In the course of doing business mistakes are made. In fact, for a business trying to be a market leader, you almost have to make some mistakes.
The list of major blunders by corporate America is pretty impressive. The Ford Edsel, New Coke, Crystal Pepsi, the Apple Newton, Microsoft Bob.
What the folks at Patreon did in the last couple weeks was something of a tour de force when it came to messing the whole thing up.
Patreon is an online membership platform designed to help artists and creators get the financial support they need to continue doing what they do. With Patreon, supporters, known as patrons, can fund the creator on a recurring basis or item by item. The patron can set the amount they are willing to give and the frequency. It’s not a perfect system, but it has been pretty successful since its launch back in 2013.
So it was rather amazing to see just how badly the company could mess it all up two weeks ago. They announced that they were changing the ways fees were charged on the donations. The old system charged variable fees to the creators. In the proposed system, those fees would be set and paid for by the donors. Creators who rely on smaller donations immediately noted that the burden would fall especially hard on their patrons. Patrons were less than impressed as well. Now a ten dollar a month donation cost the patron more than ten dollars, with that extra money going into Patreon’s pocket. To make matter’s worse, Patreon’s initial response to the concerns amounted to a pat on the head and assurances that the company knew what was best for everyone. Effectively, they told the creators that Patreon knew a better way to run the creator’s businesses.
What happened was predictable. Smaller patrons (and they make up a large part of the donor community) simply dropped out. The new fee structure of 2.9 per cent plus a flat thirty-five cent charge, made the cost of the small donation jump. The creators put up a howl.
I’ll give the company this much. They recognized their mistake and changed direction in a matter of days. Patreon offered one of the better apologies I’ve read as well. In the words of founder and CEO Jack Conte, “We’re going to press pause”. The promise is that the next system will take all the needs of the creators and patrons into consideration.
Making mistakes is part of pushing the boundaries in the pursuit of being the best. Learning to recognize those mistakes and move away from them as quickly as possible is what separates the best from rest.
(The original radio broadcast and podcast misstated how much the fees would increase the total donation. We apologize for the error)
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