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The Creator Economy & Global Parity
This week’s obsession is the creator economy. And, in particular, the opportunity for creators on the continent to participate.
For the uninitiated – the creator economy, broadly speaking, refers to the proliferation of people making a living from creating and selling stuff on the internet. It’s worth mentioning, as well, that there is a distinction between the creator economy and the gig economy – namely, that the gig economy monetizes commoditized, one-off services, whereas creators are monetizing unique, individual products or services, and are doing so on a recurring basis.
Meanwhile, much of the excitement in the space is exemplified by the amount of investment in and around it –
Whereas the first cycle of the creator economy saw top creators making a living online, now the question becomes – is it possible for the rest of us?
Venture capitalist Li Jin argues that The Creator Economy Needs a Middle Class, citing data from platforms such as Spotify and Patreon showing an incredible lack of parity in earnings. Only the top 1 to 2% of creators are making money.
I suspect the same holds true when looking at geographic parity, as well – those that are making a living come from developed markets. This, despite the fact that the internet is global by default.
What’s noticeable about the above map of investments is that investing in creators directly is missing. (While social tokens are to some degree an investment in creators, that’s a separate conversation altogether). Indeed, one of Li’s suggestions for how to foster a creator middle class is to provide capital to up-and-coming creators. She writes,
If creators are the new small businesses, what is the new version of small business lending? Some creator verticals require upfront capital investment or capital to unlock the next level of growth, and could benefit from funding in order to lower the barriers to entry. While the returns on being a successful creator may not be venture scale, there could be new models like social tokens or niche creator-focused funds that provide a bundle of funding and education.
Li also introduces the idea of Universal Creative Income. Historically creating has only been for the well off – someone whose family has an income of $100,000 is twice as likely to become an artist, actor, musician, or author than someone from a family with $50,000 income. I’d imagine this stat holds true for the pursuit of entrepreneurial careers, as well.
A core component of Li’s thesis is that in order to increase the parity and opportunity for those to take advantage of emergent internet- (and crypto-) enabled opportunities, we need to see more experimentation. And in particular, more experimentation that enables less privileged creators to do more of what they do best.
So assuming the creator economy is here to stay, and that this is what the future of work is going to look like, shouldn’t we see more experimentation along these lines in the African tech ecosystem and African markets, at large?
Should TikTok give out thousands of smartphones and data to up-and-coming creators? (Indeed, TikTok already has a Creator Fund.) Should Bundle or Binance cover the Gas fees of artists looking to mint NFTs? Should Boomplay or Spotify build studios for musicians across the continent? (And aren’t these types of experiments what impact investors are for, too?)
To be sure, I don’t even think these are very radical ideas. The sports and music world has long employed talent development models. Professional soccer – sorry, football – teams have youth academies. Scooter Braun brought Justin Bieber and his mom to Atlanta and paid all of their bills when Bieber was 13. There are venture-backed influencer incubators in China.
The blitzscaling approach of big tech companies subsidizes consumption. But what happens when we subsidize production?
What happens when more individuals – in environments of high joblessness, and low consumer spend – are given opportunities to foster their talent and tap into global markets?
That’s not a rhetorical question – I hope we take the initiative to find out.
Thanks, as always, for reading!