A Journey Through 100 Influencer & Creator Startups— Part 2: The Why
Why influential creators matter more now than ever before
In my last Medium post, Part 1 (the map), I attempted to organize and categorize the sprawling influencer economy. In Part 2 of this series, I’ll talk about why it is important to work with influential creators. Not just for eCommerce brands but for any company — from SaaS to healthcare and from Web3 to Fintech — that wants to appeal to young people today.
Why adopt an influencer strategy
There are a lot of names for this phenomenon — celebrities, influencers, creators, or the passion economy — but when thinking about this space through a marketing lens, they all point to the same thing: People don’t trust advertisements. Consumers increasingly don’t trust Facebook or Google. But they do trust their friends. And the younger they are, the more they trust strangers who appear to have interesting lives or hold intriguing opinions.
That’s why 80% of Gen Z and 74% of millennials say their purchases are influenced by social media — in particular, Instagram, Snapchat, and YouTube — according to a study by Yes Lifecycle Marketing. What do these platforms have in common? They consist almost entirely of user generated content.
It’s far easier to create content to turn a fan into a customer, than it is to acquire a brand new customer.
It’s also far cheaper. Last week’s tweets by Tobi Lütke, founder of Shopify, and the responses showed how much more expensive it is to acquire customers on Facebook and Google than it used to be. When building a brand now, you need a new scalable, repeatable marketing channel. Influential creators may fit the bill.
The tailwinds behind influential creators are strong. For one, Gen Z will continue to generate content over the years, as they’re looking for:
- The flexibility to live and work anywhere in the world (they always were, but especially post Covid);
- Full autonomy over their day-to-day agenda (they want to be da boss);
- The ability to make money by doing what they truly love (we all do — but as a generation, they’re making that happen); and
- Happiness and limited stress in their lives (amen).
Who are influential creators?
Influencers are creators, and creators (once they have a following) are influencers. Being a creator alone is not the dream, but it is the dream to create and influence others while doing it. Enter the influential creator.
They’re not merely people who sit around taking selfies all day. (Though many Boomers might believe that to be the case.) They may blog about food, offer make-up tutorials on YouTube, or publish a newsletter about their crypto portfolio. They might have a Twitch channel where they trash talk friends while playing video games, a podcast where they share parenting tips, or a TikTok comedy channel.
As Glossier’s Emily Weiss told Kara Swisher in 2019, “Every single person is an influencer.”
Even if you don’t command a massive audience, you can still influence friends, family, and co-workers. It’s the emergence of tools, marketing, and distribution platforms that enable ordinary people to scale and reach far more. But even someone with only a few thousand fans can move culture and change behavior, simply by sharing content online.
This ecosystem has grown quickly, and a big part of that growth can be attributed to micro-influencers and nano-influencers — people with fewer than 10,000 followers, but whose fans are highly engaged across TikTok, YouTube, Instagram, or Snap*. Working with these nano-influencers will be less expensive than hiring celebrity influencers and can be just as effective, given their authenticity and highly engaged user base.
The future belongs to creators
At Lightspeed we like to invest where common human behaviors are enabled by an overlay of technology. I can’t think of a better example of that than people who are following their passions and being followed by others. There are real tailwinds behind these creators, and the market is still a long way from mature.`
That’s why I sat down and created a market map of the 100 most interesting influencer platforms, across sectors from enterprise to education and from FinTech to healthcare. A year from now I will need to create another one, probably including companies that don’t yet exist.
In Part 3 of this series I’ll discuss how companies should best work with these influential creators.
* Lightspeed portfolio companies