Why I Failed In Porn
In March 2023 we had to make the difficult decision to close down the social media part of our company. This was one of the worst decisions I’ve ever had to make in my life, and there are a number of reasons why it had to be made. The reason is not straightforward, there were multiple factors all of which are very telling of the society we are in, and showcase the true issues within the porn industry. So, why did I fail in porn?
Adult industry challenges
Running a startup is hard and the odds are against you but run an adult startup and you’ve made things even harder (no pun intended). When you run an adult entertainment startup you have to face challenges that no other startup would ever have to encounter. On top of the everyday challenges of running a business we also had to deal with the following (but not limited to);
Getting kicked out of banks
Investment bans
Higher percentages on payment processing
Marketing restrictions and bans
Censorship
Social stigma.
All while still being expected to hit the same data/growth targets as mainstream startups. Thankfully our team was quite knowledgeable and quick to adapt to these challenges.
However, if it wasn’t for the adult industry challenges then we could have reduced our costs, find investors more easily, and market our company properly.
Finance, support & ESG
When I first started Freyja I had numerous people tell me that I would never be able to raise a funding round because of my lack of experience coupled with the fact that I was starting a company in a ‘taboo’ industry. Thankfully, my team and I were able to do so from various angel investors. However, when it came to our seed round things got even tougher, and we knew that looking for selling options would be the most realistic thing to do. When it came to it we did not have the network that was required to get such a large project off the ground. We needed a lot of cash and network in order to get to the next stage of growth and be competitive in a monopolised space. Nonetheless,VCs legally couldn’t invest in us, and private investors either had legal restrictions, or couldn’t due to taboo. When speaking with investors, I would constantly hear the term ‘ESG’ which refers to environmental sustainability goals. Many Investment firms would have ESG policies to help them make more sustainable and impact driven investments to help make society better. When I first heard about these goals I thought that sounded perfect, Freyja is all about those things. The irony was, everyone’s ESG policies also included that they were against adult entertainment. The funny thing was that these ESG policies were preventing the industry space from becoming safer. We were constantly stuck in this hard place of being an impact driven company, yet being treated as though we were criminal by these policies. Ultimately, these financing limitations and ESG policies played a large part in our company's outcome.
Wrong assumptions
Before our product went live we made some wrong assumptions. We spoke with countless content creators to figure out what they wanted from a safer site. We then implemented all of this feedback into the development of our product, assuming that they would then want to use our site since we built what they wanted. However, when we launched we didn’t see a lot of creators that were interested in what we were doing, even though we had done what they had asked for. Our team certainly was pulling our hair out trying to figure this out as quickly as possible. There were a couple reasons for this;
Long term vs. short term money mindedness. When we entered the market one of the largest fan sites was unstable due to threatening to remove adult content. Therefore, we assumed that if we could build a more sustainable option for creators income, and one that supported them more that they would use it over the unstable platform. However, when the ban was reversed it didn’t matter to a large proportion of creators that their income was still not 100% safe because their money was there on the day. We wrongly assumed that there would be a longer term money mindset when quite often it was the opposite. There was no incentive to use another site if you had money on the other no matter the politics around it. It is all about where the money is that day in this industry.
People don’t want to use more than one platform. Fair enough, we can all agree that nowadays there are too many different apps. However, there is still the morality question about whether one should use a site or another if it is more ‘ethical’ and the creator/consumer should have more moral responsibility in this decision, if there are options, especially considering that the business model of fan sites relies on the creator and not necessarily the site for traffic.
We spent too much time focusing on the highest earning and most famous creators. We eventually changed this strategy and found many amazing creators who were interested in the social impact angle of Freyja, but I wish that this was something we had done from the start not a month or two later.
Overall, we made some wrong assumptions off the bat, as any business does. This is why Freyja quickly pivoted after launch into wider social media, and pre-moderation systems as when our ‘plan’ wasn’t working we knew we had to make changes to survive and accommodate.
Payment processors
The reality was, that we barely dealt with government regulation. Instead, everything came from banks & payment processors. They were the ones who held the true power. We entered the industry at a very pivotal time due to the bombshell New York Times Article, which triggered the new Mastercard regulations. Simultaneously, one of the most famous fan sites announced that it would no longer allow porn. These events led us to a level of opportunism from our side, especially considering our comparatively advanced safety system. However, these regulations made it near to impossible to get off the ground. It made it hard to get bank accounts, it increased our costs, we couldn’t get funding and had to deal with increased stigma. We were treated like criminals for doing something perfectly legal. Even though Freyja was trying to make the industry safer, we were thrown into the same bucket as ‘bad players’. It was eye opening to see the amount of power these processors have not just over the porn industry but ultimately the control they have over what porn people can watch, and all of our sexual development. I found it especially terrifying since there is no democratic element to their regulations. The power isn’t always where the public realises it is. When entering the industry I knew I was going to be up against a large system, but I never could have imagined how deep this went.
Timing
When it comes to startups it’s all about timing. One can have a great idea/product but that can mean nothing without the right timing. To an extent you can predict what is ‘good timing’, but this is just an estimate. It comes down not just to hard work but also luck. When we started Freyja the timing was right due to the high levels of opportunism in the industry. However, the luck shifted with the regulations, and the funding hitting the startup/vc world.
Taboo & the paradox between private + public opinions
Taboo is the biggest reason for every challenge that Freyja ever faced. I've heard this word non-stop for years, and I’ve spent a lot of time thinking about the word; ‘taboo’ and what this even means. Almost every challenge we faced came down to ‘taboo’;
No bank account? Taboo
No payment processor? Taboo
You can’t run an ad? Taboo
No investment for you? Taboo
We could never escape this word but it quickly lost all meaning to me. The fact of the matter is; most people watch pornography, and from my experience people are interested in the industry, and they want to talk about it. It was fascinating to see how many people would suddenly open up when I spoke about my job. A lot of people were passionate about what we were doing, and expressed the necessity for it. There’s something insane about the fact that we had investors even ask for vouchers for their kids. And yes, despite everyone agreeing on the importance and necessity of what we were doing, people would still not invest because it was ‘taboo’. This showed an incredibly interesting paradox in what people’s private opinions are versus their public.
When it comes to ‘taboo’, we are all shooting ourselves in the foot. This is because it not only stops the industry from becoming safer, it also stops access to better sex ed, and even limits our understanding of consent. One could even go as far as to say that this in turn stops us from being able to reduce sexual harassment and assault. The reality is with increased tech & digitalisationporn will never go away, it is only becoming more accessible. Pretending porn doesn’t exist is not the solution. Rather, we need better sex education and proper regulation where industry experts are consulted. Based on all of the above, I would place taboo as the main reason for our failure.This paradox of taboo influenced everything. It is what stopped people from investing, it influenced the media, and it influenced the payment processor/government regulations. It is what leads to blind regulation and harm in turn.
Overall, I find all of the reasons that influenced Freyja’s outcome to be incredibly fascinating. I entered this industry because I wanted to make it safer. I naively thought that this meant something, and that others would support it. However, I quickly learnt that I was coming up against a system that was much larger than myself or our company, and it would actively prevent us from being able to do what we set out to do. One thing that I hope people take from the ‘Freyja case study’ is an understanding for where the true power of industry regulation lies; banks and processors. As consumers and creators we should really be questioning and speaking about the fact that banks, and processors are the one’s influencing what pornography is allowed, and what is not. It is also about time that we put aside this concept of ‘taboo’ so that we can actually make such an influential industry safer rather than making it more harmful and dangerous for those involved.