January 8, 2021
I know what you're thinking, but no, the $1M creator of 2020 wasn't me. However, when I reach that milestone, I'll do a write up on how I achieved it. But before we dive into how one creator made $1M in 2020 and how creators can leverage a similar strategy, we have a few other topics on the agenda.
We dive into why content is king and how it can be a MOAT, cover Instagram's direct play to retain creators, share a great resource for getting caught up on the creator economy, and highlight the underutilize opportunity of monetization for creators.
Why Content Is King
“Content is where I expect much of the real money will be made on the Internet, just as it was in broadcasting.”
While the changes to data privacy and tracking in the advertising industry have yet to be seen, one thing can be said, content is king. The creator economy's growth can be directly linked to the number of platforms that have given rise for individuals to create content and monetize their passions and skills. The downside is that when it comes to building a MOAT (every startup bro's favorite word), and truth be told, content isn't the best one. Creating quality content is not only time consuming, but it's difficult to maintain the pace and consistency needed before you see results. For example, Mr. Beast created volumes of content daily for years before he built his empire. Most creators fail to reach this point because they don't contain the energy/stamina to keep pace or they don't have the financial security to justify the time and effort.
Fortnite Creator Is Buying a Dying Mall to Develop New Headquarters
Retail isn't dead but the old post-COVID view of retail most certainly is. Web of 2PM's prolific work on Commerce dives deeper into how malls are changing. Malls are now becoming fulfillment centers of behemoths such as Amazon and Walmart, and locations for tech-enabled fitness brands to host in-person events for their loyal and mostly online customer base. The other side is the growing number of mall's being repurposed for the use of eSport championship events. The old days of malls are over, and we see this with the creator of Fortnite's recent purchase.
Source: WSJ (paywalled)
How a TikTok joke led to Ratatouliue The Broadway Musical
A few weeks ago I covered the TikTok viral joke that led to the creation of Ratatouliue the musical. Well, the musical premiered and featured prominent Broadway stars and actors such as Wayne Brady. Whether you're a fan of musicals or not (I am not), the fact that a group of social media users are able to conceptualize and help validate the opportunity for a professional rendition of Ratatouliue is unmatched.
How Mr. Beast Opened 300 Restaurants Overnight
The power of being a prolific creator with a large and engaged audience is that you're able to bring your wildest dreams to fruition. Mr. Beast achieved that a few weeks ago when he opened 300 restaurants overnight. Initially thought to be Ghost Kitchens, it turns out that Mr. Beast didn't take the drop-shipping food route and actually opened 300 restaurants overnight. In this Creator Economics video, Blake of Ludlow Ventures and Mr. Beast's manager share the behind the scenes on how Mr. Beast Burger was created.
This year will be the first year we see a billion-dollar creator and right now it's between Mr. Beast and David Dorbik.
Source: Creator Economics
Instagrams Creator Retention Play
I feel like I've been covering Instagram and Facebook non-stop these past few weeks; however, they continue to prove my point that the platforms that prioritize creators will win. This comes into play most recently as the platform has started to reach out to certain creators and divulge tips and tricks on how to best go viral and maximize the reach of their content. This is a similar tactic that TikTok leverages with their top creators.
Source: Business Insider
Hopin buys StreamYard for $250M
Livestreaming commerce is extremely popular in China with the industry already being worth $60 billion annually. U.S. startups are taking notice as more and more platforms begin to introduce live streaming or acquire live streaming companies. The most recent one being Hopin's acquisition of StreamYard. Hopin has grown from 0-$20MARR in nine months and the acquisition of StreamYard is meant to diversify their product offerings.
The Creator Economy is still very much in the early days and for those looking to familiarize themselves with space, Ryan Gum took the liberty to compile a list of some of the best works from across the industry. Simply dubbed "The Creator Economy Reading List", this is a must-read thread.
For creators, the most popular article of the bunch revolves around monetization (which can be found here). Monetization is the single biggest pain point for creators and usually the blocker from allowing them to focus full-time on creating.
