🎨 The Passion Economy: Why Now?

Or, why you might want to become a creator!

I’m starting a series of posts on the Passion Economy!

The Passion Economy is an ever-growing ecosystem of platforms, tools, and systems that enable a new kind of creation-based entrepreneurship on the internet - the creation and monetization of podcasts, videos, courses, newsletters, communities, or almost any other media!

What’s exciting about the Passion Economy is that it empowers ordinary people to work on their own terms, explore their passions further, and take control of their lives. These are all deeply beneficial to our long-term wellbeing as individuals, and having more happy, purpose-driven, financially stable people can also only be good for our society! 

If there’s a way for us to democratize access to entrepreneurship and creation on the internet, shouldn’t we be dedicating more time and energy to it?


We’ll start this series with a question I asked myself recently - why now?

The term “Passion Economy” entered the mainstream of tech and VC with Li Jin’s well-known essay last fall. Since then, there’s been an increased interest in building and getting involved in this space. 

But creators have been making a living on the internet for years! Why is now their time to shine and why are opportunities for new creators continuing to grow significantly? 

There's no single reason (there rarely is). Instead, it comes down to 4 trends.

  1. The Rise of Creators

  2. Increased Monetization Options

  3. Search for Community

  4. Acceleration by COVID-19

A quick note: there’s lots to talk about for each topic covered - I could write entire essays about some of these paragraphs! So, please forgive any potential lack of detail or simplification - I intend to dive deeper into these in the future. I still appreciate any feedback or ideas!

The Rise of Creators

In the past 10 years, everything around media and creation has gotten bigger. Across media platforms, the numbers of viewers, the number of creators, and the audience of the biggest creators have all grown. As the supply and demand sides of the Passion Economy continue to grow, opportunities for individuals to become creators increase! 

Looking at viewer growth, more and more of us are consuming content from independent creators on platforms like YouTube, Twitch, Spotify, etc.. A few examples of that growth: TikTok already has more than 800 Million MAU (!!). From 2016 to 2020, Twitch’s viewing time doubled (source) . Meanwhile in the podcast world, listening increased by 23% in 2019 (source) ! 

This viewer growth contributed significantly to the rise of superstar creators! In 2011, the #1 YouTuber had 5 million subscribers. Today, there 2,000 channels with an audience that big and the #1 independent YouTuber has 106 million subscribers. On TikTok, there are 50 accounts with more than 20 Million followers. And Joe Rogan, one of the biggest podcasters, has close to 10 million followers on multiple platforms.

As a result, people are consuming more and more great content from superstar creators, some of who are becoming cultural icons! In the same way people want to be Michael Jordan or Taylor Swift, some now aspire to be Casey Neistat or Charli D’Amelio. Being a creator has a lot of aspirational value, particularly amongst kids (~30% of them want to be an influencer!).

On the smaller end of creators, there are over 1 million channels with more than 10,000 subscribers. While these people probably aren’t making as much money as superstar creators, this could be their primary income source, depending on their monetization strategy. 

Because of the number of mid-size creators, making a living on the internet also becomes realistic and approachable. People are more likely to hear the story of a mid-size creator and think “Why not me?”

As the number of superstar creators and mid-size creators rises, it’s becoming more socially acceptable to be a creator. And because of increased viewership across platforms, each individual has a better shot at building an audience and, hopefully, making money. 

All this creates a self-perpetuating loop! As each platform grows, more viewers join. They give more attention to creators and help them make more money. Then they might see themselves becoming a creator! As they create, they bring in more viewers, more revenue for themselves and the platform, and continue the cycle.

In short, there are more superstar and mid-size creators across all platforms and media. Being a creator on the internet has become more common, more accepted, and something people aspire to be.

Increased Monetization Options

For a while, monetization for creators centered around ads. However, ads and sponsorship don't always provide a reliable wage for many creators, especially those with smaller audiences.

