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Learnings about Creator Economy

History of Creator Economy

There are two broad categories of creators:

Influencers: Provide entertainment

Experts: Share knowledge

Many expert creators have built their audience on Twitter, but to date, the company hasn't given these creators any tools to own their audience or make money. That's why creators send their Twitter followers to other platforms - Substack, Gumroad, etc. - to make a living.

Layer 1: Foundational Media Platforms. Since the late 2000s, we witnessed the birth of platforms like YouTube, Instagram, iTunes, Spotify, and more recently Snapchat, Twitter, Medium, Twitch, TikTok, etc. Platforms help creators get discovered and establish an audience by investing heavily in their recommendation and curation algorithms — they solved the distribution problem for creators. No longer were creators at the mercy of large production companies who decided what content to produce and who the audience would be.

These platforms contributed to the rise of multi-channel networks like Maker and Fullscreen. They aggregated creators and equipped them with audience development tools before they were bought for hundreds of millions, while new networks like Brat TV and Tastemade emerged. The platforms also necessitated the creation of multimedia editing tools that helped creators polish their content.

But platforms don’t always have content contributors’ best interests in mind so the smart creators learn to cross-promote and diversify their presence on different apps to minimize “platform risk”. That way they’re not vulnerable to one platform’s decline, change in priorities, removal of features, or reduction in opportunities that can hurt them, which is known as “platform whiplash”.

Layer 2: Monetizing Influencer Reach. Once top creators had built an established audience who trusted what they had to say, brands started to recognize the return on investment of paying creators to harness their on-platform reach to advertise products and services.

While some platforms split traditional ad revenue with creators, others left it up to the content makers to figure out how to monetize, leading to the rise of sponsored content and companies like Niche that brokered the deals. There are now hundreds of companies in this space including influencer agencies, sponsorship marketplaces, talent representation companies, and more. According to Mediakix, the current influencer marketing TAM is ~$8bn and it’s expected to grow to $15bn by 2022, making it one of the fastest-growing business sectors. Ideally, creators work with sponsors that match their personal brand, and don’t sacrifice content quality to overtly push a corporate message.

However, as influencer marketing grew more common and more brands started paying for it, influencers noticed a pattern: with each paid post, they’d lose some of the trust that they established with their audience, hurting their engagement and growth. Which brings us to the latest wave of creators’ evolution…

Layer 3: Creators as businesses. This is where we are today! Having developed fandoms that follow them off-platform, creators can become full-fledged businesses with multiple revenue streams beyond ads. Companies have arrived to help creators earn money by selling products such as premium content, merchandise, books/ebooks, newsletters, or selling services such as fan engagement, coaching, consulting, speaking engagements, etc.

This lets creators focus on delighting their biggest fans and making more unique niche content, rather than desperately seeking the biggest possible audience and making more generic clickbaity content.

Essentially, creators have to balance the distribution potential of certain platforms with the risk of becoming dependent on them, and monetize by either earning a little off of each fan from mainstream content for a big audience or earning a lot off of deeper connections to a smaller set of fans through niche content.

The big trend we see here is that over time, creators are becoming more diversified in their revenue streams and are being funded directly by their fans.

TAM for Creator Economy

Here’s our bottom’s up TAM (total addressable market) analysis, which adds up to 50 million creators:

Professional Individual Creators (~2M+) – Making content full-time

YouTube: Of the 31M channels on YouTube, ~1M creators have over 10K subscribers (

source⁠

)

Instagram: Of the 1bn accounts on Instagram, ~500K have over 100k followers and are considered active influencers (

source⁠

)

Twitch: Of the 3M streamers on Twitch, ~300K have either Partner or Affiliate status (

source⁠

)

Others: including musicians, podcasters, writers, illustrators, etc total ~200K

Amateur Individual Creators (~46.7M) – Monetizing content creation part-time

YouTube: Of the 31M channels on YouTube, ~12M have between 100-10K subscribers (

source⁠

)

Instagram: Of the 1bn accounts on Instagram, ~30M have between 50-100K followers (

source⁠

)

Twitch: Of the 3M streamers on Twitch, ~2.7M are non Partner or Affiliates

Others: including musicians, podcasters, writers, illustrators, maybe a total of ~2M<

Currently how influencers/ creators earn money is:

Advertising revenue shares

Graphics

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⁠

Birth of Media Platforms

Opportunity Assessment

Pros: Once these platforms gain traction they can grow rapidly thanks to virality. There have been huge outcomes in this space.

Cons: Very saturated market with the winners in each category already identified. Difficult for new entrants as incumbents all have strong network effects.

