The Shift to the Creator Economy
The Shift to the Creator Economy
The world is moving from the traditional, institution-based economy to the creator economy.
Advances in education and the democratization of technology will change how we work and earn a living.
I first came across this idea via a tweet from Naval Ravikant:
Eventually, everybody will be in the creator economy.
— Naval (@naval) May 17, 2021
As my liked tweets would suggest, I really enjoy Naval’s content. Eric Jorgenson’s Navalmanack has been one of my favourite reads of 2021. This particular tweet was quite thought provoking, but it felt like a bit of a stretch. Sure, there are creators out there. But everyone (including me) in the creator economy? Never. I’m in corporate. The traditional 9-5. Leave the creating to the pros, to the inspired few.
Nonetheless, the idea did strike a chord. It sounded like a ray of hope. Like many people, I had wondered about alternatives to corporate life before. The day job provides stability in exchange for autonomy, a salary in exchange for creative outputs. Is there a way to exit this exchange or change the rules a bit?
What is the creator economy?
Naval explains his tweet using the following thought experiment1:
Imagine if tomorrow we could wave a wand, and everybody was trained as a scientist or an engineer. [...] Within five years, robots would be doing everything from cleaning toilets to cooking food to flying airplanes to driving Ubers. And what would we be doing? We would be doing all the creative jobs to entertain each other and researching science and technology. We would have wonderful lives.
While a fully-fledged creator economy is unlikely to happen during our lifetime, the message is one of hope. He asserts that we are all creators, but the tasks currently filling our days are holding most of us back from realizing our creative potential. If we fast forward the effects of education and the impact of science and technology, everyone could be part of the creator economy.
How does the current landscape compare to the creator economy?
In the current institution-based economy, workers are stuck in their 9-5 jobs, where they exchange their creative efforts for a stable salary from an employer, usually a large institution or corporation.
In the new economy, you could be working for yourself or a small team and capturing most of the value from your creative outputs. You could define your own schedule since you are rewarded based on output, not hours worked.
The downside is you are taking more risk by stepping away from a safe, steady income. There is no guarantee this route will actually work.
Despite the risks, there are tons of benefits to being a creator. You have skin in the game. Your incentives are aligned. You own your creative outputs and you have more autonomy. Not to mention personal happiness, richness of life and listening to your creative spirit. That’s where the magic happens.
Most importantly, you can serve yourself and others better by making things for yourself and pursuing your passions. Write of Passage mentor and software engineer, Louie Bacaj, sums it up perfectly:
I’m glad to hear it from you Naval.
I keep saying this to family members, they think I’m nuts, anyone with real skills will be better served and serve humanity better making for themselves rather than a company or institution.
Especially now that the infrastructure is there.— Louie Bacaj (@LBacaj) May 17, 2021
Why is this shift becoming possible?
The democratization of technology has made it possible for anyone to become a creator. The infrastructure is there. There are countless platforms, services and apps that are either free or close to free, that allow you to set up shop. Technology also gives us leverage and expands our reach. In How To Make Wealth, Paul Graham describes the impact of technology:
What is technology? […] It is the proverbial fishing rod, rather than the fish. That's the difference between a startup and a restaurant or a barber shop. You fry eggs or cut hair one customer at a time. Whereas if you solve a technical problem that a lot of people care about, you help everyone who uses your solution. That's leverage.
You can create a website for your online store with a couple of clicks. You can set up a newsletter for people to follow your writing. You can record a podcast for your listeners. You can upload a music video for your subscribers on Youtube. You can create short, punchy content for your followers on TikTok and Instagram. You can start an online course on Udemy. You can create software without serious coding knowledge by using no-code tools like Bubble. You can ship your software or app on marketplaces like Gumroad or AppSumo. The list goes on and the opportunities are endless.
We help creators quit their job.
— Gumroad (@gumroad) September 28, 2020
There are many creators who have done just that. They have claimed a little piece of the internet for themselves and captured most of the value of their output instead of trading it for a salary.
Take Kyla Scanlon. She is one of the most successful financial influencers (“finfluencers”) on TikTok and Twitter. What is she good at? Producing great content and hilarious(!) videos for her followers to understand the workings of the economy and the world of finance. She unpacks meaty issues like the debate surrounding the US debt ceiling and the current issues with global supply chains in a funny, relatable way.
Ana Fabrega, edupreneur and Chief Evangelist at an Elon Musk affiliated school called Synthesis, is another great example. She has gone from teacher to successful education entrepreneur by using the leverage of the internet. Through a combination of writing, podcasts and youtube videos she has gone from 600 to 60,000 followers on Twitter in a couple of years.
As Kyla, Ana and many other creators have proven, making a living online has never been more achievable. And this is only the start. As technology becomes more accessible and the world becomes more decentralized there will be even more options to become independent.
