How Only Fans Was Able To Pay Creators $3 Billion Dollars

ROI Overload Business, Tech & Finance Newsletter

  
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Happy humpday.

How’s everyone’s week going?

If you’re casually a billionaire, I expect you should be getting ready for your flight into space…..

If you’re not a billionaire however, and you’re like the rest of us, here’s another weekly newsletter breaking down…

The one.

The only…….

Only…

Fans.

You read that right, we’re going to break down how Only Fans went from zero to hero, and talk about their growth strategy.

If you don’t know what only fans is, stay tuned, you’re in for a treat.

We also have a review of a new productivity app, a little Malcolm Gladwell, an interview with the futurist, Dr Mark Van Rijmenam and a lesson for anyone that trolls online.

All right, here’s what’s coming up this week.


📈 Case Study: How Only Fans Was Able To Pay Creators $3 Billion Dollars

The internet has changed the way we live our lives.

You can find almost anything online, including a significant amount of adult content.

Pornography websites have hundreds of millions of visitors every day and saw a significant increase in traffic during the peak of the pandemic.

However, another website offering gated pornographic content in a similar subscription model to Patreon also saw a significant increase in traffic. 

Today, I will talk about OnlyFans, the concept for gated content, it’s incredible growth strategy and its fascinating founder, Tim Stokely. 

Glamworship

In 2011, Stokely spent his time partying around the world and burning through his family’s money on "business ideas.” Glamworship was one of those ideas. 

The Glamworship website stood out by focusing exclusively on “financial domination,” a sexual fetish in which a “submissive” gives gifts and money to a financial “dominant.” 

The idea came to Stokely when he stumbled upon subreddits about financial domination. He saw how much money people spent on these experiences, yet no one created exclusive content for them. 

Funded by tens of thousands of dollars from his family, he then decided to develop Glamworship. 

Glamworship viewers offered some big money in exchange for playing out their wildest financial fantasies. The performers quickly took advantage of this opportunity, and a Cameo-for-financial-dominance economy began to blossom.

Unfortunately, a newly born mini-economy that leveraged Twitter and Venmo took place. Users would view content on Glamworship, reach out to the performers on Twitter, request a video, pay the performers via Venmo/Paypal, and then receive the video. This effectively allowed the users to bypass the fees that resulted in profits for Glamworship.

This strategy didn't sit well with Stokely, so he closed Glamworship and started a new company in a continued attempt to create a business offering of exclusive content.

Customs4u

Instead of users independently finding performers on Twitter, contacting them, and arranging payments in an unreliable industry, Customs4u handled all the work.

However, many performers were not happy about this because it lowered the barrier to entry into the industry, saturating the market with new performers and making the niche more competitive. As a result, Stokely was never able to develop Customs4u at the scale he had envisioned.

121with

Stokely then took a break, moving from the porn business into the trades and services business; he founded 121with as his next company. Here, the concept was for tradespeople to sell their expertise via an audio or video call. 

121with and Customs4u both leveraged creator-fan relationships to run their businesses. Unfortunately, like the previous venture, 121with failed. Nevertheless, it presented a good business model, just not in the right industry. 

The Beginning Of OnlyFans

Stokely then reentered the adult entertainment market a year later.

As Instagram grew in popularity, many adult entertainers used it to post videos and pictures to promote themselves. However, the dominant social media platforms banned pornographic content and often banned users for even borderline content.

This gave Stokely the idea of building a paid social feed like Instagram or Twitter, where creators can earn money directly from their content. 

In 2016, he launched OnlyFans. Here, viewers would pay subscription fees ranging from $5 to $50 a month to access content created by performers. OnlyFans received 20% of the subscription while creators received the rest. 

The experiences Stokely gathered from his previous business ventures contributed to the success of his new company. Through Glamworship, for example, the company gained insight into the concept of paying performers directly for special video requests. Meanwhile, the initial OnlyFans customers came from Customs4u, and its business model evolved from 121with.  

The early days of OnlyFans then revolved around enabling creators to upload custom content. By tailoring their content to audience preferences, creators built closer relationships with their followers. 

An Effective Referral Strategy

Tim and the OnlyFans team didn't want just anyone on board. They wanted people who could contribute to their success. 

Therefore, OnlyFans created an incentive structure aligned with the platform's goals to encourage users to recruit the right people. Its key objective was to facilitate referrals with “quality over quantity” in mind. 

The OnlyFans referral program rewarded its members with a 5% lifelong revenue share. 

If you recruit someone, for example, who makes $100,000 per year on OnlyFans and keeps them on the platform for five years, the company will pay you $25,000. 

It is this incentive structure that has led to creators utilizing the referral program as well as encouraging others to join the platform.

Making Use Of Twitter

Fanscope was the first product OnlyFans developed to help creators leverage their Twitter following. It was released just three months after OnlyFans launched and finished setting up its payment infrastructure. 

Fanscope could be described as a live version of Cameo. Creators can start a Fanscope session through OnlyFans and have the link automatically posted to their Twitter accounts. The live session then receives exposure from their entire Twitter following.

To watch the live stream, Twitter followers must click the link and sign up to OnlyFans. This strategy brought more people to OnlyFans because it lowered entry barriers. New users could see what they can expect from an OnlyFans page without investing any money.

Steady & Predictable Growth

In contrast to other live platforms, OnlyFans saw adult performers as assets, so instead of prohibiting them, the company empowered them. As a result, they never restricted their content but instead, they encouraged the creation of unique content. 

