We’re excited to share our insights on the creator economy via a previously confidential recording of a presentation from our September 2021 LP Summit. Carlos Pereira and Sebastian Park are joined by YouTube’s Global Head of Gaming, Ryan Wyatt, to discuss the “2nd Renaissance”.
You can download the full presentation at the bottom of this page.
We believe a new generation of tools and tech-focused on creator monetization and media distribution is setting off an explosion of opportunities for individuals to build their own personal brands and ventures. This shift is redefining the professional goals and information diet of new generations.
The positive feedback loop between monetization, tech, and culture is leading to a 2nd Renaissance – an explosion of creativity and opportunity for solopreneurs across various forms of media
When it comes to influencer monetization, we believe we’re at a 3rd market stage where digital media and goods are making monetization more platform-agnostic, which in turn leads to making money being less scale-dependent. Software is eating the creator world
- 1st Phase: Market was very B2B centric. In general, for creators to be monetized on platforms such as YouTube, they needed a lot of scale – in part, because the unit economics of advertising are very volume-dependent. Being able to live as a creator was an opportunity limited to very few
- 2nd Phase: Creators began building out their own D2C commerce funnel, with early examples including Kylie Cosmetics, and more recently Chamberlain Coffee (Emma Chamberlain) and Charlie D’Amelio with Ring Light. Revenue streams diversified beyond advertising, enabling people to dedicate themselves to “creator jobs” even if they were only focused on or known in a smaller niche. However, D2C commerce often skewed physical, which has higher challenges around distribution and margin structure
- 3rd Phase: Rise of dedicated monetization platforms (e.g., Patreon); creator fintech products (e.g., XPO); robust digital economy that allow creators to sell high-margin, low-friction goods into. Startup costs for solo-preneurs are down, while unit-economics are up – possible to achieve a living wage with a much more concentrated audience
The tech, tools & platforms that are powering up the 2nd Renaissance are the product of a thriving investor market, with significant funding for creator economy businesses. Creator Economy businesses are projected to raise close to $5B in 2021
This funding has gone through a variety of segments in the market, ranging from:
- Splash, which enables millions of users to make and share music in Roblox
- Infinite Canvas, which acquires and enhances IP developed by creators is User Generated Content gaming platforms
- OpenSea, which has crossed over $10B in all-time volume and has catalyzed a significant TAM expansion for digital artists
Culture is shifting, and being a “creator” (in all of its definitions) is an increasingly desired career, especially across younger generations in the U.S., more kids want to be YouTuber than Astronauts! This boom in the supply of high-quality minds into the space, in turn, brings on more success… and an increase in the supply of great media we consume from individuals instead of large companies – have you wondered how much of your information diet comes from creators, from your favorite podcast to how you learned to bake that cake?
We believe these trends are going to continue for a long time and are watching (and investing!) in several themes in the space.
