The Game Is Rigged: Rethinking The Creator Economy

Jan 27, 2022

Do you remember the internet before influencers?

Before teenagers were regularly becoming millionaires on YouTube or TikTok? Before billions of us started sharing our lives online?

The opening bit of Iliza Schlessinger's Elder Millennial special on Netflix always cracks me:

"Gather 'round the Snapchat children! I will tell you the tale of… THE LAND LINE!"

I've been online for almost thirty years. I have tales of landlines, dial-up, life-before-Google, life-before-Amazon, Xanga, LiveJournal, and MySpace. I have a whole summer camp worth of scary technology stories to tell the Zoomers.

I started creating for the internet back in 2003. Took a hiatus. And then came back at the dawn of Web 2.0 in 2008. I was blogging three times a day and building a significant following on Twitter back then. I didn't think of myself as a "creator," though. A writer, a blogger, a strategist, yes. But not a creator. According to journalist Taylor Lorenz, YouTube didn't start calling the people uploading videos to their platform "creators" until 2011–and they were the first to define the term in relation to online content and social media.

The term languished in relative obscurity for almost a decade. But by 2020, it had hit the mainstream. Before that, though, the first person I knew who was talking about the creator economy was Gina Bianchini, the founder of Mighty Networks.

Gina defines creators differently than the way you typically hear in the media.

While mainstream journalists try to make sense of hype houses and recipe trends that cause feta cheese shortages, Gina and her team are interested in a little more nuance. She told me that they define creators as people who are gathering followers together around a particular expertise or interest. These creators are focused on creating results and transformation for the people who follow them, even if that's simply feeling like they're not alone anymore. She said, "The way the rest of the world defines creators is content creators who produce content, and build audiences, and seek to occasionally monetize."

This article is based on episode 370 of What Works.

Click here to find it on your favorite podcast player.

The creator economy is still in its relative infancy. The truth is we don't know what the creator economy is yet—but that doesn't stop me from asking the question! So what is the creator economy? And why is it making so many people miserable?

When I first heard Gina talking about building Mighty Networks for creators, I was a bit thrown off. I saw it as a tool for small business owners, organizations, and movements. And I can remember talking with her about that distinction at the time. To my mind, especially back in 2017, a "creator" was someone who made money off of content via a social media platform. A business owner, in this case, was someone who used content to market a product or service.

If you've been around the internet block for a bit, you can probably see this distinction. But if you've really only ventured into the territory of content marketing and social media in the last few years, this distinction is probably meaningless. And that's because the creator economy has evolved. Creators are no longer simply influencers with a little more to say—they're community builders, media entrepreneurs, and merch designers.

Most mainstream media hasn't caught on to this evolution yet. I follow a couple of journalists who have—Taylor Lorenz at the New York Times, who I mentioned earlier, and Rebecca Jennings at Vox, to name two. We still see plenty of reporting that centers on the influencer or advertising models and much less coverage of emerging ways for creators to make a living. Mainstream media is still trying to figure out what's happening on TikTok. To be fair, I don't always understand what's happening on TikTok, either. I regularly ask my daughter for a report.

Gina wanted a definitive way to share her vision of the creator economy with the wider world. So she commissioned an independent research firm and asked them to dive in. Gina wanted to find out what creators' challenges were, how much money they were making, how they were making that money, and—importantly—how they were feeling about life as a creator. She told me two things were essential to her: that the research be wholly independent and that the study was the largest ever of creators. She didn't want critics (or cynics) to accuse her of tipping the scale and skewing the results.

The first thing they discovered in the research was something both Gina and I were already familiar with: the grueling hamster wheel of content creation and the impact it can have on creators' lives. This number might be hard to believe, but 93% of creators surveyed said that being a creator has negatively impacted their lives. (And that point, it's probably worth asking, "Well, why would anyone become a creator? Or stay a creator?" And that's a fair question. I guess it's the same reason people keep playing the lottery: the potential upside dramatically outweighs the current downside, no matter how unlikely.)

93% of creators surveyed said that being a creator has negatively impacted their lives

Gina told me she wasn't surprised. "It was consistent with what I was looking at and seeing just anecdotally. We have created, through social media, this promise of making money following your passions. And the game is rigged. The game is rigged and it is somewhat offensive to me how rigged the game is."

If you've tried to replicate the success of Celebrity Entrepreneurs or followed the tips and tricks of the people who make a living teaching you this stuff, you know what Gina is talking about. You know the game is rigged. And yet, the promise of making it work is intoxicating. So how exactly is this game rigged? Too many ways to count—but Gina and I talk about two of them.

The first way the game is rigged is that we're playing a game that wasn't designed for us.

