How OnlyFans Was Able To Pay Creators $3 Billion Dollars

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Growth Story is a weekly podcast that breaks down the strategy and tactics utilized by high growth companies, in a short case study format hosted by Scott D. Clary (@scottdclary).

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Welcome to success story, the most useful podcast in the world. I'm your host, Scott Declari, and today we're going to go into the history of only fans. I'm going to break down how they were able to grow into the name they are today. We're going to break down how they were able to pay creators over three billion dollars. I'm going to tell you the story of their founder. I'm going to walk through roughly the four failures he had before he hit it big with only fans. This is a business case study, all right. So let's be real. The Internet has definitely changed the way that we live our lives. You can find almost anything online, including tons of porn tons of adult content, but only fans does it a little bit differently now. It's not to say that it wasn't a smart business decision to get into that niche. PRENOGRAPHY websites get millions of visitors every day and in the pandemic they saw significant increase in traffic. Everybody's stuck at home with nothing else to do. But only fans was one of the first iterations of a company that was gating pornographic, porn adult content, whatever you want to call it, and it was in a very similar subscription model to what you saw with Patreon. So today going to break down only fans. We're going to talk about the concept of gated content, we're going to talk about their incredible growth strategy, we're going to talk about their founder, Tim stokelee. Let's get right into it. So we're going to start off with Glam worship. So in two thousand and eleven Tim stokely spent his time partying around the world. He comes from a very, very well off family. He eventually pivoted from partying to using his family's money to try and start businesses. So he's now he's trying to become, you know, a little bit of a contribution to society. Wants to try something that may actually end up working out. So the first business idea that Tim has is called Glam worship. Now glam worship is a website that focused exclusively on financial domination. Now, financial domination is a sexual fetish in which submissives give gifts of money to a financial dominant. I don't know why this is a fetish. I don't know why I would look for a reason to give my money away, but apparently this is something that people really get into. So the idea came to Stokeley when he stumbled upon a subreddit about financial domination and, I guess, guys that were into this stuff. I don't know if women are into financial domination as well, but anyway. So he saw how much money people spent on these experiences. And when I say guys being into it, I mean guys being the ones that are paying random strangers online. It's I guess that's what he tapped into with the subreddit. He saw how much money people were spending on these experiences, but nobody was really creating products for this group of people that loved to Glam worship. Funded by his family, he put a couple, you know, a couple tens of thousands of dollars into this business idea and he decided to develop glam worship, develop the business concept, develop the website. What it offered, so glamorship viewers offered, will rather sorry. What the platform offered was the ability for viewers and users to offer big money in exchange for playing out their wildest fantasies with creators online, the performers. So the adult entertainers quickly took advantage of this. Opportunity and basically it was a cameo for financial dominance economy that started to grow and blossom. So you would go into this platform, this website, and you would just pay money for whatever you wanted to have access to. Unfortunately, it was a mini economy and it leveraged twitter. So it leverage people building their networks out from their...

