Indexing the Creator Economy | Hacker News Reader

Indexing the Creator Economy

stripe.com

40 pointsmooreds31 comments

One of the biggest problem I see with the creator economy is that most of the highest grossing products on any platform are get rich schemes. Real estate, credit repair (like the example quoted on Teachable), drop shipping tutorials etc are heavily marketed and sold as a way to get rich. I don't really like that kind of business being the poster child of the creator economy. I'd much rather it be artists making music or writers like Strachery.

Look carefully, you'll see that the secret to making it and getting rich in the creator economy is to sell the secret to getting rich and making it in the creator economy, which is itself the secret to getting rich and making it in the creator economy. It's all very ironic.

"Look carefully, ..."

Been that way for many years. It's almost like recursion.

The web has a dominant bias for itself. The users who engage with it the most promote themselves and their own views. It is not a true representation of all people because not all people engage with it on the same level or to the same degree.

This makes it all the more confusing that "9%" of the population can have such influence on the other 91.

https://nypost.com/2021/10/15/airplane-creator-slams-joy-kil...

Specially pervasive is "learn to grow your audience on Twitter like I did" teaching people how to grow an audience on Twitter

That, posting MRR progress 3 times a day is the new showing super cars to bait people into the game.

Selling tools during a gold rush is always a sound strategy.

Though there are some streamers getting rich through performance and sponsorships. At least if the Twitch leaks are to be believed. Some YouTubers are also earning upper middle-class incomes producing niche content. So I don't think it's all get rich schemes. Sadly that does still appear to be the easiest road.

While that's what's visible, I know people who have started real, non-scammy businesses in the 'creator economy'. Some of the highest profile e-shops are also real companies. Scams come and go, some people get middle-class rich, but the companies actually getting big are real, legit businesses. And there are lots of small-scale success stories in plenty of 'maker' industries.

Author of the linked blog post here. Understand the skepticism. But get rich schemes, credit repair, and real estate are all prohibited from using Stripe—they're against our terms of service (https://stripe.com/restricted-businesses#unfair-predatory-or...). Many of these businesses predictably see chargebacks from customers since their services don't pan out. We (and the credit card networks) carefully monitor for this activity and move these businesses off Stripe, and they're excluded from the data in blog post. We've also only analyzed legitimate businesses, and the Teachable example is one of them.

Get rich schemes have always had the tools to sell and market their stuff—snake oil and Nigerian princes have been around since the beginning of the internet. What's different about the past year (and what the big jump can be attributed to) is that creators have the tools now—from streaming services to newsletter platforms. More individuals are equipped to pursure their passions—selling their books, art, or podcasts—motivated by the largest audience that's ever been online, due to 2020's accelerated shift. As the post says, the category that was fastest growing over the past year was community—connecting real people with each other, surrounding the output of these creators.

While I’m sure there’s definitely a team handling the obvious cases, there are a lot of people who sell these schemes packaged as “training” or advice of some sort. And the number of titles in the self-help category is infinite, so it simply isn’t going to be possible to stop them.

If you take a look at some of the top grossers on Gumroad and Stripe independents (Tai Lopez comes to mind) they’re all selling an multimedia version of a self-help book. Maybe they work, maybe they don’t, but I have a strong distaste for the genre in general and don’t like that most of the success stories are people selling dreams.

The recent Twitch earnings leak showed that 95% of streamers made less than $1,000 this year. Median earnings were less than $100 for the year. A lot of these "creator economy" think pieces talk about people hitting the seven figure jackpot, but the reality is that unless that distribution changes dramatically, it's not going to be a viable source of income for the overwhelming majority of people. Middlemen and service providers OTOH will make a killing on the sheer scale.

But that 95% of streamers also like just put a couple of hours into it, no? Or just turn Twitch on while they're playing without actually doing anything. The question is, out of the ones trying to make a living as a creator what ratio succeed.

I did some napkin math when the Twitch leak happened and it’s something like 0.04% of people trying make a livable wage. If you count all the people active streaming it was 0.01%. Will look up the post and edit it in.

Edit: And I was off in remembering by quite a bit the figures are 0.008% and 0.002%. https://news.ycombinator.com/item?id=28771960

It's an important distinction to make, a lot of people stream just for fun and those are the ones I personally enjoy watching the most. The premise of the article and many others like it however is that this is supposed to be the future of creative work, and that somehow it's a way of making a living out of that.

Speaking of Twitch specifically, a lot of people are lured into streaming with the promise of earning money doing what they love. And a lot of them don't make it, despite streaming 8+ hour sessions most days of the week. The unfortunate reality is that success is not purely proportional to dedication, and it quickly leads to horrible problems like burnout and depression.

Exactly, it's pretty well documented at this point that labor put in is not an indicator of payment earned. Especially, when that labor is tethered to a heavily stratified economy with big biz at the top.

I do feel that this changes when people act outside platforms and companies. For example, a surfboard maker, putting in a ton of labor should see some return on the time invested, but it won't necessarily be in money earned.

Which brings up another point entirely. These pieces that used money earned as a metric for success are dated af. Thanks for the advice, dad.

Could we make a similar observation about mobile apps.

For example, how much do the "95%" of walled garden, mobile app developers make.

