Thread by @FoldableHuman

Obviously there's a lot of Patreon talk today.

1/?

First thing's first: aside from the nightmare of grandfathered rates and the plague of feature-tier infographs needed to explain WTF who gets what at what rate, the three tiers are, whatever.

If a new platform launched with this as their slate I would just nod and say "okay." It's unremarkable on its own.

In 2017 Patreon attempted to change their payment system, moving away from bundling, because they were having trouble complying with financial regulations. That inevitable change is packed into these changes.

Similarly a move away from a fix % processing fee to just charging the actual VISA/MasterCard mixed %/fixed processing fee.

That isn't a clean change, and they've got some weird opt-in "you can stay on the old 5% system if you want" customer retention offer going. Why they didn't just throw VISA under the bus back in 2017 I don't know, but here we are.

I mean, you don't really lose anything by telling your customers "it's VISA's fault" because who cares about VISA's feelings? They're the definition of a merciless corporate entity. They don't even have a sassy Twitter persona sharing hot memes and thirst tweets.

The obvious red flag is that the grandfathered options aren't going to hang around forever. They're blatantly a temporary customer retention strategy. Maintaining the existing payment structure for a subset of users means maintaining two independent processing structures.

Give it 12 months, they'll say "oh, 80% of users use the new system so we're just moving everyone because almost everyone already loves the new system!" and they'll consolidate. Again, why they didn't just go "look, this is what VISA charges us to process payments" in 2017 IDK.

The "Pro" fee going up to 8% is where I get a bit 😑 [beleaguered sigh]

(keeping in mind that the "Pro" tier is basically what Patreon is right now)

If 5% under the foundational business model wasn't enough to run the company that's an indictment of the leadership's ability to actually, like plan for the future and draw up a business model and anticipate costs and run a company.

If 5% was enough to run the company then raising the core product to 8% is just a straight price hike because you can.

Neither of those are particularly great.

Long term they could leave the "founding" users at 5% and count on new users and/or general churn to eventually overtake them, but I'm not going to be shocked if mid 2020 brings a round of new features that don't have a "founder" rate to drive conversions.

The optimist in me is "okay, they needed to tweak the model because it was slightly broken and PR is difficult but they're not going to keep screwing with it"

The pessimist in me is "their product slate looks like cell phone plans and they're going to behave accordingly"