Emergence of Influencer Marketing

Pros: There is an opportunity to build a large, scalable business in the platform/marketplace segment given that brand marketing is still the #1 way that creators generate income. Who will be the DoubleClick of influencer marketing

Cons: There has been no major outcome in this space, with Twitter’s buy of Niche and Google’s acquisition of FameBit only ranging in the tens of millions. Our hypothesis is that there are several reasons why:

None of these platforms can monopolize on supply — influencers are incentivized to sign up with as many of them as possible. Defensibility is a key question.

Top influencers work with agencies, not platforms/marketplaces. These platforms typically capture a long tail of small to medium-sized influencers.

Influencers all have distinct personalities and are thus hard to manage — platforms are not equipped to do so.

Creators as Businesses

Pros: Integrated platforms like Twitch or YouTube can charge a high 30-50% take rate because they can leverage the consumer engagement they already have to provide creators a ton of value on building an audience.

Cons: In contrast, standalone companies have a low take rate of typically 5% because they don’t have additional value add and need to align themselves with the creators. Given that the largest platforms in this space have under 500K creators, a 5% take rate off an average of $10/month donation will be tough to build a large business.

a16z

They’re accessible to everyone, not only existing businesses and professionals

Now the ability to make a living off creative skills has trickled down to individuals at scale, helping everyday people to launch and grow businesses.

Companies have the opportunity to engage entrepreneurs in the early stages, then capture economic value as they grow. They might start with a

very basic offering⁠

and add product capabilities as their customers earn revenue and develop new needs.

They view individuality as a feature, not a bug

New platforms highlight variation among workers in categories that can benefit from more diversity in user choice.

For new platforms, this model can pose a sizable risk: once consumers are able to work directly with a preferred provider on an ongoing basis, they may take that relationship offline.

They focus on digital products and virtual services

Whereas past generations of entrepreneurship-enabling platforms typically focused on selling physical products (e.g. Amazon, Etsy, Ebay, Shopify) or in-person services (e.g. Task rabbit, Care.com, Uber), new creator platforms are focused on digital products

They provide holistic tools to grow and operate a business

Platforms are incentivized to help creators succeed and grow, rather than driving discrete, one-time transactions.

Some platforms offer marketing tools like custom landing pages, coupons, and affiliate programs. Others provide behind-the-scenes support: Walden, for instance, connects new entrepreneurs with coaches for strategy and accountability.

Creator Economy Platforms

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Content Creators Are Businesses⁠

⁠

A diagram of all the current platform that play within in the Creator Economy. Platforms within the creator economy have four purposes but are unable to do all of them and effectively help amateaur creators monetize their creation .

Four Purposes

Content Discovery - You’re looking to discover content so you can find inspiration, pass time, discover new ideas, and more. Examples of these platforms are as followed - pinterest, twitter, instagram, youtube,tik-tok, youtube, medium, and substack. These platforms hold content in different forms for users: videos, short- form, newsletters, blogs, short-words, pictures, etc.

Create/ Find Community - As creators start to find their niche and develop their fans - they are shifting to the creation of communities which they can utilize to increase engagement of followers, increase referrals, and monetize. Similarly, users , once feeling a sense of belonging with an influencer/creator and niche, they will similarly look for communities of this nature. Platforms that live within this space are like - discord, reddit, twitch, luma, patreon, instagram

Commerce - Not all creators monetize based on their creation like posting videos, making tik-toks, or affiliate links. Creators are able make landing pages, templates, courses,small hacks, etc. Platforms that live within this space are like: gumroad, kanjabi, ghost, grailed, etc.

Creators as Businesses

I am not a businessman, I am a business, man!’ — Jay-Z

Creators have been able to utilize content discovery, individuality, and community to monetize and build trust with people who consume digital content. this has led to platforms in the above categories to focus on funding creators, creating turn/keys and resources to help them grow. Some of these platforms include: patreon, tik/tok, substack, youtube, or cameo

Diffusion lives in the middle, by doing a little but of everything just right, and targeting the long tail of the creator economy ( ~48M) we should be able to create the middle class of creators to help them build their 100 true fans and monetize.

Wealth/Audience Pt 1

Audience is one of the many things that allows for people to reach a level of social capital and status that allows them to rise to the level of idolization.

Humans used to only purchase and follow their idols - people chase and try to attain a social capital and status by mimicking their vibe.

Now, increasingly, people are becoming friends with their idols. The rise of platform technologies has allowed intimate relationships to be built with creatives and people who we idolize. Leading to what we are beginning to call ‘The Creator Economy’.

It is well understood that the internet has created extraordinary abundance in information and products. Abundance solves problems for humans, but via commoditization, it creates others. In a state of abundance, ownership conveys no status. In a world of commoditized products, little personality is expressed through purchasing.