As the platforms grew and more users built larger followings, the concept of "micro influencers" surfaced. Suddenly, more people on Instagram and other platforms could monetize through smaller brand deals, in part by catering to niche audiences. The biggest creators on YouTube previously scored larger brand deals and started product lines like people do now, but with less viewers and less money at stake, it made less sense for businesses to sponsor or invest heavily.

Still, advertising and sponsorship can be unreliable and can require a large following in order to be used as a primary income source.

For example, after one of his videos hit 1 million views, Jack Conte received just $166 from YouTube, which led him to start Patreon. On TikTok, after getting 100M views, 10M likes, and 550,000 followers, Hank Green made a solid $3.60 (from donations).

But through Patreon and other monetization platforms, creators can get paid directly by their fans through subscriptions or product sales rather than relying on ads or brand deals. These income streams usually aren't exclusive, but depending on the creator and audience, one income stream can be much more lucrative than another.

Diversified income streams also create stability for these entrepreneurs, something that’s incredibly important - if you’re leaving a salaried job to grow your audience and make money on the internet, you need to be certain you’ll be able to pay rent next month.

Through these platforms, it’s become easier to make money on the internet and build a stable income stream

Additionally, a loop forms - as more monetization and creation platforms arise to solve the needs of current creators, more people will feel comfortable starting their own business because the tools now exist. For example, Gumroad simplifies the process of selling an ebook, so people are more likely to consider making and selling an ebook. The same could be said for Etsy and other marketplaces. 

What had to be hacked together previously can now be done easily. Everything from building a website, making graphics, selling products, managing administrative work, etc. Li Jin wrote more last week about the unbundling of work and how it will facilitate creation in the Passion Economy.

Search for Community

A third factor in the rise of the Passion Economy is people’s need for community. As platforms like Facebook, Instagram, and Twitter grow, people find them increasingly saturated and noisy. It's no secret that these platforms are not always the best mediums for genuine connection, for belonging, and finding people with the same niche interests.

But people are still looking for these benefits! We all still want to belong and be around like-minded people. As Greg Isenberg points out in his Unbundling of Reddit, this is being spun off into different niche-specific platforms or communities. Reddit itself can only serve so many different niches and use cases through its simple (but efficient) feature set.

Through entertainment, education, or discussion, creators have the power to connect people across the world through their topics of choice. As a result, they have the potential to offer great communities, both directly and indirectly. 

Directly, through a Discord, Slack, or a paid community on Circle, Memberful, etc.. Indirectly, communities can be found anywhere, like in the comments of a niche TikTok or of a marble racing video. 

On TikTok, we recently saw Step Chickens and other "cults" arise - they even made their own app! People also deeply identify with the communities of their favorite YouTubers, for better (see below) or for worse.

Jelle's Marble Runs (a marble racing channel) has 1.2M subscribers and is sponsored by Last Week Tonight!

As social networks become increasingly noisy, consumers will continue to search for their corner of the internet, their people, regardless of where they’re located. Brands and creators can serve as the lighthouse for those people, intentionally or not.

Acceleration by COVID-19

Finally, the adoption of the Passion Economy, much like everything else on the Internet, has been significantly accelerated by COVID-19 and stay-at-home orders. As we stayed home, we looked for ways to spend our time and money on the internet. We looked for ways to connect with other people like us, and we discovered new creators, platforms, and services. With more time on our hands, more people created or shifted their businesses online, growing the Passion Economy.

While it’s up for debate how much of the recent growth will be sustained, there is no doubt that this year will lead to a significant increase in the number of consumers and creators in the Passion Economy. 

Check out this crazy growth!

Gumroad: A 40% jump in creators with a sale in 6 months. $12.5M processed in June, up from $8.3M in January. Gumroad was doing well before and it’s a great company, but the jump in mid-March is just crazy!

Etsy: Total Sales were up 93% from this time last year if you don’t include masks (147% if you do!). There was also a 15% increase in sales per seller, a 35% increase in sellers, and a 41% increase in buyers. More buyers, more sellers, and more money per seller!

 

Patreon: Estimated creator earnings is up around 50% in 6 months! (per Graphtreon)

Twitch: Huge increases in # of channels and viewers (per TwitchTracker)

E-commerce as a whole

Conclusion

Greater creator visibility, more monetization opportunities, a need for finding community, and COVID-accelerated growth - together these trends have a compounding effect that has caused the growth of the Passion Economy to skyrocket. And we’re just getting started! 

The Passion Economy is exciting and important because it offers people an opportunity that did not exist before - the ability to make a living by educating, entertaining and supporting others. They can do what they love and build a life on their terms, offering them one of life’s best resources: freedom.

If you’re seeking that freedom, jump in! Create! Entertain! Teach! There’s always a need for more unique voices, interests, skills. And if you want to create that freedom for others, maybe build something for creators!

There’s no better time than now.

If this was interesting to you, please subscribe as I continue to explore the Passion Economy. Up next: how creators take the leap.


Many thanks to the people who gave amazing in-depth feedback for this essay - Harshita Kaushal, Sandeep Suresh, Pratima Manga, Mikaela Reyes, David Lie-Tjauw, Prerit Oberai, Kanan Rengaraju, Zach Davidson, Melisa Seah, and Kavya Ravikanti.

It wouldn’t have looked anything like this without you!

randonauting & existentialism

Generally Speaking on July 25th

Happy Saturday! I’m really happy to have you here.

I’m hoping to use Generally Speaking as a place to share original thoughts, questions, news, and some personal updates. I want to ask questions and hopefully spark interesting conversations! 

The format will vary - today I want to talk about randonauting and existentialism. It’s a quick, 3 minute read.

I would love to hear any random thoughts or feedback you have! Reply!


intro to randonauting

Randonautica explained: what it is and how to use it | Pocket Tactics

In June, my friends and I got into this thing called Randonauting, which I think got popular originally through a series of TikTok. Here’s how it works.

If the world is deterministic (there is no free will), most of what we do in life is largely predictable and there is a clear path set forward for us, right? What Randonauting offers is a way out of your set path, by giving you (almost) completely random locations to visit. By adding a factor of randomness to your life, you are 1. exploring new, interesting places and 2. fundamentally altering your life through a domino effect - you're presenting yourself to new stimulus, going somewhere new, and altering every decision you make moving forward.

Now, that's how I understand Randonauting. There's a lot of "science" around it, but I've kind of interpreted it as I prefer, to be honest. It’s just more fun.

An additional layer added by Randonauts is the option to set an intention before getting a coordinate. What you can do is ask the universe for something specific, like unity, your future, something scary, or the number 12.

Now this is where hyper-logical folks (me) tend to go "oh but isn't that just confirmation bias, blah blah.." Yeah it is. But also it's just fun to explore the world and your mind!

I've been thinking about it almost like a geographical tarot reading, astrology, or palm reading. You might not get anything that interesting or accurate, but it's just fun to explore.

my randonauting adventures

I started this with a few friends a month or so ago. We decided to ask the Randonautica app for two points, our intention being "the future" (we all just graduated and are desperate for guidance).

The point we got was in a park behind a house, in a neighborhood we sort of knew. We tried seeing the point from the front of the house to no avail. Instead, we decided to explore it from the park behind it, which is a huge forest with a single trail.

At one point, the weirdly steep trail turned a sharp left. But our destination was straight ahead. Somehow, there was a small hidden path where we needed to go. We marched on. Eventually we lost the trail. We went down a hill, up a steeper one, and then we were moderately trespassing.

One of my friends kept going and ended up on someone's driveway. They came out on their lawn & saw her, so she had to go find a different path to meet back up with us - a mildly spooky moment. There was no huge sign for us, other than maybe the future was not going to be as straight forward as we thought.