In 2018, Leo Radvinsky, a Ukrainian-American web entrepreneur who had built up a fortune with a site called MyFreeCams, was able to buy 75% of OnlyFans. After that, the company kept growing steadily. 

OnlyFan’s success soared tremendously in 2020 when celebrities began to publicize it. Beyoncé name-dropping it in her song and Cardi B joining the platform are some of the events that accelerated its growth. 

So far, OnlyFans has paid its creators more than $3B, and more than 120 million viewers have joined the site. 

As of today, the vast majority of OnlyFans creators are adult entertainers. The company, however, has started to invest in rebranding it to appeal to a broader audience. 

This year, they established a creator fund of £20,000 ($27,800) to help four aspiring musicians kick start their careers.

Whether they will pull off their attempt to join the mainstream market is a topic we’ll have for another day.

4 Lessons From OnlyFans

  1. Tim Stokely had multiple failures before the only fans success. Most ‘overnight successess’, take years.

  2. If something is not favored by the larger market, there’s an opportunity for business. Tim focused on a marginalized market segment that was kicked off of other social platforms, and gave them a platform and community.

  3. Get your customers to sell for you. OnlyFans launched a highly lucrative referral strategy which brought people to their platform.

  4. If you don’t give up, the timing will eventually be right. Tim launched multiple businesses, any of those could have coincided with a global pandemic event, but they didn’t and failed for a variety of reasons. However, if you think that you’re not lucky or the timing isn’t right for whatever it is, you’re trying to build… keep going, because eventually, if you put time into something and you put in the effort, the timing will eventually be right, and the luck will eventually find you.


💻 SaaS Of The Week: Clarity

The best way I’ve heard Clarity described is that it’s the epitome of “simplexity”.

Clarity is the simplest productivity app ever made.

Run your team with a single weekly doc and keep everyone on the same page without endless configuration & maintenance.

Check It Out

If you feel like you’re lacking a little organization, and inviting a little too much chaos in your life… definitely give Clarity a spin.

A simple app that makes it easy to keep everything in order.

I’ve definitely enjoyed using it (and found it to be very useful) for the past few months.


🎧 Things You Should Listen To: How To Future Proof Your Company (AI, Blockchain, Big Data) With Dr. Mark van Rijmenam

I was able to sit down with Dr Mark van Rijmenam, this past week on the Success Story Podcast.

Dr. Rijmenam is an international keynote speaker on the future of work and the organisation of tomorrow. He delivers also virtual keynotes and webinars.

He is the author of three best-selling management books on big data, blockchain and AI. His latest book – The Organisation of Tomorrow – details how AI, blockchain and analytics turn your business into a data organization.

He is the publisher of the ‘f(x) = ex‘ newsletter, read by thousands of executives, on the future of work and the organization of tomorrow, has spoken in 20 countries across the globe and collectively inspired over 100.000 managers, directors and C-level executives.

Listen On iTunes

Here’s what we spoke about….

02:57 - Mark’s origin story.

12:02 - Blockchain in Fortune 500.

18:03 - What is true digital transformation?

20:05 - How to properly use data to drive business decisions.

26:28 - German cars and air filtration.

37:50 - Getting company buy-in to a digital transformation.

39:57 - Data and sovereign identities.

50:48 - Germany, WW2 and GDPR.

56:52 - Pivoting in a pandemic.

01:00:20 - Advice for entrepreneurs.


📚 Things You Should Read: Blink by Malcolm Gladwell

The book so good, that I somehow have two copies.

Malcom Gladwell is an incredible thinker, and challenges us to evaluate the way we think.

Drawing on cutting-edge neuroscience and psychology he revolutionizes the way we understand the world within.

Get It On Amazon

Blink is a book about how we think without thinking, about choices that seem to be made in an instant - in the blink of an eye - that actually aren't as simple as they seem. 

This book will get you to understand how to trust and rely on your quick instincts and judgement, so that you can get to the point, where you can really trust your gut.

Obviously a massively useful skill in business, or just in life.

Definitely a provocative read.


🧠 Scott’s Thoughts: Online Is Forever

Life is long.

Incredibly long.

And anything you post online.. will be there, forever.

A warning, kids.

Why do I say this?

Because I reached out to my LinkedIn audience on a very, polarizing issue.

I asked the question…

“Is it ok for an employer to fire an employee who refuses to get vaccinated?”.

Obviously something that is going to come up in personal and work conversations as businesses start to re-open.

It’s a polarizing issue to say the least.

Besides the fact that almost 16,000 people voted and voiced some opinion on the matter, which is telling to the complexity and the seriousness and the passion behind the topic, the comments were…. shocking, and not in a good way.

I expected some discourse, some debate, but I expected it to be relatively tame as it is LinkedIn.

This couldn’t be further from the truth.

People, with their full names, pictures and employers/jobs on display verbally abused each other, degraded each other’s opinions, and basically displayed the worst of social media, in, what was supposed to be an educated conversation on the topic.

And don’t get me wrong, there was great conversation…

But to the people that post without thinking.

The people that say whatever comes to mind, and perhaps don’t think to filter it.

Remember, that life is long.

And perhaps before you post anything, think about whether you want your children or grand children reading it back to you in 60 years.

If not, perhaps find a better way to say it, or don’t say it at all, if it doesn’t add value or insight, because once that comment or post goes out… it’s tied to your name, forever.


Podcast

If you like the content in this newsletter, there’s a pretty good chance you’ll like my podcast, “Success Story”, where I unpack the playbooks of entrepreneurs, executives and other high performing individuals.

Check Out The Podcast


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-Scott

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