The internet has altered that dynamic — rather than passively watching a commercial on TV, we actively follow the lives of different creators, ask questions of them, and peek behind the curtain.

Abundance has made all things equal. Creators are simply aggregating friends to sell products.

Models of Wealth Building

Three Ways of Monetizing Audience

Promote → Leverage audience to sell others products to your following. You are able to profit from impressions and engagement → ads ( display/audio) and affiliate programs

Sell - Leverage your audience to sell your products & profit from the sales → products can be either digital ( premium content, courses, software, community, e-books, online events) or physical ( CPG, books, events, in-person)

Invest - Leverage your audience to build ownership ; profit from upside → direct investment → syndacite → think calacancis or mr.beast

Tldr - Leveraging audience to build wealth by promoting products, selling products, or investing in their audience or along side with them.

Wealth/Audience pt 2

How do we pay creators?

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Screen Shot 2021-05-13 at 12.04.51 PM.png

⁠

Promote

There are three stakeholders in a promotion-based monetization model: creators, audience members, and advertisers. Each party pays with a different currency.

Creators pay with effort. They put in the work to create a product in the hopes the audience consumes and engages with it. Audience members, on the other side of this interaction, pay for this effort with attention.

This is a symbiotic relationship, up to a point. Each party benefits, though no money is earned. Advertisers solve that problem. They buy the attention accumulated by the creator and pay with money.

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⁠

Sell

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⁠

Creators remove the need for advertisers by monetizing from audience members directly. Creators pay with effort while the audience pays with money first, attention second. Functionally, that means, ceteris paribus, a creator prefers a subscriber that pays but never consumes to one that consumes but never pays. Attention is important to the extent that it acts as a lubricant for conversion and retention — creators that have an attentive audience will find it easier to increase their following and retain members.

Investing

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⁠

Creators that build wealth by investing in startups add a stakeholder to the mix: the company’s founder. This model can be leveraged in conjunction with those listed above, or independently. Isolated, creators buy ownership from founders with money and audience attention. The agreement they make is that they will expose the founder to their audience in addition to the cash provided (a commodity).

Sharing

Effort, attention, money, and ownership can all be distributed within an audience but What are we trying to achieve?

Co-Creation

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⁠

Creators can better serve this desire by sharing the effort required to bring a product to life. For example, rather than creating a new course on analyzing SaaS businesses, I could solicit interest from the community, selecting applicants to help out. In the process, audience members become "contributors," learning and applying new skills.The problem is curation — it may be difficult to grasp an individual's abilities and commitment without considerable assessment time. But as creators get to know their audience better, this issue should be mitigated

Sharing Attention

⁠

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⁠

We all seek a sense of belonging. It's what inspires our desire to seek out groups of like-minded people. Once that fit is established, there's status in being a community leader. The most direct example here is Reddit: the moderator of a particular subreddit holds status to those engaged in the community. Even a contributor that writes a popular comment benefits — receiving upvotes and other awards for their involvement. This form of anointment is not common in creator circles.

The creator could (and should) highlight those contributors that worked to create the product or engage with the community on a regular basis. By doing so, they share attention. Within the confines of a particular community, that attention can grant status.

Again, this is an opportunity. While existing platforms track audience members as paying or non-paying entities, there's no system (that I've found, at least) that classifies members based on effort and engagement. That could prove a valuable tool that recalibrates the creator-audience relationship.

Our behavior depends on whether we believe ourselves to be a medic or soldier, engineer or manager, creator or audience member. While those roles have meant that traditionally creators pay with effort and audiences pay with attention or money, new models allow for mediation. Boundaries are movable, lines are blurring.

In this period of dynamism, this dance of frameworks, creators must decide what they want to achieve. Those that learn to share — to distribute effort, attention, money, and ownership — have the chance to build deeper relationships with their audience, and eventually subvert the concept of an audience in and of itself. In the end, the goal is not to be one thing or another, to be some half of a circle, light or dark. It is to be in the arena, to bring others in, and together, to build something greater than ourselves

The Era of Antisocial Social Media

Social platforms are still reporting robust growth — yes,

even Facebook⁠

— despite a growing chorus of opposition. Social conversation continues to shape everything from

culture⁠

to the

media cycle⁠

to our most intimate

relationships⁠

. And we now

spend more time than ever on our phones⁠

, with endless scrolling through our social feeds being a chief reason why.

But dig a little deeper, and a more nuanced picture emerges about social media users today that has important implications for the ways in which brands reach customers. Specifically, when you look at who is — and more importantly, who is not — driving the growth and popularity of social platforms, a key demographic appears to be somewhat in retreat: young people.

