07Guy Raz?

  And how much money were you guys able to raise for the first round?

• 1:04:10Speaker 01

  At the time, the, I think at that round, the company was valued at 6 million. And so we ended up raising, that first round ended up being 2.1 million at a 6 million valuation. So it was, you know, about a third.

• 1:04:24Guy Raz?

  Right. And, because, you know, this is an important conversation to have because a lot of entrepreneurs listen to this show and we've had founders on the show who've said, biggest mistake of my life. You know, Tristan Walker will say, I should never have raised money. Other founders said, who say, "It was so important, so glad I did it. I got support and guidance, and I couldn't have built this without going to venture capitalists and taking the money." Was it absolutely necessary? Could you have done Patreon without raising money?

• 1:04:52Speaker 06

  I don't believe so, Jack. I think we needed that team in the early days as we were building it out. Plus, I think the partners that we ended up working with were very much aligned with the spirit of our mission. And we haven't talked a lot about that, but at the time, this idea that we were trying to get artists and creators paid, that ended up filtering out a bunch of various investors who just didn't even want to touch the space of music or art in particular.

• 1:05:21Speaker 01

  Yeah, I think it was really important. I don't think Patreon, not I don't think, Patreon would not have gotten close to where it is today without that. I mean, even from that first day, Patreon started growing a lot. And, you know, we needed to hire people to answer emails and help build features and scale the company. And we would not have been able to afford that without raising money.

• 1:05:50Guy Raz?

  All right. So you guys raised $2.1 million. And what do you do with that? Do you get an office? Do you get, do you start hiring people? What do you start doing with it?

• 1:05:59Speaker 01

  The first-

• 1:05:59Speaker 06

  You became roommates again.

• 1:06:00Guy Raz?

  Oh, really?

• 1:06:03Speaker 06

  Yeah, we got a home office in Noi.

• 1:06:05Guy Raz?

  In San Francisco.

• 1:06:06Speaker 01

  We got an office in Noi Valley. Yeah, it was a two-bedroom apartment. And we moved in together. And at that point, we hired Tyler Palmer, who was the first employee. And he hired a couple of folks, Cole and Tony, who started building out the, basically, like the artist relations and the marketing and the operations, customer service side of the business.

• 1:06:30Speaker 06

  Yeah, it was just our bedrooms. And then it was attached, yeah, out into the kitchen where we set up a few desks. And they would come in every day, and Jack and I would wake up and walk out into the office.

• 1:06:40Guy Raz?

  So initially, the first, I don't know, I mean, you're getting more and more people to sign up. But from what I understand, like, even with the 10% fee, the processing and platform fees, it wasn't covering your costs.

• 1:06:55Speaker 06

  Yeah, no, I mean, we were not profitable. I mean, 5% of the 10%, by the way, wasn't, didn't go to us, right?

• 1:07:02Guy Raz?

  For you guys.

• 1:07:03Speaker 06

  Yeah, it was for the payment.

• 1:07:04Guy Raz?

  Pay, Stripe, and whoever was, yeah.

• 1:07:05Speaker 06

  Exactly.

• 1:07:06Guy Raz?

  So the 5% going to you guys wasn't much.

• 1:07:10Speaker 01

  Not a lot, yeah, which is, again, we, because we had that business model with a really low percentage, which, which came from this idea of not wanting to be another wedge between creators and their fans, right? So we wanted to, to have a low rake. And so, yeah, even, you know, when the company was processing 100,000 bucks, that's only five grand for the company.

• 1:07:35Guy Raz?

  So, I mean, how, I mean, because you had a runway, $2.1 million, and that was going to run out eventually. How long did that last you before you had to go back out and raise more money?

• 1:07:48Speaker 06

  We were cheap. I mean, again, even after we fundraised, Jack didn't take any salary. Actually, I don't think I took any salary on the first round either until, until after our second round. And we, we didn't spend much. That's why we rented a home as opposed to an actual office. So we didn't end up running out of that money. We had more than, I think, a year of runway left as we saw the business ramping up and then went on to raise, I guess, a much more serious, a series A round.