After that, we headed to our second point, which happened to be a Buddhist temple and community. Monks were chilling in front of their homes as we walked to the temple, hoping to go inside and explore. Unfortunately, we were shooed away. But as a fan of meditation, this was a cool sign - maybe I should re-focus on my practice. While less exciting, the second point was still fun! I had no idea this place existed.

existentialism

A few days later, my girlfriend was about to head home to LA and I knew I'd be at home with no clear plans for a couple months at least. I turned to Randonautica to give me an answer - what next? The question has become a recurring theme in my life and I thought maybe this could be the time I figure it out. [Narrator: it wasn't.]

On my drive back to the airport, in a part of the Seattle area I'm less familiar with, I asked for a point and headed over. On my way, I saw a "Lovers" store - maybe the universe was telling me to focus on my relationship. An indoor skydiving place - maybe the universe was telling me to take more risks. A shelter - maybe I should focus on helping others.

I got to my point, between two houses in a very normal, average neighborhood. Being unfamiliar with the area, I didn't feel comfortable walking around, so I just slowly drove by once. I didn't see anything that I caught my eye at first. I drove slowly again, and saw literally nothing of interest. I headed home.

The existentialist in me began to chuckle. The universe had done it again. There was nothing. This random coordinate generator was never going to tell me what to do with my life.

Yet again, I had looked for SOMETHING to tell me what to do, how to live, what my purpose should be. And once again, I was reminded that only I could figure that out for myself.

I recommend randonauting, but remember - you still have to create your own meaning. There are no shortcuts.

For if indeed existence precedes essence, one will never be able to explain one’s action by reference to a given and specific human nature; in other words, there is no determinism – man is free, man is freedom. [...] We are left alone, without excuse. That is what I mean when I say that man is condemned to be free. Condemned, because he did not create himself, yet is nevertheless at liberty, and from the moment that he is thrown into this world he is responsible for everything he does.

- Jean-Paul Sartre

Have a great week-end!

Martin

future anxiety

Generally Speaking on July 8th

Happy Wednesday! Thanks for signing up, I’m really happy to have you here.

I’m hoping to use Generally Speaking as a place to share original thoughts, questions, news, and some personal updates. I want to ask questions and hopefully spark interesting conversations! 

The format will vary - today I just want to talk about… everything going on right now. 

I WOULD LOVE FEEDBACK! Please reply with any thoughts!


Future Anxiety

I tend to be fairly optimistic about the broad, ambiguous future - on a macro scale, I think society tends to improve and resolve itself over time; on a micro scale, I think most personal situations tend to just figure themselves out and if they don’t, we eventually move on emotionally from them.

But in the past month, I’ve felt a growing anxiety about the future. Part of that might be that I’ve been cooped up at home in Seattle since March without much to do or much to think about other than this whole.. thing.

I’ve been thinking that there might be something bigger, however. I’m starting to get worried that this thing is much worse than we’re all realizing, and that we might not be close to being done with it.. at all.

It started in early June when I had a call with a much smarter friend of mine, who had happened to do research on diseases and specifically the Spanish flu. He told me that during the Spanish flu, the second wave came in the fall of the first wave and was actually much larger and deadlier. Part of that was due to the lack of advanced medicine, a deadly mutation, the trenches of WWI, and general lack of understanding of the virus, which are not true today.

However, he explained that a few factors for our second wave will still be true:

  • More volume - instead of the virus being highly concentrated in areas like NYC and Seattle, it has reached every state and almost every county in America. We no longer have just one outbreak, we have thousands.

    • There is also a higher volume of confirmed cases. There were almost twice as many confirmed cases this week (365,000) than the entire month of March (188,000). Part of that is due to more testing, but the point still stands.

  • More transmission - as flu season begins, R (the transmission coefficient) will quickly increase, meaning each individual will get more people sick.

    • This is because our immune systems are weaker in the cold, and possibly as we spend much more time inside.

    • Arguably, we will also be even more relaxed about it than we were last month.

