I realize now that the hard part is not being brilliant and coming up with great ideas. The hard part is really being honest with yourself, because we so often want to look at the world through rose-colored glasses.
Jack Conte is on a mission to eradicate the phrase “starving artist” from the lexicon.
A musician by training, Conte is the CEO of Patreon, a company whose platform allows creative people to flourish by pursuing their craft, which is no small feat in a web advertising world still dominated by CPM (cost per thousand impressions) metrics, which is a measurement of how much money it costs you to reach 1,000 readers, viewers, visitors, or listeners.
In its first five years, creators on Patreon have earned over $350 million using the company’s platform. And this year alone, Patreon estimates it will pay out around $300 million in compensation as fans or “patrons” pay creators to access their work. Creators are free to create different access tiers with varying benefits — and charge accordingly. In return, Patreon, which does the heavy lifting in terms of infrastructure and marketing, receives a 5% revenue cut.
We spoke with Jack to learn more about his business and how a musical artist — he also supplied the voice for the teen males in the video game The Sims 2 — managed to morph successfully into an entrepreneur and tech CEO.
Q: Where did you grow up?
I was born in San Francisco.
Q: One of the few who can actually say that. Have you lived there your whole life?
I know. I’m such a rare breed. But, yeah. I was born in San Francisco and I’ve been in the Bay Area my whole life. I’ve also lived in the South Bay, the North Bay, and I just moved to the East Bay.
Q: Your mom was a jazz singer and your dad was a jazz pianist, which is very cool. Did they encourage you to play an instrument?
Yeah, I was six years old when I started playing piano. I started taking classical lessons.
Q: Was there a particular type of music you liked when you were young?
My dad taught me how to play the blues when I was six. And I started writing songs, improvising, and playing blues with my dad.
Q: How did a family atmosphere that was heavy on the arts influence you?
It was everything. It is probably the reason I decided to be a professional musician after graduating from college. Had I not grown up with music and had the confidence in my own musical ability, had I not spent my whole life making music and arranging for my acapella group and big bands and all the music projects, I probably would’ve just graduated and felt totally unprepared. But instead, I was a music and technology major, and when I graduated I thought, ‘Screw it. I’m going to do it. I’m going to be a professional musician.’ I don’t think I could’ve done that had I not had literally decades of experience making music.
Q: Music obviously was a passion. Did it ever get in the way of learning math, social studies, and all the other subjects that kids study in high school?
No. I loved that stuff too. I was a good student and I worked really hard. True story: My mom had to tell me to go to bed because if she didn’t, I’d just stay up doing my homework. So, no. music didn’t get in the way.
Q: After you graduated from Stanford, what was your career plan?
I wanted to become a professional musician and sell my music, go on tour, and be an artist. I just didn’t quite know how to make that happen.
Q: Then you discovered YouTube. How did that impact your music career?
Yes, right after graduating, I discovered YouTube, which was a brand new video-sharing website. I started uploading my music to the service and that’s when I first began connecting with an audience and found people who actually listened to and liked my music.
Q: You couldn’t have timed it any better. How did it work out?
I got very excited about the exposure, obviously, and started heavily investing in the platform and building my audience on YouTube. Within a few years of graduating, I was making my living as a professional, full-time musician. I was selling MP3s and then I would do uploads to iTunes as well. I started a band called “Pomplamoose” with my girlfriend at the time — she’s now my wife — and we started selling a lot of music. I remember we sold 30,000 songs in one month. And we owned all the masters because we didn’t sign with a label or anything like that. So, we just got a check for $22,000 right into our bank account.
Q: The band was successful and you had fulfilled your dream of becoming a professional musician. What was the spark behind the idea of doing a software startup?
Well, the band was doing well financially and from an audience-building standpoint. But when it went on hiatus, I started working on a music video toward the end of 2012. I must have spent over $10,000 on the project — and even maxed out two credit cards. That was really the moment where I thought something was wrong with the equation. I was going to put out a video that would get a million or two million views. I’d already spent all of this money and would only be making $150 in ad revenue from the video. I thought, ‘Hold on a second.’
Q: So, this was a proverbial necessity being the mother of invention moment?
Yes, but it’s not quite a “starving artist couldn’t make it work” story. There was this one moment where I was making the video and I knew my fans were going to like it. I had spent a lot of money and three months of my time on it and still there was no way for me to make a living from that video.
Q: Step me through your collaboration with Sam Yam on co-founding what would become Patreon. How did that come together?
It was the beginning of 2013 and I was in the middle of making this wild video that was costing so much money and taking so much time. And I started thinking, what if my fans just paid me a buck a month? I sketched it out in a little black book that I have and drew out the idea for a website. I started calling everybody I knew, including Sam, and talked about this idea.
