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Revisiting Patreon – 100K Subscribers #36

Steve Dotto here. How the heck are you doing this fine day? Me? I would like to wish you a really happy new year because this is the first vlog that I’m delivering of 2015 and I want to wish my entire community a really prosperous, happy and healthy new year in 2015 as we move ahead. Today as I was taking a look back at the year that was, I wanted to pick one thing that surprised the heck out of me in this journey of growing my YouTube channel and building a business out of YouTube for this vlog, for Growing Your YouTube Channel to 100,000 Subscribers. When I looked back at the year that was, the thing that just gob-stopped me and has completely surprised me is the community’s engagement in Patreon, the crowd-funding site that is not generating a fairly substantial amount of revenue as far as I’m concerned and I think as the year goes ahead will become my most significant revenue source. So we’re going to take a look today, a revisit, a remix, at Patreon on DottoTech. I began this whole project, Growing Your YouTube Channel to 100,000 Subscribers and actually this whole YouTube project of building a community on YouTube to see if I could recreate the success that I had on television, to see if YouTube could indeed support a content creator and could be the basis for moving ahead. I didn’t have any preconceived notions about where I was going to make money and how I was going to make revenue. I knew there were opportunities out there to do digital products and sell courses, to get advertising revenue from AdSense and other things, consulting, other things would come along as result of creating authority through a YouTube channel and building a community through the YouTube channel. All of those have generated revenue. Some were more successful than others. We’ll talk about them as the year goes on. Certainly, the digital products are doing quite well and we’ll be talking about the digital products as they relate to Patreon. But the thing that shocked the heck out of me this year was when I launched a Patreon campaign. Now Patreon is crowd-funding for content creators. It’s like Kickstarter for content creators. What happens is you basically go to a community and you say help me create content by financially supporting me and I’ll give you some perks. There will be some benefits attached to being a part of this community. For me, what this became was a place that people could come and the pitch that I put out at the beginning was if you help me by giving me a little bit of money, then I don’t have to spend all my time looking for advertising revenue and I can create more and better content and people responded quite well. We launched the Patreon campaign a little over six months ago, maybe seven months ago and immediately we had some traction. People were saying yeah, I get that, Steve. They were giving me $1 a month and $5 a month, very small amounts of money which basically said to me that they were supporting my endeavors. As a content creator, it was awesome. It was a really affirming feeling to have people staying and actually paying money. When my money came in and the first month ended and I think $350 or so came into my account, I was like wow, that is so cool! But I didn’t really even at that point say this is going to be the main pillar. This is going to be where I’m going to make most of my money moving ahead because I didn’t really have a sense of what the difference was in what a patronage site, a crowd-funding site like this could represent. As the year moved on, it slowly increased until the point that I looked at it—I don’t know what caused me to make this change but as I was looking at it, I thought what I want to do is—I guess in September when I created a really nice new little course, my Evernote Made Easy course, when I created that course I said I should really make that course available to the people who are supporting me on Patreon. So at the $10 level of patronage, the people who were supporting me at $10/month—this was starting on October, I think, I out it out—I said hey, if you’re a patron, thank you for your support and I’ve got this new course that I developed. It’s normally $97 but as a perk of your patronage, I will give it to you for free. People responded immediately. All of a sudden, I had people upgrading their account, new people were signing up and everybody that I started at the end of my sales webinar, I was talking about—now there’s a two-edged sword here because I was telling people they could buy it for $97 or they could join me on Patreon at $10/month and they could access to the same content. So people immediately said, what happens if I just sign up for a month and then I unsubscribe; do I get the course still? Of course, you still get the course. If you’re the sort of person that wants to do that then I wasn’t going to worry about plugging all of the loopholes. I guess it was a pretty big loophole but I wasn’t going to worry about plugging it because think the idea of community means that there’s a certain type of person that’s going to be attracted to it and if you’re going to do that, you probably weren’t going to be a member of my community anyways. Besides, I also offered a money-back guarantee on the course so you could always ask for your money back anyways and you would have gotten your money back. So there were ways to get the course for free if you really wanted to. Frankly, if somebody wants the course for free and they were going to do one of those things, I would rather they would just write and say Steve, give me the course for free please or I’ll just do one of these other things. Then I’ll just