Buying Content For Your Digital Platform.

Buying Content For Your Digital Platform.

You've done it. You've put in hundreds of hours. Tens of thousands of dollars. And countless more things you never expected to give up. But you finally have a fantastic content-creation platform ready to revolutionize how people connect, share, and create. You've poured your heart and soul into developing the perfect venue and officially reached out to make it public.

But how do you fill it with the content it deserves? You can't help but think, "If I build it, they will surely come." Dooming yourself to live in a reality that rarely brings success, you quickly realize that building a product is much more than just developing one. This reality often has a way of humbling even the most innovative creators.

Allow me to share a cautionary tale—a story of a talented entrepreneur who set out to prove that the "build it and they will come" mindset was all that was needed to achieve success.

This entrepreneur, let's call them Alex, had a groundbreaking idea for a social networking platform that aimed to bring people together through their shared love for obscure indie music. With unshakable confidence in their vision, Alex focused solely on developing the platform. The design was sleek, the features were cutting-edge, and the user experience was seamless. The platform was a masterpiece, ready to change the indie music scene forever. Excitement built as Alex launched the platform, eagerly anticipating the flood of users who would undoubtedly embrace their creation.

Weeks turned into months, and the expected influx of users has yet to materialize. The platform sat in a digital corner, quietly waiting for engagement that never came. Alex's faith in the "build it and they will come" approach had led to a painful realization: a remarkable product alone is not enough to ensure success in the competitive digital landscape.

The Illusion of Passive Attraction

The phrase "build it, and they will come" carries a romantic allure, conjuring visions of effortlessly drawing in users like a magnet. I know you've told yourself this at least a few times if you have ever built anything that you hoped to have users for. But there's no shame in it. It's a comforting notion that we all experience at least once.

The idea that your innovative creation will shine so brightly that people will naturally flock to it is tantalizing. And it's not just limited to content platforms—it's a mindset that often permeates various aspects of business, marketing, and brand building. For digital platforms, this mindset is akin to constructing a beautiful, well-designed store in the heart of a bustling city, expecting foot traffic simply because of its location and aesthetics. Countless continue to fall into the trap of believing that a great product alone will lead to automatic success. It's a seductive illusion that promises to bypass the challenges of active promotion and outreach. You are not unique or special.

Interestingly, among those who try to avoid this, many inadvertently follow this path.

Think of the countless businesses that invest significant resources in creating an exceptional product or service, only to need help reaching their target audience. Or the enthusiastic bloggers who pour hours into crafting insightful posts, only to wonder why their readership remains stagnant. Or the indie hacker that spends all their time getting feedback instead of marketing to the audience that has been identified.

While the saying might sound appealing, the truth is that even the most iconic brands and successful ventures did not and cannot rely solely on this principle. Behind the scenes, proactive efforts were at play—strategic marketing campaigns, brand awareness initiatives, and consistent engagement with the audience. Companies like Appleexternal link and Nikeexternal link didn't sit back and hope for customers to appear magically; they actively shaped their brand identities and communicated their value to the worldexternal link.

To divert from the path of passive attraction, one must embrace a proactive willingness. It's not enough to rely on the notion that your creation's brilliance will inevitably draw attention. Instead, you must actively seek out the outcomes you desire. Just as a master gardener tends to their garden, nurturing each plant to ensure a vibrant and blossoming landscape, you too must cultivate your platform with deliberate care.

Inflation: The Momentum of Critical Mass

So, how do we reach critical mass? Like a snowball gathering speed and size as it rolls downhill, your platform needs an initial group of engaged users who create, share and interact. This momentum attracts more users; before you know it, you've achieved a self-sustaining ecosystem.

But how do you entice those early adopters to join and actively participate? How do you get those first few flakes of snow to stick together? You put them under pressure; you squish them into a ball ready to roll along the ground.

In business, this pressure comes in the form of incentives. Explicitly, incentives to use and talk about the platform/product in unique and valuable ways. Not in the form of raw monetary compensation but in access to the practical things and value your product enables.

Like your hands on the snowball, the incentives that surround your product supply that pressure. Coming from all angles, all ten fingers wrap around the fragile and quickly melting snowball to create a base you can roll into a head for a snowman.

Before getting too deep into this, it is critical to note that paying your users could be improved upon when the inputs of that payment response are not beneficial to the broader platform ecosystem. In reality, incentives should most directly be thought of as incentivizing the product, not just the user.

  • Bad: Paying users for doing an action in your app.
    • Money stops when your company can't afford it anymore.
  • Good: Enabling users to make money from the actions in your app.
    • Money stops when the user stops participating, or the company no longer needs to grow from compensation-based incentives.