  • We might delay closing again, because US leaders are very reluctant to shut down our economy again. We know how bad for the economy the first closing was, and a second one would be terrible - unemployment would rise again, businesses would close permanently, the government would need to bail individuals and corporations out again.

So, the virus will be more in places, at higher volumes than in March and it will spread faster than it does currently. And we’ll probably be reluctant to close as harshly as we did back then.

And in the meantime, we’re still not all wearing masks and avoiding big gatherings. Our country is struggling to deeply care about this and unite to fight it the way others have. Part of that is due to how decentralized our system is and the lack of any central leadership - the responsibility has fallen to governors and mayors, who just don’t have the same experience and thoughtfulness that national leaders could have.

The entire EU has as many cases as Arizona on some days. It kind of feels like this - 

“It’s going to be fine”

Instead, I think as a country we’ve just been naive, individually and collectively. I don’t know about you, but in April, I didn’t even think about how this could last another 6 months. I thought things would get better. We’d figure it out. This was temporary. On a psychological level, I think we all want it to end up fine.

Our collective feeling can be summed up by Donald Trump’s “I hope it will just go away.” We’re exhausted from the anxiety of the last few months. We pretend it’s going to be okay. We say that we’ll re-open colleges, the NBA, Disneyland in the future. We set a date and expect things to be okay by then. July, then August, then September. 

But by ignoring a potential unpleasant future, do we make it even more likely? 

We’re in a weird “normal” at the moment, with some distancing. We expected this to last for a while, and then once we’d have a vaccine, we’d be back to our full, old normal - no masks, no distancing, no problems. 

Instead, I think the second wave will be worse than now, and potentially worse than the first wave. Things will get worse before they get better.

And the vaccine won’t be here for a while. Fauci is “cautiously optimistic” we’ll have a vaccine by early 2021. We’ll still need to distribute it across our country - how long will that take? Who gets it first? Who pays for it? What if we don’t have it before summer 2021? When do big offices reopen (I don’t think I’ll be in one until Spring 2021)?

And once we’re out, what happens? How do we move on as a country from this tragedy? Will we develop a collective PTSD? What happens to our economy, the unemployed? How does this position the US compared to other countries who handled this better?

There are so many questions about the future of the world, and I wish US leaders, systems, people, culture were just… better. But, like everything, we will eventually get through it. 

I hope this moment in time motivates us to improve all of our country’s systems and never have anything like this happen again.

The Election

On a much more optimistic note - I actually think Biden is in a very good place right now, barring any sort of major shift (which is fully possible). I know that after 2016, Democrats are fairly cautious, and Biden is no Barack Obama, but read this article on Why Biden’s Polling Lead is Different From Clinton’s in 2016.

In addition, I think we’ll also see a lot more House and Senate Democrats elected as general disapproval of Trump by moderates increases. There are numerous polls showing that voters in swing states disagree with Trump on race, something he’s been doubling down on, and on his handling of the coronavirus. While this isn’t good for our country in the short term, he’s essentially digging his (and the Republican Party’s) own grave.

Barring a second wave right before elections, and any major impediments to vote-by-mail, I think Democrats can be optimistic about Election Day. Which, by the way might be more like Election Week if things are close.

But in the same way that undesirable futures aren’t as unlikely than we think, desirable futures aren’t as likely.

Overall, this year so far has taught me a lot about the fundamental unpredictability of the future. In December, I knew I’d have a big graduation and then travel this summer. I knew it. There was no chance of something like this happening.. Yet here we are!


Personal Updates

  • I’ve been doing short-term options trading during the week, an interesting “hobby”. I call it nerd gambling. It’s always interesting to learn new skills!

  • Trying to read more articles and books. Currently reading The Intelligent Investor, an investing classic. I’m building my own long-term investment portfolio!

  • I’m still at home in Seattle! Summer is just starting here. Lots of hiking!

  • I’ll be joining Stadia on August 17th! I’m very excited to be working on video games, one of my first hobbies.


Thanks for reading! I’m hoping I can improve every week, so thanks for joining me!

- Martin

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