save you the trouble and send you the course for free. Having said that, the idea of community is what was important here. As I started to see more and more traction, as people started to jump onto Patreon at that $10 level, I saw the number increasing pretty dramatically. Then we launched another course. I did another one with Mike Vardy and poor Mike Vardy, he jumps on and he helps me build this Task Apps Made Easy course. I included it in my patronage because I didn’t think that it was going to be that huge on Patreon. I thought that other people were going to buy it but indeed a lot of people jumped on that as well. Even though they could get the bundle for $149, people still chose to get the course a lot on Patreon. Mike includes it in his Patreon site as well. But regardless as this moved along, a shift happened in my mind, in the way that I looked at things. I recognized that I was basically able with this Patreon support, with including these courses in Patreon as a course at the $10 level, I had created a sort of membership system. I could have quite easily taken all of my own content and out of my own website created a membership site where you pay me $10, $20 or $30 a month and you get access to all of the content at a membership site and you just give the money directly to me. Those work well. Lots of people use those and they’re very, very successful. But there’s a psychological relationship that happens then and the fact that if you join the membership site, you are my customer. You’re purchasing content from me. Keep that in mind and then think of what happens at Patreon. At Patreon, the people come in with an attitude of I’m supporting you. I’m not so much paying for what you’re going to give me as supporting you to create new content in the future. That’s the philosophy behind Patreon. It’s about content creation. So when they get the stuff in the past, it’s a perk as opposed to something they’re purchasing from you. So people don’t feel like they’re your customer. Instead, they feel like they’re your patrons. They are supporting you. The feeling for me is the same. It’s not so much that you’re my customer but you’re a supporter of my community. There’s just a slightly different philosophical feel to it. Does that make sense? I think it does if you stop and think about it. So I started to recognize this. It takes a while sometimes but the light started to dawn in November and all through November I was thinking how am I going to approach Patreon, moving ahead into 2015? It crystallized in my mind what I should be doing and how perhaps you can be looking at using Patreon moving ahead. What I decided to do is I decided to take Patreon and I decided to push my courses as much as possible, all of this new content I was going to create into the Patreon community. There were already several hundred people in the community so there were people that were going to appreciate that content coming down the pipe to them, A, but it also seemed to be a very easy sell, to ask people for $10 or $20 a month to support you on Patreon as opposed to ask them for $100 to $200 to $300 or $400 to purchase a course outright. That was the philosophy that I thought about moving ahead. Now there are a couple of caveats to that. When I launch a brand new course, I don’t think that it should be available to the patrons of Patreon immediately. I think there should be a window, six weeks maybe, where I could launch it and I can actually sell it and I can include some extra little perks to people that are selling and then make it available to people on Patreon. That’s still something that I’m working out in my mind but I think that that’s a reasonable way to approach it, especially some of my high-ranked courses that I’m developing around content publishing, around YouTube publishing that take a lot of time and effort to produce the course, there should be a time that I could sell it as a fixed product as well. That’s what I’m doing moving ahead, looking at Patreon as potentially the best revenue source for me. I am basically planning an editorial schedule now of releasing products into Patreon. So what I had to do was I had to make some decisions now. Patreon has—you can see the numbers here—we’re now just a little bit over six months into it and we’re sitting at nearly $2,700 a month in revenue already off of it. This is not insignificant as far as I’m concerned and if this has grown this fast, if we’re growing by $2,500 in about six months, if I can do that same growth rate by the end of 2015, you could see how this could be a significant part of any independent producer’s income. So that’s my plan. Having looked at that, I had to take a look at this which is the pledge structure, exactly what you get for what you give. I’ve always wanted to reduce the numbers. I’m actually a little bit stuck with this idea because I’d like to get rid of this $5 a month pledge and just have $1 a month and then let people add maybe anywhere between $1 and $10 and not actually have a fixed number like this just so there’s one less thing for them to look at. But I don’t know how to do that with the existing people. It’s something I’ll have to talk to people at Patreon about. But once we hit this $10/month level, that’s where real money as far as I’m concerned starts to come into me and that’s where the really valuable perks should start to go out to the patrons. What I’ve decided I’m doing is I’ve tiered my content because I have two different audiences. I have you folks who are the audience that’s interested in webcasting, podcasting, screencasting, YouTube publishing and in social media and internet marketing, which is what this vlog is really all about. Then I have my productivity