The ones who survive are the ones best adapted to their environment.

Charles Darwin (1809-82)

As the voices on the web echo the birth of the metaverse, there’s a class of creators that is lagging behind.

Many small to middle size creators are failing to make a sustainable living as major brands, labels and platforms are cashing most of the dividends from their creative work.

The ethos

As web2 was brought to life, the internet became a space of content production and not only consumption. People were called to share content online and audiences could be reached easily, without needing permission from gatekeepers.

However, as easier as this process got, the more Web users became creators, and reaching an audience became harder and harder, as attention became a rare commodity. Supply exceeded demand and attention-grabbing techniques were marketed everywhere, while social media platforms understood that audiences were, in fact, their real asset, and started to draw an inflection into a model where creators had to pay to reach their people.

From Passion to Profit

The development of platforms and elaborated searching tools allowed for a class of workers to find short term jobs online, giving them their sought-out freedom. However, this movement – the Gig Economy - resulted on an over-saturated market, pushing workers into low-income solutions with almost no benefits and security. Soon, a derivative of this model appeared to shape the self-employed class, using originality as market differentiation, as workers became creators, and their passions were turned into profit.

The Passion Economy brought a new economic paradigm by creating self-employment for a growing slice of the working force, introducing a model that entailed building an online audience, cultivating direct relationships with followings and monetizing by selling products and/or services that capitalize on skills, knowledge and/or brand deals.

Although it was considered as an alternative to the Gig Economy, where the workforce was commoditized and brought to a rising exploitation ecosystem, the Passion Economy was driven through a similar path, as the same platforms that enabled its rise started to play as gatekeepers.

These social platforms were catapulted to success by the creators themselves, as they moved upwards in the adoption curve, but shifted to a different business model that took advantage of its users as a captive audience for advertising deals.

Soon, creators and influencers were at the mercy of the big platforms, paying ads to reach their own audiences, built and nourished as an investment that became unfruitful as those platforms became market giants.

The Creator Economy

The Creator Economy overlaps with the Passion Economy, as content creation became a paradigm of marketing the products and services of the latter, and creativity is a basic tool to work in this ecosystem. Similarly, artists became content creators not only in their own craft but also in other media spaces, as attention became the most sought-after asset of the present days.

Social media and other platforms became a springboard for creators, allowing them to access their potential customers directly and establish their own online shops, eliminating the need for the intermediate structures and, often, distribution chains. The traditional gatekeepers of creation – labels, agencies, publishing groups, major brands, etc. – became less and less relevant, while, on platforms, attention became a scarce commodity, and the access to audiences was increasingly only apparent.

Social platforms were marketed as the way to go for nurturing direct relationships with audiences and building communities that would allow creators to make a decent living with a relatively small audience. However, as their users base grew, social platforms developed algorithms that showed less content to creators’ audiences, leveraging this asset into an advertising business model where creators had to “pay to play”.

After the spring 2017, when YouTube was surprised by a massive withdrawal of its advertisers with concerns of being associated to reprehensible content, many creators realized, for the first time, how fragile their sustainability was, due to the inherent dependence on others’ platforms. For then on, many voices have been rising about the emergent need to build businesses on creator’s owned land, i.e., to use your own platform, website or email provider.

Building (sustainable) Communities

As stated by Kevin Kelly in 2008, one can make a decent living with 1000 true fans, the people that buy anything you put on the market. This number isn’t, obviously, absolute, and sustainability depends a lot on the business dynamics (positioning, product range, catalog diversity, scarcity, business model, etc.) and, thus, can be attained even with a lot smaller numbers. It is fairly consensual, nowadays, that this kind of fan base is built through developing a true community.

Community building has become an indispensable skill in a brand development strategy.

But what is, in fact, a community?

Many creators and small business owners are under the impression that one can build a community in the comments section of social media posts, and work with the misconception that a community is the same as an audience. Although both can overlap in some way, a community is a group of people that have a shared interest and that develop relationships with each other. It involves a dialogue between its members and, ideally, a shared pathway into mastering something important together. That underlying characteristic of communities allows them to be a floor for building relationships, and that is the most solid ground to build a business on.

People may come into a business for the content, but they stay for the relationships that they build within that context (with the creator and with other members). That not only helps creators solve the problem of retention, but also opens the door for a more easeful way to build a business. Community allows the creator to escape the stress of having to post constantly and having the right solution for every problem.