For example, 2019

findings⁠

from Edison Research and Triton Digital show social media usage overall among Americans 12 to 34 years old across several platforms has either leveled off or is waning, while 2019

research⁠

from Global Web Index suggests that the amount of time millennial and Gen Z audiences spend on many social platforms is either flat, declining, or not rising as greatly as it has in years’ past.

To understand what’s driving this shift, you need only talk to young people. They’re saying that after years spent constructing carefully curated online identities and accumulating heaps of online “friends,”

they want to be themselves⁠

and make real friends based on shared interests. They’re also craving

privacy⁠

, safety, and a respite from the throngs of people on social platforms — throngs that now usually include their parents.

To reach these younger audiences on social, marketers are going to have to re-think their approach. The first step is to understand the distinct characteristics of these more closed, and often more private and interactive online spaces. Since I believe that naming a trend helps provide a framework for understanding it, I have dubbed these spaces “digital campfires.”

If social media can feel like a crowded airport terminal where everyone is allowed, but no one feels particularly excited to be there, digital campfires offer a more intimate oasis where smaller groups of people are excited to gather around shared interests.

I’ve identified three categories of digital campfires: private messaging, micro-communities, and shared experiences. Some digital campfires are a combination of all three.

Let’s examine the characteristics of each, as well as how brands are successfully navigating the challenges of reaching the audiences in these environments.

Private Messaging Campfires

Private or small-group messaging — usually but not always with one’s real-life friends — is the primary purpose for gathering.

In a 2019

survey⁠

from ZAK, a youth-focused creative agency, nearly two thirds of the 1,000 people polled, all under 30, said they prefer to talk in private message threads rather than on open forums and feeds. Sixty percent of respondents stated that talking in private groups means they can “share more openly.”

Private messaging campfires often exist on traditional social platforms. Facebook Messenger and WhatsApp are among the most well-known examples. According to the ZAK survey, 38% of people under 30 only use Facebook for the private messenger function. Instagram, the rare platform

showing an upward usage trend⁠

among younger Americans, recently launched a new, standalone app, called Threads, designed expressly for

quick-fire messaging with close friends⁠

via the camera and text.

For the most part, brands aren’t invited into these private chats. Some have responded by adapting similar technologies, like texting (whether with actual humans or

human-seeming chatbots⁠

), to mimic the intimacy of personal conversations with friends.

For example, there’s

Text Rex⁠

, a members-only, text message-based, personalized restaurant recommendation service from the dining review site

The Infatuation⁠

(a favorite among millennial foodies). Users can text questions like “Where should I take my date in midtown Manhattan?” or “What’s the best midday sushi in Santa Monica?” and receive answers from actual humans (Infatuation staffers).

Similarly, there’s

Community⁠

— another text-based service that launched last year to help

corporations, stars and high-profile individuals⁠

facilitate direct conversations with their fans via text messaging “

without getting buried by social feeds and algorithms.⁠

” Community’s primary users are celebrities (among them: Kerry Washington, Amy Schumer, and Paul McCartney). But some fashion and lifestyle brands like

MadHappy⁠

APL,⁠

and

Beautycon⁠

have already signed on, and the opportunity for brands to speak more directly to their customers via a channel they’re already using is a promising development.

Tip: This is the hardest campfire for marketers to penetrate. Get to know your audience intimately in ways that go way beyond simple demographics. Specifically, work to understand their habits — especially how they consume content and communicate across multiple platforms — and use this to inform the channels on which you communicate with them. Think about how you can reach customers by mimicking their behavior.

Micro-Community Campfires

Primarily interactive private or semi-private forums where people gather around interests, beliefs, or passions.

Like the private messaging campfires, micro-community campfires often live on traditional social platforms. Facebook Groups are probably the best-known example. The “close friends” feature within Instagram Stories has become a tool

some influencers are using⁠

to share exclusive content and interact with small groups of their followers, for a fee. Slack, best known as a workplace messaging tool, is also a place where micro communities are connecting, often around shared professional interests.

YouTube has long been a hub for hyper-specific communities and that’s still the case today,

especially among teens⁠

. Sure, anyone can watch or engage with a YouTube video, but the cornucopia of channels means there’s something for every conceivable niche interest. For a user, the effect of wading through a vast sea of content to stumble upon something meaningful — combined with the intimacy engendered by the direct-to-camera style of videos on the platform, and the loyalty that comes from subscribing to creator channels — can feel revelatory. (The same cannot be said of the Chinese-owned app TikTok, which, while growing at a

phenomenal clip⁠

, is largely oriented around the consumption of a

seemingly endless⁠

feed of entertaining videos served up by an algorithm. It does not allow the user to intentionally connect to specific interest communities).

Micro-community campfires can also spark in unexpected places. Young people are gathering, for example, on

Discord⁠

— a voice and text chat platform designed for gamers, which has become something of an under-the-radar hub for beauty obsessives, with multiple servers devoted to topics like advice about makeup or cruelty-free products.