The discovery process for such apps is also interesting. Does the arrangment of apps into "Top 20", "Most popular", etc., type lists, as seen in Apple's AppStore, boost the success of the "5%" at the expense of the "95%" that become less likely to be discovered.

There is also an analogy to SERPs. Users are encouraged to consult only the "top result" on page one. This structure plays well with an ads sales business, where advertisers compete for a spot on the top of page one. Search results not in the top 5 are like the "95%", unlikely (and not intended) to be discovered.

To me, these "businesses" resemble a lottery in some respects. Winners are promoted but "99.9%" of players are not, and will never, be winners.

Granted, this is a subjective viewpoint I have had for a long time, and the necessary evidence to prove/disprove it is not made public, but the Twitch discovery seems to support the idea.

That's pretty much my thought as well. I find it really insidious to promote the idea that anyone can have success, by pointing out a few poster children who are by far an exception to the rule. Even more so when their success depends not on the strengths of their ideas or the work they've put in, but the connections they had or the benefits the platforms promoting them extract for themselves.

While I generally agree, what you said is more applicable to games. When you make tools, the long tail of the income distribution is thicker due to a large number of niches that are too small to to be interesting to large players with budgets for user aquisition

It's still possible to make a livable wage by publishing high-quality niche apps and investing in some ASO

Interesting:

-- Stripe reported "aggregate earnings" as $10B, so maybe $3B last year. Unclear what the platform skims and if that was included: I bet 30%, but let's go with 0% for this

-- Based on Twitch, those 680K earners is really 34,000 people getting most of it, so say average $88K per significant earner. But we know averages are misleading in celebrity-driven fields like music/sports/writing, so probably a few lottery winners getting rich while most supposedly "successful" earners are still getting below $88K, so maybe a median of say $30-50K for them

-- Put to scale, Amazon has 150K+ drivers, so 4-5X the number of 'creators'

So the bad news this article tries to hide is that the creator economy is much smaller and lower paying than folks are marketing. But the good news is what they say little about but appears in the chart: that's an awesome growth rate! If the 30K worldwide keeps doubling over 10 years, that turns into 30M people world wide! 0.4% of the world population is a real number!

Then again, I'm unsure how different the 'creator economy' companies ultimately are for most creators, sort of like a band not caring whether they're using an accountant vs turbotax. Maybe they provide some lift for some creators, but for the regular (non-celebrity) earners, unclear how much is the platform vs the creator.

Most people aren't aiming for the jackpot. I make less than that from the things I do, but it was enough to pursue a bunch of long-deferred hobbies to the point that I could close off or change the paths I had in mind for them, for years. Now that little bit can go toward becoming more since I was able to explore the full space of possibilities and get a better sense for what I wanted to do.

I was curious about the creator in the screenshot who earned $1 million on Teachable in 1 hour[1].

Interestingly, it looks like this creator is involved in the credit repair "industry" and runs some sort of "academy" teaching people how to start a credit repair business.

Forget the creator economy. It speaks volumes about the state of the economy.

[1] https://ampmacademy.com/

Identity laundering bot/avatar MLM networks will be fun.

Going on a tangent, one thing that surprises me is how much software has failed to take the place of humans as teachers.

I feel like the creator economy is going to be a rather short-lived event.

I don't imagine AI overlords will be appearing in the next century, but I do imagine primitive brains capable of simple tasks will appear and with it, replace whole swaths of the economy, including teaching positions.

I'm sure we have different definitions but I think software is taking the place of traditional teachers. You no longer need to have a teacher learn content then run a short course at an adult education centre, some big name teacher can record their content once and distribute it across the internet forever.

It's not the same as AI producing content but people like people so I'm not surprised by that.

> people like people

Yes, and it's so profitable that someone will inevitably try to use AI-animated "people" to harvest market demand for organic people. Similar to cloning popular software or movies with lower-rent talent. Andrew Niccol, creator of Truman Show, Lord of War, Gattaca and Lord of War, made a film called Simone about a computer-generated fashion/celebrity avatar. Some of the dynamics in that film have already been seen on social media and will likely expand in future metaverses.

Correction: duplicate movie reference above should have been Anon, available on Netflix.

Is VR a dead fad? Why is it always about flesh and blood humans?

Facebook has the data to explain.

> imagine AI overlords will be appearing in the next century

If early AI overlords were used to manipulate human perception, would most humans even know it happened?

This began in the early 2010s (e.g. Cambridge Analytica), if not earlier.

Creator economy is awesome trend that hopefully unlocks people’s skills worldwide.

I do quibble with the article throwing around terms like exponential growth. While growth has picked up, it doesn’t seem like it is growing at 10x a year.

Huh? Doesn't exponential mean a self applied multipler? 1.0000001X a year is also exponential growth, as is 1.4x (40%) or 2x. Anything that grows on itself (the next is a multiplier of the previous number) is exponential.

Colloquially the term exponential is generally used for functions where the relevant domain includes an "elbow" and where the local maximum is at least orders of magnitude larger than the local minimum.

Or put another way -- any exponential function can be locally approximated by a linear function, so we might use the term exponential growth for a function where growth is poorly approximated by a linear function over the relevant domain

Ah, thanks for the true definition.

Reply on news.ycombinator.com