Gina doesn't believe anyone at the big social platforms is inherently evil—even Mark Zuckerberg. Instead, she looks at how the business is structured. Social platforms are built to serve two different audiences: everyday users and advertisers. And really, the platforms cater to the experience of everyday users only in so much as it makes advertisers more willing to pay for those users' attention. Or as Richard Seymour writes in The Twittering Machine, "We write to the machine, it collects and aggregates our desires and fantasies, segments them by market and demographic and sells them back to us as a commodity experience." Everyday users feed the platforms with information—our posts, comments, and clicks—which is then used to woo the advertisers.

"If you look at what [the platforms'] actions are through those filters, [you see] they're built for two things that are not the third thing. The third thing is the superusers, the creators that have emerged from this world," Gina said. At the end of the day, I think we, the superusers, know this: these platforms were not built for how we use them to grow audiences and build small businesses. But it's so easy to forget it in practice.

The second way the game is rigged is how these platforms manipulate unpaid labor.

That's why social media experts will often tell you that if you're not getting results, it's because you're not posting enough, you're not creating enough content, you're not creating content that your audience wants to see.

The reason posting more, learning what people like to share, trying out every new tool the platforms create, and responding to every comment seems to be the answer is that the platforms depend on our labor. They rely on us to fill the feeds with things that keep people scrolling, clicking, and viewing ads. The platforms care about us at a group level--they need those super users to stay on the factory floor. But they don't care at all about us at the individual level. They don't care that they're using our labor in ways that make us miserable or jeopardize our livelihoods. They don't care that, as Jenny Odell writes in How To Do Nothing, "that we are left with twenty-four potentially monetizable hours that are sometimes not even restricted to our time zones or our sleep cycles." We end up financially dependent on things entirely out of our control. The study revealed that 77% of creators surveyed said that if something changed in the algorithm, it would have an immediate and negative impact on their livelihoods.

77% of creators surveyed said that if something changed in the algorithm, it would have an immediate and negative impact on their livelihoods

Now, just for a moment of sociological and historical context: this isn't new. In What Tech Calls Thinking, Adrian Daub points to how affective labor, service, and care work is expected to be unpaid. This is work typically done by women. Therefore, by the transitive property of exploitation, we find that the work women do is expected to be unpaid. Those Yelp Reviews, the motivational quotes, the careful representations of home life, the free education, the heavy emotional lifting—none of that deserves compensation, right? Daub writes sarcastically, "Who knows what gentle disposition moves these good-natured souls to write, what whimsy makes them review restaurants for free? It's not their job; it's a hobby, something to occupy their time. They are 'passionate,' 'supportive' volunteers who want to help other people." He goes on to explain how these same scripts are used to define what is "real" labor and what is not. What activities require compensation and which do not. The same scripts are used against women, disabled people, people of color, queer people, and other marginalized folks and passed off as "not a fit for company culture."

While platforms don't recognize our contributions as labor, it certainly feels like a job. Labor writer Amelia Horgan calls it "the jobification of everyday life."

I will explore the labor side of this question more in my next essay. But let's get back to the research on the creator economy—and something that feels a bit more hopeful. Gina told me she was excited to see evidence of a shift in how creators build businesses they have more control over. These are "independent" creators—folks building their own platforms and communities. According to Gina, the research shows that there are 4 characteristics of this new way forward:

Independent creators own their data rather than renting it from the big platforms.
They go niche instead of trying to appeal to a broad audience.
They invest in community instead of "building an audience."
They build their own network effect instead of pounding the content creation treadmill.

Gina first had a vision for this since she founded Ning back in 2005, a community hub platform I used when I was just getting started gathering people online! Now with Mighty Networks, she has a fresh perspective on the power of connecting in online spaces. She said, "It's about how do you create the conditions for people to meet, build relationships with each other, tell their stories, their experiences, their ideas, collaborate with each other. And when you make that shift, the really cool thing is you're like, 'Oh, wait a second. This almost feels too easy. This feels too light.'"

I can certainly attest to the fun of watching people come together, solve each other's challenges, and share their experiences. And I will also say that it takes care and intention to create the space where that comes easily. Building a space for people to gather safely requires emotional labor—something some of us are better suited to than others. Putting that aside until next week, though, let's do some math on the creator economy. Because the numbers reveal both disturbing information and exciting trends.

The researchers investigated a simple question: what does it take to generate $1000 per month?

TikTok? 25 million views
YouTube? 2 million views
Instagram? 100,000 followers
Substack? 230 subscribers
Patreon? 225 patrons
Mighty Networks? 26 members

For some context, the difference between the first three and the last three platforms is direct sales. On TikTok, YouTube, and Instagram, those views and follower numbers are what it takes to generate $1000/month when the people paying you are sponsors or advertisers. The number is much smaller on Substack, Patreon, and Mighty Networks because you're selling directly to your audience. Mighty Networks requires so many fewer customers because you can typically charge more for a higher level of value. So to be clear, there is a bit of apples and oranges going on here. But I actually think that's useful. What you sell when you operate on a platform like Mighty Networks (or other community platforms and learning management systems) is very different from what you're selling on Patreon or Substack. And what you're selling on those three types of platforms is vastly different from monetizing your social media audience.