• 1:08:18Guy Raz?

  That was in 2014?

• 1:08:21Speaker 01

  In 20, yeah, 2014, we raised the, the $15 million round.

• 1:08:25Guy Raz?

  Meanwhile, Jack, you are the CEO of the company. And I'm curious how you kind of figured out how to do that job. And because you were, I mean, you're a musician and you've got this part of you that I'm assuming you really want to pursue. Like, how did you, first of all, at what point did you be able to say, okay, I can't, I actually cannot pursue music full time? Like, I can't, like, I, I kind of have to make this a side gig?

• 1:08:55Speaker 01

  So first of all, it was a slow process. I think the desire to not take salary really came from a place of wanting to be a creator and wanting to continue to make art and videos and music. And a couple of years into the company, it became very clear that...

• 1:09:19Speaker 01

  I needed it to be my full-time focus, which was a really, really painful, tough thing. Because not only was this for me, not only did this decision affect me, but my wife. You know, we were partners in crime on this rock band that was kicking ass and getting millions of views and touring around the United States for big rooms. And like, we were living the dream as creators. And not only was I abandoning my career, I was abandoning her by choosing to focus on Patreon. And the moment where I basically stopped working on Pomplamoose

• 1:10:02Speaker 01

  and took a salary as CEO, that was a tough moment because I felt, I was one of those kids in my twenties who was like, I am not going to be an artist in my twenties and grow up to be a businessperson in my thirties. That is not the kind of person that I am. I'm going to stay an artist in my life. And then I found myself running a business.

• 1:10:23Guy Raz?

  Yeah. And so when you were, I mean, like, a year into this, you had no kind of, no standards, right? Like, you didn't have, you know, any particular rules around who could join. What happened in 2014 that changed that? That kind of was like a shot in the arm? I mean, where you guys were like, wait a minute, we need to have some kind of standards here.

• 1:10:53Speaker 01

  The thing that caused the debate was a website called 8chan that launched on Patreon.

• 1:11:02Guy Raz?

  Yeah.

• 1:11:03Speaker 01

  And they were using Patreon to fund the development of the site.

• 1:11:09Guy Raz?

  And you started to look at the site and you saw crazy, crazy stuff.

• 1:11:14Speaker 01

  Yeah, I mean, there was, you know,

• 1:11:18Speaker 01

  sexualized depictions of minors and things that we, just from a values perspective, it felt like that we should, there should be something in place to stop this from, from happening.

• 1:11:34Guy Raz?

  So what did you do?

• 1:11:35Speaker 06

  Well, I recall this distinctly because, looking back, I'm sort of on the wrong side of history of this. But I remember feeling like, hey, we had not sort of done, this would be our first outright ban, which we had never done before. And it was a line that I was very concerned about. I even ended up on the call with, with the, I guess, the founder of A Chan at the time.

• 1:11:56Guy Raz?

  And he lives in like the Philippines or something, I think.

• 1:11:58Speaker 06

  That's right, yeah. And in my mind, and through, you know, the conversation with him too, the, what was going on was, he had built out a platform that was like very heavily emphasizing free speech. And he wanted to take down the things that were breaking the law. At least this is how he represented to me, and that's why I was sympathetic to it at the time. And I was concerned about our ask of creators to, if they didn't have the intention to be uploading these, you know, I agree with like just terrible things, like how we could still support them in terms of the business that they were building or the art that they were trying to get shared.

• 1:12:42Guy Raz?

  I mean, this is really interesting because this is really the beginnings of certain people weaponizing the First Amendment and this idea of free speech, really turning it into a weapon and turning it against what it's designed to do, which is to, you know, prevent tyranny. But, but posting photos of children or, or even, you know,

• 1:13:07Guy Raz?

  Horrendously vicious and dangerous conspiracy theories is not what that's about. But it's easy to, I imagine it would have been easy for him to manipulate somebody like you with the argument that it's about free speech.

