Priceonomics

Cindy Gallop never intended to get into sextech.

Today she is the CEO of a small startup, a video platform called Make Love Not Porn, whose members pay $5 to stream videos submitted by content creators. Its premise is unorthodox, even for the contrarian atmosphere of Silicon Valley. 

In a world of abundant, free porn, Gallop is asking people to pay to watch videos of ordinary people having sex. And in a world in which having a nude picture online is most people’s worst nightmare, she is asking people to publicly share videos of themselves having sex. 

But it all started with an observation from her sex life. 

“Make Love Not Porn is a total, complete, and utter accident,” Cindy Gallop tells us, as we talk over Skype. “This issue would never have crossed my mind if I had not experienced it so intimately and personally.”

The issue Gallop is referring to is the fact that porn has, by default, become sex-ed for young people. And as Gallop explained in a 4-minute, tour de force TED Talk in 2009, she realized this because she dates younger men. 

When Gallop dated men who modelled their behavior in bed on porn, she communicated her preferences. But she worried about “the young girl whose boyfriend wants to come on her face… and hardcore porn has taught her that all men love coming on women’s faces, all women love having their faces come on, therefore she must let him come on her face and pretend to like it.” 

So Gallop, a former advertising executive, decided to do something about “the creeping ubiquity of hardcore pornography.” She created a “clunky, little website,” makelovenotporn.com, which compared the practices of hardcore porn with the messy reality of real world sex, and she launched it at TED. 

A screenshot from makelovenotporn.com

Gallop did not intend to launch a business—just “start a dialogue.” She succeeded. Nearly 1.5 million people have watched her talk. Three thousand people a day visited makelovenotporn.com, and she received thousands of emails.

“Every single day for the past 7 years,” she says of the emails. “From every corner of the world. They tell me about their sex lives and their porn watching habits… They write for advice. Fifteen-year-old boys write. Fifty-year-old women write. And it was the sheer cumulative impact of all of those emails that made me feel that I had a personal responsibility to take this initiative forwards.”

Gallop could have become an anti-porn crusader. But she is not anti-porn. She enjoys hardcore pornography; she just wants people to recognize that porn is entertainment and rarely reflects the reality and diversity of real world sex.

She could have started an initiative to get parents and schools to help teenagers recognize the difference between porn and real world sex. 

But she decided to start a business, MakeLoveNotPorn.tv, because, as she explains, “I knew, if I wanted to find a way to counter the default of porn as sex-ed globally, I had to come up with something that had the potential to one day be just as all-pervasive in our society as porn currently is.”

She faced a daunting challenge. While it is a maxim of startup world that many great business ideas originally sound like bad ideas, Make Love Not Porn (MLNP) sounded particularly farfetched: MLNP would be a video platform for real world sex. Anyone could submit videos of himself or herself masturbating or having real, unstaged sex. Members would pay $5 to stream videos, and MLNP would split the profits 50-50 with its “Make Love Not Porn stars.” 

MLNP exemplifies Gallop’s belief, which she very much wants to tell you about, that the business model of the future is: shared values + shared action = shared profits (financial and social). She and her team describe the mission of MLNP as improving our sex lives for the better.

Today, MLNP has neither failed nor achieved remarkable success. Two years after its launch, it is in public beta and, according to Gallop, earns revenues in the low five-figures each month. 

A market does exist for real world sex videos. Around 100 Make Love Not Porn stars are sharing sex tapes with impressive enthusiasm, and a small but enthusiastic community pays to watch them.

Instead the biggest obstacles have been what is usually the easy part of starting a business: opening a bank account, sending emails to a list of members, and accepting Visa. Because as Gallop says, “My team and I fight a battle every day to build makelovenotporn.tv—an honest, transparent, ethical business with a social mission—because we are barred from using the business infrastructure that other tech start-ups take for granted.” 

“The small print always says ‘No adult content’.”

Pitching Sex in Silicon Valley

It’s not unusual for a startup founder to struggle to raise funding. 

When Gallop talked to investors, she had a few things going for her. Gallop has an impressive background in marketing—she started the U.S. branch of the ad firm Bartle Bogle Hegarty and won the 2003 Advertising Woman of the Year Award. A team including a designer and a developer, who worked with Gallop on another startup, IfWeRanTheWorld, wanted to work on MLNP. She could also cite the reaction to her TED Talk and examples like E. L. James’s Fifty Shades of Grey as evidence that socially acceptable sex may be an untapped market with huge potential.

But Gallop faced both typical and atypical challenges in pitching Make Love Not Porn. She did not have a prototype and users that could show the promise of MLNP’s unusual premise. Nor could she deploy extensive data about her market, because, as Gallop points out, “No one is funding the comScore of porn.” There are no data analytics firms for porn and sextech. 

But the fundamental problem, she stresses, was that investors responded to her pitch like they were pastors: they simply would not touch an adult entertainment company. 

One venture capitalist, Gallop says, told her, “At the end of the day, it’s not about what I think. It’s about what every other partner and every investor in my firm will think." Investors understood what she was trying to accomplish, but they would not break the taboo that surrounds companies that reach into our sex lives. 