Q: By this time, Sam, who was your college roommate, had already worked for a few years as an entrepreneur. This was your first time at this. What was his reaction when you came to him with what you were thinking about?
I had never been in tech or anything like that and had no idea what I was doing. So I called him up and said, ‘Sam, do we need to sign a non-disclosure agreement or something like that? Or can I just show this to you?’ He was like, ‘Jack, ideas are cheap. It doesn’t matter what you sketched out on pieces of printer paper. What matters is building this thing. It’s all about the execution.’
I met Sam the next day to show him the idea. He immediately got it and within about a half hour of talking through it, he got really passionate and kept saying, ‘Jack, this is going to work. This is huge. This is going to work!’ And then he added, ‘Jack, don’t tell anyone about this idea.’ And I said, ‘Okay, Sam. I won’t tell anybody else about it.’ It was such a funny moment where he went from basically saying, ‘Eh, who cares about ideas,’ to saying, ‘Don’t tell anybody.’
Q: And Sam took the ball and ran with it?
That night he went home and started coding Patreon.com. Sam ended up building the entire website all by himself in three months — the payments flow, the creator page, the CRM system, the messaging system, everything.
Q: I saw a video you shot of the bedroom, that I understand became an ersatz office where Sam basically camped out and wouldn’t leave until he finished. Is that true?
Sam is one of those superhumans that gives himself completely to projects and missions, and, yeah, he would not sleep. In those first three months, I remember there would be some things that would pop up and we’d hear that YouTube was doing this or Kickstarter was doing that or that there’s some new company that’s announced something — and Sam would push forward the timeline by a month and just make up for the time by not sleeping. He’d fall asleep for 15 minutes and then wake up and force himself to keep coding the website.
Q: Why do you think Patreon clicked with users?
There’s this huge discrepancy between what creative people feel they’re worth, and then the systems of the internet and the world that pays those creative people. It’s not just video producers. It’s also podcasters and journalists and anybody who puts content on the web. The early winners of the web were advertising companies that were basically trying to figure out how to turn engagements and eyeballs into revenue. And that was the business model of those companies. It was, how do you turn eyeballs into dollars?
Q: That was good for the companies but not as good for creative people. Am I correct?
It turns out that that system was very bad at valuing artists and paying them what they’re worth. Advertisers on the web think in terms of CPMs, which are two or three dollars on the web. So, if you have 20,000 people reading your blog, you’ll only make a few bucks from that. It’s a crazy system but it’s one that’s currently financing the production of content at scale globally and systemically on the web.
Q: That’s also a system that puts individual content creators in a bind. It’s really hard to think about making a living that way, right?
Exactly. Take somebody who has 20,000 fans. Instead of getting paid a few hundred bucks a month, they can be paid $10,000 a month, which Patreon is doing. That product is going to spread like wildfire because, finally, you’re closing the gap between what artists feel like they’re worth and the check that they get at the end of the month.
Q: What’s been your biggest satisfaction from doing this?
Sending creative people money every month. That is the most rewarding thing that I’ve ever experienced in my life. Having creative people make a living by doing what they love and having this platform that enables them to do that. I can’t think of anything in the world that makes me feel more satisfied and more rewarded than that. And the fact that it’s happening at the scale that it’s happening is also very satisfying and rewarding.
Q: Do you think the talents and attributes that go into being a successful artist help or hinder you as a CEO? You also need to deal with bureaucracy and all of these sundry business details that need to be attended to, right?
I think you can be a successful artist and a crappy CEO. And the opposite is also true. You can be a good CEO and a crappy artist. But I think for me, the type of artist that I was — I had to kill myself to be a successful artist. I had to learn constantly and work really hard. A lot of the stuff around being an artist and developing melodies and composition — none of that stuff comes naturally to me. I have to grind it out. I have to learn why and then make it better. Now that I’m working at a company, I also have to grind it out and just never give up and work really hard. And so that skill set has served me very well as a CEO because, at a company, everything is changing so quickly. You have to learn so much and you have to move at such an incredible pace and be open to changing yourself and how you think about things.
Q: You obviously didn’t train at the Wharton School. When you’ve dealt with business challenges, what surprised you about the way you were able to handle situations?
I think the biggest surprise is that I learned it’s not rocket science. The media just fetishizes CEOs and founders so much, but they’re just normal people who try really hard.
I now realize that the hard part is not being brilliant and coming up with great ideas. The hard part is really being honest with yourself because we so often want to look at the world through rose-colored glasses. And it’s really hard to look around you and be honest about the problems and to be honest about your own shortcomings. It doesn’t require genius. It just requires being brutally honest with yourself and being open to all that crap that you then have to go fix to accomplish really hard things.
