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> This move could make even more sense if Patreon was aggressively heading toward IPO This upsets me so much. Patreon is a perfect example of a company that co

> This move could make even more sense if Patreon was aggressively heading toward IPO This upsets me so much. Patreon is a perfect example of a company that could operate as a non-profit and everyone would benefit; but, instead, they need to make so much money that they're valuable on the Stock Market. It seems like a net harm for society, here :/

PragmaticPulp 4y ago
> Patreon is a perfect example of a company that could operate as a non-profit and everyone would benefit; Everyone except all of the employees who built the company with some equity compensation. Like it or not, a lot of the current and former employees are equity holders in the company. An exit event gets them paid for their ownership piece. Of course, anyone could start a non-profit Patreon competitor if they really wanted to and operate it as such. However, cloning Patreon isn't as trivial as it might sound to the casual observer. A lot of work has gone into getting the company to this point, and IMO it's fair to reward the people who took on the risk to make it happen.
- t-writescode 4y ago
  As an employee of a startup, I understand the value and desire to get that compensation. My argument is that I wish Patreon had been non-profit from the start and such there would never be a time for them to "Go Public"; and, all their employees would already be focused on the common good that comes out of a patronage platform.
  - kasey_junk 4y ago
    How would that impact their ability to recruit and retain talent though? They are competing against some of the best paying firms in the world. “Making it easier for podcasters to make money” is not high on the list of causes I’d give up my high paying gigs for.
    - t-writescode 4y ago
      "High paying" and not-for-profit are not necessarily contradictory terms. Market rate for good engineers is still what it is.
      - melony 4y ago
        A significant amount of tech compensation is in equity. It means Patreon would have to offer a lot more in cash to match the same total compensation as other firms.
        t-writescode 4y ago
        Only for your (edit: FANG-style) companies, really. A lot of startups give options, which are pretend until the company goes public; and, in many cases cannot be considered real money, ever. I may be "a fool", but when I wasn't working for a startup or a FANG, my stock earnings were pretty piddling, really, and my salary was (a bit less) than FANG's pre-stock earnings.
  - scoofy 4y ago
    I just have no idea how this would work? I'm starting a golf wiki: https://golfcourse.wiki https://golfcourse.wiki , and i really am thinking about taking in a not for profit direction. I just... I don't have any money, and if I ever made any money instead of losing money on it (currently), I could never imagine making enough to actually pay employees. Patreon works because they marketed the hell out of themselves. That costs a ton, and it almost certainly was funded by VC capital. I wouldn't be surprised if they didn't operate at large losses for years. I guess, as someone trying to build a startup from nothing, bootstrapping is just hard. Lord knows I'm very proud of the growth I've had, but I'm still almost certain that nothing will come of the nearly 3 years I've worked on this site. Unless you're willing to potentially bankrupt yourself to build a nonprofit, or fight on alone incredibly slowly, I really think that nearly every startup with seed funding will absolutely have to sell out big time.
    - throwaway290 4y ago
      How did Patreon advertise that it cost a ton? Where there many ads or commercials, online and offline?
      - ryanbrunner 4y ago
        Marketing for SaaS is rarely in traditional media, and isn't limited to paid ads. Everything on a non-app website is marketing. Obtaining case studies, references, trade shows are all under the umbrella of marketing. Even stuff like exclusivity contracts can be "marketing" in a sense - it may not land that way on a finance budget (genuinely don't know how that stuff is classified), but a lot of big creators are incentivized to join platforms outside of just choosing what works best for them. Disclaimer: I work for a Patreon competitor (Supercast) and I'm not saying any or all of the above is definitely something Patreon does, it's just things that are typical in the industry.
    - t-writescode 4y ago
      I'm not a lawyer, but I imagine: It really does probably start with the kindness of the initial benefactor - or as an in-house job until such time as the "profits" exceeded the founder's "wages" and then they could hire more people and have a reserve of X years of current employees' wages to handle the ups and downs. It would likely need to start from someone that either has a primary job, or is independently wealthy, though, and then that person would need to remain at the company because AFAIK (I'm not a lawyer), you cannot pay a "board" at a non-profit.
  - raffraffraff 4y ago
