Creator Economy 'Short Report' - The Creator Support Organizations - Part 2/2
Written in partnership with the French Student VC firm G. Ventures
In the first part of the Creator Economy ‘Short Report’ about the Creator Support Organizations, we have reviewed the why these creators support organizations are necessary.
Now, let's go deeper in our review 😎.
Let’s get a look at these solutions
As previously said, like any entrepreneur, a content creator needs two kind of supports to develop his/her business: money and help!
Let's speak about help!
This "help" is basically service-oriented non-financial support. The creator is a “solopreneur” by design, so he will need support to accelerate his/her business. It could be mentorship, career management, masterclasses, workshops, P2P learning, peer community, or free perks (creator-centric tools, free devices ...). So, we have dedicated companies or in-house offers from companies that are wanting to unlock the growth possibilities of the creators with this support.
🟪 Digital accelerators and acceleration programs
The accelerators and acceleration programs from big tech companies regroup all these assets in an articulated system, that creators could obtain by applying to these programs. Like any regular acceleration program, there are requirements and after passing through that, the creator ends this program with not only followers, but customers and a sustainable business and community.
👉 Let's see the LinkedIn Creator Acceleration Program!
The LinkedIn acceleration offers, during a 10-weeks program, financial help with a grant per participant, and non-financial support such as coaching from experts, creator-to-creator networking opportunities or possibility to be featured across LinkedIn channels. Obviously, you need to be a LinkedIn copywriter with a good traction coming from your followers to have access to the program. It is the classic digital acceleration program: support to help their own creators and pushing them with money and coaching.
👀 Other listed examples?
🟪 Brick-and-mortar accelerators and acceleration programs
The brick-and-mortar accelerators and acceleration programs are, as you could guess, the kind of offer but with an highly valuable asset: the possibility to meet and discuss with the creator next to you, which understands your situation, your challenges and with whom you could share experiences. We all know the value of meeting people in the real world, and especially when it comes to business.
👉 Launch House is a good example of it.
It is the perfect example of a creator accelerator. It is a first physical accelerator for creators. Launch House is not just offering digital masterclasses for creators: the accelerator offers a workspace where creators could connect and learn from each other, while learning from the best in sessions, events or retreats. Furthermore, like any startup accelerator, the creators, organized through limited time-batches have access to office hours, discussions with very talented founders or investors, and perks (we‘ll have the “Creator Economy touch”, such as member-only NFT drops).
👀 Other listed examples?
🟪 Content Studios
How to support someone? You could either offer support in a recurring way, or in a one-off way. Acceleration is all about staying in motion, the content studios is about offering instant support. The content studios are Instagram-friendly areas. These studios are the fruit of collaboration between a brand and an design agency, and coming from a company's initiative. In these studios, creators could use the store to shoot content for social media and websites. It gives creators a place to work, but it also gives brands top-notch content they can then leverage on their social feeds. For the brand, it is the opportunity to push their clients to live the creator experience in real life and buy products in the process.
👉 Let's check out one of the best content studios: Nike Hovercraft Studio.
The famous sport brand and the retail experience agency Hovercraft Studio has offered a new place where creators and clients could test an immersive AR experience, where they will go to the “Basecamp” and discover the wildlife. Through this studio, Nike had the opportunity to promote their new collections and the creators had new content to post!
👀 Other examples?
🟪 Talent agencies
If you have seen 10 pour cent or Entourage, you have a quick idea of what is the purpose of these organisations. The talent agencies care about the career development of their protégés. In the case of creators, they will help them find brands partnerships and will give them career advisory. In exchange of this work, they will take 10% of the revenues of the creator. I think it is very interesting to put them in this analysis, because the talent agencies clearly show that we have to consider content creators like “real” artists, on the same level of TV series actors, musicians, or screenwriters. We could think that the talent agencies broke into this world through their unscripted TV departments (including sports, reality TV, documentary TV or improvised situation comedy) by handling careers of reality TV personalities, bridging the gap between the traditional entertainment world and the Creator Economy. As the digital world has shaken up the well-established talent business agencies, the big talent agencies have to diversify to survive and the Creator Economy was the most relevant target. In the meantime, new talent agencies directly popped up in the Creator Economy and only handles content creators or pro gamers.
