Pop quiz.

Let’s say there’s a website that gets adopted and embraced by a marginalized community — in this case, sex workers and professionals in other sex-adjacent industries.

No investor will touch them because of the demographics of their early adopters, so they have to get scrappy.

  • They lean on creators for all their content.
  • They let creators charge their followers for subscriptions and take a 20% cut (Which is fairly aggressive, honestly).
  • They run no ads, relying instead on word-of-mouth marketing from a community of one million creators.
  • They even publish transparency reports to keep reporting squeaky clean.

It works. They grow to 130 million users.

And in 2020, they do $400 million in revenue, $300 million of which is profit, per The Information.

OnlyFans’ Sudden 180 Is An Important Lesson For All Creators - Post Outline

What happens next?

If the company is OnlyFans — which it is — the ride abruptly ends.

That appears to be the gist of new reporting from Bloomberg: OnlyFans will ban sexually explicit content beginning October 1st to sustain relationships with its payment processors.

According to Bloomberg’s reporting:

“The changes are needed because of mounting pressure from banking partners and payment providers, according to the company.”


This isn’t hugely surprising; last December Visa and Mastercard yanked their support of PornHub for concerns related to monetization of illegal and/or nonconsensual content.

But it sucks for the creators, big time. All that sexy profit was built on creators’ backs.

Now what?

The Profit Margins Were Nuts

How good is a 75% profit margin? Really freaking good. For comparison, Mike Michalowicz’s book Profit First — a wildly popular introduction to finance for entrepreneurs —suggests that freelancers or business owners doing under $500K/year in revenue aim for an initial profit margin of just five percent.

Even the most ridiculously profitable companies in the world grapple to clear 50% in profit when they’re hauling in hundreds of millions of dollars a year. There’s no denying OnlyFans’ extraordinary position, particularly when operating at a loss is the norm in the tech space.

What makes this pivot a shame is that OnlyFans’ creators were actually succeeding in a paid creator pass-through model. These models are all the rage in 2021 and have popped up everywhere lately:

  • Substack paints a fairy tale around paid newsletters, but unless you already have a huge audience or can meet the moment the way Heather Cox Richardson did, it’s an uphill battle.
  • Facebook recently announced Bulletin, its response to Substack, and gave preliminary creators large advances to get things off the ground.
  • Spotify is also creating monetization opportunities by offering a paid podcast model. They’re not even taking a cut of revenues for the first two years. Apple Podcasts is already ready to compete, but will take a whopping 30% cut (Which is so Apple of them, honestly).

These models secure top talent to use as role models for their business proposition. But that setup is flawed. Do you have an agent? Do you already have 500,000 followers on Twitter? No? Then you’re probably not going to get amazing monetization results from the jump.

Perhaps the arrival of celebrities like Cardi B and Bella Thorne to OnlyFans were negotiated, but for the most part the platform truly did let creators in an otherwise shadow-banned industry leverage the internet to generate income, particularly in a pandemic (Which— reminder! — is not over yet).

Related: Substack Review: Why You Should (or Shouldn't) Start an Email List

Since Big Tech Can’t Be Trusted, Do This Instead

If you aspire to make money as a creator, or turn your efforts into a business one day… you need a way to own your audience.

That’s why I advocate building an email list on your own channels if you’re a creator, small business owner, or online entrepreneur.

There are many reasons. But this week’s announcement from OnlyFans is a cautionary tale when it comes to attracting and owning your audience: The big technology you build your following on could pull the rug out from under you at any moment.

Are you ready for that? If not… you need to be.

The Takeaway

Use big tech to reach people and share your ideas, talents, or gifts.

But also be prepared for big tech to leave you standing on the curb at any moment. OnlyFans isn’t the only company to build its bank account on the backs of creators, and I’m sure it won’t be the last.

Until then, let’s see what unfolds in the weeks to come for one of the world’s most profitable technology companies.

Thanks for reading. 🙏🏼

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