...twitter followings and what not to bring them in, bring them into the funnel, but a mini economy rather that leveraged twitter and Venomo started to remove glad worship as the middleman in this equation. So glad worship was the platform where people would come in and they would start to facilitate these transactions and you'd have audience members and you have creators and that was that was a community. But because now you had the ability to connect with these people, glam worship, the business model was to basically a skim fees off these transactions. So of course, if you have the contact of the person that you are paying to do whatever and you realize that, hey, instead of doing this on Glamorship, why didn't I just go over to twitter? I can you know, we can just chat on twitter, I can dm you whatever I want and and I can, you know, send videos or pictures via twitter or any other snapchat doesn't matter, and then I can just ven. I can then know you the money. So what's the point of Glam worship? Because now I actually cost me less and I get less fees, or perhaps the creator gets to keep more of the money. That the that the person is sending them. So glam worship doesn't really make sense anymore. Just seems like something that can be removed. So so what it started to happen with this new mini economy that was being built on the back of Glam worship is users would view content on Glam worship and then they would reach out to the performers on twitter, because again, the performers basically brought in their following the glamorship through their twitter followings and their social followings. And then, once they reached out to the performer on twitter, they would request a video and then they would pay the performers in Venmo or paypal and then they would receive the video. So this basically allowed users to bypass the fees that resulted in the profits, in the revenue for Glam worship. So obviously this wasn't great stokey wasn't happy with this. He saw the he saw the fact that people were just avoiding and circumventing the platform. So it killed glamor ship. But he wasn't done yet. He still wanted to build something that had some legs to it, so he started a new company and it was still focused on creating exclusive content. So second company He created was customs for you. So instead of users independently finding finding performers on twitter, contacting them and arranging payments, customs for you handled all of the transaction. But to keep people on the platform you had to focus on volume. You had to focus on getting as many people into customs for you as possible because, again, if you didn't have volume, there is still easy ways to circumvent and just go direct to the performer. So he focused on volume the second time and the performers were still not happy, because this lowered the barrier to entry into the industry. It's saturated the market with new performers and it made the niche very competitive. So the basically the largest performers or adult entertainers that basically could have made this plat are driven awareness to this platform. Made Customs for you more wellknown. They basically said, listen, you're catering to people that are just getting started, which is fine, but we want to we want to put our work on a platform that favors people that have some sort of tenure in the industry, that have some sort of following, some reputation. If you're just focusing on people that are just getting started, that's fine, but then we don't want have anything to do with it. So when you have your, you know, your biggest advocates and influencers in the industry saying, you know, I don't really care about it, it's not getting the traction that you want, because that that in and of itself is really hurting your marketing and your growth efforts when you know the people that you really want to champion your platform really don't care about it. So stokeally killed that. After customs for you, he started a business called one hundred and twenty one with. Now one hundred and twenty one with moved away from adult entertainment and then he moved still. He was still trying to figure out how to connect and create market places and communities, but this particular this particular business was not focused on adult entertainer so for...

...one hundred and twenty one with, the concept was for Tradespeople to sell their expertise on an audio or a video call. So if I need a plumber or if I need somebody to perhaps help change a tire, instead of bringing somebody out and hiring a specialist, which is you know, it can be expensive just for a small job, maybe I can do a video call with that specialist and they can walk me through what I need to do myself, so that it saves me money. It gives the specialist scalability because now they can charge hourly rates without leaving their house and actually going on site to do work. So it's a win when the client says a little bit of money, but it also allows the specialist to scale their service. So one hundred and twenty one with similar to customs for you, although different industries. They leveraged the Creator Fan relationships as well as, like the the professional fan relationships. It for no, no real reason other than it perhaps wasn't the right time or it wasn't it wasn't taken to market properly. One hundred and twenty one with also failed. Still couldn't get the traction, couldn't get the cripple mask couldn't get as many people on the platform as stokely wanted, so he killed it. So this is three failed businesses at this point. But, as you can see, the model for only fans is starting to develop. He understands the power of building community, he understands the power of Gating, he understands the power of facilitating payments between creators and professionals and the audience and the users. But he just needs to figure out how to bring all of these pieces together. And that's what happens with only fans. So soaklely took some more time off. So this is again, this is the third business venture be well, he's failed with three business ventures and then eventually he gets, you know, he gets only fans, and we know where that ends up. But he takes some time off. He goes back into adult entertainment because, if you remember, one hundred and twenty one with was just with Tradespeople, not with adult entertainment or the adult industry. So he still wanted to get into the adult entertainment industry and he also saw an opportunity because you saw a lot of social platform. So at this point when he's building this out. INSTAGRAM is massively growing in popularity for content creators, for influencers. Many adult entertainers try and use it to post videos or pictures to promote themselves. But instagram is banning these pictures, banning these accounts, banning these users, so they don't have a social platform to publish their content. Because now what are you going to use? Your going Linkedin band, facebook, band, instagram, band. Twitter actually does have some adult content on it, but twitter is not a visual form. It's really focused on tech. So the best place for visual content before only fans, was instagram. Creators were not welcome there. So this gave stokely the idea of building a paid social feed like instagram or twitter, obviously focused on visual where creators can earn money directly from their content. In Two thousand and sixteen he launched only fans and and let's just pause for a second, because let's not forget that most of the most of it. I'm doing this, I'm doing this case study in two thousand and twenty one right, like, I've only heard of only fans in the past, maybe a year. So even though now it's it's obviously successful. It took him four to five years to get it to the point. After, after, after, after three, three fails, three failures, so that he had a successful business. There's a lesson there, anyways. And two thousand and sixteen he launched only fans. Here, viewers would pay subscription fees rating from five to fifty bucks a month access content created by performers. Only fans receive two twenty percent cut of the subscription. Creators received the rest. And let's be real, like the the reason why only fans was a success because of the experience that stokely gathered from all of his previously business ventures. Through Glamorship, the company gained insight into the concept of paying...