• 1:13:20Speaker 06

  Yes, that's how the argument began. And then there were other things that we had to talk to him about too, right? There were communities that were sort of thriving, they're spreading hate. And so it started us really going down this path of like, when there is real world harm and people getting hurt, what is our role and responsibility? And I think that's where we started figuring out that. We wanted healthy communities and we would have to lay out these guidelines in a very specific way.

• 1:13:49Guy Raz?

  So how did you begin to write them down? What did you do? Did you like bring in a lawyer or outside advisors? Or I mean, because I imagine both of you guys had really good intentions. Like if I'm in the company, I'm going to be saying, guys, we cannot do this. This is wrong. At the same time, you've got investors, you've got to make money. I'm sure the HN community was probably generating significant revenue for you.

• 1:14:12Speaker 01

  So, yeah, the investors are super helpful here. Besides just the money, they connected us to people who had worked on these types of problems before. Reddit had dealt with stuff like this. Facebook had to deal with stuff like this.

• 1:14:28Speaker 06

  Still does.

• 1:14:29Speaker 01

  And still does. And we got connected through those investors to a fellow who had wishes to remain anonymous even to this day. He had built these very massive content policy and trust and safety and enforcement systems. And he worked with us for a period of two months to draft the first version of what became Patreon's content policy, which was, turned out to be about 40 pages was the first version of it. And to tell you the truth, that was one of the most horrific two months of my life was

• 1:15:07Guy Raz?

  Why?

• 1:15:08Speaker 01

  Well, because the internet is a, can be a dark place. And there are really horrific things out there. And in that two months, we had to Explore all of those cases, real, in the world, on Patreon. And we had to have some very deep philosophical conversations about what are we okay with supporting? And what are we not?

• 1:15:32Speaker 01

  And then content policy is like anything else at a company. It's a, it's a living, breathing thing that you iterate on and it changes over time. But that first version, you know, and the creation of that first version was a very difficult two months.

• 1:15:46Guy Raz?

  Difficult because you had to make specific choices about what you would accept and what you wouldn't accept?

• 1:15:53Speaker 01

  There are two reasons. The first was Sam and I, this was one of the first moments where we had fundamental disagreements about the business. And so it was challenging our relationship in a way that we hadn't dealt with before. Is that fair, Sam?

• 1:16:10Speaker 06

  Yeah, I think that's right.

• 1:16:11Speaker 01

  Yeah, like we, we had to like have really intense values discussions where we weren't on the same page. And that was, that was really hard.

• 1:16:22Speaker 06

  And in particular, too, we hadn't come up with even a framework for how we would get through these decisions. We were bringing in, I remember there were all these sessions where we would just bring in everyone from the company. And there were all these different like disparate opinions. And we couldn't figure out how to put them together because people were very divided, even internally. And I think all of this just became very exhausting for both of us.

• 1:16:46Guy Raz?

  So how did you, what did you come up with? What was the policy you came up with?

• 1:16:50Speaker 01

  The, the end state of this project, working with this outside person that helped us, you know, write the first version of it, was, was this content policy, which was a rules-based framework that gets to a level of specificity that I think most people are probably unaware of. Like, for example, people say, you know, I've heard people say, you can't define porn. You just kind of know it when you see it. I beg to differ. You can define porn. We have spent quite a lot of time defining porn in way more detail than probably anyone wants to hear about or go into. And then do that across everything. Weapons manufacturing, hate speech, what is harassment?

• 1:17:31Speaker 01

  You know, the output of this content policy was rigorous definition around what we meant by each of those things and as many edge cases as we could think of. That's how much detail you want to go into.

• 1:17:43Speaker 06

  Yeah, I think the perspective I always liked, I don't remember how we landed on this, was that, you know, we're facilitating art. Art should in some sense be bridging a lot of these divides and not increasing them like some communities would be doing. And so guided with that, I think, you know, we're constantly, as Jack noted, it was an evolving document. But at least we sort of knew directionally where we want to be.

• 1:18:11Guy Raz?

