For the three years starting in April of 2017, I ran much of The Prepared’s (and ultimately my family’s) income through Patreon. I started doing so as an experiment - one that by any measure has been a success. But while Patreon was instrumental in that process, I recommend that creators not structure their incomes and careers around Patreon. Here’s why.
Patreon’s creator analytics are opaque and unpredictable
Like many creators, I chose Patreon’s “pay by the creation” (rather than “pay by the month) mode. This directly incentivizes creators to continue doing the actual work, and keeps them accountable to the commitments they make.
But what Patreon doesn’t tell you is that fans can optionally set a monthly cap on their spending, and that cap can be arbitrarily low - even less than your per-creation commitment level. In other words, a reader of my weekly newsletter could pledge $5 per newsletter, but then set a $2 monthly cap. The worst part about this is that there’s literally nowhere in the Patreon backend that I can see this cap. I spoke to Patreon’s product team about this in late 2018, and they told me that the best thing I could do is to look at my creation-by-creation analytics at the end of the month and see which of my patrons paid for which creations; if a person doesn’t show up at the end of the month, then they must have set a cap.
This is a totally unscalable solution, and it makes the process of issuing patron rewards excruciatingly hard to manage. Creators need the ability to quickly and easily determine who is paying them for what; Patreon makes this impractically hard.
Further:
Declined pledges were a big problem on my account, and Patreon makes it unnecessarily hard to figure out whose charges are declined.
These numbers do not represent earnings.
Patreon provides email alerts for when a new patron makes a pledge, but has no email or push notifications for when patrons delete pledges.
Patreon has no creator-side notification system for declined charges or charges that are flagged for fraud. Worse yet, their patron-side notification system appears to be totally ineffective; many long time patrons (and personal friends of mine) were genuinely shocked to hear, many months later, that their monthly charges had been declined - leading to their pledges being automatically canceled by Patreon. Even worse, Patreon’s “Declines” page, which shows the total declined amount on a month by month basis, has no way of showing which patrons’ pledges were declined - you instead need to go into the “Relationship Manager” and filter by “Declined” to see whose charges have gone through, and when.
If you, as a creator, go through all of the effort to find charges that have been declined or marked as fraud, it can then be really difficult to recoup that revenue. This is mostly a result of the fact that most Patreon creators charge a small amount of money (a couple dollars) per month. In theory you could email or message the patron when their charge doesn’t go through, but in practice it feels a bit weird to be hounding someone over (say) $4. If the pledge was billed on an annual basis, though, it might be a big enough sum to warrant the effort.
Patreon uses accounting terms with little regard for their generally accepted meaning. See the screenshot above, which is titled “Earnings Projections” but then actually lists gross revenue. In accounting, earnings is the same as profit - it’s what a company has left after every expense is paid, whereas gross revenue is the total amount that a company takes in and doesn’t take into account expenses at all. In other words, Patreon is suggesting that the numbers here are what will be deposited into my bank account - but once Patreon takes their platform fees, it’ll actually be significantly less. This kind of sloppy terminology is all over Patreon’s creator backend, and no matter how you slice it is either the result of gross incompetence or a deliberate desire to deceive creators.
Patreon’s fee structure makes no sense
Between credit card processing fees (2.9% plus $0.30 per transaction) and Patreon’s cut (between 5% and a whopping 12%), your earnings will be significantly less than your top line pledged amount. In practice, I saw total fees of between 8-12%. (Note: I signed up for Patreon before they shifted to tiered pricing, and now have a “Founder” Pro plan at a 5% platform fee rate. If you signed up for a Pro or Premium account today, you’d pay Patreon 3% or 7% more than I do, respectively.)
If Patreon were actively bringing customers to me - if normal people were just out there browsing Patreon for awesome things to support - then that might make sense. But the reality is that success on Patreon is inextricably tied to having your own platform and community. All Patreon does is manage recurring payment processing - a commodity service that many companies do for a drastically lower fee structure. Sure, ostensibly you can also be having conversations with patrons, generating some kind of community there, etc - but every step you take to encourage users to interact with you on Patreon, the more you undermine your own platform. In other words, Patreon engages in rent seeking - but they ultimately do it on your platform, and don’t bring a built-in audience with which to raise you higher.
When I transitioned off of Patreon, I moved to a combination of Quickbooks Online ($645/year; note that Intuit is a terrible company) and Squarespace’s ($480/year) recurring products feature. The result is that my processing fees dropped dramatically. At my peak Patreon earnings, I was spending almost $300/month ($3600/year) on Patreon’s platform fees. My current revenue is roughly 3x what it was then, but I’m paying 68% less than I used to be. My current payments, web hosting, and accounting software outlay is $1,125 a year; if I had remained on Patreon my annual fees would be about $10,000.
Patreon integrates with basically nothing
Okay, you’re saying - so Patreon isn’t the perfect all-in-one platform that will allow me to bill, chat with, and build my audience. But maybe it’s a piece of a larger puzzle?
It’s a great idea, but unfortunately Patreon does a terrible job integrating with the other services that I use to run my business.
The first thing I’d want from Patreon is an easy way to automatically share my content (which most creators distribute elsewhere - for me, it’s Mailchimp) to Patreon. But while Patreon does have a public API, it’s poorly developed (there is no sandbox/testing area, and the most recent updates to their API libraries are from January of 2019) and only allows browsing/looking up data on Patreon; you cannot post content to your Patreon account via the API. This lack of functionality also exists in Zapier’s implementation of the Patreon API: You can use Patreon as a trigger, but not as an action.
What this means is that creators are inherently tied to Patreon’s terrible, horrible, clicky clicky GUI. You are completely tied to the limitations that are built into Patreon’s web product, and don’t have the ability to build automations that’ll speed up your content and customer management.
Patreon also fails to integrate well with accounting software - something that flies in the face of their promise to give creators “the stability you need to build an independent creative career.” Their API (and Zapier’s implementation of it) only provides pledge activity, and is therefore inaccurate (caps, declines, and fraud aren’t factored in - it’s a guesstimate at what you might make in the future) in all of the ways described above.
What Patreon is good for
I really can’t stress this enough: If your intention is to build a meaningful income, there are much better options out there than Patreon. What Patreon does offer is a quick way to see whether people on the internet will pay you a little money for something that you’re already doing for free.
This is a nontrivial thing, but it’s something that you should really think through before you start a Patreon page. If it’s a success, then it’ll likely make a lot of sense for you to transition off of Patreon at some point in the foreseeable future. That might be fine - especially if you’re really early on and success feels like a longshot - but The Prepared’s transition off of Patreon required a lot of management on my part and resulted in roughly 1/3 of my patrons dropping their pledges.
To be clear: I’m deeply appreciative of all of the people and companies who supported me through Patreon, and it really is true that those first couple of dollars made a big impact in the path of my career. But Patreon as a platform did remarkably little to support me along that journey, even after I became a moderately successful creator and took quite a bit of time to explain my frustrations to both their customer service & user research teams.