...performers directly for special video requests. Meanwhile, the initial only fans customers came from customs for you. But the business model evolved with one hundred and twenty one with the early days of only fans revolved around enabling creators to upload custom content. By tailoring their content to their audiences preferences, the creators built incredibly close relationships with their followers, something they were not able to do on any existing major social media platform. Now let's talk about the way that only fans grew. So the first strategy they used was a highly effective referral strategy. Stokely and the only fans team didn't just want people that would use the platform, they wanted people that would they want to users on the platform that would contribute to the platforms success and growth. Turn your customers into your evangelist. So, therefore, only fans created an incentive structure and affiliate structure, for lack of a better description, that aligned the platforms goals to encourage users to recruit the right people. The key objective of this referral program was quality over quantity. So I wanted if I have a user on my platform, VI have a creator, content creator on my platform, I want them to get other like minded professional content creators onto the platform, because they all run in they all run in these same circles. If you are in an industry, you will know other people in the industry and you'll know you'll have connections just any industry. This is how it works. So stokely knew this and he knew that if I could incentivize the content creators to speak to their friends, their peers, other people in in in an industry, they can bring them onto the platform. So what? Only fans. Did they set up an affiliate program? Five percent lifelong revenue share. So if you recruit someone, for example, who makes a hundred thousand dollars per year on only fans and keeps them on the platform for five years, the company only fans will pay you twenty five thous on top of the fact that you are still making money from your audience members. So that's that's an incredible affiliate program for a social media platform because, yes, a philly programs exists in other industries and in other ways, but for social media there's no affiliate program to get somebody to sign up for instagram. There's no affiliate program to get somebody to sign up for Youtube or for facebook or for Linkedin or for anything really. So this is a little bit novel for Social and the affiliate program work. This is this was this was a good strategy for Tim and the only fans team creators were creating content, but they were really trying to get into other people's revenue potential by sending affiliate request invite, getting their friends in, getting their peers in, because they tapped into that revenue share. So a very smart, effective or for Ol strategy by Tim Stokeley and the second the second way they really focused on growing only fans is through the use of twitter. So they created a product called fans scope. Now, fanscope was the first product that only fans developed to help creators leverage their twitter following. Because, remember, a lot of these creators they were either they weren't very prominent on other social media platforms or they were banned from other social media platforms. So fans scope was basically a live version of cameo. That's the best way you can describe it. Creators can start a fan scope session through only fans and have the link automatically posted to twitter. So then now you're live session receives exposure from your entire twitter following, which is again where some of these creators had their largest audiences. and to watch the live stream, the twitter user must click the link and sign up to only fans. Now this strategy brought more people to only fans, brought more audience members to creators because it lowered the barriers to entry. So new users, who could potentially be new content creators or new users who could just be content consumers, could sort of test and see what they could expect from an only fans page before they started investing any money.

