Need Business Advice? Watch Porn.

Have you masturbated today?

I’m guessing you have. According to the Kinsey Institute, over 50% of adults between 18 — 40 years old masturbate daily. A better question would be “where have you masturbated today?”

The ubiquitous access to pornography makes this a more interesting question. Whether it is in a magazine, on your computer, mobile phone, tablet or television, porn is easier to find than clean water. The rise of the adult entertainment industry has made this material omnipresent. Last year alone, Covenant Eyes, an internet research firm, reported that the Adult Film industry created 13,000 videos that brought in over $13 billion in revenue. Compare that to the 504 movies and $8 billion that Hollywood made in that same period.

“The porn industry is no longer the hidden sister to mainstream entertainment,” says Stephan Savin, an analyst at Merrill Lynch, “Porn is the mainstream now.” Yet, even though the industry is recognized for its entertainment merits, it is almost completely ignored for its highly innovative business and technological advancements.

Pornography is continuously on the cutting edge of society. The innovations happen because porn is “an ecosystem in which participants are willing — indeed forced — to experiment,” says Bruce Arnold, principal of Caslon Analytics, a research and analysis firm, in an interview with Network World. “And where experimentation isn’t hobbled by common sense, good taste, or bureaucracy,”

The industry made advancements where its mainstream competitors lagged. In the early-1990’s, Richard Gordon founded Electronic Card Systems, an online credit card processor that was used by websites such as ClubLove, the publisher of the Pamela Anderson sex tape. It wasn’t until 1994 that Amazon came online with a similar payment system and years later that the system Gordon pioneered was widely copied online.

Olark, a chat software for websites, is a by-product of the porn industry. This software is billed on their website as a way to “boost your sales, solve issues and understand your customer” by allowing employees to message visitors in real time. Hipmunk, WePay, Weebly and 5,000 other websites have adopted this software. That doesn’t account for the hundreds of thousands of customers using identical products by Zopim, Velaro, Bold Chat and similar companies. Before it was widely adopted in the mainstream technology market, PornHub and XHamster effectively implemented it in their live webcam products.

The online sensation LOLZ Cat videos would not exist without the porn industry. Years before video sites became popular, or even possible, X-rated sites were pushing existing technologies to make it possible for a pimple-faced teen on a dial-up modem to have his heart’s (or other organ’s) desire of skin flicks without having to spend hours downloading them. Before YouTube, Netflix and CNN, websites like Danni’s Hard Drive were streaming videos to consumers directly in the browser without any plugins. “Without these sites, it is unlikely that CNN would be effectively delivering news clips of global breaking issues,” wrote Lewis Perdue in Eroticabiz.

Porn even beat Google. Before Google, Reddit and Link Exchange existed as sites that directed and monetized traffic, X-rated conglomerates were already successfully doing so. Top rated websites would aggregate links and send viewers to affiliate websites. “Back in the ‘90s, if you subscribed to an adult site and left after three months, you’d get an e-mail offering access not only to that site but to three other networks for the same price. There was a lot of that going on,” says Mark Frieser, a leading entrepreneur in the industry, in an interview with PCWorld.

One of the most recent trends that companies have adopted from the pornography industry is the “independent contributor platform” business model. Instead of distributing content that was made in-house, X-rated websites allowed individuals to publish their own independently produced content and receive a cut of the profits; eerily similar to YouTube’s entire business model. This model has become so popular that countless technology startups have begun adopting it in their respective industries. Uber is not a car service; it is simply a platform that connects drivers and riders. HomeJoy is not a maid service; it just helps you find an independent house cleaner. Washio for laundry, BloomThat for floral arrangements, Shyp for package delivery and Naked Apartments for real estate don’t actually have employees doing what you think, they just provide the platform.

Students, business owners, entrepreneurs, marketers, investors, writers and academics spend thousands of hours studying and analyzing businesses. And yet, the pornography industry is overlooked. A quick search of the Harvard Business School curriculum shows dozens of cases discussing blue chip firms and even a few entrepreneurial startups, but nothing related to the “Not Safe For Work” (and apparently, school) industry. Stanford University, Michigan University, Baruch College and New York University’s business schools all present identical results.

The industry that pioneered countless technological advancements, innovative business models and ingenious marketing strategies (just check out Pornhub’s crowd-sourced safe-for-work campaign) has been completely ignored in traditional business teachings. Aside from Eat24’s recent case study describing their extremely successful advertising on porn sites, it is nearly impossible to find a university or corporation teaching its students about the industry.

If we want the next big business, we need to watch more porn.