Brands can tap into existing micro-community campfires by

partnering with influencers⁠

, or they can invest time and resources to build their own campfires from scratch — a heavier lift, of course, but if the brands doing it well are any indication, it’s an effort that is well worth it.

One example is Sprite, which spearheaded a campaign for the Latin American market last year called “

No Estás Solo⁠

” (“You Are Not Alone”). Working with an agency, the company used data from Google to determine personal pain points that young people were searching. It then set up Reddit forums, each helmed by an influencer who had personal experience with issues such as feeling like you’re in the wrong body. The outcome: poignant personal discussions about loneliness, all led by Sprite.

Another example is the

private Slack group ⁠

created by beauty brand Glossier, often called one of

millennials’ most trusted brands⁠

. Created exclusively for its best customers to talk about all things beauty, organize meet-ups and discuss products, the brand credits the group with helping to co-create one of its

now-top-selling products⁠

, Milky Jelly Cleanser. At one time, this type of forum might have been dubbed “market research.” Today, it also serves as an engine for fandom, while simultaneously allowing the company to be nimble and responsive to anything that is discussed there.

Tip: These campfires are not indexed by Google or advertised on the platforms themselves, so they’re hard to find by traditional means. Study your audience to find breadcrumbs that will lead you to their micro-community campfires. Then, partner with an existing campfire or create your own.

Shared Experience Campfires

Private or public forums where participating in a shared experience — often around a specific shared interest — with a like-minded community is the primary purpose for gathering.

Perhaps the best example of this type of campfire is

Fortnite⁠

, a multiplayer video game that has more than 200 million users, up to 8 million of whom are online at any given time. The game has been called a de facto social network thanks to the role it occupies in the lives of its players: Indeed, half of teens say they use it

to keep up with their friends⁠

— some of whom they’ve never actually met in person — with most spending six to 10 hours each week on the platform). Last year, the EDM artist Marshmello

staged a virtual concert⁠

inside the game that 10.7 million people “attended.” Fortnite is a form of entertainment, but more than that, it’s a catalyst for bringing together like-minded people for a shared experience. And the game’s steep learning curve lends it an aura of exclusivity.

The live broadcasting and viewing platform

Twitch⁠

serves a similar function. Live streamers, primarily gamers, broadcast their own gameplay, usually with audio commentary, for fans who can watch and interact via chat. Twitch users consumed

592 billion minutes⁠

of live-stream content last year, and Twitch has recently pushed into non-gaming categories like music and sports. As with Fortnite, the primary draw to Twitch is its entertainment value, but the “stickiness” comes from the community and sense of excitement that forms around a shared interest or individual.

So how can marketers zero in on the right shared experience campfires for their audience? As with the other campfires, they must first identify the communities and parts of the culture that their brand fits into. Then, determine the online experiences these audiences seek. Brands like the NFL, Marvel, and Nike have done just that,

leveraging Fortnite⁠

, for example, to reach their audiences by selling skins (stylized weapons and outfits for players’ in-game avatars), creating branded

mash-up game modes⁠

, and doing

limited-edition product drops⁠

inside the game.

Tip: Customization is key. Don’t simply replicate what you’re doing on other platforms — it will come across as ham-fisted. Instead, pay close attention to the behavior of the people in the campfire you want to reach, think about what value you can bring to them, then get creative about the products and messaging you’ll use to engage them.

Without question, the digital campfire trend is firmly on the radar of the big social platforms. “Today we already see that private messaging, ephemeral stories, and small groups are by far the fastest growing areas of online communication,” Mark Zuckerberg wrote in a March 2019 public

post⁠

, announcing a strategic shift toward more closed, private modes of communication.

Zuckerberg is paying attention to this shift not only because the data shows that

Facebook is losing young audiences⁠

, but because the re-direction of attention to more private modes of communication represents a major challenge for the company.

About 98%⁠

of Facebook’s revenue comes from advertising, and people in smaller, more closed forums are much harder for advertisers to reach at scale.

It is neither simple nor straightforward to reach audiences gathered around digital campfires. But as traditional social platforms grow, they become more crowded, and it becomes more difficult and expensive to reach people there anyway. In light of this, digital campfires become a much more attractive alternative — one that requires more groundwork and more careful tending, but one that could potentially have big payoffs for brands in terms of loyalty, retention, and long-term love.

Research for Culture as Curation

⁠

Lessons about the Creator Economy from Twitch and Substack⁠

⁠

Consistency is the key to growth.

The 80:20 rule applies to both creators and fans.

The community is just as important as the content.

Creator collaboration helps all creators grow.

Unbundling will lead to rebundling.