  But I mean, you guys, because of this policy, did alienate some of your better-known podcasters like Sam Harris, who was on Patreon and he decided to stop using it because he didn't support the policy. He said, you know, that it violated free speech. And presumably, you talked to Sam about this when he decided to leave.

• 1:18:34Speaker 01

  Well, I talked with Sam many times. You know, he's such an incredible thinker. I respect him so much. And, you know, I was very clear about our logic and why, you know, why we have to have a content policy. And I think these things are complicated if you're not inside a company. I think, look, things have, over the last few years, it's become very, very clear, I think, to people why companies need to have a content policy. But at the time, his reasoning was the First Amendment should do it. That's, that should be the policy. And, yeah, I mean, we disagreed. So, and we weren't going to...

• 1:19:17Speaker 01

  You know, we weren't going to change our minds to keep two or three creators, as painful as that was. But again, like, I am really proud of our content policy. And I think, I think more folks, you know, should, should do that, especially like emerging tech companies. I wish more folks did that. So, so look, it's a, it's a bummer and I, I wish Sam was raising money on Patreon. His pitch was awesome and straight from the heart and right on. But sometimes, you know, you have values-based disagreements like that. And, and that's what happens.

• 1:19:56Guy Raz?

  Putting out any idea into the world, especially a platform like this, is going to create friction, right? Even though your intentions are good and by and large, it serves people well, there are going to be critics. It's normal. It's part of the process. Our show gets criticized. And you have been criticized for a variety of reasons. Let me just start with one of them. A critique is that actually, almost nobody on the platform makes a serious living. There was an article that came out in 2017, I think it was called, "No One Makes a Living on Patreon." You know, it said something like, you know, 80% of the creators who shared what they earn make less than the federal minimum wage.

• 1:20:32Speaker 01

  Yeah, I'm not sure that's criticism as much as just as like a, a statement. Perhaps it was meant as criticism, but like Patreon, I think is solving a very specific, clear problem. One of the problems it's not solving is the demand curve. We can't solve supply and demand. We're also not solving helping everybody find, you know, new fans. These are really hard problems that other companies do way better than us right now, actually. And we were very narrow in our focus of what problem are we trying to solve? And the very specific problem that Patreon set out to solve early was, so you're a creator,

• 1:21:16Speaker 01

  you're reaching millions of people, and you're getting paid a hundred bucks a month in ad revenue. Great. Patreon is the platform for you. But if you're not reaching-

• 1:21:26Speaker 01

  A million people, or it doesn't have to be a million, but if you don't have an audience, actually Patreon doesn't work so well for you at all. And so I think it's totally fair to like, point that out. And I actually think it's important to be honest about that. Like, we want to be honest with it. If somebody expects they're going to come on to Patreon without having found a thing that, that resonates with people, that's not a problem that our product solves. And, and actually, if we were to try to solve that, it would be incredibly defocusing. And I think we'd end up doing worse at our mission. And at the end of the day, the thing is, there are now tens and tens of thousands of creators who are making a lot of money on the platform and building media companies and leasing office space and hiring teams.

• 1:22:11Speaker 01

  And now there are creators making millions of dollars a year on Patreon. But we're not, we're not going to solve the product market fit problem for folks.

• 1:22:20Guy Raz?

  So one of the challenges that you guys have had to deal with over the years is how to roll out changes to your revenue model. Because inevitably, users, they don't like it when they get used to a certain system and it changes. But a few years ago, you kind of ran into some trouble when you announced that you were, you were going to shift the way that processing fees were being handled. So I guess instead of the creators paying the processing fees, the patrons would have to pay them on top of the subscription fees that they were already paying. And that caused a backlash, right?

• 1:22:57Speaker 01

  There were, yeah. So that, you were very kind about it. Thank you. Describing the backlash about patrons paying fees. That was the worst product rollout in the history of the company. And it was, I mean, backlash doesn't begin to describe how it felt from the inside. I mean, there was a tweet at me every two to three seconds for probably 72 hours, equating me to the devil. I mean, it was, it was, it was very...

• 1:23:33Speaker 01

  Anxiety inducing.

