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dumb business decision

When The Dumb Business Decision Is Actually the Smart Business Decision

Back in the day (10 years ago) YouTube was this website where random people from all over the world could upload random videos—and random they were. Remember when Charlie Bit My Finger was a sensation? There were virtually no production values. People had digital cameras and it was a big deal if its quality was more than a few megapixels (who even talks like that anymore?). There was no HD—pretty much everything was 240p quality. And if you did create a smash hit like Charlie Bit My Finger (or Charlie the Unicorn? Shoutout!), you had no way of getting money from it.

Man, things have changed so much.

Now kids grow up wanting to be YouTubers—like it’s a legitimate career. Just kidding—thanks to advertisers and sites like Patreon, it is a legitimate career. Congratulations, Kids!

Patreon is a platform that puts the money making in the hands of creators. Instead of relying on ad revenue (especially after a change in YouTube’s algorithm left it drastically reduced)**, creators can produce content directly for their audience who can, in turn, directly support the creators’ efforts. Support can be given for as little as $1 a month.

In December, Patreon announced that they’d be changing their fee structure. I’m not a Patreon creator so I don’t entirely understand the ramifications of the decision, but they must have been huge because Twitter blew up. Many creators were upset with the changes claiming It would significantly hurt their revenue. Subscribers were upset about the change in fees and a good chunk of them left the platform. It was pretty ugly.

So what do you think Patreon did?

Better yet, what would you have done if it were your company receiving the backlash?

Defend it using the same logic that was used to make the decision in the first place? Explain to your base why these changes are good for them? Talk about your vision moving forward?

That’s what most companies do. They make the decision that’s best for the company (ie profit and growth) and either think little of their target audience or simply underestimate the impact it would have on them.

So it’s remarkable that, just days later, Patreon issued an apology and officially rescinded their decision.

We still have to fix the problems that those changes addressed, but we’re going to fix them in a different way, and we’re going to work with you to come up with the specifics, as we should have done the first time around. Many of you lost patrons, and you lost income. No apology will make up for that, but nevertheless, I’m sorry. It is our core belief that you should own the relationships with your fans. These are your businesses, and they are your fans.

Wow.

Evidence that sometimes the smart business decision is the dumb business decision.

Maintaining integrity and authenticity with your customers–especially your core customers, your target audience–is how to build a business that lasts. It’s how you recover from dumb decisions, and it’s how you leave behind a legacy. Establishing trust is the real smart business decision.

Anna Ray