Fact
Your reward for succeeding on a percentage platform is losing the customer
Calacanis argues percentage-take businesses (Substack, Patreon, ad rep firms) are structurally doomed with their best customers: once a creator gets big, the cut becomes a salary's worth of money and they leave for flat-fee tools, just as Sam Harris left Patreon for his own site.
“And so your reward for succeeding was losing your best customers. The reward for Patreon succeeding is they lose that customer to a Stripe or Ghost, or, you know, there's all these like tools that charge you a flat rate to do subscriptions.”
Steal thisIf you build a percentage-take platform, lock in value beyond billing or your winners will defect to flat-fee tools.
Story
AppLovin's Lion Studios: house ad inventory built a $100M+ games unit
Shaan explains how AppLovin spun up Lion Studios by buying a small dev shop and publishing hyper-casual games pumped through ~5% of its own cheap house ad inventory. The throwaway inventory turned acquired games into a multi-hundred-million-dollar business unit.
“They bought this, this little dev shop and they call it Lion Studios and, uh, they just publish their own mobile games and they pump it through their own ad network with the cheap, uh, house ad slots. And, uh, that's become like a multi-hundred million dollar business unit within their ad network now.”
Steal thisIf you own distribution or spare ad inventory, acquire content/products that only lack reach and route your cheap inventory at them.
Number
Sam Harris's Waking Up app: a guess of $10M/yr at ~100% profit
Discussing a mental-health app idea, Sam estimates Sam Harris's Waking Up meditation app at roughly $10M a year in revenue and nearly all profit, and says apps like this grow mostly through heavy paid performance marketing on the app store.
$10M
Estimated annual revenue of Waking Up app · USD/year
“And I think one guy who's kind of exploiting this opportunity in a good way is Sam Harris with Wake Up. And I don't know for a fact, but if I had to bet, I would say that's a $10 million a year company that is almost 100% profit.”