    On "getting that compensation", are there other ways to financially bootstrap a company and give "future payoff" to investors and early employees without requiring IPO/acquisition? What do the balance sheets and end of year accounts look like for a non-profit? What happens if they generate surplus profit? Can the CEO and director simply pocket it too avoid "making profit"? Or must they reinvest in the company? Or pay dividends to original investors? Or give it to charity? Burn it in a pile?
    - sdrinf 4y ago
      | On "getting that compensation", are there other ways to financially bootstrap a company and give "future payoff" to investors and early employees without requiring IPO/acquisition? In virtually all existing use cases, I'm strongly against cryptocurrencies, buuuut token issuing and the related Ponzi scheme has been the single biggest new thing they brought to the table which _does_, actually solves this (minus the questionable legality, the Ponzi, and all the current issues the crypto market is having). IE: issue utility-coin for founders & first employees, issue utility coin for public, increase overall utility (and thereby price) of coin, cash out of coin via public. Some coins even carry voting power, which makes the end-consumer part of the governing process. Connecting value-holding with utility _is fairly novel_, haven't seen it being tried in normal corporations before, and might be interesting, if it works. The other config would be dividend-paying corps; however they went out of fashion on account of growth-above-all-strat playing corps being able to fundraise based on the _biggest hopes and aspirations_ any of the potential investors can dream up; which means, a competitive market have selected for growth-above-all against dividend-paying. | What do the balance sheets and end of year accounts look like for a non-profit? What happens if they generate surplus profit? Can the CEO and director simply pocket it too avoid "making profit"? Nonprofits _totally can make a profit_; buuut they can't distribute it to directors, and can't issue dividends. They could have increased salaries; however the governing check&balance on the organization, is that they must have 3 independent people on the board, who checks decisions against the organization's "non-profit mission"; and having high salaries for execs can't really fit that.
- foobiekr 4y ago
  It might actually be a good business for the Internet Archive to get into. It seems like a natural adjacency to their current mission. They could even include a "right to archive and distribute" clause at, say, 5Y old content.
- nescioquid 4y ago
  > However, cloning Patreon isn't as trivial as it might sound I imagine the non-trivial piece is adoption and normalization of the business model. Or do you mean that there is something technically difficult in what they are doing (which would surprise me greatly)? Now that Patreon has normalized people donating on a subscription basis to content creators, that actually helps competitors.
unity1001 4y ago
Nobody can operate at scale as a non profit. Capitalism-designed legal system crafted non-profits regulations in such a way that non-profits will never ever be any kind of competition to profit-driven capitalist companies because they have to beg every 2 years for money from outside in order to be able to stay afloat. They can only gather 2 years' worth of operating money legally. So its 1 year of actual work, then starting begging for a year so that you can gather enough money over that year to be able to survive another year before having to beg for money again.
- jefftk 4y ago
  > Nobody can operate at scale as a non profit. Wikipedia seems like the biggest tech counterexample.
  - ethbr0 4y ago
    Wikipedia's labor costs are anomalously low.
  - noirscape 4y ago
    Wikipedia "works" as a non-profit but they are also 100% the Kings of deceptive marketing to get way more funding than they need to operate and blow most of it on stuff unrelated to Wikipedia or to an ever-growing endowment that supposedly already covers the site for several decades. Source: https://www.dailydot.com/debug/wikipedia-endownemnt-fundraising/ https://www.dailydot.com/debug/wikipedia-endownemnt-fundrais... // associated HN discussion: https://news.ycombinator.com/item?id=27339887 https://news.ycombinator.com/item?id=27339887 For a more practical example; I moderate a wiki project with semi-decent traffic and a decent enough reputation and our operating costs are about ~3k each year (it's like a little more than that) if the donation rounds are any indication. The donations usually occur in November and we get funded within 3 weeks. In terms of expenses, it's really hosting and a small amount of money set aside for a WMF developer (independently) to maintain our custom extensions for the site. You don't need tons of money if you just want to stay solvent.
    - jefftk 4y ago
zeckalpha 4y ago
Like Open Collective?
Ekaros 4y ago
I'm not sure about non-profit. But certainly one that should be run as lean and mean. After all there is only so much money to be extracted. And the whole system is not that complicated. Entirely reasonable business to run, but not something that will be an unicorn...

