Does The Creator Economy Need A Rebrand?
The term “creator economy” was a masterful exercise in branding, but the industry was undoubtedly too nascent to be so succinctly understood. The reality is that we are in the beginning stages of a fundamental shift in labor; the opportunity to meaningfully earn through content creation will continue to revolutionize the way people work, communicate, consume, and engage – impacting nearly all consumer-facing categories. So, we raise the question: is the “creator economy” really just the consumer economy?
In the earliest days of this shift, VCs were quick to identify, label, and capitalize on the opportunity before deeply understanding where value would be generated. Consequently, they encouraged the founding and funding of companies building against the need-state, as everyone conceived of it at the time. Today, it has become clear that many of the creator economy darlings had insufficient value propositions that served (but were inherently limited to) few, high-earning creators.
But a few more years of industry maturation has demonstrated that the creator economy is much larger than just the infrastructure bets it has become synonymous with. It’s the creators themselves, not the tooling layer, that will generate and own the lionshare of economic value going forward. With a better understanding of who creators are and the businesses they are building, we can start to grasp the scope of the market opportunity.
What’s a creator?
It depends on who you ask, as evinced by the volume of divergent responses to Li Jin’s 2019 tweet. From our perspective, most creators have a specific area of focus (e.g., storytelling, rubik's cubes, beauty, etc.) and excel at person-led audience/community building. As Michael Dempsey articulated, “creators span industries and technical expertise. They build experiences that humans interact with, from art to products to other types of content.”
By this definition, Sean O’Malley, Marques Brownlee, and Dr. Becky are all equally “creators.” Though their content and platform usage vary broadly, they each use their personality to drive engagement (if not cult followings). When you broaden the concept of a creator, it becomes apparent that a wide variety of people fit into the model.
Where is value captured?
For traditional creator economy companies (i.e., the infrastructure layer), the value chain looks something like this:
Existing social platforms offer content creation tools, efficient top-of-funnel discovery, distribution, and ad monetization (particularly on YouTube). This leaves other monetization, revenue not derived from big social platforms, as the predominant slice of the value chain where creator economy startups must compete.
Many companies addressing this white space have assumed that monetization is uniform across their constituents – which is why there are many versions of ostensibly the same product (e.g., link-in-bio, gated access, white labeled merchandise platforms, etc.). This has also led to a whale problem, in which the highest earning creators are most likely to forgo existing platforms in favor of a bespoke monetization experience. To be clear, there is still a need for these companies, but we are likely to see more specialization as creators’ product and business requirements mature.
Ironically, whales churning from these one-size-fits-all monetization platforms is net positive. It means creators/digital cult leaders are building unique, multi-faceted businesses around themselves and their expertise, and that the “creator economy” is beginning to shift from infrastructure companies to actual creator businesses.
Unlike traditional companies, creators have an embedded audience (vs. product preceding customer acquisition), and as such have unique insight into product-market fit and can take advantage of the highest revenue/profit opportunity within their domain. Creators may start with one or two categories, but they have a natural expansion path into adjacent pools. The more this happens, the more they start to resemble traditional, multipronged companies.
In short, the “creator” opportunity is really a “consumer” one. And if today’s US discretionary spend is more than $5T per annum, then creator-led companies poised to capture even a small portion have enormous potential. Until today, the scale of this market has been difficult to imagine because creators do not exude the institutional air of traditional companies – they feel like a best friend, a coworker, a classmate, or a mentor. But in the intimacy they foster lies their power - they are the living, breathing marketing mechanisms we love to consume. And while we will leave the specifics of the creator economy rebrand to the rhetorically inclined, we are confident that we are witnessing the birth of a new generation of consumer businesses.
About Slow Upload
An exploration into individual- and creator-first companies: how they are built, underwritten, and financed. From the Slow Ventures Team, Sam Lessin, Megan Lightcap, and Caroline Cline.