• 1:23:37Guy Raz?

  Cannot be fun.

• 1:23:38Speaker 01

  It's not, it's, no, it's, it's the opposite of fun. But, but we learned so much about, you know, our community and product development and, and communication and, and how to talk to our creators. And so the next time we, we rolled out something like that, you know, we literally talked to over a thousand creators first, which we did not do that time. We did A B tests and like, we got the data and the data showed that actually it was a great thing, but that's different than talking to a person and hearing them react to it

• 1:24:21Speaker 01

  and hearing their feelings about it. Like, you know, you can't just disassociate that from the product experience.

• 1:24:30Guy Raz?

  Have you become profitable yet?

• 1:24:32Speaker 01

  Sam, are we talking about profitability?

• 1:24:36Speaker 01

  Also, yeah, so no, Patreon's not profitable. It's tracking toward profitability. We're burning money every month, but actually the business is like very healthy. The financials are, are very healthy and.

• 1:24:49Guy Raz?

  And to help the business, I guess last year you rolled out a new payment plan for, for the creators, which is a tiered plan. So they, depending on like the level of service they get, they, they pay either like five or eight or 12% of the income that, that they get from the site. Is that right?

• 1:25:06Speaker 01

  Yeah. This new plan, the, the three creator plans that we rolled out have amazing adoption. Creators are, are, you know, opting into those, those more feature-rich products. And, and so it's, it actually has like changed the business. So like, we're going to keep adding features to those. So, I mean, if we're going to keep building out the product and building more things. But, but I think very, you know, very clearly like, yes, this is, this worked. This allows us to like scale and be healthy and be a long-term, meaningful company.

• 1:25:40Guy Raz?

  And how many, how many creators are on the platform now? Hundreds of thousands, right?

• 1:25:44Speaker 01

  It's a little over 200,000, yeah.

• 1:25:47Speaker 06

  Who are getting paid.

• 1:25:48Guy Raz?

  I mean, I imagine that this COVID era has been a blessing for, I mean, it's a horrible situation, of course, but all of a sudden, you've got people at home, creators who cannot tour, who can't play in coffeehouses, and you're not, you know, it's not like stadium-level bands that are going on Patreon, but people who might play to 100 people, now they can't do it. Have you had a massive spike in people onboarding?

• 1:26:16Speaker 01

  I mean, yes, it's been, it's been wild to see. I mean, the pandemic has been such a brutal thing in the world, and it's, it is so weird to think about, you know, it is true that it has benefited Patreon, and that dichotomy is very strange for me. Like, I think the way I'm trying to think about it is like, I'm glad something like Patreon exists to catch creative people right now in a moment like this. So, for example, AEG, Live Nation, both canceled global touring operations. So, very suddenly, there are these creators who were looking forward at a year or two of, you know, touring, and hundreds of thousands, or millions, or tens of millions of dollars of touring revenue

• 1:27:01Speaker 01

  that evaporated over the period of a week.

• 1:27:05Guy Raz?

  Yeah.

• 1:27:06Speaker 01

  And so, the, you know, the level of launches on Patreon are what you could expect in a situation like that. Not only creators, you know, launching on the platform, you know, triple-digit growth month over month in podcasting and music and things like that, but, but also patrons, like, stepping up and really doing their part. I think a lot of people are looking for a way to help right now, and, and patrons are too. And there's like a really easy way that they can.

• 1:27:33Guy Raz?

  When you guys think about, you know, this path and where you are today, how much do you think that it has to do with your intelligence, skill, hard work, and how much of it is just luck?

• 1:27:45Speaker 06

  I mean, my opinion on this is largely like, if you're fortunate enough to be, to fall in in order to build as part of a community that is this excited about an idea. I felt like if it wasn't us, it was gonna be someone else. And so, in a lot of ways, at least personally, I feel like very appreciative of sort of the, you could call it luck too, of the timing and the opportunity to do this. I also think, just to the general point of your question, like, we wouldn't have been able to make it if we didn't work extremely hard from the get-go.

