The end of Influencer Parties: How Creator Economy Companies Can Prosper in Tough Times

In the last 2 years, the creator economy space “went viral”.?

Funding in startups skyrocketed, raising more than $6B from Q1 2021 to Q1 2022 in the US alone. And it’s not just the number of investments but also the deal sizes.?

Spotter raised $454.7M in Series C and $200M in Series D, Kajabi raised $550M, Clubhouse and OpenSea raised $100M, etc. All in the same time period.?

And this was somewhat expected. Whenever money is cheap and available, people (VCs) tend to take more risks than usual. The creator economy space provided just that. Insane numbers for the companies that could reach scale as millions of people entered the space.?

We all stood there and watched as one link-in-bio after another wanted to be the next Linktree , Patreon , or OnlyFans . I know people that raised millions with an app and 10 creator signups. If you can get to 100 or 1000 you could have raised an A round then and there.?

It was all about user growth. That’s what VCs cared about, at least until our Gs showed up, Putin and J Powell.

Within what felt like a week, VCs went from “Go ahead, spend millions on hosting influencer parties and fancy dinners” to “Oh, all of that doesn’t matter you should be revenue-focused”.?Or ever since YC’s, “default alive”.

You’d think the founders are in charge….

How the landscape has changed

Now, companies are switching their focus from growth to monetization i.e. generating revenue.?

And who generates revenue? Creators who actually make money.?

Companies tried everything to get their hands on creators who monetize. They made creator studios, houses, and even produced shows. However, that didn’t lead to any meaningful growth.?

In fact, I spoke with a few founders and they said that it actually backfired. The extreme spoiling of creators wasn’t accompanied by growth in the company's bottom line which is, of course, revenue.?

And a lot of them pivoted. Which is a good thing. Finding your focus and where you can provide value is what companies should be built on. But the main question that now needs to be resolved is: How do I find the niche creators I care about? And is the market even that big?

The hard part: How do you find creators who monetize?

While they’re mainly on social media platforms like Instagram, YouTube, and Tiktok, many creators who monetize use off-platform solutions to generate revenue. They don’t rely solely on social media for their income.?

And we all know by now that a big social media following doesn’t always equate to revenue.?

Because of this, creators got creative *pun intended* with how they monetize. They turned to off-platform solutions that allow them to monetize through what they do best - courses, merch, hosting events, digital products, subscriptions/memberships, 1:1 coaching, etc.?

They even started building businesses around their content.?

Just take a look at what MrBeast did with Beast Burgers. His restaurant opening is the biggest one in history. Logan Paul & KSI surpassed Gatorade and Vitamin Water with their Prime drink, and are selling out at Walmart stores all over America.?

Because our main goal is helping creator economy companies scale, we turned our focus onto creator platforms. This is of course very much in line with what we want to be as a company, and this is pretty much the time we’ve been waiting for.

So where are creators monetizing??

Well, on:

• OnlyFans
• Patreon
• Udemy
• Twitch
• Shopify
• Linktree
• Koji

And how?

Well, they:

• Sell physical or digital products
• Offer freelance services?
• Use affiliate apps like LTK or MagicLinks
• Have newsletters
• Online Coaching
• Custom drawings
• and a TON more things.

In fact, we have a full report for many platforms creators use to monetize. You can check it out here.

The even harder part: How do you find creators who aren’t monetizing yet but have the potential to do so?

These creators have the creativity and an audience on social media but aren’t monetizing yet. Most of the time it’s because they don’t know how to.?

The way you would approach these creators is different. The sales cycle is longer because they need to be further educated on the topic of monetization and how your product can help them achieve that. They also need to give it a try themselves and learn how it works.?

Many companies I’ve talked to recently are interested in creators they call ‘hustlers’. (Funny that almost 100% of the companies use this exact word).

No one has a clear definition of what that type of creator is but most of them are interested in creators that are trying to make money.?

But Nikola, isn’t everyone interested in making money?

Well, yes but not everyone can do it.

The secret to finding the “hustlers” is twofold:?

1. Estimating the potential of their content
2. Understanding their potential as a person

For 1) there are a few parameters that might be telling:

• Engagement
• Audience growth
• Being focused on one main channel but having distribution to more
• Having unique content (different for every niche)?
• Post frequency

As for 2), that’s very difficult. How motivated are they? Are they responsive to email? Would they do a more challenging onboarding process in order to explore something? Would they jump on a call to learn more?

So yes, it’s hard but it will be worth it if you can crack the code. So please be willing to experiment. If it was an easy problem, everyone would have solved it by now.

My advice to companies in the creator economy

To sum up this short article, my advice to companies in the creator space is to target these two groups of creators.

But also, please, give creators more time and act as a hand-holder throughout the sales cycle, especially to those who aren’t monetizing yet but are actively trying to.?

If you believe that your product can truly help them achieve their goals, be there for them.

Share educational content, invite them to webinars, send them resources and even have 1:1 chats if necessary.?

For both creator groups, the point is to prove to them that you are the brand that can help them go to the next level.

Now good luck in these tough times!