Exploring OnlyFans P&L (Profit and Loss)

Let's explore OnlyFans' P&L. Did you see that they're worth more than most of the edtech companies?

Yeah.

I saw that chart on X this morning.

Hey man, when there's demand, there's demand.

They say OnlyFans is worth $18 billion. I don't know if that's true. That seems high to me.

So it says OnlyFans generated $6.6 billion in payments, $1 billion in 2022, $1.3 billion in revenue, and $658 million in profit before tax in 2023. The number of hoes— oh, sorry, it says it over here. This is creator. The number of creators rose 29% to 4.1 million and fans plus 28% to 305 million. The owner paid himself a $472 million dividend up from $338 million. The biggest pimp of all time. So, okay. If you just look at— okay, I'm just looking at almost like a year ago.

And just for context, Eric is reading this. He's not coming up with the script on his own.

I'm reading this. I got trapped here so I could get in trouble. But okay, let me just reread this again. Total number of creator accounts in 2023 was 4 million. Okay, now in 2022, it was 3.1 million. So growth of basically 29%. Total number of fan accounts. Okay, in 2022, it was 238 million and then it went up to 305 million. So another 28%. So it says the number of creators grew a bit faster than the Johns. The johns, I guess, would be the fans.

Yes.

So yeah, yeah. But the dividend is most interesting to me. 472 over 338.

Are they making assumption here that the most creators are women and most of the members are men? I don't know if that's true or not.

I would say that's definitely true. I'll bet you a good amount of money that's probably true.

No, it's okay. I don't want to make a bet.

Okay.

I don't know much about OnlyFans other than it got banned for credit card processing.

But you know human nature.

I know human nature.

Okay.

Yes.

But so this is a UK-based company, right? So a UK-based company, they're required to publish their financials. You're a British citizen. Yeah. So yeah. Thank you, Brad, uh, from recordeditpodcast.com.

So OnlyFans is doing $600+ million a year in profit. They're worth $18 billion.

Where'd you see that?

I saw it somewhere online this morning in an infographic.

Okay, nice.

That means they're worth roughly thirty times profit. Is that what people are saying?

So okay, I I see this over here. So it says gross payments made through OnlyFans. Da da da. So six point six billion in gross gross. I guess you'd call that GMV. The group's revenue increase. It's not showing valuation here.

No investors.

No. And he bought this, by the way. He bought this company and kind of made it into what it is.

How much did he buy it for?

Cheap, I think. If you just search up like OnlyFans, like founder, like acquisition or something.

It was like a million, two million dollars.

It was like a couple million dollars, maybe less. OnlyFans P&L. But yeah, I think it's incredible. I mean, you go out and you create something that people want and if there's demand for it, it will be fulfilled. And by the way, they tried to pivot a couple years ago where they're saying, oh, it's not going to focus on— they're trying to get away from the adult industry. And then it was like—

It did not work.

Pandemonium, right? So sometimes just stick with what you know. Well, I had this from Matthew Ball. So he kind of broke this out over here. So by the way, okay, let me just show this to you. 2019, okay, net revenue was $56 million. All right. 2020, $358 million was net revenue. 2021, $932 million was net revenue. And then 2022, $1.1 billion net revenue. And then 2023, $1.3 billion. Wow.

Yeah.