Alternatively, it fosters relationships and gives space for members to answer each other's questions, share experiences, brainstorm solutions and create a close group that cheers their peers’ accomplishments. Community is the right environment to set learning experiences and habit formation, as it propels results with network effects, building on motivation and empathy. As relationships are developed, community has an important role on client retention, as communities increase one’s intrinsic motivation to make progress on the path to transformation and celebrating results become a fuel for further progress.

Community Design

A sustainable community is one that potentiates the creator’s actions by creating space for participation, involvement and relationship building.

That’s why there are two main factors a business owner must consider when building its own community: where and how.

The place where the community is built may determine its culture and even its success. Communities that operate within main social networks, as, for instance, in FB groups, may have an apparent easier access, but also have to consider time-consuming experiences that compete for the customers attention and are often responsible for a negative attitude that can permeate to the community’s culture. Also, as stated before, building in someone else’s land is risky. The difference is between working with a rented audience or owning followers’ contacts, being able to reach them without having to submit to a dictatorship of algorithms or a pay-to-play logic. That’s why it is so important to own the space where one can build a community, and to choose between the options that allow for easy access, seamless use of the platform(s) and that features foster relationship building between clients.

Community Design is determinant on a community’s ability to be successful. It must be conceptualized as a matrix where motivation and habit formation are the building blocks of a structure that allows its users to master something important together. The Creators Economy is, currently, questioning the solutions of the platform economy and the mega social media networks, to concentrate their efforts in the development of interest-based communities (or niche communities) set mainly on white labelled platforms, owned by creators, where they can build their own worlds and exist as hosts rather than experts, escaping the dictatorship of the constant need to feed that space with content. The opportunity for creators is, rather, to design a community that brings like—minded people together, giving them a safe space to achieve transformation, creating conditions for members to grow symbiotic relationships, and in a way that the community essentially runs itself.

The Creator Economy Footprint

The Creator Economy has exploded over the past year, accounting for more than 50 million creators, and more than $100 billion, including the influencer marketing segment and hundreds of new startups, as stated by The Influencer Market Factory (Sep 2021).

However, a recent study conducted by the SAAS company Mighty Networks and strategy agency Bodacious, based on research done by NonFiction Research (From Dependence to Independence, Oct 2021), states that this number might be severely underestimated and that creators are, in fact, 400 million, which points to a much larger piece of the present economy.

The problem remains for most of the creators: not being able to monetize their skills and talents in a sustainable way. The study mentioned above showed that 65% of creators are reaching a glass ceiling with their earnings, feeling overworked and underpaid, and many are close to burnout (From Dependence to Independence, Oct 2021). This recent study also shows that as much as 77% of creators worry about being dependent on social media platforms for their earnings and most of them are seeking new paths to their sustainability.

For some authors, this is looked at as an expected consequence of the attention scarcity that characterizes current society. Others, however, think about it as an opportunity to develop new business models that allow creators to lean in on their talents, by attracting followers and building sustainable niche communities, monetizing through various revenue streams and using innovation as leverage.

In the last years, platforms have emerged that in force the viability for direct relationships between creators and their followers. Patreon, for instance, occupies a new place in the market, allowing creators to be paid directly by its fans, through tier-based restricted content, capitalizing one-to-many relationships.

However, some voices advocate for the need to explore one-to-one relationships in a community-based framework, giving birth to interested based communities, bringing true network effects to the creator’ ecosystem. The solution, for many creators, has been adding platforms as Discord, developed for gamers as a tool to communicate while playing games, to work as community hubs. Nonetheless, the user experience of this kind of solutions is not ideal for every user, and it’s obvious that using two or more platforms makes it harder to access, as it steepens the learning curve and makes the access more time consuming.

Other solutions, as Mighty Networks, have been trailblazing into the market, offering an all-included holistic approach, giving their customers a space to create interested-based communities, where creators can nurture fans mutual relationships, sell courses, create safe spaces and catalyze their fans’ path to transformation. As these solutions get into the market, big social media platforms are increasingly being used as discoverability tools, rather than a place to build a business. Obviously, this is threatening their market share, as emergent platforms get increased attention for their higher growth capacity and discovery potential.

As creators are immersed in the winter of their discontent, new forms of audience building are emerging and, with it, new business models are being considered. The world of social media and business development is changing, and, consequently, paradigms are shifting and new ways of thinking about fandoms and communities are paving the path for the years to come.

The dawn of the Ownership Economy

As solutions for creators are coming into the market, a new designation for this ecosystem of creators and their fandoms is being generalized – the ownership economy.

Obviously, this designation is a consequence of the fact that finally the business models used by these creators are based in their owned spaces but are also a reference for other dimensions of the interaction between creators and their fan base.