Access the list here:
The Creator Economy Reading List
The Creator Monetization Portfolio
I've had 10 requests in the last week on how to approach monetization for creators. Most are looking for one-off recommendations on what they need to do but the answer is more nuanced than that. To help creators understand, I've highlighted a portfolio approach similar to entrepreneurs (prior to discovering the below thread). Most creators should not rely on one source of income whether that be a product, service, or branded shoutouts/advertising. Instead, they should utilize a portfolio approach that allows them to not only grow their revenue, but protect themselves if one income stream fails.
Here's how it works:
10% on promotion/affiliate: this percentage of your revenue should come from direct promotions of products you would actually use, do use or support. The reason being is that when you promote products that are related to your target audience, you can use those sponsored posts or ads to get in front of the brand's audience as well. Say you run a dog blog that has 100k active followers and a brand reaches out to you for a branded partnership/promotion of their product. When you're negotiating terms for the deal, negotiate that they will share your sponsored post with their audience.
This achieves a couple of things:
1. you get paid for the brand deals
2. you get exposure to a new audience that will potentially follow or subscribe to your content. This compounds over time and results in better brand deals and a larger audience.
20% on Paid Communities/Newsletters: paid communities and newsletters have gotten a lot of attention through platforms such as Substack and Patreon and through the success of creators such as Ben Thompson of Stratechery,Web of 2PM, Dru of Trends, Lenny's growth newsletter, and Anthony Pompalino's Pomp Letter. While paid newsletters and communities can generate a significant amount of revenue with a smaller amount of customers, it's a difficult way to monetize for the majority of creators. The reason being is that the minute your content becomes pay to consume, you're decreasing the reach of some of your best work. Additionally, you aren't giving the leniency of taking breaks from creating content which leads to content burnout.
In terms of communities, paid communities require outside resources such as community managers and can't become too large. Once communities become too large, individuals feel lost in a sea of others making them not want to partake or engage in the community. This isn't the case for all creators but it should be noted the paid community and paid newsletter space doesn't work for everyone.
30% on digital products: digital products can be anything from a second brain, a database of resources, printables, or a template for how you create your content. I place great importance on digital products because digital products have virtually 0 costs of goods sold. Unlike physical products which require shipping, inventory management etc, digital products can be highly profitable. Companies such as Big Life Journal do millions alone from PDF printables.
15% on physical products: physical products are relatively straight forward. Platforms such as Fanjoy and Printful have enabled creators to create physical products without worrying about inventory and other barriers to entry. The challenge with physical products is that COGS eats into margins; however, this doesn't discredit the opportunity for physical products. Physical products are a very large opportunity for creators but it doesn't lie with dropshipping and poor quality products. It requires investment in inventory, quality materials, and supply chain management. The DTC brands of the future will be built by creators or the distribution network of creators.
25% on courses: courses both self-paced and cohort paced are growing at a rapid rate and are an increasingly great way for creators to monetize. Similar to digital products, the COGS for self-paced courses is virtually 0. While cohort paced courses require a time investment, it also creates the opportunity for creators to charge more money. It's not shocking to see a cohort-based course priced at $10k+ with people willing to pay that. However, the course route requires having knowledge or skills that people are willing to pay for. Naturally, you can pack up anything into a course; however, you can't always justify a high ticket barrier to entry.
With the rise of cohort-based courses and individual course creators, we're seeing a shift in education/continued education. Rather than solely rent out your time, more and more creators are creating content and digital products to monetize their personal systems and learnings. In Eliot's essay, he highlights the rise of 2nd Brain Marketplaces and how curating content can be profitable.
Source: Eliot of SuperConnected
How one creator made $1M in 2020
As we rapidly approach the first billion-dollar creator, Ryan Gum comes back with another amazing thread on how popular YouTuber Ali Abdaal generated $1M in 2020 leveraging multiple revenue streams.
source: Ryan Gum
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