The Creator Economy and the Role of Boards in Building Successful Companies

The Creator Economy and the Role of Boards in Building Successful Companies

Introduction:

The creator economy has rapidly grown over the past decade, with more than 50 million people worldwide identifying themselves as creators. This shift in consciousness towards finding fulfillment in work and being one's own boss has led to the rise of independent content creators, curators, and community builders. As creators gain power in the media ecosystem, they are moving their top fans off social networks, becoming founders, and diversifying their revenue streams. This article explores the various layers of the creator economy and the lessons that can be learned from the world of board governance in building successful companies.

Layer 1: Foundational Media Platforms:

The creator economy is built upon platforms such as YouTube, Instagram, iTunes, Spotify, Snapchat, Twitter, Medium, Twitch, and TikTok. These platforms provide creators with the opportunity to share their content and engage with their audience. However, it is important for creators to cross-promote and diversify their presence on different apps to minimize "platform risk" since these platforms may not always have the best interests of content contributors in mind.

Layer 2: Monetizing Influencer Reach:

Once creators have established a loyal audience, brands recognize the value of paying creators to advertise their products and services. Influencer marketing has become a rapidly growing sector, with the current market estimated to be around $8 billion and expected to reach $15 billion by 2022. However, creators need to be mindful of maintaining the trust they have built with their audience, as excessive paid posts can harm engagement and growth.

Layer 3: Creators as Businesses:

Creators who have developed dedicated fan communities can transform into full-fledged businesses with multiple revenue streams beyond ads. The latest trend in the creator economy is direct funding from fans. This "economy of recognition" allows creators to focus on creating niche content designed to attract their most dedicated fans, while platforms benefit from earning a cut of these direct transactions.

The Role of Boards in Building Successful Companies:

In the world of business, the role of boards is crucial in ensuring the success of companies. Lessons from board governance can be applied to the creator economy to help creators navigate the challenges they face. Here are three actionable advice for creators:

1. Focus on the Big Picture:

Creators, like board members, should be laser-focused on identifying the big questions and issues that will turn their content creation into a great opportunity. Avoid getting distracted by small minutiae and stay committed to the long-term vision.

2. Learn from Others:

As Charlie Munger suggests, learn vicariously from the experiences of others. Master the best practices that successful creators and businesses have already figured out. Don't try to dream it all up yourself; nobody is that smart.

3. Embrace Intellectual Honesty:

Creators should strive for genuine product-market fit before scaling their businesses. Boards hold up a mirror to management, assessing their intellectual honesty in evaluating product-market fit. Premature scaling is a common cause of startup failure, so it's essential to take the time to reach real product-market fit.

Conclusion:

The creator economy has revolutionized the way individuals can pursue their passions and build successful businesses. By understanding the different layers of the creator economy and incorporating lessons from board governance, creators can navigate the challenges they face and thrive in this rapidly evolving landscape. Focus on the big picture, learn from others, and embrace intellectual honesty to build a strong foundation for long-term success.