Zoe Scaman, founder of the strategy agency Bodacious, developed a “Fandom Formula” that proposes that Fandoms are developed through 3 dimensions: community, autonomy and equity. A community based on a shared interest might be sufficient for building a fandom at its inception, the other dimensions may be essential to leverage its power as a sustainable business model.

But what are autonomy and equity in this Fandom Formula?

Autonomy is, in fact, one of the dimensions of intrinsic motivation, that inner drive that makes us keep moving forward, not based on extrinsic rewards or outside recognition. The other layers that add to intrinsic motivation are purpose and mastery. The same way that community rends purpose to the birth and growth of a fandom, autonomy allows fans to develop their own projects and/or lead groups that have determinant contribution for those fandoms’ successes. That may look like collaboration projects, where a fan can, for instance, design a merch line in collaboration with an artist, develop new collab spaces by introducing their own audience to that fandom, teach a course to that creators’ fans, and much more ways of exploring new business models that bring a new set of possibilities for incentivizing people to become part of a fandom.

This can become a new way for creators to be a part of each other's businesses and to make a sustainable living by fostering collaborations in several interesting markets, building a thriving creative network. This symbiotic relationship between creator and his fans expands the array of products that the creator can present to the market and, also, it broadens the market itself, bringing new audiences to his awareness circle.

Equity is a very interesting piece of this puzzle. The way fans can support and participate financially in the artist/creator intellectual property. This type of involvement has its roots on crowdfunding initiatives but is much more interesting than those. Creators can be funded directly by their fans, giving them shares of their IP, as a form of shares of their work, unlocking a whole new paradigm of revenue models for fans.

In this kind of world, fans can make a sustainable living by funding a handful of creators, developing a whole new class of curators that establish themselves as a pivotal block of a flourishing creator economy or, better said, ownership economy. For creators, giving equity of their work to fans, which can be done in a myriad of different (creative) forms, is a way of bringing fans to the stakeholders’ table. They will promote and contribute to their supported creators’ work for having skin in the game.

Equity may even tap the last vertex of the intrinsic motivation triangle: “mastery”. The ability of being a curator of creative work and to see that work gaining value and being acknowledged by others is a confirmation of one’s own discernment of value.

A needed reference about this latter dimension of the Fandom Formula:  Equity is being explored, as the ownership economy starts to rise, through the lens of web3. The ability of developing smart contracts that can undoubtedly prove ownership of something, as a digital asset or IP, is being pivotal to unlock some new forms of interaction between creators and fans, and new business models that allow those interactions to be leveraged as a revenue stream.

World-building and the new Universe

World-building is setting a culture. In other words, when you imagine a world to build, you have to start with your own set of constraints, rules, and realities.

Think about the Star Wars saga. It has its own logic, its own set of rules. Characters work within those guidelines. Their actions, reactions and behaviors are a consequence of the power dynamics installed, the time lapse and environment where the story takes place and the laws of physics that apply to those settings.

Any kind of story takes place in a world that exists under constraints and boundaries. That makes stories more creative and imaginative, for creativity grows from overcoming setbacks and seeing possibility beyond the obvious.

We are now, as we approach the end of the first quarter of century, writing the story of the new universe. The possibility is endless, as disruption is always present at the start of an era.

Creativity can be, at last, a springboard for thriving businesses that support a sustainable living. If that is possible, only time will tell. There’s a risk of replacing the gatekeepers of yesterday for the ones of tomorrow. Speculation and/or the need of start-up funds to back creators’ endeavors can stifle this economy at inception. We need to be creative and design the systems that nurture creativity and initiative and push away old models of doing business. We need to be inclusive, give voice to minorities and help new creators on-board this new and exciting space.

But how can creators stand out in this ecosystem?

As we know for some time now, storytelling is a major component of business building. Marketing leverages stories, as businesses are not only selling products or services, but rather showing their potential clients how to get from where they are to where they want to be. Businesses sell transformation and belonging, they show possibility.

In this new universe, communities are the ground where businesses are built on, and the new set of tools, as smart contracts, are the building blocks of the structure where ownership (and notably shared ownership) can rewrite the way business models are developed.

Creators can, thus, build their own worlds: for and with their people, focusing on specific niches and shared interests, designing their own incentives and community culture, setting the rules on what can be a safe and exciting space for achieving meaningful transformation.

The way creators are able to imagine and create new exciting worlds and how show their audiences what can be like to belong to their communities of like-minded people and how that space can help them develop their own projects and make a living, is going to be determinant to the way creators shape not only their lives and businesses, but also this nascent Multiverse.

The future is here and the ones who can adapt will be the ones who survive.