Fri. Jan 21st, 2022

Ten years agoIf you were a sloppy kid who somehow made a living off YouTube ad revenue and brand deals, you were probably told you didn’t have a real job. If monetizing your creative output is how you pay your rent, you’re part of the creative economy, a vibrant new industry.

An oft-cited historical report from venture capital firm SignalFire says that creators are the fastest-growing type of small business. Despite the creator economy only really taking off a decade ago, there are now 50 million people who consider themselves “creators,” and more American kids want to be YouTube stars (29%) than astronauts (11%), according to signalfire. So it makes sense that more and more startups are popping up to provide tools to creators – it’s an opportunity to monetize a growing market and smart entrepreneurs want to make money.

As this market expanded, I’ve written about credit card companies for makers, community building tools, and companies that help you design a product to sell, among other ventures. But because my inbox is teeming with too much creator-focused startup pitch, products, and opportunities to ever consider, I’ve noticed a troubling trend: Not all of these companies are really good for the creators they intend to serve. Some may be quite predatory.

For example, if an all-in-one creator platform folds, what does that mean for creators who put all their eggs in that basket? How do major technology takeovers affect the people who make money on those platforms? If venture capitalists invest in creators as if they were startups, how can those creators protect themselves from exploitative conditions?

Startups must have a backup plan to ensure that if they don’t become the next Patreon, the creators who trusted them won’t be doomed.

Startups must have a backup plan to ensure that if they don’t become the next Patreon, the creators who trusted them won’t be doomed. I’ve started asking these questions to any startup that claims to be a “one-stop shop” or an “all-in-one solution” to the creative economy. Fourthwall had a good answer.

The company said it has earmarked three months of emergency operating expenses to ensure that if they fail, they can help makers transition to other platforms. Fourthwall also said it would make its platform open source if this happened. But either way, this friction isn’t exactly helpful.

The inherent tension within the creative economy lies between the promise of financial freedom and the realization that this freedom comes at a price. As more startups strive to connect talent with brand deals, build monetization tools, and develop new social platforms, creators need to know what to look for to avoid a bad situation — and startups need to think for themselves as if they were being in a maker’s shoes, realizing that if a maker entrusts them with their company, they have a moral and financial obligation not to screw it up.

“A platform is not your friend”

When Spotify bought the popular podcast creation service Anchor in 2019, podcasters panicked. But Amanda McLoughlin, CEO of the independent podcast collective Multitude Productions, had seen such massive acquisitions happen before. Since the early days of YouTube, McLoughlin has been a creator herself, so she’s seen the industry change from both a creative and business perspective. A defining moment in her early life as an internet creator was when Google bought YouTube in 2006.

“Before 9 a.m., I received a dozen messages from friends and colleagues who were concerned about what such a large and unexpected consolidation means for those of us trying to make a living from podcasting,” McLoughlin wrote at the time. So she repeated the lessons she’d learned from the YouTube acquisition: diversify your revenue streams, don’t rely too much on individual platforms, and believe in your own worth.

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