What are the basis vectors of the passion economy?
As I delve into the Passion & Creator Economies, this is a question that I've found myself continuously coming back to. The idea of moving towards a more independent and fulfilling future of work just aligns so well with my values that I haven't been able to stop thinking about it.
So naturally, the scientist in me has been trying to do as much research around this space as possible.
The founder in me has been trying to do as much networking within this space as possible.
The software developer in me has been screaming to start building something. (Shhhhh developer impulse — pause before building as you learned last time...)
And the mathematician in me wants to understand the space from first principles.
Today, let's let that mathematician come out & play.
So what are the basis vectors of the passion economy? And what the hell is a basis vector? 😂
Essentially, this is just a formal way of asking: what are the best ways to break down the passion economy that will encapsulate the most information?
An easy way of thinking about basis vectors is that they're the most pertinent questions to ask if you were playing a game of 20 questions while trying to guess a "creator". You would ideally want to start by asking questions that would cut out the largest chunks of potential answers as you drill in towards a specific person.
- Are they older than 25?
- Are they a household name that my mom would know?
- What is their primary platform: YouTube? Twitter? OnlyFans? etc.
Together, these basis vectors would form a space of all possible creators where certain clusters like influencers or SMBs lend themselves to certain types of products and playbooks.
As a founder exploring the passion economy, I believe it's absolutely essential to have a solid understanding of the target creators I want to help before building solutions for them.
With this beautiful caveat from George Box in mind, let's explore some models that I've found particularly useful when it comes to better understanding the passion economy.
Horizontal vs Vertical Fame
First up, there are two types of fame these days:
- Horizontal — Celebrities & influencers with a wide audience.
- These people are famous in the traditional sense and are oftentimes recognized as household names.
- Vertical — Domain-specific experts with a narrow audience.
- These people are famous within their specific domain or niche.
- They generally won't be household names, but higher-end domain experts are often known by name to other people within their field of expertise.
- This is an over-simplification; in practice, there is a lot more overlap, irregularity, and people don't actually fit into neat little boxes (or ellipses 😂).
- SMEs are Subject Matter Experts.
- I'm defining savants as thought leaders who've expanded their influence so far as to be household names.
- Vertical fame can be just as cult-like and lucrative as horizontal fame; they're just manifested in very different ways.
- Most thought leaders and savants started their careers off by focusing on vertical-specific domain expertise and then expanded their influence horizontally to other domains over time.
- What can we build that will produce more savants?
- Is this even a good goal to be aiming for? Elon Musk was recently asked this question on Clubhouse and his exasperated response was that the vast majority of people probably don't want to go through what he's been through. They may think they do, but in reality, they really don't.
- What can we build that will produce more interdisciplinary thought leaders?
- The vast majority of products in this space target influencers or SMB professionals. Is it possible to build solutions that will make it easier for domain experts to expand horizontally into new domains ⇒ thought leaders?
- Where do you see yourself on this graph right now?
- Where would you like to be on this graph in the future?
- I think the vast majority of people desire to be in either the celebrity bucket or the influencer bucket.
- My personal goal is to aim for the top practitioner side of domain expertise within the tech world and then branch out into a bit of thought leadership over time. Can't hate on me for having goals. 💪
- I think the most important question to ask yourself here is: what does your personal definition of success look like?
- If you're a founder in this space like myself, which persona(s) on this graph are you targeting?
- What are their primary motivations?
- Where on this graph does your target audience want to be, and how can you help them get there?
Entertainment vs Knowledge
As a creator or professional, are you primarily providing value in the form of entertainment or knowledge?
These two are definitely not mutually exclusive, as there are plenty of examples that artfully combine the two, but I believe that they're fundamentally important, orthogonal value props.
- Entertainment — Celebrities, social media influencers, and many creators
- These folks focus on providing various forms of entertainment, whether that be via comedy, drama, fiction, art, music, or human connection. ❤️
- Popular platforms include YouTube, TikTok, Instagram, Cameo, and OnlyFans.
- Common consumer desires these platforms tap into include: envy, lust, sloth, and gluttony.
- Knowledge — Teachers, knowledge workers, and domain experts
- These folks focus on providing various forms of knowledge, whether that be via education, mentorship, journalism, or selling their expertise. 🧠
- Popular platforms include Teachable, Substack, Podia, 50% of Clubhouse, 50% of Twitter, and 20% of YouTube.
- Common consumer desires these platforms tap into include: pride, greed, gluttony, and envy.
- Entertainment and knowledge are loose umbrella terms that encapsulate a lot of different forms of value.
- Neither type of utility (entertainment / knowledge) is more important or valuable than the other. They just focus on fundamentally different value props and lend themselves to different strategies.
Looking at this graph, there's a clear distinction between platforms that focus primarily on providing entertainment versus platforms that primarily focus on providing knowledge. The entertainment platforms in orange are more focused on social, entertainment, comedy, or human connection. Whereas the knowledge platforms in blue are more focused on education, career growth, and/or making it easier to sell knowledge-based skills & services.
If we blur this graph a bit, we can see some areas that are useful to think about as groups. They tend to have similar value propositions, target audiences, and growth strategies. This also makes it very clear to see which areas don't provide enough value or focus to build venture-scale businesses around.
Platform Utility Opportunities
- Platforms that manage to provide value with a good mix of entertainment and knowledge are especially powerful. Examples include YouTube, Twitter, Clubhouse, and Reddit.
- These platforms and their respective value props are strongly correlated with the creators and their audiences.
- E.g., if you position yourself solely as an education platform, you're going to attract educators on the supply-side, and knowledge-seekers on the demand side.
- Conversely, if you position yourself solely as a social or entertainment platform, you're going to attract influencers and creators on the supply-side who mainly provide entertainment value, and consumers who value entertainment & consumption on the demand side.
- This graph is closely related to our previous graph of horizontal vs vertical fame, but I think it provides a useful alternative lens through which to try and understand this space.
- What are some examples of creators who span across entertainment and knowledge?
- What are examples of platforms which focus on one value prop (either entertainment or knowledge) and their dual platform which has a similar business model that focuses on the opposite value prop?
- If there isn't an existing dual platform, does this present a good opportunity for a startup to fill the gap?
- This is a bit more guided than the traditional X for Y startup analogies.
From a meta perspective, I believe these distinctions provide a very useful lens through which to try and understand the creator and passion economies.
I also believe that it's incredibly useful for anyone building or investing in this space to have a solid higher level understanding of these mental models. I've personally found it really helpful in building analogies between different types of companies across these different axes.
Another great way to map the space of companies and opportunities is to build different market map models. I've aggregated a list of the best market maps I've found in my breakdown of the Creator Economy.