👉 CAA (Creative Artists Agency) is a great exemple of them.
One of the “Big 4” US talent agencies (with UTA, ICM -soon part of CAA?- and WME) invests massively in creators and in the Creator Economy. The agency have developed their own VC branch (Connect Ventures), investing in Creator Economy startups, and they represent famous creators like top gaming creators (Ninja, Dr DisRespect, StoneMountain64), TikTokers (Boman Martinez-Reid) or even “different” creators (Lil Miquela, we’ll let you check... 😂). This agency is a juggernaut, established from decades. In the Hollywood space, they push the talent agent from a simple stakeholder to the entertainment industry, previously ruled by studios, to the position of new king of the game, by consolidating the majority of the talent in Hollywood (if you want to know more about the agency business, read *The Mailroom: Hollywood History from the Bottom Up* of David Rensin or The Gold Standard: Rules to Rule from Ari Gold; the first is more about the history of the industry, the second is satirical representation of the talent agent). This agency crafts the artist management: the creators were just the next target!
👀 Other examples?
🟪 Admin support programs
When we speak about admin support, we’re about all the tasks handled in a company by the SG&A teams. in these tasks, we‘ll find legal support. For this case, we’ll focus on the sole listed member of the space.
👉 We have found one admin support program: Substack Defender.
Substack has decided to go further in supporting their writers by providing them a legal support. In other words, they give to their independent writers pre-publication legal review of their individual stories and responses to cease-and-desist letters. According to Substack, certain writers could be victim of abuses of copyright laws or spurious defamation claims, and their engagement alongside their creators push the company to develop this services in order to help them what the writers are the best: write!
👀 Other examples?
If you have other relevant examples, happy to know them: send us an DM in LinkedIn or Twitter ;)
🟪 Creator support startups
These organizations are very interesting subjects because they are not programs and support structures, but real companies. They created unique business models, by working in partnership with and not just alongside creators, and decided to develop a packaged offer around a win-win vision. They present an offer that will bring additional value to the creator by either creating new lines of business around physical or digital products (Genflow or Freeland), or a whole platform that will supporting them creating content from the idea to the distribution (Creator+).
👉 Let’s talk about Freeland.
Freeland is born from a community of, we could say, indie hackers, who see the opportunity to help the content creators with their key asset: develop digital side businesses! So, they decided to work in partnership (very interesting, because they position themselves not as a service provider, offering to develop a product like any web agency, but as a business partner, aligned on the interests) with big creators to help them develop their new lines of business. It could a SaaS business, an application, or online course program. They handle the tech, and the creator handle the promotion, and they share the profit: everybody wins!
👀 Other examples?
What about the money 🤑?
Even if these benefits have great value to creators, nothing will replace the power of the money! Especially for creators which did not have access to classic equity financing like the startup world. In the same way, we have financial support structured like packaged products.
🟪 The Revenue-Based Financing solutions (RBF)
The Revenue-Based Financing is not a Creator Economy specialty. Lots of companies uses this kind of financial services, and these startups find success (Silvr in France is a great example). It is one of the main financing alternatives in the startup industry.
The concept is easy to understand: a company obtains an upfront cash (after a few due diligences from the RBF company) for its business in less than a week, without any equity dilution. The company could then use this extra cash to finance treasury and accelerate the growth. A few months later, the company will reimburse its fund provider by giving them a percentage of the monthly revenue plus a fees (6-9% of the upfront cash in average). Simple, effective, and the company quickly obtain cash!
This kind of operation is now available for the creators and is a huge milestone for them.
To obtain finance, a creator has four ways: self-financing, love money, bank loan and fundraising.
Self-financing is the basic 101, and does not supply big money in one shot.
Love money is depending on the personal network.
Bank loan: forget it, traditional banks does not consider creators as regular workers (and it is one of the biggest pain addressed right now, with a extensive offer of creator-focused digital banks at disposal for the content creators).
Fundraising is traditionally for regular companies and startups, not “solopreneurs”.