Different monetization for different willingness to pay.

Come for the tool, stay for the network.

Small creators want discovery. Large creators want revenue.

How-to-curate?

Define what you’re trying to accomplish (business objective). Decide what will curating achieve for you. For a brand, curation can retain an audience and attract the new one that hasn’t considered a brand before. It can attract a collaborator or start a brand partnership. It can increase product value and protect pricing. For an individual, curation can be a way to get into a creative profession or monetize their taste.

Define the point of view and the story you’re trying to tell (brand objective). Root your curation in one of the modes described below, and clearly define a filter that will distinguish things and behaviors that you focus on, and those that you don’t. Decide and specify what makes your curation distinct and what is the inimitable aspect of your own experience.

Define how you are going to convey this story (strategy). Identify the sources of the material (products, videos, memes, references, images) for your curation. Define the sub-themes or sub-categories that enforce your wider narrative. Organize them according to your filter and clearly convey why they made the selection. Keep in mind that every item needs to tell the same story as the entire narrative.

Make an execution plan. Define the when and how often you will share, and how you’ll socialize your selection and nurture your community. Decide who you’d like to attract.

There is a number of ways for brands to implement curation, and here are some of the mechanisms to select and organize items by:

Values. Filtering brands within a category based on their values (gender equality, sustainability, diversity) makes it easier to make a decision between products with similar properties. For example, The Helm is a platform that curates only products by brands with female founders, across categories. The Helm’s tagline is “Make It Easy to Invest in Women,” and indeed, in the context where female founders command infinitely less VC money then men, best way of supporting female-led business is through purchase of their products. In menswear and home goods, Bombinate protects and preserves the work of human hands by connecting craftsmanship brands to men seeking high-quality lifestyle products.

Knowledge and expertise. It is easier than ever to access specialized knowledge and expertise, from YouTube luxury watch videos to menswear forums and luxury handbag aficionados. Highsnobiety and Hodinkee are combined media and e-commerce destinations that provides not only information and expertise on modern aspiration and watches, respectively, but also product purchase opportunities.

Cultural moment/atmosphere. Right now, we are at the cultural moment of general life improvement. “Wellness” is a tab on almost any site, from fashion retail to selling plants. Products across industries get filtered through this mood, and are presented as the answer to the question of whether they make our lives better and more fulfilling, if they help us advance on the Maslow’s hierarchy of needs, or whether they enrich us emotionally, mentally, and spiritually.

Story. Curation, by default, creates stories. Stories boost the relevance and significance of a product or a brand. They turn them into collectibles, lend them meaning and cultural purpose, and emphasize their social and communal dimension. LeBron James and Kim Jones tell their travel stories for Rimowa. In this way, they contextualize Rimowa luggage in a larger narrative of creativity and ambition.

Hobby and interest. Modern running and cycling brands are an example of the curation of an entire lifestyle around their customers’ passion for the sport.

Trend and hype. For those wanting to know what’s bestselling now, there’s New York Magazine’sThe Strategist or The Sill’s most popular plants.

Location. A good cultural narrative cannot take place just anywhere. A provenance like South of France, Lower East Side on Manhattan, Harajuku in Tokyo or Kreuzberg in Berlin are culture machines. Brands that emerged there capture more than a geographic location: they get the mood, the atmosphere, the time and the community, along with a particular subculture and a taste. Streetwear brands like Supreme are unmistakably rooted in downtown New York; there is a strongly emphasized Parisian vibe of brands like Maje or Sandro or Isabel Marant.

Personality or celebrity. The rise of social commerce goes straight into heart of consumers buying curated product selections from each other, or as Steve Dool, Head of Brand Partnerships at Depop, puts it: “There is something very 2020 about buying stuff from someone who made their name dancing or jumping off the side of a building or whatever.” There’s credibility in peer-to-peer curation, along with a shared taste: “another added benefit of allowing consumers to shop from people with similar interests and points of view, as opposed to brands that cater to their aesthetics or preferences,” adds Dool. Elsewhere, modern art connoisseurs Justin and Hailey Bieber have been tapped by Paddle 8 as curators.

Price. Popular iteration of curation by price is “gifts under $50.” A lot of retail sites offer filtering by minimum and maximum price as well, but there’s opportunity to make this filter more appealing by wrapping it up in a story of spending wisely or being smart.

Heritage, ritual, and tradition. The common perception is that a brand with a link to heritage and craft almost immediately achieves a veneer of rarity. This mechanism is often used in retrofit manner, with brands (and entire regions) clamoring to emphasize their provenance and heritage. Brand founders are often elevated to the level of artists. A modern brand that does this well is Aesop, which rooted its retail into its positioning as a “fabulist,” and doubles down on the craft and tradition of storytelling in its brand behavior, through stores to brand magazine and content to the website and events.