With a simple understanding of the costs and value of the services you offer, you can fine-tune the relationship to balance the scales of cost:valuecost:value. You can provide more, you can offer less, and you are in complete control of the relationship and the way resources are exhausted. With an understanding of the costs and value of your platform, it will be possible to acquire content at a fair-to-discounted rate effectively.

Incentives provide the fuel that kickstarts user engagement, but they are not an eternal or permanent solution. Early users need to feel like they're part of something exciting, and intrinsic incentives help foster that sense of belonging.

As a platform that has funds to spend on generating the critical mass, it is not just about content creation but audience expansion. Having creators release new content without anyone to consume is the same as having no content. But, the idea of diverging from "build it, and they will come" leads us to a system that looks a lot like a high-level referral engineexternal linkexternal link.

In what may appear as a chicken-or-egg situation, you are forced to make a decision. However, this time, the reality is quite simple, as you cannot start with the users (the egg). You must start with the chicken and focus on creating mechanisms that create new eggs. Your aim is farming users, not just buying them. Farming users becomes cheap and simple when you've formed an evangelistic community.external linkexternal link

Yet, the journey to critical mass requires more than just incentives—it demands outright subsidizing content creation. Take the example of user-generated content platforms like Mediumexternal link. In its early days, Medium paid writers to contribute, ensuring a steady stream of high-quality content that attracted readers. Medium is a unicorn in this situation, they tried countless different models, but one stands out as directly comparable to the conversation we have today; incentivizing the creation of high-quality contentexternal link:

"We are planning to invest 100% of founding Medium member revenues on content. Over time, we plan to start covering our own costs — but we're over-investing in the short term to help kick off the right types of content, and we'll continue to invest aggressively in the longer term.

In order to ensure quality and make sure creators get paid fairly, we are not paying contributors based on any sort of performance metric. We will be paying a flat fee per piece, which will vary depending on length, amount of original research, and the credentials of the author. Members will also get a say — what you read and recommend will have a big effect on what we buy more of and how much we're willing to pay. (The easiest way to affect this as a member is to recommend the type of stuff you want more of.)"

Although costly at first, this practice created a foundation upon which the platform's success was built. Eventually, Medium reached a point where only a very small portion of content was sponsored.

It is not just written content that can be purchased. Nearly every central digital media platform has used this model to leapfrog its competitors. Even the "monopolies" of media industries such as YouTubeexternal link actively spend many millions a year to generate contentexternal link that maintains the audience desired. Kick, a new streaming platform led by Stake has spent hundreds of millions on attention and mainstream creators like xQc, Amouranth, Trainwrecks, Hikaru, Corinna Kopf quickly amassing the eyes of millions in just a few short months. On the complete other side of this, you have Nebulaexternal link, another streaming platform that focuses more on pivotal content creation that people would subscribe forexternal link instead of optimizing for a raw increase in attention and consumption.

While many of the giants before have reached this stage by acquiring a base of attention and viewers to nurture and convert into power users:

  • HBOexternal link: Chased quality over quantity in funded platform content creation.
  • Netflixexternal link: Pioneered the pipeline for "internet-based platform original" content.
  • Apple TVexternal link: Funded the creation of sponsored content for their unique hardware.
  • OnlyFansexternal link: Enables and distributes creator earnings.

This ability exists for those operating in traditional business and those building and working within the crypto industry. In fact, those in the crypto industry have a more direct and attributable mechanism available to them: genuine incentive alignment.

  • Rollbitexternal link: Enables digital casino gambling and token speculation fueled by affiliate partnerships.
  • FriendTechexternal link: Enables commodization of "your network is your net worth."
  • Flipsideexternal link: Enables paid data analysis with crypto-based compensation.

Every platform must start somewhere, and there is no shame in pouring some fuel to start the fire; many of the most admired organizations took precisely this route.

Momentum: The Double-Edged Sword

Content acquisition comes at a hefty price. Thus, we must address the elephant in the room: the risk of failureexternal linkexternal link. Only some content platforms following the incentivized and subsidized path will succeed. While strategies like offering incentives and subsidies can significantly boost engagement and user participation, the digital landscape is an intricate maze where even the most well-intentioned efforts can fall flat. For this approach to succeed, leveraging decentralized marketing becomes essential.

Note: ✨ Decentralized marketing ✨ is not the use of pod-like responsibilities that place critical stakeholders at the helm of the ten pillars. The commonly used definitionexternal link of ✨ decentralized marketing ✨ is incorrect, inaccurate and should be discarded.

Generally, decentralized marketing is the notion that users themselves become ambassadors for your platform. They spread the word, attract their network, and create a snowball growth effect. In theory, it's a dream scenario—users become natural advocates for your platform without much nudging. Unfortunately, it is a double-edged sword.