So again it's all about teasing people into a platform. How do we find ways to get people in? Let's tap into where the people already are and bring them in. I don't need somebody to I don't need to when I'm marketing something. For example, say I'm a content creator and only fans, by marketing myself. I don't want to have to first get, you know, Joe Blow to care about me and then I have to get joe blow onto only fans. I want want to go to you know other you know John Doe and who's already following me on and on twitter, and I want to say hey, I'm also over here, because John Doe already knows who I am. Joe, you know, Joe Blow doesn't know who I am. So I want to bring in people who already know me because it's an easier it's an easier way to build my audience and only fans with people that are already care about me. So the integration between existing social platforms is very effective for that reason, because these people already like your content and you're just moving them into another platform with a very low barrier to entry. You're making it easy right now. These two strategies really paid off. Of course, we started off in two thousand and sixteen, but these strategies were just ramped over the year. So, in contrast to other live platforms, only fans saw addle performers as assets. So instead of prohibiting them, as we know, the company empowered them. And this was empowering a niche group of content creators that really were marginalized by most other social media platforms. So, as a result, they never restricted addle content. They encourage the creation of unique content, and this, along with their growth strategy and the fact that nobody else was really serving this target group of content creators, saw only fans grow incredibly fast. In Two thousand and eighteen, Leo Radvinski, who's a Ukrainian American web entrepreneur, he built a fortune with a website called my free cams. He was able to buy seventy five percent of only fans, and then after that the company just kept compounding and compounding. And then now, fast forward to two thousand and twenty. Only fans success soort tremendously when celebrities began to publicize it. Beyonce was named dropping it in her Song Cardi beat joined the platform. These are some of the major celebrity events. Is started to accelerate only fans growth. Now today, only fans has now paid a creators more than three billion dollars and they have over a hundred and twenty million active users and it's very it's worth noting that the vast majority of only fans creators today are adult entertainers. That was the marginalized group that they built their community on. But the company is now taking their success and they're trying to build it out to a wider audience. So, for example, they just launched a creator fund of Twentyzero Pounds, or twenty seven thousand eight hundred approximately US dollars, to help for aspiring musicians kick off their careers, and they're doing more initiatives to bring in other segments, other types of content creator. So will it work? Will have to see. But that is the story of only fans from when they started to today, and incredibly interesting and a lot of entrepreneurial lessons. Regardless of whether or not you're into the content, doesn't matter. The fact that I'm going to actually I'll break down I'll break down four lessons so we can sort of itemize some of the main things that we that we saw Tim do and that led to only fans success that are basically industry agnostic, transferable to any industry, any type of start up or entrept trepreneur. Let's go into it. So for lessons from only fans, Tim stokely had multiple failures before only fans success. Most overnight successes take years and that's true in any business started by almost anybody. So just a lesson there and something to think about if you are doing your own thing. Another lesson as something is not favored by a larger market. Sometimes there's a reason for that, but there could also be a potential or an opportunity for business. So Tim saw a need for a marginalized market segment. All these adult entertainers were kicked off other social media platforms. He gave them a platform, he gave them a community, and that's what that's what was the core that...

