Sex-inspired startups: pros, cons, pitfalls
When a startup focuses on sex, it encounters a lot of obstacles in the way from funding to advertising. Vivien Zyang tells how sex-oriented startups are looking for ways to pay bills without affecting their mission.
From the translator: The article talks about difficulties with startups only for adults in the west, and we must remember that in post-Soviet realities most of the startups described fall under articles 242 of the Criminal Code of the Russian Federation (up to six years) or 301 of the Criminal Code of Ukraine (up to seven years).
Cindy Gallop has a weakness for young men. Her experience of dating young men helped to realize that they were under the influence of pornography too much. This led her to launch MakeLoveNotPorn ( make love, not pornography ) - a digital marketplace for user-generated content that tries to “normalize” real sex.
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Gallop talks about our anti-sex culture, which keeps us from talking about sex, and it becomes harder for us to distinguish between “real sex” and fake sex, or pornographic sex. The former advertising consultant made it her mission to change the outdated views of society, but she faced difficulties in finding investors. Amazon, PayPal, Apple, and even Chase Bank refuse to deal with her and her like.
“Each obstacle that a technology startup faces is three times more difficult if a startup is related to sex,” Gallop says. “We cannot use any part of the business infrastructure that every startup takes for granted, because the small print always says“ without content for adults only ”.
It was difficult for her to find adequate funding because no one wants to raise her hand in public and declare that they support sex.
“It's all because of the fear of what other people think,” says Galop. “The young venture capitalist approached me last year ... and he fully shares my vision, but he said:“ In the end, it doesn't matter what I think. It is important that all other partners and investors in my company think. ”
Keith Murray Maloney, founder of the adult entertainment company O'actually (What’s Really), heard from other entrepreneurs about scary venture capital stories, and from the very beginning decided that she "would not approach them."
“I did a primary research and knew that it would be a waste of time,” says Maloney, who has now received funding from an angel investor who, in her words, “really shares our worldview.”
If entrepreneurs decide to follow the crowdfunding path, then they will face the problem that “people will not publicly unite around sex,” Galop argues.
Dema Tio, the founder of Vibease wearable smart vibrators, quickly realized that crowdfunding would be a serious challenge after Kickstarter rejected his campaign because the platform does not accept projects with "pornographic materials."
“At first, many were urging me not to go into the IT industry with this product, but to turn to the porn industry,” says Tio, who created the product for his wife during their distant breaks. - But, for me it is not pornography, and not a toy for perversions. It's about intimacy because many couples are looking for solutions to maintain their intimacy.
If sex innovators have gone through a financing phase, they may find that their business is too sexy for banks.
“I cannot open a corporate account anywhere,” says Galop. - No one will allow me to open an account for an enterprise that has “porn” in the title ... I talked with banks for startups, with Silicon Valley Bank, with Square One Bank, and they don’t want to have anything to do with me.
Gallop eventually opened a Chase bank account, but “one serious guy” at the bank was uncomfortable because of the nature of the MLNP and told Gallop to do business elsewhere.
Colin Hodge, the founder of Down - an application, formerly known as BangWithFriends, also got a bad experience with Chase, when he applied for a corporate credit card, he received the answer that banks do not work with accounts "in this industry."
“We need someone with willpower who can come up and say,“ Hey, this is a legal industry, and we shouldn’t deny the legitimate business, ”says Hodge.
Entrepreneurs fear that the inability to find a payment system that will allow users to pay for services and products will ultimately make it impossible for a business to flourish.
In 2002, Visa and MasterCard decided that adult content should fall into the category of “high-risk” merchants, that is, when processing payments, companies engaged in this business will pay a higher commission. In this regard, PayPal has announced that it will no longer work with companies that are associated with materials for adults.
Gallop agitates against this on his company's website and asks users to send email to PayPal president David Marcus asking him to work with MLNP.
“If MLNP could work with PayPal, Amazon, AmEx, Google, Stripe, and other major payment systems, we would double our earnings per day without making any additional efforts,” says Gallop. “More people are willing to pay if it would be easier for them to do it. ”
Gallop believes that these companies will not work with her because they do not understand what she is trying to do. And they charge an exorbitant commission because her company works in the adult industry.
But the problems do not end there. Sex-oriented startups often get kicked out on the App Store, as was Hodge's business last year, and they can't use social media like Facebook to advertise their services or products. Even such a seemingly simple thing as finding a partner to send email to subscribers can be a problem.
Even entrepreneurs in the entertainment sector who are not directly involved in the adult industry experience the stigma of porn. Nick Blake, who is launching a streaming mobile channel, is trying to figure it all out. “For most of us, sex is a very intimate, private matter, but the business world is a very public thing,” he says. “You want big things in your portfolio that are acceptable to everyone.” You need brand appeal. Adult content is delicate because everyone wants it, but no one wants to talk about it. ”
As for Gallop, all these problems only push her to think about opening her own bank.
“The next big thing in technology is changing the world through sex,” she says, and no one gets in her way, not even America.