What people misunderstand about the creator economy?

In the 1940s, people criticized Hollywood’s assembly-line approach to filmmaking. In the 1960s, people feared television was rotting our brains. In the 1980s, (mostly white) people fretted over rap lyrics and the rise of hip-hop. Demonizing art and those who create it is an age-old tradition.

There is five reasons that people currently partake wothing the creator econmy

Creative Expression

Creativity is the main reason that kids want to work as a creator because it if a form of self expression. ( respectively creativity sat at 24%, Self-expression at 11%, and connect with people + finding community at 8.4%).

Youtube broke down the barriers of content creation but it’s become easier. Apps like tik-tok have created in-app tools that allow creators to remix culture and build on other’s creation. This fixes a cold start problem by providing inspration to create content.

2. Horizontal, not Vertical

Creators are not like hollywood entertainers (comedians, actors, entertainers) sure they exist but thats vertical, the creator economy is horizontal.

The creator economy has utilized platforms to enable people to broadcast their knowledge, expertise, and tastes. This allows internet to be a distribution tool that creators can utilize to share and monetize their creations.

3. Diverse Voices

Hollywood has long had a fraught relationship with race. But while traditional media has been slow to reflect the world we live in, the internet has opened the floodgates for diverse talent and stories. By removing the mostly-white, mostly-male gatekeepers of media, the internet ensured that anyone could create content for audiences around the world.

the internet has reinvented creativity and art. Anyone can broadcast their story and find an audience.

4. Reclaiming Agency

The internet levels the playing field, and anyone can use their hustle and savvy to amass a following and monetize that following

5. Removing Gatekeepers

For my parents’ generation, the American Dream meant physically moving to America to pursue economic and social mobility—a better life. For today’s generation, the internet has replaced The United States as the Land of Opportunity—the place where hard work and an appetite for risk is rewarded the mos

Li Jin & James Currier

There’s all this attention going around and it’s going to get increasingly monetized in all directions now because we can measure it in the digital realm

We are all participants in this huge, massive, multiplayer online game. This game spans the entire web, it spans the entire world, it bridges to the offline world.

figuring out how to get more attention is the rewardable talent for the current age

Just a few make a ton and almost everybody else makes nothing?

That’s a symptom of how discovery works on the internet, which is that it’s driven by these algorithmic discovery platforms, the social platforms, and those discovery platforms determine what readers are able to find

participants into types of creative work that had been previously inaccessible to people.

But for these companies and for many others, they’re creating the entire toolbox that a person would need to convert their skills, or their interests, or their passions into a product, or a service that can be easily offered and create a great consumer experience at the end of the day.

So you’re taking people from zero to one, from, “I’m not making any money,” to, “I’m making some money.”

Can we create something that creates new transactions that aren’t happening at all?”

creating a new market where previously the market had been much smaller or didn’t exist.

I think it’s also emblematic of the huge shift that’s happening in work in this country.

The power law gets steeper in this case because of the transparency that the internet gives us.

which is that some people are very charismatic and other people just aren’t. Some people are really fast, and smart, and interesting to listen to and some people aren’t.

People are realizing where they really are, as the internet lets you visibly compare to quite literally everyone around you — and so we’re not having the illusion anymore like we used to, that we’re doing better than we really are. And it’s painful.

Web 3

a vector for allowing platform participants to become the owners of the platforms themselves.

The ownership economy sort of thing where we’re going to have many more ways for people to participate in ownership of the real estate, or the companies, or the platforms, or the art that they’re involved with.

how we can involve all of the platform participants as co-owners and stakeholders in these platforms.

The Creator Economy Explained: How Companies Are Transforming The Self-Monetization Boom

What is the creator economy?

• The creator economy value chain and opportunities

• The creator economy market map

• How large is the creator economy?

• The biggest creator economy companies and the most active investors

• What is the creator middle class?

• What’s next?

What is the creator economy?

The creator economy refers to the independent businesses and side hustles launched by self-employed individuals who make money off of their knowledge, skills, or following.

The rise of digital platforms like YouTube, Instagram, and Vine gave way to the influencer economy as we know it — from sponsored posts (sometimes even fake, for clout) all the way to Instagram Story shout-outs to branded wedding engagements.

As being an influencer/creator evolved into a more full-fledged G on the whims of brands, come with strings attached, can fluctuate largely from month to month, and force creators to cater to broad niches or demographics.

Basing business around largely free content also deflated the value of creators’ work. This has driven today’s growth of more insular communities where creators strive to own their audience.

The largest creators are also now influential enough to draw users to new platforms, further incentivizing platforms to reward them:

• Substack writers take home 90% of subscription revenue.

