Business Growth in the Creator Economy: Layering Innovations to Stay Ahead

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Sep 28, 2023
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Business Growth in the Creator Economy: Layering Innovations to Stay Ahead
Introduction:
In today's rapidly evolving business landscape, CEOs face the challenge of sustaining growth and outpacing the inevitable slowdown that comes with maturity. This phenomenon, known as "gravity," affects even the most promising companies. However, by implementing a strategy of layering new innovations on top of their core business, CEOs can accelerate growth and change the long-term trajectory of their organization. This article explores the concept of layering in the context of business growth, drawing insights from successful companies like eBay, PayPal, OpenTable, Apple, and Amazon. Additionally, it delves into the emerging influence of big tech in the creator economy and how their efforts are shaping the future of this industry.
Layering Innovations: Adding Depth to the Core Business
The concept of layering innovations involves introducing new, complementary businesses or initiatives on top of the core business. By doing so, companies can leverage their existing assets and expand their revenue streams. eBay, for example, introduced the "buy-it-now" feature alongside its traditional auction format. This innovation attracted new users and listings, becoming a significant driver of growth. Similarly, PayPal expanded internationally, improved its merchant services, and ventured into offering credit, all of which contributed to its rapid growth. OpenTable introduced mobile applications, expanded internationally, and developed yield generation products, further enhancing its position in the market. Apple's success can be attributed to the introduction of new layers such as the iPod, iTunes, iPhone, and iPad, which built upon its core business of computers. Amazon, too, has diversified its offerings with layers like Prime, digital goods, Amazon Web Services, and Kindle devices.
The Power Shift in the Creator Economy
In recent years, big tech companies have recognized the growing influence and value of content creators in the digital landscape. Influencers, who generate high-traffic content on platforms like Facebook and YouTube, have expressed frustration over the minimal rewards they receive compared to the platforms themselves. As a result, big tech has begun to develop features and monetization options to retain and incentivize creators. Facebook, for instance, allows users to tip creators through its Stars system. The company also plans to introduce paid access to Live Audio Rooms and establish an Audio Creator Fund. Amazon, through its Amazon Live Creator app and Twitch, enables influencers to earn commissions through livestream sales. Livestream shopping has proven to be a lucrative avenue for companies, as seen with Taobao Live's success during China's Singles' Day. Google-owned YouTube, with its massive user base and extensive reach, entices creators with the promise of financial success through ad revenue.
The Controversy Surrounding Platform Fees
While big tech's efforts in the creator economy are commendable, there is a growing concern surrounding platform fees. Apple, for instance, charges a hefty 30% fee on in-app purchases and subscriptions. This high percentage has been criticized for hindering the growth of the creator economy. Some argue that reducing the fee to a more reasonable percentage, like 3%, could significantly boost the industry's size and potential. Platforms like Stripe, which only take a 3% cut from retailers, serve as examples of more favorable fee structures. Nevertheless, platform fees remain a contentious issue that needs to be addressed to foster the growth of the creator economy.
Actionable Advice for CEOs:
- 1. Embrace innovation and continuously explore new initiatives that complement your core business. Look beyond optimization and consider the potential leverage of adding layers to your organization.
- 2. Invest in product innovation and create a culture that supports and rewards it. The best innovations enhance your core business and capitalize on your most valuable assets.
- 3. Stay ahead of the evolving landscape by proactively delivering new innovations today that will have a significant impact on the long-term growth of your business.
Conclusion:
As the creator economy gains momentum, big tech companies are making strategic moves to retain users and empower content creators. By implementing features like tipping systems, paid access, and livestream sales, these companies aim to capture a larger share of the creator economy's estimated $104 billion market. However, the success of the creator economy ultimately lies in the hands of the creators themselves. As they seek platform-agnosticism and independence, it is essential for CEOs to recognize the value of nurturing and incentivizing creators while providing them with opportunities to thrive. By embracing innovation, layering new initiatives, and cultivating a culture of continuous growth, CEOs can navigate the challenges of business maturity and shape the future of their industries.
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