So take it for what it is. I got to take a minute to tell you about the Agency Owners Association. This is a peer group for agency owners. Think YPO or EO, but for agency owners. And I just wanted to read you a couple of testimonials. So this first one comes from Carrie, and we asked her, what do you like most about the group? She said, having a group of people to discuss and bounce ideas. The leads are great too. Yes, we share leads in this group as well. This one from Aliyan. He says, the ability to really post whatever I want and need and the group responds. Great experienced members. Getting a lot of insights from conversations with other members. Getting a lot of value from sessions from Eric, getting advice from others as well. And so if you want to grow your agency faster and you want a peer group to do so, just go to marketingschool.io/agency. This is a group that both Neil and I created, and our hope here is to create a vibrant community of agency owners and do a lot more with it in the future. So again, marketingschool.io/agency, and we'll see you inside. I mean, the other thing, you know, people talk about founder mode, right? So, you know, this is when you're— I would classify like the situation you have and even mine too, where you have the lion's share of the control control, you're not at the whim of other investors, your board, or maybe other stakeholders trying to take control and trying to influence you. I do believe, because I know there's artists out there, there's one guy that like made these really— his art's just amazing. I'm like, so who do you follow as an artist? Right? He's like, oh, I don't follow anybody. I was like, what do you mean? He's like, because I don't want to be influenced by other people's aesthetic style, like all those things, right? So I do believe that also applies to entrepreneurship because I do think entrepreneurship is a form of art. And I think the less influences, outside influences you have, and you just kind of focus on what you know and what you believe, the better results you're going to get. And this is a good example of founder mode.

It is. And a lot of times people just interact in the business because they know what's happening. Like, for example, this weekend, our sales numbers for our SMB division have been terrible for the last 2 months. So then I get a call and I know the sales numbers in and out. Like I knew—

You know them every day. Yeah, I really do.

People come in like, oh yeah, we got this deal. I'm like, yeah, I already know.

Yeah, yeah.

You know, like we're pitching for an agency of record deal for a really large car corporation. And my team is going to tell me, actually they know now at this point, if we made it as a semifinalist, so there's one other company, I already know we made it.

That's the finals.

Yeah, finals. So I already know we made it into the finals before they even told me. And the reason being is someone on the team told me right after their original meeting, like, yeah, they said that we're going to end up making the finals.

This is something good that doesn't get talked about enough. But when Neil first started MP Digital, he was really good at making sure he calls people on sales every day. And now it's become ingrained in the culture.

Yes.

That, hey, we're a sales organization. Not that you're a sales organization, but you're very sales-focused.

I think sales is in our DNA. So over the weekend, you know, one of our divisions was doing roughly a third of what they normally do in sales, 2 months in a row. So then they're just like, yeah, leads have been continually going down. So then I hop on a computer, I talk to my co-founder, and I start going through all the flows, okay? I'm going through each flow, like our analyzers, our quiz, our consulting page.

Your funnel.

Make sure that works. Yeah, all our funnels. And I noticed one funnel that's off. It's been off for 4 days. That's what they confirmed for me today. They fixed it. It was just API calls and it just not going through. So they fixed that. But right away after that was fixed, I was like, okay, maybe leads will go up a little bit, but not much. So then I started digging into the lead numbers and I go back in time all the way from January. So I'm starting to correlate because I know how long we get a lead. And then when it closes, when you look at the average close time. So I started looking at January, February, March, April, May, and from January to May, technically June, we started going down every month consecutively, just a little bit. Starting back in June, we started going back up a little bit.

Traffic?

Traffic and leads. And we're back to the January levels. So we're equal in leads that we were getting in January, roughly.

Yeah.

It could be off by a few percentage points, but it's close enough. So now I was just like, so what do you mean sales is saying that leads are down? I'm like, here's a screenshot of the data.

Yeah.

And I'm like, I just want to make sure we're looking at the same data. And how did they react to that? And then I was like, by the way, this is lead count just for United States and SMB and all enterprise leads and all other countries are removed from this data. And you're looking at one for one, like like for like, this excludes paid ads, all that kind of stuff. And then I had reports for paid ads and all that. Here you go. And here are average closes per channel. You know, here's average close time. And I'm like, okay, if you're telling me leads are a little bit down, all right, it's not even down 10%. You're talking about low single digits. Revenue off 10%. All right, revenue off to a third down. I'm like, no, no, no. I'm like, something's off. And then if you start looking at our sales, what's happening is, is we have different, not necessarily plans because everything's customized, but we have starter plans too. And if you look, they're closing roughly the same amount of deals, but they're closing people on easier plans to sell. Like they're just like, hey, let's just start this starter plan. Let's just test this out. And if it goes well, then we'll add all these other things. And I'm like, this is probably the problem because the numbers don't lie. If you just look at the data, you're like, you're closing the same amount of deals.

