🔥 OnlyFans is a massive business

When it comes to the creator economy, Patreon is the name that comes to mind. Between 2013 and 2019, the platform paid out $1B+ to creators of all stripes.

But an unlikely competitor is blowing it out of the water: OnlyFans.

According to a recent Bloomberg profile, the site — which allows people to charge fans for access to videos, photos, and personalized communications — is on pace to dish out $2B this year.

Never heard of OnlyFans?

The platform’s traditional power users are attractive females selling the “opposite of G-rated” photos to (usually) male buyers.

Today, its biggest accounts are from the world of Instagram influencers like Jem Wolfie and Andrea Vasile.

But adult performers and sex workers — who are unable to meet clients in person — have taken to the platform as a way to earn a living during the pandemic.

OnlyFans founder Tim Stokely is a serial entrepreneur

He founded a successive series of startups throughout the 2010s, prior to the launch of OnlyFans in 2016:

• GlamWorship, which facilitated transactions for a sexual fetish known as “financial domination” (which may also have been a phrase used in Amazon’s pre-IPO prospectus)
• Custom4U lets customers order personalized videos
• 121with was a marketplace where tradespeople (e.g., plumbers) could sell their expertise

Stokely tells Bloomberg that these ventures gave him key insights into the creator-fan relationship.

Mainstream celebrities are taking notice

Musicians like Cardi B and The Weeknd have used OnlyFans as a promotional platform. Actress Bella Thorne pulled in a single-day record of $1m when she joined the platform.

While sex workers expressed concern that the likes of Thorne will “gentrify” the platform and take away a much-needed income stream, OnlyFans’ growth outside of adult content looks inevitable.

Already with 85m+ users and 1m+ creators, OnlyFans is adding 500k users a day and — with a 20% take on the $2B in sales — will bring home $400m in 2020.

If Patreon is already worth $1.2B+, the sky’s the limit for OnlyFans.

Check out our related coverage:

• OnlyFans is in Trends’ 30 “future of media” companies
• Sam’s viral Twitter thread on a top OnlyFans creator
• Give Trung startup ideas for a URL he owns: OnlyPhans

“Do you want an extended warranty?” may be 6 of the most stressful words in the English language.

The source of that stress? Information asymmetry.

According to one study on TV purchases, customers overestimated the likelihood of a product breaking by 3x. Merchants capitalize on this false intuition by offering highly profitable warranty products (50%+ margins) — and 20 to 40% of consumers end up buying them.

Extend has raised $57m to improve the experience

The startup’s investors include Meritech Capital and fintech giant PayPal, which is always looking to back cutting-edge financial solutions.

Extend’s CEO Woody Levin tells The Hustle that the gold standard in the extended warranty space is AppleCare+.

“Getting AppleCare+ is so smooth that people don’t realize it’s an extended warranty,” he says. “We want to let all merchants — not just the top 1% — offer the same experience.”

To do so, Extend has created a “digitally native” warranty solution (e.g., transparent pricing, a chatbot, and a dashboard of products) that online merchants can add in a few lines of code.

Kayley the chatbot is available 24 hours a day for customers…

… and so far has processed 98% of Extend’s claims, which are underwritten in partnership with big insurers like AIG.

Extend currently covers $27B in gross merchandise value — everything from $1.99 spark plugs to $30k Rolex watches. Its biggest merchant partners include Peloton, Advance Auto Parts, and iRobot.

“Merchants who add a 3rd party extended warranty see a double-digit percent increase in overall product purchase conversions,” Levin tells us.

Low stress = big bucks.

The folks at the Federal Trade Commission (FTC) have been busy.

In addition to hitting Mark Zuckerberg with antitrust papers, the commission also moved to block P&G’s acquisition of female DTC razor startup Billie.

The core of US antitrust law has been ‘consumer welfare’…

… AKA whether an acquisition would raise prices for consumers.

But with the rise of Big Tech, it has expanded its antitrust playbook to properly address things like:

• The stifling of innovation
• The maleffects an acquisition may have on other stakeholders (suppliers, partners, advertisers)

For antitrust nerds (we see you), Billie is a throwback

Billie was launched in 2017 to combat the “pink tax” — the extra cost that brands place on common female consumer household products.

The startup, which has raised $35m, clearly had enough traction to attract P&G.

“If P&G can snuff out Billie’s rapid competitive growth, consumers will likely face higher prices,” said the FTC, which also blocked Edgewell’s acquisition of Harry’s men’s razors in February.

Industry proponents say blocking these deals will take an exit option off the table for startups and make DTC investing an increasingly hairy experience.

How Sam Adams inspired us to raise $350K in 3 days 

When Boston Beer Company first IPO’d, founder Jim Koch let loyal local drinkers buy shares in the company before regular investors — giving them some skin in the game. 

I loved this idea and wanted to do the same for The Hustle!

And that’s how we found SeedInvest. 

SeedInvest’s platform helped us to raise $350K from actual readers, not VCs (though we did have lots of big-name investors reach out once they saw).

The round was so successful that we decided to close it just a few days after launching –plus it was one of the better PR moves we ever made.

If you’re looking to raise from actual fans of the brand, SeedInvest has you covered. Check out their site here. 

– Sam (Parr, not Adams)

The porn and adult video industries have had no shortage of controversy over the years.

In the latest row, the website Pornhub barred unverified users from uploading videos after the platform was accused of facilitating child abuse.

What’s lesser known about the industry is its history of advancing tech innovations. Per The Atlantic, the porn overlords were at least partly behind many of the great inventions of our time:

• The VCR found an initial product-market fit among people wanting to watch X-rated fare from the comfort of their own homes.
• Cable TV attracted early subscribers by offering certain “premium” content.
• Popular bulletin boards and forums in the early days of the internet were built around adult content.
• VR and haptic technologies are finding some of the earliest adopters in the… well, you get it.

Further, Plytix makes a fairly convincing argument that internet users buying adult content in the 1990s laid the groundwork for ecommerce.

Common functionalities first found in the online transaction of porn include: online credit cards, fee-based subscriptions, affiliate programs, site membership, the double opt-in process and — gulp — email marketing.