PragmaticPulp 4y ago

> Patreon is a perfect example of a company that could operate as a non-profit and everyone would benefit; Everyone except all of the employees who built the company with some equity compensation. Like it or not, a lot of the current and former employees are equity holders in the company. An exit event gets them paid for their ownership piece. Of course, anyone could start a non-profit Patreon competitor if they really wanted to and operate it as such. However, cloning Patreon isn't as trivial as it might sound to the casual observer. A lot of work has gone into getting the company to this point, and IMO it's fair to reward the people who took on the risk to make it happen.

t-writescode 4y ago
As an employee of a startup, I understand the value and desire to get that compensation. My argument is that I wish Patreon had been non-profit from the start and such there would never be a time for them to "Go Public"; and, all their employees would already be focused on the common good that comes out of a patronage platform.
- kasey_junk 4y ago
  How would that impact their ability to recruit and retain talent though? They are competing against some of the best paying firms in the world. “Making it easier for podcasters to make money” is not high on the list of causes I’d give up my high paying gigs for.
  - t-writescode 4y ago
    "High paying" and not-for-profit are not necessarily contradictory terms. Market rate for good engineers is still what it is.
    - melony 4y ago
      A significant amount of tech compensation is in equity. It means Patreon would have to offer a lot more in cash to match the same total compensation as other firms.
      - t-writescode 4y ago
        Only for your (edit: FANG-style) companies, really. A lot of startups give options, which are pretend until the company goes public; and, in many cases cannot be considered real money, ever. I may be "a fool", but when I wasn't working for a startup or a FANG, my stock earnings were pretty piddling, really, and my salary was (a bit less) than FANG's pre-stock earnings.
- scoofy 4y ago
  I just have no idea how this would work? I'm starting a golf wiki: https://golfcourse.wiki https://golfcourse.wiki , and i really am thinking about taking in a not for profit direction. I just... I don't have any money, and if I ever made any money instead of losing money on it (currently), I could never imagine making enough to actually pay employees. Patreon works because they marketed the hell out of themselves. That costs a ton, and it almost certainly was funded by VC capital. I wouldn't be surprised if they didn't operate at large losses for years. I guess, as someone trying to build a startup from nothing, bootstrapping is just hard. Lord knows I'm very proud of the growth I've had, but I'm still almost certain that nothing will come of the nearly 3 years I've worked on this site. Unless you're willing to potentially bankrupt yourself to build a nonprofit, or fight on alone incredibly slowly, I really think that nearly every startup with seed funding will absolutely have to sell out big time.
  - throwaway290 4y ago
    How did Patreon advertise that it cost a ton? Where there many ads or commercials, online and offline?
    - ryanbrunner 4y ago
      Marketing for SaaS is rarely in traditional media, and isn't limited to paid ads. Everything on a non-app website is marketing. Obtaining case studies, references, trade shows are all under the umbrella of marketing. Even stuff like exclusivity contracts can be "marketing" in a sense - it may not land that way on a finance budget (genuinely don't know how that stuff is classified), but a lot of big creators are incentivized to join platforms outside of just choosing what works best for them. Disclaimer: I work for a Patreon competitor (Supercast) and I'm not saying any or all of the above is definitely something Patreon does, it's just things that are typical in the industry.
  - t-writescode 4y ago
    I'm not a lawyer, but I imagine: It really does probably start with the kindness of the initial benefactor - or as an in-house job until such time as the "profits" exceeded the founder's "wages" and then they could hire more people and have a reserve of X years of current employees' wages to handle the ups and downs. It would likely need to start from someone that either has a primary job, or is independently wealthy, though, and then that person would need to remain at the company because AFAIK (I'm not a lawyer), you cannot pay a "board" at a non-profit.
- raffraffraff 4y ago
  On "getting that compensation", are there other ways to financially bootstrap a company and give "future payoff" to investors and early employees without requiring IPO/acquisition? What do the balance sheets and end of year accounts look like for a non-profit? What happens if they generate surplus profit? Can the CEO and director simply pocket it too avoid "making profit"? Or must they reinvest in the company? Or pay dividends to original investors? Or give it to charity? Burn it in a pile?
  - sdrinf 4y ago
    | On "getting that compensation", are there other ways to financially bootstrap a company and give "future payoff" to investors and early employees without requiring IPO/acquisition? In virtually all existing use cases, I'm strongly against cryptocurrencies, buuuut token issuing and the related Ponzi scheme has been the single biggest new thing they brought to the table which _does_, actually solves this (minus the questionable legality, the Ponzi, and all the current issues the crypto market is having). IE: issue utility-coin for founders & first employees, issue utility coin for public, increase overall utility (and thereby price) of coin, cash out of coin via public. Some coins even carry voting power, which makes the end-consumer part of the governing process. Connecting value-holding with utility _is fairly novel_, haven't seen it being tried in normal corporations before, and might be interesting, if it works. The other config would be dividend-paying corps; however they went out of fashion on account of growth-above-all-strat playing corps being able to fundraise based on the _biggest hopes and aspirations_ any of the potential investors can dream up; which means, a competitive market have selected for growth-above-all against dividend-paying. | What do the balance sheets and end of year accounts look like for a non-profit? What happens if they generate surplus profit? Can the CEO and director simply pocket it too avoid "making profit"? Nonprofits _totally can make a profit_; buuut they can't distribute it to directors, and can't issue dividends. They could have increased salaries; however the governing check&balance on the organization, is that they must have 3 independent people on the board, who checks decisions against the organization's "non-profit mission"; and having high salaries for execs can't really fit that.
foobiekr 4y ago
It might actually be a good business for the Internet Archive to get into. It seems like a natural adjacency to their current mission. They could even include a "right to archive and distribute" clause at, say, 5Y old content.
nescioquid 4y ago
> However, cloning Patreon isn't as trivial as it might sound I imagine the non-trivial piece is adoption and normalization of the business model. Or do you mean that there is something technically difficult in what they are doing (which would surprise me greatly)? Now that Patreon has normalized people donating on a subscription basis to content creators, that actually helps competitors.