• 1:28:28Speaker 01

  Yeah. You know, I've done a thousand things in my life. Nine, you know, 199 of them haven't worked. Patreon was one that happened to work. Was I smarter, or did I make better decisions with Patreon? Like, no. I mean, it just was like, there's a lot of happenstance and circumstance and, and, you know, Sam and I killed ourselves to, like, to, you know, do it, of course.

• 1:28:58Speaker 06

  But I love this attitude too, because it puts us in a place where I think both of us feel an immense sense of responsibility and that we have to be great stewards, right? Of both creators and the opportunity, and even our teams that are helping us along on this mission. And I think we take that very seriously.

• 1:29:17Guy Raz?

  And by the way, one thing that we haven't talked about, which is like, quality. Like, how serious are you guys about the quality of the stuff that's on Patreon? I mean, because, I mean, you've been on YouTube, right? And there's, obviously, there's great stuff on YouTube. There's a lot of really awful, mediocre stuff on YouTube as well. I mean, does it bother you if someone uses Patreon to put, like, I don't know, like, terrible music, or terrible art, or whatever, out into the world? Like, or do you just not care?

• 1:29:50Speaker 01

  Oh, God. I mean, we would never... Like judge the quality of somebody's art and have that be an input into a decision whether to include them in Patreon like that, that we would of course never ever do anything like that.

• 1:30:06Speaker 06

  I actually find it so awesome too, if there's something so tiny niche that only like a handful of peoples passionately care about, right? I feel like that in effect is sort of how we've piggybacked off this whole movement on the internet that allows any community to find within an interest group, some set of folks who care so deeply about that. So yeah, like Jack said, like why, why in the world would we ever care about that?

• 1:30:31Speaker 01

  I mean, we, the, the, the beautiful thing about the internet is that suppose you're a total weirdo, like suppose you make stuff that like in your life, in your town, nobody in your town likes your music. Nobody likes it, like only one in a thousand people like what you have to make. Like, great, on the internet, there are literally millions of people who will like your stuff if your ratio is one in a thousand. You can get millions of fans and make hundreds of thousands of dollars a month. Like that is, I love that about the internet. I think that's such a special, weird, wonderful time in, in the development of, of humanity to, to, to be connected like that.

• 1:31:17Guy Raz?

  That's Jack Conti and Sam Yam, co-founders of Patreon. What is the weirdest, most niche Patreon site creator that you've seen? Like just the most odd niche thing that you can think of?

• 1:31:33Speaker 01

  One of my favorite examples of this was just like, I don't get ASMR at all. I don't get it. Like it doesn't work for me.

• 1:31:40Guy Raz?

  You don't get ASMR? You don't get it? Not, not at all? It doesn't work?

• 1:31:44Speaker 01

  My brain is not tingling right now.

• 1:31:46Speaker 06

  I'm getting the tingleys, guys. I don't know what you're talking about.

• 1:31:48Guy Raz?

  Yeah, how are you? You have ASMR people on, on there?

• 1:31:52Speaker 01

  Yeah, it does really well.

• 1:31:53Guy Raz?

  And people pay for it monthly?

• 1:31:54Speaker 01

  Oh, yeah.

• 1:31:55Guy Raz?

  Maybe I should get on it. This gig doesn't work out for me? I'm doing ASMR Patreon.

• 1:32:01Speaker 01

  Don't quit your day job.

• 1:32:09Guy Raz?

  Hey, thanks so much for listening to the show this week. You can subscribe wherever you get your podcasts. If you want to write to us, our email address is [email protected]. If you want to follow us on Twitter, we're at How I Built This or I'm at Guy Raz. Also on Instagram, you can follow me at Guy dot Raz. This episode was produced by Rachel Faulkner with music composed by Rameet Arablouei. Thanks also to Liz Metzger, Derrith Gales, J.C. Howard, Julia Carney, Neva Grant, and Jeff Rogers. Our intern is Farah Safari. I'm Guy Raz, and you've been listening to How I Built This. This is NPR.