So, RBF solutions have begun to pop up as lot of creators began to show very serious and steady revenue streams, so that these companies could trust in the finance strength of these content creators.
For the creators, it is game changer for them: they want and know to develop their activity and monetize it, and they don’t have shares to give, so this option is the best. The two stakeholders are aligned, on the same page: help the creator to earn more money!
👉 Let’s speak about Spotter.
Spotter is one of these solutions. The solution purposes in 24 hours to give answer of the cash demand and offers to the creator, after the initial deal, to have access to more brand deals. We could see that the RBF solution is a creator acquisition channel for Spotter to attract the best ones (given that their high requirements to have a deal with them) for their partner brands. So, the company could earn money for the RBF deal and keep the creator all along and continue money alongside him with these brands deals. We don’t know the details of their agreements, but it seems that it is excellent deal for the creator and Spotter.
👀 Other examples?
🟪 The alternative investment solutions
Equity investment are traditionally the funding source of the limited companies, not individuals! It was unfair, given that a company could be the will of one person! The creator economy pushed people to share content and value on several types of format, why it the the purest one: money? The blockchain technology and the cryptocurrencies enables creators to share, like regular companies with stocks, value of its work through tokens, or “social tokens” to be precise. Their social tokens enable someone to share piece of their value earned with their “shareholders”. In return, the token holders have a right of inspection on the creator activity, and obviously a share of its “dividend”. Beyond the social token, the creator has the possibility to have a “capitalization table” of his/her fan community or his/her fellow creators.
👉 HumanIPO is a good example of it.
With this solution, the creator could create and issue his/her own token, to sell them to the community. Like in the traditional financial markets, it is win-win solution for all stakeholders: the creator will earn fresh money, the fans could make a profit in trading their tokens. It is basically the ultimate engagement of the fan with its favorite creator: engage on the long term and believe in his future growth.
👀 Other examples?
At last, the financial support could come from the organizations, through the creator funds.
What is a creator fund? A creator fund is a vehicle created by a organization to finance the creators. The goal here is to finance the people who will send them the user attention. Basically, the fund gives an allocation to the creator to finance all he needs to create more content and improve the quality of his production.
There are two types of creator funds.
🟪 The 'regular' Creator Funds
These creator funds offer money in traditional currencies or fiat, like dollars or euros. The creator obtains the funding and will create content on the social platforms.
👉 Let’s see YouTube Shorts.
Launched by YouTube, this $100M fund will be used to finance the creators, in exchange of Shorts. The selected creators of the Shorts Fund will have to meet standards on various factors, including the location of their viewers and the overall growth of Shorts. Their funding will be distributed each month from $100 to $10k to each creator.
👀 Other examples?
Spotify Greenroom (sadly closed the April 20... 😶)
🟪 The NFT Creator Funds
The NFT Creator Funds will offer financing in cryptocurrencies and support to creators to launch their own NFT series.
👉 Ripple Creator Fund is a good example of it.
This $250M fund is dedicated to support the creation and monetization of NFT series based on XRP Ledger (XRPL). How it works? Creators and brands will use this fund to create new NFT series, but also gives other stakeholders like the talent & management agencies to offer to their talents to opportunity to launch their own NFT series with support. In fact, when you launch your XRPL-based series with Ripple Creator Fund, you will have a full package of services to help you launch the NFT collection, including the technical support, the marketing and creative agency, and the marketplace to launch the NFT series.
👀 Other examples?
Just NFT Fund
So, let’s summarize all the initiatives!
Like you see, lots of initiatives was launched to help creators produce their best content, and it's just the beginning!
What we can say about the future of these Creator Support Organizations 🤔?
One interesting point is that in the future, the creators would have a whole staff to help them monetize their community.
We have a very interesting discussion with Corentin about the future of these organizations. After dozens of discussions with creators and lot of hours spent observing his market, he sees that we will see in the future three recurring stakeholders around the creator:
an agent/manager
a support organization helping to create or grow offline revenue streams
a support organization the online revenue lines
The first one is the agent or manager, in charge of the booking and contracts management of the creators with the brands and other entertainment companies. We have addressed the topic with Smile Conseil in France, or the juggernaut CAA in the US. All the creators need at a certain of time of their career someone who will have the skills and the time to handle the business development. And it is pretty obvious when we see the entertainment world: the singers, actors, screenwriters, musicians.. All of them have a agent or a manager, so that they could focus on mastering their art. It is the same for creators.
