In the last chapter of “Creator Economy”, we talked about the basics, short history and top trends in Creator Economy.
Summarizing it all in two lines - The creator economy consists of people who, just like any of us, have a hobby that becomes monetizable. For platforms, they are the tools that allow creators to make an income from doing what they love.
It’s not an exaggeration if I say- Creators are new Founders. You can figure out WHY in the last chapter below:
https://amitunboxed.substack.com/p/the-creator-economy-part-1-turning
Now coming to the next part - to understand the economy and power of the creator economy as we are already a part of it, directly or indirectly.
So… Let’s go…
Phases of the Creator Economy
1. The Community Builders
The earliest pioneers of the modern creator economy, community builders, took advantage of novel technologies. They were brought about by the internet: blogging, YouTube vlogging, and later posting on Instagram. These creators focused on audience building, engaging with their communities, and building loyal followings that hung on their every word or image. This opened up monetization opportunities, primarily through YouTube ads or sponsored content on Instagram and blog posts. Sometimes, creators would hack together the ability to accept payments and offer subscriptions to their most loyal fans.
2. The Mass Influencers
As creators gained huge audiences - often the millions of followers - they became celebrities in their own right. They would operate across multiple platforms, using one platform to pump up the other. In a way, these influencers became more like media companies than individuals. Top-tier influencers were making millions per year through branded sponsorships or through selling their own merchandise.
3. The One-Person Brand
This evolution involved a mindset shift. Instead of seeing themselves as the brand (which enabled selling merchandise with their face on it), they would become an entrepreneur themselves. They would use their clout and influence to build a variety of products that go beyond novelty and into actual solutions. Common products included online courses and other info products and even building and selling technology. The latter were often inexpensive, single-function platforms that later became known as “micro-Saas” in some online forums.
Introducing The Creator Economy Middle Class - Having Million Followers Really Doesn’t Matter :-)
With audience-first business building now a commonly understood way to launch a startup, many would-be creators focused on building their audience first. The vast majority will never reach millions, or even hundreds of thousands, of followers. However, creators are learning they can monetize their audience at much smaller sizes.
These creators - the ones who run revenue-generating audience-first businesses at smaller scales - are part of a new burgeoning category: The Creator Economy Middle Class.
Members of the creator middle class are often freelancers, coaches, or consultants. They use their audience to sell high-value services, online courses, and other digital products. A key difference between the creator middle class versus traditional influencers is one of identity. An influencer likely has followers who just love them for their look or personality. Followers of creators in the middle class usually do so for practicality and to learn something from the creator as an expert.
The Economics of The Creator Economy Middle Class - Want To Develop Something for Creators?
Believe me - this creator economy middle class is what most excites investors. This is because creators have the power to create the most loyal audience.
You might be thinking that I am making a very bold statement here - yes, indeed it is! But here is why…
Becoming an influencer is, at least in part, due to luck. You can do everything right - make great content, post consistently, and engage genuinely - but still never “go viral” and gain a million followers. However, the success rate of jumping into the creator economy middle class is much higher, which means more people can try it out.
With the creator economy middle class model, the unit economics of platforms like Patreon, Buy me a Coffee, Contribee, or even Substack, the one I am writing this newsletter, make a lot of sense. The top creators make $200,000+ per month, but there are only a couple of hundreds of those. The average creator might only make $500 - $20,000 per month, but there are thousands globally. The platform makes more money from millions of smaller creators rather than hundreds of influencers.
Now that the unit economics make more sense, creator economy venture capital is flowing into providing solutions for the one-person brand:
Managing multiple products and services.
Creating, hosting, and selling digital products.
Managing community access points and engagement.
Handling payments and fulfillment.
Each platform - and then undoubtedly the “all-in-one” platforms that will naturally follow, like Expedia did for the travel industry. They could feasibly support millions of small creators around the world. And that provides the potentially outsized returns that make them attractive to venture capitalists.
Power to The Creator - Make It Accessible
A key part of the creator economy growth is the disintermediation of connection. You used to have the people that created and the audience owners. To sell anything, the creators would need to broker a deal with audience owners, often for a significant chunk of profit. New tools of the future of the creator economy, from existing platforms to no-code builders, help creators develop a direct connection with their audience. Add a dash of entrepreneurship and the scale of the internet, and you have a huge opportunity for people to build million-dollar businesses. Or more with only one employee: the creator themself.
That’s it for today :-)
Hope each of you has a great start to your day. I’ll talk to everyone tomorrow.
— Amit
I am a technology enthusiast, entrepreneur & creative thinker, who enjoys crafting Tech Products to make a real difference.
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