Yep.

Oh, let's look at the companies I've closed. Let's look at the companies in the past. Let's compare their budgets because we collect budgets. What is your revenue? What's your budget? Oh cool, that hasn't really dropped. What's really dropped is you're just selling people for stuff for way less. And it's not that we were overcharging or anything before, we're giving a lot less work for what they're selling now because they're selling packages for way lower or quote unquote customized plans. And we're like, this is the problem. And you know, they'll work on fixing it. But yes.

I want to take a second to tell you about my podcast co-host's agency. So NP Digital. So Neil Patel Digital, what they do is they do a whole host of marketing services and they are global, they're worldwide. They have SMB services as well. They have mid-market to enterprise services as well. They cover the entire gamut. So you could just go to mpdigital.com to learn more about it. And now back to the episode. That's, so this goes back to, and by the way, founder mode could also be like, people can misinterpret it and be like, oh, like this gives us an excuse to kind of just do whatever we want.

No.

No, we're just saying you need to be involved. Because if you weren't involved and you just took it at face value, then everyone would have been like, oh my God, marketing's broken. But no, in fact, sales is selling the wrong thing, right? And maybe not the wrong thing. I shouldn't say that. It's more so sales is going through the path of least resistance. Because I would do the same thing too, right? If you could sell something easier and just try to like, you know, get your close rates up or whatever your quota looks like, that might be it.

And my CEO, first identified this when our sales numbers started going lower, not on the lead count. He was mentioning to me, he's like, yeah, leads are dropping. And then I was like, all right, you know, I'll check that out later. But after the first month, he was just like, when sales went lower by roughly a third, he's just like, yeah, it seems like they're selling just people on entry plans instead of selling them everything they really need to succeed. Month 2 goes by, he's like, I think it is. I'm going to have to dig in with the team and figure this out with the salespeople.

Yeah.

But you talk to the leaders of different divisions, You usually always blame marketing. Oh, marketing isn't doing a good job, or leads are not enough. And people just blame it on external factors. It's like, no, no, let's go in there and let's look at this from a neutral viewpoint.

Do you guys— so for us, we don't even look at MQLs that much anymore. We just look at SQLs to align sales and marketing together. We're just like, just look at SQLs. Not saying we don't throw away that MQL metric, we still have it, but we just try to have one unifying thing that people can look at. That way it reduces the blame, the finger-pointing. Because they always like to point fingers at each other.

We look at the whole funnel. How many leads you get? How many calls did you make on each lead? How many of those leads turn into discovery calls? Out of the discovery calls, how many of them are qualified and turn into pitch prep? How many then get pitched and how many sell? So we look at the whole funnel and the reason we do it that way, and there's no right or wrong way, we can see where there's a gap. So if we're seeing, which is what we saw in the data over the past few months, the call numbers are the same, the number same, roughly the same number of pitches, roughly the The same number of pitches are turning into closes. So when you're looking at the funnel, all the metrics are staying the same, but the biggest difference is people are paying a lot less than they used to be, and that is something related to the salesperson.

Yep. So we do the same thing. We look at the entire funnel. We look at where funnel drop-off is. It's marketing 101. But for us, instead of saying, oh, marketing is just held to MQLs, we're just saying, hey guys, you now are held to SQLs, because an SQL is someone that actually is qualified and shows up instead of just this MQL, which is like this arbitrary number. We'll still look at it, but we want them to be aligned on one thing. Go ahead.

On a side note, going to MQLs, we just look at marketing as leads and marketing is held to a lead count number.

Okay.

If the leads are junk, that's a marketing problem and that shouldn't even be a lead. So they should only be passing leads that are real leads and are somewhat quality.

Yep. So that is it for today. Please don't forget to rate, review, subscribe. Go to marketingschool.io/agency. You can no longer just sign up for it. It's application only now. And if it does look like it's a good fit, we'll have someone from our team reach out and see if it's a good fit for the group. So that is it for today, and we will see you tomorrow. Thank you.