Venture capitalists are infamously non-transparent when they decline to make an investment, and their rejection of MLNP may be due to other, unstated considerations. But Gallop’s claim that taboos around sex prevent companies like hers from fundraising is widely shared by sextech entrepreneurs. 

As Fast Company reports, Kit Murray Maloney, the founder of a women-focused, adult entertainment site, “heard about the VC horror stories” and decided “it was going to be a complete waste of my time" to talk to venture capitalists. Crowdfunding efforts fare no better: Kickstarter removed Vibease—a remote control vibrator for couples in long-distance relationships—from its site. Many venture capital firms also have “sin clauses” in their contracts that prevent them from investing in industries like gambling, firearms, and porn. 

Perhaps the most innovative approach to adult content—Utherverse's virtual reality porn and a kinky, massive, online, multiplayer game—is notably self-funded to the tune of $50+ million by the company’s wealthy founder, Brian Shuster. 

Gallop had an idea for a scaleable, tech-centric business, a social mission, and an intriguing proof of concept, in the form of her TED Talk, that she may be onto a huge, unfulfilled need.

But sex does not sell in Silicon Valley.

Photo credit: Alexis Gravel

It took 2 years, but Cindy Gallop did secure seed funding from an angel investor. 

With that $500,000 investment—a modest amount of seed capital for a tech startup—Gallop worked with two co-founders, a developer and a designer, to build the site. As MLNP’s funding dwindled, they both took on full-time jobs elsewhere. The current team is small: Gallop works full-time, unpaid; Madam Curator Sarah Beall works full-time to manage the community and vet submitted videos (the primary criteria is that the sex is consensual and not staged); and an assistant curator and a developer work part-time. 

But finding funding was just one of many problems.

For most startups and small businesses, opening a bank account is routine. That was not the case for MLNP. “I can’t find a bank anywhere in the world,” Gallop says, “that will allow me to open a business bank account, honestly and transparently, for what we want to do.” She has the same problem when it comes to accepting payments from MLNP members. “PayPal won’t work with us,” she says. “Mainstream credit card operators won’t work with us.”

A number of technical tools that are fundamental to building a tech startup are equally off-limits to Make Love Not Porn. In the past, tech companies needed their own servers to host their websites and data; now startups rent server space from Amazon Web Services. But Amazon Web Services refused to host MLNP. Gallop’s team also had to build its own video streaming platform instead of paying for an off-the-shelf solution, because providers like Brightcove refused to work with them. Companies like MailChimp, which manage membership emails, declined MLNP’s business as well.

In each case, the terms of service said “No adult content,” forcing Gallop to contact each company to ask if they could work together. The answer was usually “no.”

No Adult Content

Cindy Gallop is used to people suggesting that she copy what the porn industry does.

Adult entertainment companies have found a way to overcome their isolation from the modern financial system: a subsector of payment processors has sprung up to serve the porn industry. 

But since the porn industry has nowhere else to go—and because porn is a “high risk” industry, due to all the people who call credit card companies to claim they did not buy and download “The Texas Vibrator Massacre” last night—the rates are extremely high: around 15% for a small company instead of the normal 3%. 

According to Garion Hall, the owner of the porn site Abby Winters and the payments processor GMBill, he has struggled to find enough cash to pay performers when banks refused his business. He also saw his profits fluctuate dramatically when a bank dropped his business, forcing him to go with the high rates of the adult industry’s leading payment processor. 

Gallop with early members of the MLNP team: Michael Smith, Sarah Beall, Corey Innis, and Oonie Chase

It’s hard to overstate just how detrimental a credit card processing fee of 15 cents of every dollar is to a business’s prospects. If the notoriously difficult restaurant business, for example, had to pay the porn industry’s rates, most restaurants would either face bankruptcy or go cash-only. Make Love Not Porn, of course, does not have that option. “We can’t work with someone who’s charging us, a tiny, bootstrapped startup with a revenue sharing model, 15%,” Gallop tells us.

Gallop finally found a German bank, whose team is very supportive of her business, that set MLNP up with a merchant account that allows MLNP to accept Visa and Mastercard at a 3.9% rate. The PayPal competitor Dwolla also agreed to work with MLNP, but for now, Dwolla only serves the American market. 

The payments setup is far from ideal. MLNP members regularly ask to use PayPal. The credit card companies also put MLNP in the high risk division—over Gallop’s objections that they are socially acceptable sex. This means that whenever members rent a MLNP video, their bank sees a high risk transaction from a European bank, flags it, and stops the transaction. 

When Gallop says that MLNP could double its revenues overnight if she could work with Stripe and PayPal, she may be understating the case. 

It’s not Porn, it’s Real World Sex

Given all the obstacles, Make Love Not Porn’s growth is both small and impressive. 

Over 400,000 people around the world have signed up for a MLNP account—although only a minority have rented a video. The site has over 100 MLNP stars, including real porn stars who share the sex they have off the set, and around 400 videos to rent. The number of available videos fluctuates, because MLNP stars can ask at anytime for MLNP to take down a video. (Many do if they break up with their fellow MLNP star.)