From the translator: The article talks about difficulties with startups only for adults in the west, and we must remember that in post-Soviet realities most of the startups described fall under articles 242 of the Criminal Code of the Russian Federation (up to six years) or 301 of the Criminal Code of Ukraine (up to seven years).
Cindy Gallop has a weakness for young men. Her experience of dating young men helped to realize that they were under the influence of pornography too much. This led her to launch MakeLoveNotPorn ( make love, not pornography ) - a digital marketplace for user-generated content that tries to “normalize” real sex.
')
Gallop talks about our anti-sex culture, which keeps us from talking about sex, and it becomes harder for us to distinguish between “real sex” and fake sex, or pornographic sex. The former advertising consultant made it her mission to change the outdated views of society, but she faced difficulties in finding investors. Amazon, PayPal, Apple, and even Chase Bank refuse to deal with her and her like.
“Each obstacle that a technology startup faces is three times more difficult if a startup is related to sex,” Gallop says. “We cannot use any part of the business infrastructure that every startup takes for granted, because the small print always says“ without content for adults only ”.
Financing problem
It was difficult for her to find adequate funding because no one wants to raise her hand in public and declare that they support sex.
“It's all because of the fear of what other people think,” says Galop. “The young venture capitalist approached me last year ... and he fully shares my vision, but he said:“ In the end, it doesn't matter what I think. It is important that all other partners and investors in my company think. ”
Keith Murray Maloney, founder of the adult entertainment company O'actually (What’s Really), heard from other entrepreneurs about scary venture capital stories, and from the very beginning decided that she "would not approach them."
“I did a primary research and knew that it would be a waste of time,” says Maloney, who has now received funding from an angel investor who, in her words, “really shares our worldview.”
People will not publicly unite around sex.
If entrepreneurs decide to follow the crowdfunding path, then they will face the problem that “people will not publicly unite around sex,” Galop argues.
Dema Tio, the founder of Vibease wearable smart vibrators, quickly realized that crowdfunding would be a serious challenge after Kickstarter rejected his campaign because the platform does not accept projects with "pornographic materials."
“At first, many were urging me not to go into the IT industry with this product, but to turn to the porn industry,” says Tio, who created the product for his wife during their distant breaks. - But, for me it is not pornography, and not a toy for perversions. It's about intimacy because many couples are looking for solutions to maintain their intimacy.
If sex innovators have gone through a financing phase, they may find that their business is too sexy for banks.
“I cannot open a corporate account anywhere,” says Galop. - No one will allow me to open an account for an enterprise that has “porn” in the title ... I talked with banks for startups, with Silicon Valley Bank, with Square One Bank, and they don’t want to have anything to do with me.
Gallop eventually opened a Chase bank account, but “one serious guy” at the bank was uncomfortable because of the nature of the MLNP and told Gallop to do business elsewhere.
Colin Hodge, the founder of Down - an application, formerly known as BangWithFriends, also got a bad experience with Chase, when he applied for a corporate credit card, he received the answer that banks do not work with accounts "in this industry."
“We need someone with willpower who can come up and say,“ Hey, this is a legal industry, and we shouldn’t deny the legitimate business, ”says Hodge.
Entrepreneurs fear that the inability to find a payment system that will allow users to pay for services and products will ultimately make it impossible for a business to flourish.
Visa and MasterCard classify adult content as a “high-risk” business.
In 2002, Visa and MasterCard decided that adult content should fall into the category of “high-risk” merchants, that is, when processing payments, companies engaged in this business will pay a higher commission. In this regard, PayPal has announced that it will no longer work with companies that are associated with materials for adults.
Gallop agitates against this on his company's website and asks users to send email to PayPal president David Marcus asking him to work with MLNP.
“If MLNP could work with PayPal, Amazon, AmEx, Google, Stripe, and other major payment systems, we would double our earnings per day without making any additional efforts,” says Gallop. “More people are willing to pay if it would be easier for them to do it. ”
Gallop believes that these companies will not work with her because they do not understand what she is trying to do. And they charge an exorbitant commission because her company works in the adult industry.
But the problems do not end there. Sex-oriented startups often get kicked out on the App Store, as was Hodge's business last year, and they can't use social media like Facebook to advertise their services or products. Even such a seemingly simple thing as finding a partner to send email to subscribers can be a problem.
Adult content is delicate because everyone wants it, but nobody wants to talk about it.
Even entrepreneurs in the entertainment sector who are not directly involved in the adult industry experience the stigma of porn. Nick Blake, who is launching a streaming mobile channel, is trying to figure it all out. “For most of us, sex is a very intimate, private matter, but the business world is a very public thing,” he says. “You want big things in your portfolio that are acceptable to everyone.” You need brand appeal. Adult content is delicate because everyone wants it, but no one wants to talk about it. ”
As for Gallop, all these problems only push her to think about opening her own bank.
“The next big thing in technology is changing the world through sex,” she says, and no one gets in her way, not even America.
Source: https://habr.com/ru/post/248155/
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