What could be better than making a living from doing what you love? More and more creators have flocked to YouTube, Instagram and TikTok to find out. With an estimated 200m users trying to aggregate and monetise their following, according to a Linktree report, social media has transformed from pastime into an economy of its own right.
And there’s still room for growth: within the next five years, an estimated 1bn people will self-identify as creators.
That’s stoking investor interest in the sector. According to Crunchbase, funding for creator economy startups more than doubled from $460m to $939m last year, and is on track for a new record in 2022.
Among these startups is Berlin-based The Plate, a platform for culinary creators that Sifted picked as an early-stage startup to watch in our Pro briefing on the creator economy, released today. The Plate wants to help creators monetise their content through offerings like cohort-based learning, workshops and coaching with a focus on live formats — while taking a 10% cut of their earnings.
We quizzed cofounder Isabell Weiser on why she believes the future of creator platforms will be vertical, not horizontal, why she sees Instagram and TikTok as enablers rather than competitors, and the potential of Web3 technologies to improve conditions for creators.
Social platform algorithms encourage creators to serve up large volumes of content while relying on opaque monetisation models. If the creator economy is broken, how can startups fix it?
The vast majority of full-time creators are making less than $50k a year while their content is driving $180bn in ad spend across social media platforms. We think the system is fundamentally broken and, as its beneficiaries, the big social networks are not the ones who will fix it.
Startups like us are trying to challenge this status quo by enabling creators to directly monetise their talent. We’re following an industry-specific focus because we think creators will need different tools to succeed depending on their vertical. We’re trying to apply what Substack, OnlyFans and Twitch have done in their respective industries — writing, adult content and gaming — to the food sector. The key is figuring out exactly who you're building for, and to work very closely with them to understand their needs.
Let’s talk revenue models. With 99% of creator revenue going to the top 0.01% of creators, how can startups capture a share of that already small income?
The only way to convince creators to give up a share of their revenue is by demonstrating that we can help them generate more of it.
On our platform, we’re actually seeing that it’s not the biggest accounts or most famous personalities that are earning the most, but those who are the best at engaging with their community, like fermentation expert Flavio who offers live classes and tutoring on the subject. In this context, we’re providing the tools to support this engagement by helping them set up offerings that include workshops, coaching and commerce. This gives creators a chance to directly monetise their work from their fans — with us taking a 10% cut on earnings — without amassing a million Instagram followers.
Broadly speaking, creator economy startups focus either on developing alternative platforms or new tools for creators (including content production and fintech). What are you doing?
We’re combining both: our primary aim is and has been to provide creators with a platform to monetise their content, but we also guide them on how to improve their strategies for engagement. That could include advice on how to build an educational offering or pick a specific niche to focus on. Over time, by seeing what is working well for whom, we’re hoping to provide our creators with better and better guidance and transfer learnings between them.
Is the market saturated? Can new players compete against social media giants, and funnel a critical mass of viewers to new platforms?
We actually don't see social networks like Instagram or Tiktok as competitors at all, but rather as enablers. They’re great platforms for inspiration, but our view is that some people are so passionate about certain verticals that they want even more engagement. Even if these make up only 1% of your followers, they can form a close-knit community that creators can interact with in a more intimate way, and who will also be more willing to pay for certain extra offerings.
For the time being, our creators take a lot of their existing traffic from social media and reroute it to us. Going forward, we’ll need to scale to the point where we can facilitate discovery by directing users from one creator to the next all within our platform. Our end goal is to build up a passionate food-focused community in its own right, like Strava for athletics — but in our view, that platform can coexist with people posting about their interest on social networks, too.
What’s your view on Web3 technologies to improve conditions for creators — such as using tokens or NFTs as monetisation techniques. A logical conclusion or a step too far?
Our main focus is on finding and identifying all the ways creators can monetise their work, primarily using live formats. We can definitely see these being taken to the next level in a world where the metaverse has become a more commonplace for creators to interact with their fans. We’re also curious to see how Web3 technologies could improve conditions for creators — and perhaps remove or reduce some of the smaller costs, like transaction fees, eating away at their revenue. In the end, it all comes down to timing — we don’t want to build a Web3 application because it’s sexy, we want to build it when it makes sense.
Amelie Bahr is a senior intelligence analyst at Sifted. Federico Scolari is a junior intelligence analyst at Sifted.
