Necessity
Necessity, innovation, and porn
Welcome to the MoneyNeverSleeps newsletter!
This was a big week for the MoneyNeverSleeps team as we recorded our 100th podcast episode, hit 100 subscribers to the newsletter and we were thrilled to announce our inclusion in FeedSpot’s Top 20 Entrepreneur Podcasts You Must Follow in 2020.
So a big Thank You to all our listeners, subscribers and FeedSpot!
If you’re reading this but haven’t subscribed, now’s the time to join!
Listen, if it not for these hood inventions
I'd just be another kid from the block with no intentions
On the dock of that bay, serving a life sentence
- ‘The OtherSide’ by The Roots
Everyone has heard of the old saying “necessity is the mother of invention”.
According to Dictionary.com, the definition is: A need or problem which encourages creative efforts to meet the need or solve the problem.
Supposedly this saying traces all the way back to the ancient Greek philosopher, Plato.
Why Should I Care?
To me, the key piece here is ‘encourages creative efforts’ as often the problem requires a new answer or looking at the problm from a different angle.
Maybe your company has a challenge breaking into a new market or dealing with some potential new regulation coming down the line.
Maybe in order for you to overcome this problem, you have to move into a new sector or be able to offer a new solution or product feature that is outside of your comfort zone.
Embrace the challenge.
Make innovation part of your process.
Always look for new ways to truly meet your customer’s needs.
Don’t be afraid to look outside your comfort zone or area of expertise to find solutions.
If you need inspiration, look to…porn!
From payments and email marketing to pay-per-click ads and affiliate programs, much of modern ecommerce and they way we interact with websites as we know it owes its foundations to porn.
In other words, sex not only sells, it invented new ways of selling.
Let’s look at some well known examples…..
Online Credit Card Payments
Forget Jeff Bezos or the Collison brothers.
Anyone that sells anything online owe some gratitude to Richard Gordon, the founder of Electronic Card Systems.
Richard Gordon founded the company and pioneered the then-innovative-now-normal credit card processing infrastructure and rolled out the technology to a broad array of porn sites in the lates 1990s and early 2000s.
The profit model was simple: Take a small commission for processing sales from porn sites where users purchased naughty content.
For most of the 90’s and early 00’s, Gordon's credit card transactions system introduced online payments and provided services to top porn sites.
In 1998, the infamous Pamela Anderson & Tommy Lee sex tape was released and it was the nautical voyage that launched billions of online credit card transactions.
According to Forrester Research, Web users spent about $1.3 billion on online porn in 1999. That represented about 8 percent of all internet commerce that year, with more money than people spent online on books or plane tickets.
Back then, it was the Internet's leading industry.
Fee-Based Subscriptions
From Amazon to iTunes and Spotify, fee-based subscriptions are a big part of modern ecommerce and daily life.
What you may not know is that the porn business set the stage for online subscriptions as a way of building sustainable revenue.
At first, porn sites offered moderate monthly fees with sky-high cancellation costs in an effort to ensure a few months of revenue out of each user.
The sites acted as their own merchants at first, before outsourcing payments to other providers.
Modern Affiliate Program Model
Amazon are widely assumed to be the company that brought affiliate marketing to the masses, but there are many that will argue that Ron Levi pioneered it.
Ron Levi founded Cybererotica (the original pornography mega-site) and he invented FastCash, which allowed for the creation of mini-porn sites that showed porn samples for free while directing users to larger, paid sites. The larger sites would then pay for that traffic.
Porn sites are typically barred from traditional marketing platforms, so Levi and other early leaders in porn were forced to develop their own. They bet that pictures of nude humans would attract eyeballs (and therefore clicks) and they were right.
Now, the idea of getting companies to produce marketing content that points to larger sites is built on the foundation set by Levi and other founders of the pornography industry.
Double Opt-In Processes
I bet you have done it before.
We all have.
You sign up for a website or newsletter, you submit your email address, choose a password, and then the site or app sends you a quick email with a confirmation link.
Once you click it, you can access the site as a user. Going through these painful steps ensures that you’re not a robot and reduces the number of fake accounts created.
What you probably don’t realise is that porn companies (specifically Cybererotica) developed the double opt-in process to address users’ very valid security concerns.
Now, every time you complete a double opt-in process, you’ll think about porn. (You’re welcome!)
I think it’s pretty clear that the porn industry has lead the way on innovation for years, mainly because it has constantly been forced to adapt to technology advances, disruption, regulation, etc
It’s also pretty clear that inspiration can come from anywhere.
Tell me why I’m wrong…
- Eoin
Left Field
How do I describe ‘Left Field’? It’s a place to put the content (newsletters/articles, etc) that we have amassed over recent weeks or previous years that really make us think or change our thinking on a particular topic. All the content will offer an alternative view of some topic in financial services, technology or sport (or a combination of all three!)
MindGeek: The Not-so-Secret Tech Giant of Montréal
Following the theme from above to go a bit deeper (!) into the world of online ‘entertainment’ with the story of MindGeek, the behemoth in the billion-dollar pornography industry.
What is staggering about MindGeek is that it’s sites receive a total traffic exceeding 115 million users daily, compared to YouTube, one of the most well-known content distribution platforms, which has a daily viewership of 30 million users.
(Interesting side note: when I worked in Future Finance in the early days of the company, we shared the top floor of a Dublin office building with MindGeek and would regularly chat to the team there in the hallway, etc without having any idea what they did!)
Anyway, I won’t give away too much. Enjoy the article and feel free to get in touch to discuss more!
- Eoin
Can’t Sleep?
MoneyNeverSleeps podcast episode from this week:
Episode 100: Money Talks #22: Challenges of the Challengers and Top 10 Episodes
For the 100th episode of MoneyNeverSleeps, Eoin and Pete dive into their favorite topic – the challenges of challenger banks – and look back to the first 99 episodes to build out a list of their Top 10 episodes.
Podcast Recommendation: Highy recommend checking out ‘The Brian Keane Podcast’ where fitness entrepreneur Brian Keane answers your questions and interviews leaders in the world of fitness, health, mindset and natural wellness to share tips about all things that can support you on your journey to becoming the best version of yourself.
Book Recommendation: I have just finished reading "Bad Blood: Secrets and Lies in a Silicon Valley Startup" by John Carreyrou which tells the truly remarkable story of the breathtaking rise and shocking collapse of Theranos, the multibillion-dollar biotech startup. One of the best books I have ever read!
Article/Newsletter Recommendation: if you haven’t heard of it already, check out ‘The Profile’ by Polina Marinova Pompliano. Its a fascinating weekly deep dive where you can learn from the most successful people & companies every Sunday morning.
This newsletter has been written by Eoin Fitzgerald and Pete Townsend
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