Twenty percent
2024-09-20 | tags: thoughts

If you run any kind of middleman operation (N-sided marketplace), you can take lessons from OnlyFans.

OnlyFans has generated massive dividends for its owner … while also managing to pay out tons of money to creators:

"OnlyFans Billionaire Owner Pockets $472 Million Dividend" (Forbes)

(For background on marketplaces: I've written about middleman business models here, here, and here.)

What makes OnlyFans a middleman/marketplace operation? Simple: it sits between content creators and buyers, handling everything from payments to tech infrastructure.

In doing this, OF takes a 20% cut – that is, it pays 80% of every incoming fan/subscriber dollar (pound, Euro, …) to creators.

Few middlemen can hold a candle. From record labels to tech recruiter firms to various gig-economy apps, we've all heard tales of (or experienced firsthand) the middleman taking a much larger cut in exchange for far less value.

Does this mean that every middleman should limit their take to OnlyFans's 20%? Not necessarily. Should middlemen treat 20% as some magic number? Not at all.

My point is that if you make money by sitting between two parties, you'd do well to revisit what you provide versus what you charge parties for the privilege.

If you are taking a lot for doing very little, well, it's time to have a think.

To be a fly on the wall...

I wonder how things are going at LinkedIn HQ these days?

Complex Machinery 016: Packaging up crime and mischief

The latest issue of Complex Machinery: AI use cases, as driven by fraud and stunts. And squeeze bottles.