Marketing authority Seth Godin has this test for brands: “Will people miss you if you are gone?”
Harley-Davidson, Virgin America, Instagram, Tesla, iPhone and Disney all pass his test.
Recurrency isn’t something people will miss when it’s gone.
So we are shutting Recurrency down and working on a new product for creators and fans.
Why Didn’t Recurrency Catch On?
We did a bunch of things to differentiate Recurrency from other recurring crowdfunding services.
We had a supporter-first focus. We let people pledge to support creators who weren’t even asking for support. We required supporters to leave testimonials when they pledged money to creators. We let creators be supporters themselves by forwarding their income to other creators — again with a testimonial explaining why. We let visitors search for creators across multiple social networks at the same time and our site built creator profiles on the fly.
Regardless of this supporter-first focus, a service like ours only works if creators show up and do the work.
And Recurrency didn’t get enough traction with creators to survive.
What Could Have Been
A few months ago, we got pretty deep into talks to acquire another business and merge it into ours. Initially, the combination looked incredible. They had dozens of famous creators who would never do recurring crowdfunding, plus decent revenue and a great team.
But this is the key part: those famous creators would have never used Recurrency. It would have been like inviting celebrities to a hot party and then tricking them into attending a different party next door.
We walked away from the deal.
Can’t Someone Else Run Recurrency?
We’ve talked to some other companies about keeping the service going, but these companies just want our codebase, not our member base. And those deals won’t happen quickly enough to avoid interrupting the service for our creators. So our code and our brand may eventually find a new home, but for now the service is ending.
Can’t You Just Get More Investor Money?
We raised some money last year to launch the site, but all of the investors we’ve talked to for funding future rounds have serious concerns with recurring crowdfunding. They specifically point out two major problems they have with Patreon, the leader in this space and the business Recurrency is measured against in these meetings.
Their first concern is the business model. Patreon has raised $47M from investors, is valued at $100M+ and collects roughly $50M/year for creators. But with a 5% cut, they only keep $2.5M. Even if they double their income, they are stuck living off of investor money.
And these are not good times to be living off of investor money!
Drip — which has raised more money than Recurrency, started four years before we did and has collected millions of dollars for musicians — announced this week that they are also shutting down.
The second concern we heard from investors was about the level of creators using the service. One of them dismissed Patreon by saying, “They top out at Amanda Palmer.” That’s a direct quote. I actually love Amanda Palmer. I support her on Patreon and her TED talk on the Art of Asking was a defining moment in this space.
Amanda F. Palmer is our patron saint!
But we get what they’re trying to say. Superstars don’t do recurring crowdfunding.
But it’s not just superstars. Over and over, we’ve heard the same list of creator objections:
- “I don’t like asking my fans for money.”
- “I don’t want to make exclusive content for just a handful of people. That next cover song might be the one that goes viral and gets me on Dancing With The Stars and takes my career to the next level.”
- “I know how much work crowdfunding is. So I know I won’t have the time to interact with each of my supporters every month.”
- “I’m worried that my label will drop me if I collect money on the side from fans.”
- “I don’t want my fans to know that my record deal ended and I need the money.”
And there are more challenges:
One challenge is that a lot of beginning creators who have zero supporters are relying on services like ours to get them their first supporter. The trouble with that is we’re not a discovery platform. Or magicians.
Recurring crowdfunding works best when a creator has tens of thousands of casual fans and converts a few hundred into paying supporters. Not when a creator has only hundreds — or dozens — of casual, non-paying fans and is hoping to turn them into 1,000 paying fans.
We examine that challenge in better detail here: Is ‘1,000 True Fans’ Too Good To Be True?
Another challenge is reward fulfillment and delivery. Most people who do a Kickstarter don’t realize how much work it is — and how much it costs — to deliver all of the rewards and perks they promised. There are so many startups dedicated to helping creators fulfill and ship Kickstarter rewards.
But what happens when you’ve promised to reward your supporters every month? You quickly fall behind and it snowballs and it’s depressing.
And the challenge that goes hand in hand with delivering rewards is delivering engagement — just being able to interact with each supporter every month. We’ve talked to Patreon creators who watch a significant number of supporters cancel every month when they get billed because the only contact those supporters get is the monthly email saying “Thanks for the money.”
That’s not engagement. That’s a receipt.
One of our friends spent a full year planning her Kickstarter before flipping the switch — and she crushed it. But too many people think you just walk up to a crowdfunding service, turn it on and then the Internet sends you a check.
It all comes down to doing the work.
We’ve explored several ways to help creators with that work and we’ve dreamed up new products to make that work as easy as possible. We just can’t build them all and keep the core recurring crowdfunding service running. So we’re going to regroup and focus on just one of them.
Superstars + Superfans
Our guiding mission with Recurrency was to improve the experiences of superstars and superfans.
Soon, we will announce a new product that zeroes in on this engagement problem. And it’s one that works for creators who are doing recurring crowdfunding — plus creators who don’t, or won’t, use a service like Patreon or Recurrency.
But for now, we’re giving Recurrency a moment of silence.
“Make Awesome Possible.”
Two years ago, Jason told me he was moving from Los Angeles to San Francisco. I wanted to work with him again, so my wife encouraged me to share an apartment in SF. Recurrency was dreamed up on a WriteyBoard in Noe Valley.
Back then, I couldn’t have predicted that we’d be in the LAUNCH Incubator — it didn’t exist yet. Or that we’d debut in front of thousands of people on stage at the LAUNCH Festival. Or that Niki and I would sell our home in New York a few months later and move our whole family to the East Bay.
I was a lifelong New Yorker. I thought I could just go back and forth, living on one coast and working on the other, but the Valley gravity is strong!
Thank you Jason and Niki.
It’s been an incredible journey and it’s not over yet.
Recurrency would never have existed if I wasn’t blessed to work with so many talented people: Jonathan, Craig, Barb, Max, Michael, Emily, Eric, Marina, Elizabeth, Ashley, Matt, Barry, Denise, Jack, Linda, Mike, Dave, Matt, Mark, Judith, Kevin and Bill.
I’m also grateful for all of the creators who joined our service and promoted it to their fans and for all of the people who signed up and supported them.
Here ends chapter one of Recurrency.
Thank you all for being a part of it.