On the one hand, it can lead to organic and authentic growth, as peer recommendations often carry more weight than traditional marketing efforts. On the other hand, it's a wild card that's tough to control. While some platforms experience a viral explosion of interest due to user advocacy, others need help to gain meaningful traction despite their best efforts.

It is common knowledge that you should avoid trying to predict consumer behavior. Even with the most enticing incentives and subsidies, it takes time to anticipate how users will respond accurately.

  • You might offer rewards for specific actions, only to discover that users prioritize different interactions altogether.
  • You might devise attractive incentives that trigger an unexpected gold rush, rapidly depleting your funds.
  • You might be Sybil-attacked within hours of launching with incentives that have a barrier that is just slightly too low.

The constant potential for misjudging user preferences and actions is a humbling reality. You have a very volatile situation that requires an immense amount of flexibility, understanding, and foresight. When following this approach, you must be willing to acknowledge the results. You cannot continue swimming in a stream that is not working. This method requires the epitome of a reactionary defense and approach.external linkexternal link

When buying content, there's the temptation to pour significant resources into incentivizing content creation and user engagement. Incentivized user acquisition can jumpstart the platform's growth, but striking a balance is crucial. Overspending on user incentives without understanding their impact can lead to unsustainable costs and financial strain.

Have a long runway today? If you don't plan very well, you won't tomorrow. Find yourself not being careful, and you may wind up like Medium who spent 5 million dollars for content acquisition in 2018 aloneexternal link. Without proper planning when you go to raise another investment round your KPIs are going to be exceptionally weak because you outspent the conversion value. You must attempt this method with a clear understanding of the value being created and how you can direct genuinely productive behaviors to generate an eventual profit.

Amplification: Codifying Your Metrics

In the world of content-creation platforms, where engagement is the currency of success, innovative models like the Basic Attention Token (BAT) (holdings of zero) have emerged to redefine the way users interact with content and creators.

The BAT model challenges the conventional implementation of rewarding engagementexternal link by introducing a dynamic and thoughtful approach to incentivizing user attention and interaction. At the heart of the BAT model lies the understanding that user attention is a valuable resource. Instead of relying solely on ads and traditional marketing tactics, the BAT model aims to connect content consumers and creators directly. BAT is a cryptocurrency that users earn by engaging with content—watching videos, reading articles, or interacting with ads—on the Brave browser platform.

Although the BAT model might seem straightforward, its unique feature is using a concave curve to determine conversion scores. This score reflects the quality of user attention and engagement, considering that initial interactions hold more weight than prolonged exposure. The model acknowledges that not all attention is equal; a fleeting glance might not be as valuable as genuine, sustained interaction, yet there is still an eventual cliff.

The fabeled attention curve

The concave curve approach is a departure from traditional metrics that focus solely on the number of clicks or views. Instead, it emphasizes the importance of meaningful interactions. This shift in focus from quantity to quality encourages content creators to craft engaging and compelling material that resonates deeply with their audience. It's a step toward nurturing a community that values authenticity and genuine connection.

The attention model offers a glimpse into the future of content-creation platforms. Aligning incentives with genuine engagement challenges the notion that success is solely achieved through a large user base. Instead, it highlights the importance of building a community that values meaningful interactions, fosters creativity, and rewards quality content.

Now, it is worth noting that you do not need a token for this, and more often than not, adding one would be severely detrimental to the capabilities and viability of your ecosystem and product. Thankfully, there is usually no reason to use the blockchain, and this is one of those cases.

A Concave Attention Curve

At the heart of all this exists the distribution curve for interaction attribution. While it may seem complicated at first, it's pretty simple, so don't worry about not understanding; you will. Simplified, a concave curve is just a time-bound quadratic score in this situation. Imagine an exponential curve, flip it upside down, and now you have it (mostly).

Laid out, the equation holding this together is:

In the case of Braveexternal link, they have adopted the values ofexternal link:

  • a=13000a=13000
  • b=11000b=11000

where aa and bb are known constants that fit your platform needs and incentives, and durationduration is measured in milliseconds.

This results in a minimum threshold of 2525 seconds to achieve a total score of 11 with an upper bound durationduration of 1212 minutes. This means, with just a few seconds, the attribution level is happening faster than at any other time. As more time is attributed up to 12 minutes, the user has a score that is being atomically updated. However, 12 minutes is a long time, so Brave has assumed that after that point, further user incentivization is unnecessary as they've reached the logical limit.

With this model, as the visitor is attributed more "attention", they receive less extrinsic rewards. They are pushed to become a power user as they are carried along the conversion to intrinsic incentives and rewards. This is just one of the many ways you can proactively avoid overspending the conversion value of your users and defend the length of your runway.

The idea of temporally-derived attention value is ingenious. Of course, you can debate the validity of this precise approach including tokenization. Yet it perfectly illustrates a method of codifying your metrics and aggressively optimizing.