The second and third stakeholders, on the sides of the creators, are the organizations helping developing new lines of business, one for the online revenue stream (let’s say Freeland, focused on digital products & services co-built with creators) and the other for offline revenue streams (... and their counterpart, Genflow or A-Frame for example, helping creators their own lines of physical products, such as apparel or beauty products). This vision is very interesting because we could see the same in the entertainment world. In the hip hop business (read Trapital of Dan Runcie: yes it is free advertising 😅, but his content about hip hop business is one of highest quality we’ve ever seen 😎), rappers make their first money on music, then diversify on offline revenue streams (Beats by Dre, Cîroc, Vitaminwater by Glaceau for the most famous of them) and/or online revenue streams (Tidal, the music subscription service is the best example). We know what you could say: these examples could be exceptions given that the power of their respective spokespersons (basically rap moguls) but the vision is the same between entertainment personalities and creators: leverage on the content to develop new product or service lines.
Another interesting point will be the “proliferation” of the creator funds.
Like the corporate venture firms for the startup industry, creator funds are just the simple translation of companies wanting to leverage on creative organizations (even if they are one-people organizations) to develop their own business. At first, it was the social media companies which launched first the creator funds. It was obvious: they live thanks to user traffic, the creators boost user traffic, so let's invest in them to increase the boost.
Furthermore, the social media platforms have the money to put aside for a creator fund, and we did not speak about a lot of money: Pinterest, a billion-dollar company, put $500k in their first vehicle for its creator fund; Meta, the king of social media with $570B of valuation have created the biggest creator fund up to date and plans to invest $1B on the creators. $1B is huge but it is a small percentage compared of $32.8B of its last year revenues (3% to be exact), driven in good part thanks to these content creators. So, what we could see is that a good content creators needs a few thousands of dollars to develop a millions-views business, which is one of the biggest ROI, when we see the amount spent by companies in marketing and communication to generate such attention for their activities.
At last, we see companies outside the social media industry creating their own creator fund, as they understood the potential of financing their own champions. We have other big tech companies which created their own, such as Netflix and its Documentary Talent Fund, or creator economy startups, as CreatorPlus with its Flip the Script Short Film Fund.
We could think that the model of creator funds will multiply because they act as the training center in the professional sport industry: detect the best talents, the best creators and push them to create content through their platform and take the results in term of user traffic or fees on creator revenues.
A good hypothesis will be the consequence of the latter: the creator “Death Valley” will be shorter and shorter: only the nano-creators will be alone.
Yes, the expansion of creator support organizations offers enables more creators to have access to help to develop their business: at first, it was only the champions, already making thousands or millions of views who had access to organizations helping from reach further milestones, as they are already “bankable” for the company’s view to spend time, efforts, and money for them.
Furthermore, the brand partnership dynamics is very hard, because the financial deals arrives only when the creator succeed to emerge from the crowd, and be able to generate millions of views per post to earn real money from their activity with brands, and not just gifts and other kind of “perks”. So, the creators had to go through a “Death Valley” where they need to work hard, without cash compensation and a network to leverage to find their first brand collaborations, to really take off. That’s why the influencer marketing platforms like Upfluence in the US or Trendster in Egypt where created at first: help to reduce the “Death Valley” of the creators to help micro-influencers to find their first deals.
With these new players in creator support market, lot of creators will be able to have early access to tools to either develop faster and better the content, or the first checks to be 100% focus on their content creation!
That's is for today 🤗!
We hope that this long ride in the creator support organization industry was very helpful to better understand why these structures exists and why you'll see more of them in the future 😉!
We want to discover the Creator Economy with you 🤲 : see you in the next issue of Creator Economy ‘Short Reports’ discover another sub-vertical of the Creator Economy.
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Cheers 🍻
The G. Ventures and Passion & Creator team
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