...built only fans. So look for underserved, under appreciated market segments. It's a smart idea to see if you can find a way to tap into that and to create a product, a platform and a community that helps an underserved segment third lesson growth strategy. Get your customers to sell for you. Only fans launched a highly lucrative referral program which brought people onto their platform, allowed content creators to bring peers into their platform. Money talks. Align you align your audience or your customer rather, align what customers want with your business growth goals. What do customers usually want? There's a variety of things, but I mean for content creators, revenue, money, like they need to make money. There could this is what they do for a living. Any content creator is trying to find new ways to make money, especially when your first starting to create content and you're starting to build a name for yourself. So what only fans did? They just created an affiliate affiliate program that tied the goals and objectives of the content creator to the goals and objectives of the business. You bring in more people, that's a business goal. You bring in more content creators, that's a business goal. Will pay you, will pay you money. That's that's that's a content creator objective and goal. So very straightforward. Not many other social media companies did this, and only fans basically just wasn't greedy. And Fourth Lesson the fact that they leveraged existing twitter followers. This is a smart marketing strategy, and let me sort of describe how you can conceptualize and think of this for any business. So what only fans did, remember, they just said, okay, we're going to let you access your twitter following. The lesson here is, if you're trying to market anything to anybody, make make the marketing and make the make the ask of the individual as simple as possible. What I mean? What do I mean by that? So what only fans did is they said, okay, we know that your audience is already on twitter, they already like you. All we have to do is get them from twitter to only fans, as opposed to we're going to get people to know about you who've never heard about you and then we're going to move you to only fans. So they just said, let's just happen to what's already there. So this so let's bring this out to other business use cases. If you're trying to find customers for your product, if you're trying to I'll I'll use you know, I run a podcast. I'll talk about that. So when I'm trying to get listeners to my podcast, who do I try and reach out to, who do I try and advertise against? I usually advertise to one of one of two segments. I'll advertise to my audience on other social media platforms that may have not heard about my podcast, because I know they already liked me. I just need them to know that I have a podcast. or I'll advertise to listeners of other podcast because I know they already like podcasts. They just don't know about me. What I don't want to do, and I don't really care to do, is I don't really care to advertise the people that don't know me, don't like me, don't know or listen to podcast, because then I have to get them to like me and then I have to get them to like podcast. It's much easier to market to somebody who already likes me or to already who already likes podcast, because there's only one more step that I have to do. If I'm trying to find net new people, then there's two steps. I got to get them into me and and to podcast, and it's a bigger lift, it's a harder cell. So just make it as easy as possible and tap into existing tap into existing followings, existing communities, existing customers. Another strategy only fans could have done is they could have said, well, let's just cross and they probably actually do do this. They they can just cross promote between creators. So if you already are subscribed to, you know, content creator one on only fans, well, why don't you go check out content creator to one only fans, because you obviously like this type of content. So again it's all about just tapping into adjacent communities so that you don't have to make a big ass and you don't have to move somebody too far to get them involved in your product or service or business or to consume your content. I hope that makes sense. And last lesson. I cannot reinforce this enough. Tim Started. I thought it was for I guess when I'm, you know, going through this case study again, I put it together a while back. It's actually three businesses.

I'm sure there was other stuff that he didn't mention just because it honestly, was probably just such a massive failure that he didn't. He hadn't even gone on on record publicly about talking it, talking about it or building it. But three notable failures. So if you don't give up the timing will eventually be right. What do I mean by that? Will Tim launched multiple businesses? Any of those could have hit, could have worked out, could have failed. Also, one of the reasons why only fans really, really really got massive amounts of traction was due to the fact that there was also a global pandemic event that led to more people being online, being at home, looking for alternative places to consume this type of content. So, if you think about it, why was why was Tim Lucky? Why was Tim lucky that a celebrity name dropped his platform in a song? Why was him lucky that everybody was online and online activity and people searching for different you know, adult content, whatever, increased dramatically during a global pandemic? It's because he kept going. It's because he was building things for years and years and years and years. And you'll notice that when you continuously built stuff, opportunities luck, you'll start to you'll start to run into it a little bit more. So, if you think you're not that lucky, if you think the timing isn't right, keep going, keep building, keep trying and eventually, if you put the time into something and you put in the effort, the timing will eventually be right and luck will eventually find you, and this is just because you haven't given up yet. So really, really great lessons from this story for any entrepreneur. Yeah, he started with some maybe some family money, and we don't all have that luxury. But that being said, he could have started with family money and given up after the first venture and just gone to work for somebody. Or perhaps he has so much family money he never would have had to work. I don't really know. But the point is he didn't give up. And then when he didn't give up, over years and ITERATIONS and trying and failing, then all of a sudden something hits. Now everybody's looking at him like he's lucky, like the timings right, but it's really just because you didn't give up. anyways. That's it for the only fans story. I hope you enjoyed. If you like this, share with your friends, family, peers, co workers, anybody who you think would find this interesting. If you're listening to this on itunes or spotify, leave a review. If you're listening on Itunes, if you're listening on spotify, leave a follow. I think those are like the two algorithm metrics that matter if you're watching this on Youtube, hit that light button, hit the subscribe button, leave a comment for the Algorithm, and you know I appreciate you. That's all I can say. Have a great day. Hope you enjoyed talk soon.

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