The Playbook
What if Naval’s vision could be a reality for more of us? What if more people could taste the fruits of the creator economy? I have some fears about crossing over, but I’m drawn to the potential.
What will I need to jump over to this scary, yet exciting new world?
The Personal Monopoly: first I need to figure out what I’ll offer. What is my unique intersection of skills, interests, and personality traits2? I know how to price insurance products and loyalty programs. I’m also writing online and building an audience. Maybe I can create a tool to help people price interesting things, for example what to charge for food delivery services or airline tickets or a subscription to a monthly coffee pod service. I have some limited coding experience. With the current no-code tools I could develop a prototype pricing tool.
The Challenge: next I’ll need to sell this product online. It might sound intimidating, but the bar isn’t very high. Jack Butcher, the creator behind Visualize Value, has a very actionable goal: Make 1$ on the internet. I’m not a sales guru, but I can figure out how to use a platform like Gumroad to ship this pricing tool and use Twitter to feed an audience towards my page.
A tiny goal that will change your life:
Make $1 on the internet. pic.twitter.com/wF6gz1x5WV— jack butcher (@jackbutcher) October 5, 2020
Once I have earned a dollar on the internet, I need to plan how to jump over from part time to full time creator. There are two approaches:
Wait for the inflection point: Start my side project and grow it to a point where I don’t need the stability of my salary anymore.
Go all in: Make the project my main hustle before the inflection point.
On route one the side hustle becomes the main hustle when the income from your creative project starts matching your paycheck. This is the point at which you can go solo. This route appeals to me because I can try things on the side while my salary provides some stability. Tony Dinh, software developer and BlackMagic.so founder, followed this route to go solo.
You don't have to quit your job to start working on your side business.
Just do it on your own time first, only quit when you find enough confidence to do so.— Tony Dinh 🎯 (@tdinh_me) September 25, 2021
The second route sounds scarier, but there is a way to re-frame the problem by considering the concept of runway.
One thing most ppl don't realize about starting a small biz:
Say you have $16k and need $2k/mo to live on. That's 8mo runway.
Say that after 3mo, biz makes $1k/mo. Not sustainable yet, but now you have 10mo runway! ((16-2*3)/(2-1)=10)
Not-enough revenue is still real money 🤑— Malcolm Ocean (@Malcolm_Ocean) June 8, 2020
The all-in route requires you to put some savings aside. Do the math and figure out how much time you can buy for your creative project. If you have enough conviction and runway, route two makes sense. You will harness all your attention on your project giving it a higher chance of success.
Is this only a utopia?
Is Naval’s vision of the world only a fairytale or does it represent a viable, meaningful future? Is this only a variation of A Brave New World, where instead of being fed pills to remove pain, all our toil is removed by robots doing everything? Or is the creator economy a reality we should strive for?
We may not see his prediction come to fruition during our lifetime, but his idea (or thought experiment) is definitely valid. With the constant advance of education, science and technology, more of our menial tasks will become automated, freeing up time for creative pursuits, which give meaning.
In the meantime, the hybrid between institutional jobs and creator jobs will continue, with an ever-growing shift towards creative pursuits as technology becomes more democratized. As Jack Butcher jokingly predicts for the near term:
The year is 2030, the only two professions are artist and Amazon employee
— jack butcher (@jackbutcher) July 6, 2021
Certain elements of the traditional economy are still valuable and I am interested to see how these are incorporated in a creator environment.
Traditional roles provide economic stability and certainty. Currently the creator economy represents an element of risk, which makes it scary for most people, including me, to jump over.
The traditional economy also provides structure and a breeding ground to learn from industry experts and hone your craft. Ana Fabrega has become an expert in education, but she first had to be a teacher for six years to understand the ins and outs of the education system before suggesting solutions to fix it.
To flip it the other way, I wonder how traditional employers and institutions will stay relevant in this changing environment and adapt to retain and motivate their best talent. Some companies are already embracing 4-day work weeks. Many offer scholarships and funding with the caveat to work it back. The organizations that will survive in this changing world will allow employees to:
Pursue side projects to express their creative needs, and
Own part of their creative outputs. Instead of running hackathons where the winners win an iPad, the winners might win a stake in the company in future.
Nevertheless, the trend is clear and exciting. I’m still figuring out how to overcome my fears, but I’m curious enough to take a step in this direction. Hopefully we all become part of the creator economy sooner rather than later.
I’ll leave you with this. Do What You Can’t by Casey Neistat and Max Joseph.
Thanks to Jess Schanz, Nic Rosslee, Chris Wong, Bryan Landers, Aakash Gupta, Erik Newhard and Paolo Belcastro for reading drafts of this essay.
Notes: