The total addressable market (TAM) for creators is much larger than almost anyone believes. Two forces are hyper-charging the market opportunities for these creators. The first is that more of the demand side of the economy -- i.e. experiences and consumption -- is being mediated by aggregating platforms. The second is that more of the supply side of our economy is being platformized and transformed into infrastructure as a service. Those with audience and distribution on the demand side can now utilize the new IAAS to launch more and bigger businesses to capture greater value. These phenomena are not new; nor is the idea of those with audience building empires based on their popularity. But the size, scale and speed of what is possible is new. Just as most of us have underestimated the TAM for each of these underlying forces, we continue to underestimate what can be accomplished at the intersection of both.
On the demand side, I’ve written before about how our content consumption platforms are aggregating behavior in a more rapid fashion than ever before and at a far greater scale. Specifically, I focused on the power-law dynamics of digital distribution, and how it is leading to bigger fads at faster paces. This is true not just at the content level, but at the creator level as well. The biggest creators have reached massive scale, orders of magnitude bigger than the average creator. At the same time, the speed at which top creators can reach such scale is shortening dramatically. It took Charlie just 1.5 years to be the first to reach 100mm followers on TikTok, just 4 years or so after it launched, and it took Selena Gomez only 3 years to be the first to reach 100mm on Insta, about 6 years from when it launched. Meanwhile, it took Shakira about 7 years to be the first to reach the milestone on Facebook, 10 years post Facebook’s launch, and it took Katy Perry 8 years to reach 100mm on Twitter or 11 years post the services’ launch.
We are seeing demand aggregation platforms consolidate more and more of our consumption in other categories as well, creating many of the same dynamics in other verticals. Netflix is aggregating high-end video consumption. Spotify and Apple Music are aggregating music and podcasting listening. Food delivery and ordering platforms are increasingly growing their share of the restaurant business and grocery delivery is eating more of the overall grocery business. Meanwhile, ecommerce aggregators and marketplaces continue to take share in virtually every vertical commerce product category. Thanks to the rise of the multi-platform creator, many of the biggest creators are also now able to build and shift audiences from platform to platform, supercharging them as forces beyond just pure content across the demand landscape. As such, the sphere of creator influence is much larger than ever before.
Now it’s well understood that this supercharging of creators is continuing to drive more value to them. But what is less discussed is how this phenomenon is also allowing creators to drive not just media markets but capital markets at increasing scale. Our distribution platforms made social capital legible and in doing so, made it more valuable than ever. We used to know who was the most popular kid in school. Now we know who is the most popular kid in the world. And like most metrics, once visible they carry more weight. Moreover, now that it’s legible, in a world of cheap capital and low interest rates, social capital -- as a scarcer and rarer asset -- has also become relatively more valuable. To some extent, Tesla is less a car company than it is a vehicle to invest in Elon’s influence and audience. VCs focus more on thought leadership than ever before, because their access to capital is less valuable than their social capital. Dave Portnoy can become one of the biggest names in finance, raise tens of millions for businesses hurt by the pandemic and move stock prices without having billions under management or a long investing track record let alone ever running a fund or bank or brokerage because he has an audience. Of course, it isn’t new for capital to chase audiences and attention. But, influencers and creators and others with an audience can now drive capital at greater scale and at a faster pace than ever before. Just look at how many VCs, funds and investors are explicitly chasing creator-led investments and other opportunities.
With attention and capital, the question becomes what and not if to build. On the supply side, more of our world is digitizing and being transformed into Infrastructure As A Service, and this is opening up and growing far more and larger markets for creators than ever before. It used to be that most sectors often required massive capital expenditures, domain expertise and significant supply chain and operations management. But the growth of platforms such as AWS and Shopify have removed many of these barriers to business building. It was not so long ago that the industry was buzzing about Kylie’s cosmetics business, built with almost no employees and valued at ~$1Bn. But merchandise and drop shipping is just the beginning. As we saw with Mr Beast’s launch of his restaurant chain, delivery platforms and ghost kitchens are opening up the restaurant business. The rise of UGC games such as Roblox and Minecraft is opening up the games industry, with influencers like Preston Arsement driving millions of dollars with minimal overhead. Even financial products and businesses are being platformized by the likes of AngelList and Stripe. Just look at the ability of your favorite financial influencer to raise a rolling fund.
Beyond the obvious though, the growth of all sorts of SaaS businesses, no-code products, marketplaces and other platform businesses are reducing the cost, ongoing overhead and time needed to launch and run all sorts of new businesses. It used to be that creators could only access these markets via endorsement and distribution deals. And in many cases these will still be the most profitable arrangements and mechanisms. But as optionality increases and creators have more ability to compete with or circumnavigate entrenched and integrated players, and as their scarce attention and social capital become more valuable relative to other forms of human and actual capital, their take rate will rise even if they pursue partnership. This trend will only continue as we further digitize and platformize the economy.
Interestingly, this entire phenomenon is also self-reinforcing. The nature of our fad culture is driving more value not just to those who blow up, but to those who can hold on to their 15 seconds of fame, a task made harder thanks to our information overload. As I wrote before, this is driving more urgency for those with an audience to fully take advantage of it right away and cement their positions. But it is also driving many to accept the increasingly transactional and faddish nature of our culture and focus on becoming repeat 1-hit wonders; not just to monetize but rather to extend their time in the sun. Building empires is therefore not just a monetization strategy but an audience growth and retention strategy, a flywheel that cycles back attention. Dropping merch isn’t just to make money but to grow your fanbase. Launching a restaurant doesn’t just drive up ARPU from your fans but makes new fans and deepens your relationship with existing community members.
Matthew Ball has written a lot about IP extension and worldbuilding as a means of both monetizing and deepening audience love. He’s even coined a term for those who manage this process, “worldbuilders.” And this term rightfully can and should increasingly be used for the best and biggest creators. In order to thrive, creators will need to not only be multi-platform, but multi-business and multi-market. They will need to manage their IP across channels, products and markets not just out of ambition but in order to survive and maintain their position.
Putting it all together, as the demand side of our economy gets further dominated by aggregators and the opportunities for those with an audience become more diverse and larger thanks to the growth of infrastructure platforms, those at the top will not just want to become but need to become worldbuilders and empire managers. In doing so, they will further drive the growth of the creator economy. Of course, the biggest winners will be the platforms that are driving these phenomena both on the demand and supply side. But don’t underestimate the size of the opportunity for those living at the nexus of these two trends. It’s still bigger than you think.