Creator Economy is all the rage with builders and investors in 2021.
I've been a small part of this space since the early days and have seen it grow into the market it is today. We are still early. Web3 will help push self-monetization further. It will take platform dependent creator economy towards an ownership economy.
Recently, I have helped founder friends think through product wedges into the space. In this post, I wanted to open source some generalizable opinions and insights.
These learnings might help you if you are looking to build for creators -- within the Web2.0 paradigm.
1. Platforms win. Build a platform
Platforms provide creators with discoverability, monetization and tools. They help creators find audience (discovery). They help creating content easy and cheap (tooling). They help creator generate revenue through more than one monetization mechanic.
TikTok, Twitch, Youtube, Facebook and Instagram are some of the big winners of web2 social. They might not offer all three things listed above but they do darn well on two. Developer ecosystems help them fill remaining gaps. Youtube and Twitch are the only exceptions which cover all three things.
Startups built around platforms have their space and have been successful. But, they have to live with platform risk and the big money is in being the platform itself.
Building a platform is a bigger, bolder bet. So what does it take to build one?
Twitch didn't convert YouTubers to gaming. Twitch grew as live-streaming games grew. It became huge when watching gamer livestream became mainstream culture. The same is true for platforms like Substack and OnlyFans, they grew with a new wave of creator class.
Platforms that grow alongside an undiscovered creator class become huge
Instagram and TikTok solved for tooling and discoverability. Substack and OnlyFans solved for monetization and tooling. Few platforms like Twitch or Youtube are able to solve for all three at the earliest stages.
Building a platform which helps an undiscovered creator class is a strong wedge. Solving for distribution, monetization and easier creation is key
2. Discovery is easier for insiders. Dog-fooding is key.
Let me put it out there. You cannot build for a creator class without feeling their pains first hand. You cannot Mom Test, Lean MVP, or some other customer discovery kung-fu your way to building a product here.
You need to be part of the tribe. Not the top 1% but have to be someone who talks the talk and walks the walk. Someone who has experienced the pains of the people they are trying to build for. Dog-fooding is key even in the longer-run when building for creators.
As an insider, it is easier to find early adopters, identify real pains and iterate faster on ideas. "Building for community" ring any bells?
If you build something of value to the ecosystem, the community will come out to support.
Go stream if you want to build for streamers or start a vtubing channel if you want to build for v-tubers. Immersion and dog-fooding are the only way to uncover true customer pains.
A second order effect of this approach is that hiring becomes easy. You are able to hire from a pool of people who are passionate about the industry and ideally your product. They stick around longer and their passion helps them overcome any skill gaps.
So go be an insider and experience the pains first-hand.
3. How to run discovery. Talking to creators.
Discovery is an important part of building product. Running discovery with creators is not very different but these insights might help:
Creators get flooded with messages from fans, potential partners, stalkers and spammers. Those early in their journey don't have an extended team and find it difficult to process. Management teams et al guard those later in their journey. A way to cut through this noise is by finding alternate channels of outreach. If you spend enough time within a community you will notice wormholes in the system. For example while building for streamers, you have a better chance of getting a call with a streamer through their mods than direct message. Similar, wormhole exist across all ecosystems. Only insiders can exploit them.
Everyone loves to talk to someone who has a genuine interest in what they do and who they are. Some research and prep before a call can help build a great rapport during the call. If you are to build and stay in this space, these early relationships can go a long way.
During discovery session, please be considerate of a creator's time. Them taking out time to do anything except creating costs them money. Any time they are writing, streaming, recording or podcasting they're losing money. Try to make the calls short and efficient without being too transactional. You can thank them for their time by sending company swag, a gift card or even sharing early access to your product.
4. Only major revenue streams matter. This is their living.
We can think of 100s of ways every creator can monetize but their revenue comes from three to five streams.
Streamers make money through ads, sponsorships, merch, subscriptions, affiliate, donations and much more. But the majority of their revenue comes from ads, sponsorships, donations and subscriptions. The revenue mix might change between new streamers and those large. The streams remain the same. Smaller streamers rely on tips, donations and ad. Larger ones make bulk of their revenue through sponsorships.
So why do I bring this up?
Building tools for monetization is the first thing that most builders go for. Like they say "build something that helps people make or save money." And like I said, we can come up with 100s of ways for creators to make/save money. But for creators to care for your tool/product longer-term, it needs to be a top three stream.
Having said, this experimentation to establish better newer templates for monetization is key. We need more templates which are bespoke to unique creator classes. If creating for a creator class on an existing platform, you will need to become a top three revenue stream. This experiment is their livelihood. For them to adopt, you will need to prove they can de-prioritize a current stream.
5. Incentive alignment, ownership economy, web3
I promised to only talk about Web2 but not talking about web3 and creator economy in 2021 is a sin. I am sorry. Without going into much detail I will share a few things which will help you inform your building.
There exist many skeptics of the technology and associated ecosystem. Some of it may be fair but Web3 is early. Newer projects are exhibiting how good incentive design enables creator friendly environments.
Creator tools enable micro-economies. The shift from Web2 to Web3 create revenue streams which focus on community ownership over individual ownership.
Coopahtroopa has written about this in detail.
Web3 and creator economy intersect across DAOs, Social Tokens, NFT and Metaverse. I will not try to red-pill you into Web3 here but if you are curious, I curate some readings around this here.
I hope this helps you build bigger, better products within the creator economy.