unity1001 4y ago

Nobody can operate at scale as a non profit. Capitalism-designed legal system crafted non-profits regulations in such a way that non-profits will never ever be any kind of competition to profit-driven capitalist companies because they have to beg every 2 years for money from outside in order to be able to stay afloat. They can only gather 2 years' worth of operating money legally. So its 1 year of actual work, then starting begging for a year so that you can gather enough money over that year to be able to survive another year before having to beg for money again.

jefftk 4y ago
> Nobody can operate at scale as a non profit. Wikipedia seems like the biggest tech counterexample.
- ethbr0 4y ago
  Wikipedia's labor costs are anomalously low.
- noirscape 4y ago
  Wikipedia "works" as a non-profit but they are also 100% the Kings of deceptive marketing to get way more funding than they need to operate and blow most of it on stuff unrelated to Wikipedia or to an ever-growing endowment that supposedly already covers the site for several decades. Source: https://www.dailydot.com/debug/wikipedia-endownemnt-fundraising/ https://www.dailydot.com/debug/wikipedia-endownemnt-fundrais... // associated HN discussion: https://news.ycombinator.com/item?id=27339887 https://news.ycombinator.com/item?id=27339887 For a more practical example; I moderate a wiki project with semi-decent traffic and a decent enough reputation and our operating costs are about ~3k each year (it's like a little more than that) if the donation rounds are any indication. The donations usually occur in November and we get funded within 3 weeks. In terms of expenses, it's really hosting and a small amount of money set aside for a WMF developer (independently) to maintain our custom extensions for the site. You don't need tons of money if you just want to stay solvent.
  - jefftk 4y ago

zeckalpha 4y ago

Like Open Collective?

Ekaros 4y ago

I'm not sure about non-profit. But certainly one that should be run as lean and mean. After all there is only so much money to be extracted. And the whole system is not that complicated. Entirely reasonable business to run, but not something that will be an unicorn...