This is a guest post by Richard Armstrong who is an early stage investor in many startups in both SE Asia and globally. Plus Richard has cofounded several companies.
Guest Post Series: Richard Armstrong
The Struggle of Creator Models
You hear a lot of media lately about some of the creator economy models not growing or generating profits as expected.
I’m referring to the hundreds of companies that service creators like Patreon, a company that provides monetization methods for creators.
A few years ago tons of these companies were created. And for awhile it looked like tons of unicorns were gonna be created.
But lately a lot of them are struggling or even closing.
Why are they struggling?
Well as it turns out there are a relatively small number of creators who truly create large, scaling businesses. Folks like MrBeast or Logan Paul. They are the 2%.
Rather the 98% of creators struggle to make a living. Many of them earning almost nothing. And its these smaller guys that are generally the target market for all of these creator model startups.
The problem is if they’re already struggling to make ends meet… it is unlikely they’re gonna pay the $25/month to subscribe to some creator SAAS that aims to helps them.
But it would be a mistake to then conclude the Creator Economy is struggling
You see I define the creator economy far far wider than just these creator models. Rather I see the creator economy as the whole business of creating content with the intent of somehow making money.
And let’s examine a bit what is happening in the market.
Influencers are all over e-commerce. New creator brands are popping up in the hundreds each week. Some of them are starting to beat age old consumer product brands.
People are starting newsletters like never before.
Social media platforms like Linkedin and Twitter are exploding with creator content.
Every business needs a content game now
You pretty much cannot be any type of startup today without taking content pretty seriously. Why? Because content is key to the whole conversion funnel.
People rarely purchase anything on their first click. So you need to put them in a funnel where they constantly see your content on a regular basis until they buy.
And it used to be that that content could be mediocre like drip emails. But the whole content game has leveled up a ton… and now the stakes are much higher. You need to work your content muscle and get good at it.
There has never been a more impactful time for content then now
If you think about the history of the Internet… content has always played a role. But that role has never been as influential as it is right now.
Every niche is a competition for who makes the best content. And with the advent of AI both the quality and quantity are getting pushed up fast.
Creators are coming out of the woodwork in droves. Across a mix of newsletters, Youtube videos, Spotify podcasts, Tiktok, Twitter, and more.
And more and more of them are able to make a living out of it. In part because the ways to monetize are getting more diverse.
As a creator I’m also really excited about all of these trends. And thankful to all the folks that follow me. It is an exciting time and I look forward to doing some great things together.