A clear distinction to make here: In the beginning, you may offer raw monetary compensation (extrinsic) incentives to your users, but to do that, you must have the long-horizon goal of removing that need and reaching a point of equilibrium with each user. The end goal must be to get the point where the user contributes to the platform's economy. Perpetual spending without an end in sight or a plan to wean them off direct rewards is a recipe for disaster and bankruptcy.

Sustainability: Turning Users Into Profit

In a child-like dream world, one would focus solely on acquiring new users. You can't do that, though. Instead, it would be best if you acknowledged that acquiring a new user is, on average, many (~5) factors more expensive than retaining one.

Highly Valued Retention

This is one of those things that can seem obvious, but also feel "not very true." Let's look at a quick example so you can ignore any doubts about this. Take a situation where CC is the cost to acquire a new user and RR is the revenue generated per user. Our cost to retain a user is one-fifth (acknowledging that it is rarely free) of acquiring a new one.

Retaining users is the key to profit increases

With these simple rules immediately, you can construct a formula to determine the increase in profit due to your user retention efforts. With a retention strategy, if you retain 5% more users, you have 5 users who are retained and 95 who are new. The profit is:

In this example, the profit you make from the 9595 new users is 95×(RC)95 \times (R − C), since you gain the revenue RR for each new user but have to deduct the cost CC of acquiring them. On the other hand, the profit from the 55 retained users is 5×(RC5)5 \times (R − \frac{C}{5}), where the cost to keep is only a fifth of the acquisition cost. Let's break this down further for clarity. Assuming you didn't have any retention efforts and all your users were new, your profit would be:

If it's not yet evident, it should be! Creating a platform that attracts is powerful, but building one that retains users while growing is even better.

The Phased Approach

With all this in mind, it becomes easy to see that this approach calls for a phased system that allows you to transition goals as things evolve. Integrating these elements provides a cohesive strategy adaptable to changing goals and needs. Put simply, many major platforms have traversed a similar journey to:

  1. Inflation: Use subsidies and incentivies to attrack a critical mass.
  2. Momentum: Use the established audience to expand social awareness.
  3. Amplification: Convert intrinsic user incentives to extrinsic.
  4. Sustainability: Optimize the renuve and profit pipeline.

Thankfully, as previously mentioned, raw compensation is rarely the best mechanism, which means you have an opportunity to abstract that value and lower the cost of incentivization as your product improves. Don't think to yourself that you cannot compete with a company that has more funds. That simply is not the case. A company with more money has one thing, a larger temptation to spend the money they have more quickly.

The wisdom held in a case study of one of the most popular platforms in modern-day

Don't approach this strategy assuming you'll always need a vast reserve of funds.

Though, a caveat to all this is if you think: "My product is great people just won't pay for my product." News flash!external linkexternal link Your product isn't great enough and you have more work to do! A platform that is designed around decentralized marketing boostrapped with incentives is one that is highly reliant on listening to the users and meeting the value-based objectives. This is not something you can fight or lack humility about.

Thankfully, believing this becomes easier to understand by remembering the examples mentioned earlier. While Kick has offered huge amounts of money to the streamers, there is also a long listexternal link of other reasonsexternal link many of the largest streamers have considered before migrating. From being more accepting, to being able to capture a more ravenous and up-to-date audienceexternal link, to the better creator splitsexternal link, etc. Everyone had their own reasons, but the incentives were not single-sighted.

In reality, with the large amounts of money spent, the multi-million dollar acquisitions can be looked at more as simple advertising as only 0.00001% of creators have been paid to switch. Kick is acquiring ambassadors to spread their brand. Sure, one can argue that money was an incentive for the giants, but for every other creator that has moved, it took many reasons before they blindly jumped.

Now, before moving on, it would be hypocritical not to address the fact that many of the "supposed incentives" boil down to the creator (potentially) making more money. That is true. The most effective incentives are the ones that you do not have a similar cost to deliver because you have the ability to amplify the rate of distribution and user-perceived incentivization. Creating the dream that other creators can make more money by moving to Kick is free.

Of course, making more money often means the company is making less revenue, and so costs are still paid, and this is where the phase of sustainability becomes important. Still, there is no magic secret that turns an economy upside down. Eventually, all money runs out without the proper management.

Note: If you are reading all of this and thinking there is no way you can implement it, you are probably right. The only way you are really going to make it work is if you are mentally prepared to do so.

While everything will always remain uncertain, knowing what to do next at each stage is a required piece of the process. It is absolutely fundamental that you understand the economics of the platform incentives you aim to offer. Get your KPIs, understand which ones are important, build systems to track your progress, and support the needed systems to quickly pivot when time comes. Any other immediate approach and you will fail before you can truly get started.

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