Building an audience to monetize and building a customer base are two different activities that are often conflated. The confusion between the two strategies is a large part of what ends up making so many would-be social media marketers miserable. To make money from sponsorships or ads, you do need big numbers—or a highly engaged, super-niche audience that's hard to reach with traditional marketing. Building a customer base, as Gina said, can start with selling to 30 people, or 10 people, or 3 people. But, the tactics commonly taught to small business owners that could be focused on building customer bases are most often the tactics that influencers have used to amass huge audiences. This means that we work with similar numbers to the audience-builders looking to monetize. To get 30 customers, you might need an audience of 5000.

You don't have to build an audience before you can start selling something.

This isn't the only way to operate. You don't have to build an audience before you can start selling something. You can just start selling. Gina suggests, "Start with even a small group, like think about it more as a small intimate workshop. The best, most valuable communities come out of these more intimate settings." This is what I call the Living Room Strategy for product development. It involves no audience-building. Instead, it starts with building an offer for a specific group of people. It could be an intimate workshop or a small coaching group, as Gina said. There are plenty of other options, too. The difference here is that you're not focused on marketing; you're focused on sales. That's a much faster route to $1000/month—or, much more sustainably, a faster path to, say, $8000/month.

When I say what Gina is describing is focused on sales instead of marketing, what I mean is that you're not trying to figure out what kind of messages or posts will generate a new follow or a share. You're talking to individual people you could help, figuring out what needs they'd like to pay to fill, and what you could create to fill that need—assuming it's something you're interested in pursuing, of course. For so many years, the prevailing advice—and I hesitate to call it wisdom—has been to build an audience and then figure out what they want. Not only has this resulted in millions of dollars of lost revenue and unnecessarily fragile small businesses, but it's also led to burnout. It requires an untold amount of time and labor to constantly show up and "give value" on various social platforms in the name of building an audience, out of which only about 1% will buy. Doing things differently from this ubiquitous advice takes some courage. But it's completely worth it—on that, Gina and I are in total agreement. She said, "One of the agreements I asked people to make with me is to try new things and stay curious. None of these things are about being at the mercy of an algorithm. Is it easy to make the shift? No. Is it valuable and awesome when you do? Yes."

This is why answering the question of the creator economy is so important to me. There is plenty of opportunity to go around. I believe we will continue to see novel ways to build a livelihood and increasing numbers of people participating in the economy outside of the container of a "job." But right now, there is a lot of confusion about the different types of opportunities that exist and the actions required to seize them. And where there is confusion, there's also ample opportunity for exploitation. There's an opportunity to play with all the cheat codes and then sell people how you did it without telling them about the cheat codes.

Where there is confusion, there's also ample opportunity for exploitation.

Like Gina, I believe in the creator economy. And like Gina, I think it will ultimately look very different than what is being portrayed in the media today. So I asked her what we can do to start moving in that direction now: "Invest in your community and communities; invest in the connections; invest in the relationships; invest in how each and every one of us is helping the people in our orbit to be themselves and take on things that they didn't think were possible." She added that while others work themselves up about NFTS and crypto and web3, the people who will thrive—without a doubt—are those who have put time and energy into their personal connections and communities. Relationships are the best business and career insurance.

I genuinely appreciate Gina's vision and how it's formed by both keen observation and insider knowledge. I agree that investing in our communities and focusing on the needs of the people we want to serve will give us the best results over time. And I agree that starting small is the fastest way to sustainable revenue.

And, I still have questions. What is the long-term viability of the creator economy? Granted, most people won't want to be creators. But will there be enough opportunity for those who want to be creators—and put in the work toward that goal—to pursue this work at a sustainable revenue threshold? What guardrails or policy changes need to be implemented as this market continues to grow? For instance, most of our social services and safety net in the United States is tied to employment. Creators don't get health insurance—unless they buy it on the open market.

Who can afford to become a creator? Who is forced into hustling or gigging to make a living? And will internalized bias lead to even more information and community silos on the internet?

What do the gig economy and the creator economy have in common, for better or worse? What can the people participating in these labor markets learn from each other? And how can they organize to impact policy change?

What about emotional labor? Content creation, social media, developing courses--it IS a treadmill. But emotional labor can be a treadmill, too. And building a community DOES require emotional labor. As promised, this is the question I'll be tackling in next week's essay with both some personal revelations and a lot of research.