Three startup ideas for the creator economy

50 million people work as creators today. I was shocked when I first read that. We’re still early in this experiment called the Internet and it’s incredible to think that that many people are creating and sharing content online. The emergence of tools like Substack, Anchor, Descript, Hootsuite and Clubhouse have really shattered the barriers that used to stopped people from being creators. And judging from the hype on startup Twitter, we can expect even more tools in the next five years that will make it easier to produce and share quality content online.

I’ve noticed three big creator trends:

1) Creators are increasingly multi-platform. Instead of just being a YouTuber, creators have audiences on Twitch, Pinterest, Roblox, Twitter, Instagram and everywhere in between

2) Creators now focus on moving their audiences off the platforms. In the past, creators would spend time curating and building say a YouTube audience and then try to monetize via ads or sponsorships. These days, creators are increasingly moving their audiences off social media sites to their own apps or websites so they can control their distribution and monetization strategy

3) The content formats are broadening out. It used to be mostly YouTube but today it’s newsletters, podcasts, live in-person shows, live streams, games, e-books, digital courses, vlogs and much more.

So what opportunities exist in this space?

Creator-native finance

❗️TLDR: Provide a native, one-click experience where creators can access cheap loans backed by their earnings

Wealthy people can easily access loans to finance their lives. Instead of selling their shares or assets, it’s often cheaper to take a loan and use that money to pay for all their expenses. Banks have been offering these finance products to wealthy people for a long time. They understand how to model risks for yesterday’s wealthy people.

But what about today’s creators?

Imagine a creator who has audiences on multiple sites (YouTube, Pinterest, Instagram) and gets paid on a different schedule for each site. Perhaps one company pays monthly and the other pays quarterly. Maybe one company allows creators to split compensation with collaborators, but the others only pay to one account. You can see that managing cash flow and remittances can become challenging.

Let’s say a creator is getting paid $50k in a month’s time but they really need that cash now in order to pay for a house. What options do they have today? Would a traditional bank in its current format understand how to analyze the risk of a Substack writer? Is there any institution willing to offer a low-interest rate personal loan?

There’s an opportunity to build a native platform that uniquely understands the quirks of the online creator ecosystem and to provide finance features that serve them. One that understands how to effectively model loan default risk based on criteria that are unique to this space. The inspiration for this idea came from Wealthfront - they offer a one-click button for anyone to get a cheap loan if they have more than $25k in their Wealthfront brokerage account. Loans are just one piece of the pie here, I’m sure there could be multiple finance products that are tailored to the creators of today’s internet age.

Creator account management

❗️TLDR - Build a smart system that manages creator accounts and makes AI-based predictions to maximize revenue and balance risk

Multi-platform creators can be considered as a sort of investment portfolio. They spend their time and money on different “assets” each with a unique risk profile and they return different kinds of returns. A creator who spends all their time and money building and monetizing content on YouTube is playing with fire given the company can and will eventually change their policies in a way the creator doesn’t like.

How then should a creator think about diversifying their content portfolio?

Would an 80/20 model work? If 80% of their returns come from 20% of the platforms they work on, it may be wise to focus on that subset. But these platforms offer varying amounts of “audience portability”. For example, a Substack writer can easily take their email list with them even after they close their publication. Whereas I don’t think you can easily take your YouTube followers anywhere. So is it wise to dedicate your business to a platform that gives you less flexibility over time? Probably not, but how much diversification makes sense? By diving deep into the data, one can offer recommendations that seem counter-intuitive at first, but will yield extraordinary results. The systems could optimize for different goals, say international appeal, revenue diversification or content distribution strategy.

A smart system could look at the totality of a creator’s accounts and say “it’s been 3 weeks since you got a paying Instagram follower but your tips on Substack have grown 300%”. It could recommend actions for building a resilient business thereby taking a creator from a fun hobby to a wealth-generating employer. It could display projected earnings on each platform and help creators to truly understand what kinds of content performs well on Instagram vs Twitter for example.

Creator caravan

❗️TLDR - Make it extremely simple for creators to move their audiences to their own sites and apps

We’re increasingly seeing creators move their audiences off the sites where they started their following. “Twitter celebs” are publishing paid newsletters and running investment portfolios. YouTubers are selling courses and merch. Over time, I only see this trend increasing because it just makes sense. If you’re a creator, your biggest asset is your following. And you may have a variety of goods and services that you want to market and expose to your audience. The platform (e.g. Twitter, Instagram) wants you to stay because you can help them sell ads and drive continued usage of their products. So the platforms will build a number of services to keep you happy - from different advertisement formats(in-app, in-video, next-to-content etc) to ads-reporting and ads-analytic tools and also offering shopping features.

But as a creator, your business will always be at the mercy of a potential product change that negatively impacts you. A single platform product change could reduce revenue by a large amount. So it makes sense for you to seek some resiliency.

If you own your audience and own the distribution strategy, you’re in a completely different league. The lifetime value you can receive from a single follower will be greater than if you had an intermediary. I can see someone building tools to make this move easier for creators. The biggest challenge I can see here is that the social media sites especially ad-supported ones, don’t want creators to leave. So they won’t make it easy for that audience data to be easily accessed and moved over. But solve that problem and creators will love you.

✨Talk to Tobi

Do you know anyone building these ideas? Tell me in the comments