Sales are modest, but they are an impressive indication that people want real world sex videos. Even though millions of pornographic video clips are a few clicks away, MLNP members are paying $5 per video and calling their bank to make sure the payment goes through. 

Some MLNP stars are also making thousands of dollars every few months. Gallop likes to joke: “You know those scam ads that keep popping up on the Internet, that say, ‘Make $2,000 a week working from home!’ Well, now you can!” 

One perspective is that the ubiquity of pornography online has made it a commodity, whereas MLNP’s videos of real sex are a unique product that people are willing to pay for.

Cindy Gallop, though, stresses that their videos are completely different from porn. “Porn is purely masturbatory material,” she says. “We’re not just that. We’re also that and very happy to be that. But we are many more things.”

Another purpose of MLNP videos is the one that launched Gallop’s TED Talk: education. She hopes that watching MLNP will allow people to learn from diverse examples of real world sex—rather than thinking hardcore pornography is the way people have sex. “Because we’re social sex,” Gallop explains, “it’s okay for [someone] to say to their partner, ‘Oh, I came across this thing. Should we watch?’”

Another educational aspiration of MLNP is to create a new, more inclusive language of sex to replace the language that porn has given us. Whether through its video tags, MLNP blog, or other interactions on their platform, they want to coin or popularize new terms like “lickjob”, which is to cunnilingus as blowjob is to fellatio. 

“The person who coined the term ‘fingerblasting,’” Gallop says, to emphasize the problems with ceding the language of sex to porn, “didn’t have a vagina.”

She also points out that while porn is about bodies, the real world sex of MLNP is about feelings and emotion and a glimpse into people’s private lives. One member wrote to two MLNP stars to tell them, “I saw the way you look at each other. I saw the ways your eyes connect. I want to meet somebody and have that kind of relationship.” Another member wrote, “Watching porn makes me want to jerk off. Watching your videos makes me want to have sex.”

Another, less obvious category? The MLNP team wants sex to be funny; they want to see the outtakes from filming sex.

“There is a huge market for that,” Gallop insists, as she describes how they want to host a naughty version of America’s Funniest Home Videos. “Imagine a sex equivalent of Charlie Bit My Finger, which has now had over 800 million views on YouTube. Imagine something as funny, spontaneous, empathetic, everyday as that, but in the sex context. Funny or Die isn’t doing that. College Humor isn’t doing that. We want to do that.”

The mission of MLNP is to get people talking about sex. “Real world sex is not about performing for the camera,” Gallop says. “It’s about doing what you do on every other social platform, which is simply capturing what goes on in the real world in all its funny, messy, glorious, wonderful, ridiculous, amazing humanness.” 

“We’re building a whole new category on the Internet that does not currently exist: social sex,” Gallop adds. “Our competition isn’t porn, it’s Facebook and YouTube. Or it would be, if Facebook and YouTube allowed sexual self expression, which they absolutely forbid.”

It is these aspects of MLNP that explain its early growth: its community really seems to believe in the mission. As one MLNP star explained in an interview, “I think it’s important when you are being vulnerable to the world that you get paid in return. And you have to feel like you’re doing it for a reason.”

Sextech’s Moment?

For many tech startups, timing is as important as execution.

The prospects for an online dating site were poor in the early days of the web, when meeting dates online seemed weird. In the same way, while a number of podcasting startups struggled in the early 2000s, today a customer base and supportive infrastructure for podcasts has helped Gimlet Media quickly achieve critical success and a $30 million evaluation. 

It’s easy to imagine how MLNP could be an idea that came too early—or will not escape a niche. Gallop describes the extraordinary reaction to her TED Talk as largely due to the fact that she publicly discussed her sex life and an issue that everyone knows about but never talks about. Her talk could be a harbinger of cultural change, but it’s still hard to imagine a critical mass of people openly sharing bloopers from MLNP’s real world sex videos. 

Yet this hasn’t stopped sextech entrepreneurs, who are building, pitching, or selling sex toys that allow long-distance couples to “feel each other’s touch,” virtual reality sex, and educational, sex games. As Gallop points out, many of these founders are women who want to disrupt the male-dominated world of adult entertainment.

And while it’s hard to say or predict anything about the cultural acceptability of sex, the market timing may be excellent. The porn industry faces the same situation as the music business: piracy has decimated its business model, and it’s struggling to find new ones. 

Which seems like a better bet on the future: finding new ways to fund cliche, hetero-male-focused, hardcore pornography? Or inclusive, sex positive businesses that people feel good about?

But for Cindy Gallop and her fellow sextech entrepreneurs to disrupt the sex industry, they’ll need Silicon Valley to stop being a bunch of prudes. 

“We believe the next big thing in tech is disrupting sex. And the tech and business world is doing everything it possibly can to stop us,” says Gallop. “Where’s the sense in that?” 

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This post was written by Alex Mayyasi.  You can follow him on Twitter at @amayyasi.



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