• Twitch partners collect half of their subscription fees.

• Patreon creators get paid between 88% to 95% of their subscriptions.

• OnlyFans creators take home 80% of their earnings.

Takeaway - the greenfield opportunities lie building outside the ecosystem around creators as founders.

The creator economy value chain and opportunities

Creators have mostly had to cobble together a variety of tools to manage diverse revenue streams. A slew of startups are looking to disrupt the way creators make content, develop their audiences, or grow their businesses beyond advertising

Creators are operating in a more splintered environment. They have to aggregate various editing tools, disparate revenue sources, back-end platforms, and more on their own.

Examples include video editing software Kapwing, personalized video app Cameo, and creator credit card startup Karat — companies spanning use cases like content creation, fan interaction monetization, and financing solutions.

The creator economy market map

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Screen Shot 2021-06-16 at 3.10.09 PM.png

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How big is the creator economy?

⁠

Screen Shot 2021-06-16 at 3.21.37 PM.png

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On the corporate side, brands are expected to spend up to a whopping $15B on influencer marketing by 2022, per Mediakix.

A staggering 93% of customers believe user-generated content is very helpful when making a purchasing decision.

Brands saw over a 50% conversion rate for visitors to pages featuring UGC

Consumers find UGC 9.8x more impactful than influencer content when making a purchasing decision

The term “creator,” which can refer to anyone from hobbyists selling PDFs on the side to professional vloggers, and the multitudes of ways to sell one’s work. According to Signal Fire - there are 50M Creators worldwide.

Professional Individual Creators (~2M+) – Making content full-time

Amateur Individual Creators (~46.7M) – Monetizing content creation part-time

All platforms have seen money flown by them:

The top-performing YouTube channels reaped $211M between June 2019 and June 2020, Forbes reports.

• Famous Instagram influencers like Huda Kattan or Eleonora make six figures per post

• The top writers on Substack can rake in as much as $1M annually.

• Since 2011, Gumroad’s creators have earned more than $460M selling their content on the platform.

The biggest creator economy companies and the most active investors

Creator-focused companies featured in our creator economy Collection have reaped $1.3B in funding in 2021 alone, nearly triple last year’s $464M.

Andressen Horowitz is the most prolific backer of creator focused companies in our Collection, infusing cash into 18 different companies, such as UnitedMasters, Lowkey, and Beacons.

Union Square Ventures (11)

CRV (9)

Index Ventures,

SV Angel,

Social Starts

Thrive Capital (7)

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Screen Shot 2021-06-16 at 3.20.59 PM.png

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What is the creator middle class?

As the top creators on platforms amass ever-growing audiences, the overconcentration risk looms.

This becomes unsustainable in the long run for platforms. While their top creators are getting cut checks that run the gamut from 6 to 8 figures, most creators - the middle class are scraping with less.

Only fans - the top 1% reaps 1/3 of profits which is 145/month

2% of patreon creators make more than the federal minimum wage

“Creator platforms flourish when they provide opportunity for anyone to grow and succeed,” Atelier Ventures’ Li Jin writes. “Less wealth concentration means less risk that a would-be competitor could poach top creators and threaten the entire business.”

Companies have an opportunity to help creators flourish in the “long tail” of content creation. The promise of self-employment and financial freedom.

Li jin says this is the best way to foster the middle class

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Screen Shot 2021-06-16 at 3.42.33 PM.png

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The mega-famous influencers and creators may gain the power to escape today’s largest platforms, but where does that leave the rest of the “middle class” creators? And will “casual” users, or “lurkers,” feel more of a compulsion to create? . “To be a person online — at least, to be more than a lurker — requires building an avatar of yourself out of identification with the content others produce and the content you produce yourself,”

What’s next?

The broader opportunity here lies in the rebundling of all of these disparate services specifically for creators. Much like the rise of content houses and influencer marketing agencies, this burgeoning industry will drive demand for end-to-end solutions that handle everything from content creation to analytics and management.

The tools that can help them with their specific brands and niche business needs will emerge as the winners in the long run.

Going forward, expect to see more companies that focus on specifically on creators’ needs vs. a catch-all service for all freelancers.

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Learnings about Creator Economy

History of Creator Economy

TAM for Creator Economy

Graphics

Birth of Media Platforms

Emergence of Influencer Marketing

Creators as Businesses

a16z

Creator Economy Platforms

Wealth/Audience Pt 1

Wealth/Audience pt 2

Promote

Sell

Investing

Sharing

The Era of Antisocial Social Media

Private Messaging Campfires

Micro-Community Campfires

Shared Experience Campfires

Research for Culture as Curation

The Creator Economy Explained: How Companies Are Transforming The Self-Monetization Boom

Table of Contents