audience. Now some of you cross over but then I have my productivity audience that’s interested in Gmail, in Evernote and in the iPhones and that sort of stuff. So what I’ve decided to do is take all of my productivity-based courses, the Evernote courses that I’m doing, the task manager courses, any courses I do in that space and make that available to the people who are at the $10/month level because those courses are all going to be $97 and that’s what I perceive as good value for those courses. So I’m going to slot those in as perks at the $10/month level. I think people are willing to spend a little bit more money if they can make money and the things that I’m teaching in the YouTube course that I’m creating and the webinar courses that I’m developing right now, that’s going to help people create revenue themselves. So I’m going to set up at the $20/month level access to those services. So if you want to take my YouTube course, if you want to take my webinar course, if you’re sponsoring me at $20 a month, you’ll get access to those courses. Then if people want both, we will have a tier $25/month which basically gives people access to all of the courses. I think that this ultimately is going to really accelerate the revenue into my channel and into my enterprise because of the philosophical feeling of support rather than purchasing and it’s a nice, reasonable dollar value that people can handle without breaking the bank that they get a lot of good value from. They know that they’re going to be getting good courses coming down the pipe, plus they get early access to other videos and other things. But primarily, it’s all about the courses. So this is a little philosophically different and what this does for me as a content creator is it takes off a lot of pressure because here’s one of the challenges with just selling information products which is the model most internet marketers are following. It’s feast or famine. Either you’re in development or launch all the time. By that I mean either you’re building a new course, figuring out what your audience wants and then selling that course or building it up to the point where you can launch it and then sell it or you’re in that sale cycle where you’re selling it but in between the two when you’re not selling or promoting a course actively, your revenue is going to dry up pretty significantly. So creating a consistent passive income stream is really what Patreon can bring to the table. That’s exactly what I see starting to happen. As I say, this was a complete surprise to me. I fully expected Patreon to be a nice aside to kind of generate the same amount of revenue that maybe AdSense was generating but it has already passed my AdSense revenue just six months in. It also seems to be far more scalable that I might have believed at the beginning. So once I’ve launched a product now and future webinars when I’m promoting it, I’ll be doing less selling of the products and more pushing people towards Patreon, getting them into the community and at that point there, it takes a lot of the pressure off because every month we have money coming in. That’s what’s happening with the business side of Patreon. I think it has grown to the point now where all content creators have to take a good, long, hard look at it. YouTube is. They have their own content creator’s model with kind of a tip jar that they’ve been putting forward to compete with Patreon. At least, I believe it’s going to compete with Patreon. Unfortunately for me, they’ve authorized me for the program, sent me an invitation to the program. When I replied, they said oh thanks for your interest but it’s not available in your country. Apparently, Canada doesn’t have it yet so they will let me know when it’s available. Some of you might actually have it already. If you do, please let us know. If you can comment down below exactly what’s happening with it, let us know what’s going on. I hope you found this interesting today. I know it seems very narcissistic as I talk about me, me, me, me and how I’m producing this content but really we’ve been using the DottoTech channel as a testing bed and it’s the only one that I have control over so I have to basically talk about me, me, me if I’m going to show you what we’ve been doing and what we’ve learned. What I have learned, the biggest lesson from 2014 is crowd-funding is definitely worth taking a good, long, hard look at and getting your head around the difference between selling a product and being basically the mentor of a community and what the difference is for your customers from being an audience to customers now to being patrons, to being supporters of your community, of your channel. That’s a pretty profound shift and it’s one that could indeed carry you forward business-wise as you move ahead. This channel here or this video series here is brought to you by Patreon. I make it ad-free and it’s supported by the community. If you are interested in taking look at my Patreon page, I encourage you to have a look. The link is here. Also, don’t forget to of course subscribe to this channel and sign up for our newsletter for all of our upcoming webinars as we’re going to be concentrating really hard this year on webinars on webinars, teaching people how to create webinars which I think is probably the best way to actively grow your market. Obviously, YouTube is a big part of the whole entire growth process but it fits very nicely with the whole webinar process and creating an event is such a powerful thing. I think webinars are the way it’s going to be going this coming year. With that, I am done. Till next time, I’m Steve Dotto. Have fun storming the castle.

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