Web2 Problems with Web3 Solutions: Similarities Within the Creator & Builder Economy
Whether you work as a creator in web2 or builder in web3, the problems of getting discovered and monetizing your work should be familiar to you. In April 2021, social media blogger and Vayner Media alum, Antonio Gary Jr., outlined these challenges in detail in an article titled, Solving The Discoverability Dilemma In The Creator Economy. He describes them through the lens of web2 creators, while offering a clever, market-based solution (also with a web2 focus).
Interestingly, Antonio’s problem statements equally apply to web3 builders and how his solution could be further enhanced using web3 tools such as personal tokens.
The Creator Economy is Broken: Web 2 Problems
The creator economy includes individuals who generate content for public consumption, including YouTubers, Instagram Influencers, TikTokers, OnlyFans hosts, etc. Currently, social media platforms force creators to publish content on a social media platform with the intent to reach the most significant number of people and increase the opportunity for additional opportunities, such as money and sponsorships.
In Antonio’s words, “The largest threat to the creator economy is the growing issue of discoverability. If not acknowledged, the lack of discoverability for small-mid size creators means less distribution of revenue and less of a chance they will remain in the creator economy.” Going into further detail, Antonio defines the creator economy’s two most prominent problems as discoverability and monetization.
1. Discoverability
Discoverability is a creator’s ability to expand their reach by producing valuable content for a target audience. In the context of the creator economy, Antonio identifies how social media platforms use algorithms to selectively distribute paid content and content of the most popular creators. The business model of social media platforms restricts small and midsize creators from discoverability rather than rewarding high-performing content that increases creators’ audience.
2. Monetization
In the context of the creator economy, monetization is the ability of creators to generate considerable revenue from the production of content. Antonio provides examples of different social media platforms that distribute money asymmetrically, leaving most content creators scraping for pennies. By sharing a few striking statistics, he clarifies that social media platforms reserve monetization for the smallest group of creators.
“In 2020 YouTube led the pack with $30B in payouts to creators. Even with these payouts, most YouTubers are still living below the poverty line.”
“The top percentile of Spotify artists generate 90% of royalties making an average of $22k per quarter. The remaining creators make $36.”
“Under 2% of Patreon creators make the federal minimum wage.”
The Builder Economy is Breaking, Too: Web3 Problems
Builders are all persons contributing to decentralization, no matter which blockchain, project or protocol. NFT artists, developers, engineers, front-end designers all qualify as builders, and even web3 writers and podcasters are considered builders. Even still, although many builders are not dependent on social media platforms, they face similar challenges of discoverability and monetization.
1. Discoverability
Finding good talent is not easy, especially in web3. Most web3 founders choose a traditional start-up business model, but face extreme limitations in finding experienced talent, particularly developers and engineers. Most web3 talent is not active on social media or advertise their services for hire, instead they work on projects within their interests and passions. However, builders still have difficulty finding projects within their interest, and often only know about the largest projects that are well-advertised.
For new builders, discoverability is an uphill battle. Gaining attention in web3 is especially difficult without an established reputation. New builders are limited to word-of-mouth marketing and their networks to find projects to grow their skills and reputation. Still, the inherent limitations of discoverability in web3 limit new opportunities for discoverability.
To increase discoverability, builders and founders need incentives to share new and experienced builders with founders and other builders. Currently, there is no incentive to share contacts in web3.
2. Monetization
Currently, monetizing a project or contribution in web3 is done through salary arrangements, bounties, grants and NFT sales. For new builders, the path to monetization may look like attending a hackathon and getting a grant to continue building. Rather than keep building, most web3 builders are forced to become start-up founders or look for alternative ways to support their projects. Even the most experienced builders may face monetization struggles because a resume cannot fully illustrate a builder’s value. For example, suppose a builder makes considerable progress on a project. In that case, if the business model behind the project is unsuccessful, a builder may be left with no new opportunities to earn.
Finally, not everything in web3 has a monetary component. For example, public goods can be compromised by monetization because adding a rent-seeking aspect to a public good can limit access to the public good. Public goods do not generate revenue inherently, making it challenging to pay builders to contribute to their upkeep.
In the builder economy, builders often have two choices, work on public goods and seek alternative funding, or turn their project into a product for venture capitalists. Still, only the builder with the most money has the most significant opportunity to make more money.
A Web3 Solution to a Problem Created by Web2
Antonio outlined a solution using a mixture of social proof and financial incentives to improve discoverability and monetization for small and midsize creators. He proposed that platforms partner with prominent creators to curate the discoverability of small-midsize creators with referral-based rewards, similar to profit sharing.
Similar to referrals and financial incentives, we believe personal tokens are a solution to the creator and builder economy problem. Personal tokens are a type of cryptocurrency that is tethered directly to the success of a specific person or group of people. Personal tokens can be used to acquire utility from that person or as a speculative instrument based on a person’s future success. For example, a personal token can be used to purchase a concert ticket from an artist directly, or a musician may issue a personal token that can increase in value as they grow to reach the Billboard 100.
Combining Gary’s solution with our knowledge of web3 tools, we believe we could create a system similar to a decentralized talent agency. In this collective economy, a personal token would incentivize everyone to discover underrated talent, allow everyone to invest in that talent, and collectively help the creator achieve optimal monetization.
Top builders and creators could use personal tokens to incubate the success of small and mid-sized builders or creators by investing in them. Rather than require the permission or validation of social networks to create an “official referral program,” people and communities would be able to interact in a direct p2p partnership. Similarly, midsize and small builders and creators could invest and contribute to each other, helping one another improve their discoverability and monetization opportunities.
meTokens: De-Fi Enabled Personal Tokens
Built on Ethereum, meTokens allows builders and creators to capture their true value by minting a personal token. meTokens enable users to create their own utility and financial relationships, whether paying someone directly for services or creating a custom use case. Creators and builders can therefore monetize by providing services or engaging with their community using any meTokens-integrated dApp. meTokens can be used to book time on an engineer’s calendar or even contribute to an upcoming music artist’s video production. meTokens are entirely trustless and can be integrated into any protocol without platform approval or governance tokens; developers and engineers can also build new dApps related to any specific use case.
With meTokens, everything is automated for you — the only thing you need to worry about is what to name your meToken.
Thanks For Reading!
If you have enjoyed this article, or are interested in more conversations on the creator economy, monetizing people, or token models, give this article some claps and follow me on Twitter. Special thanks to Antonio Gary, Jr. for the inspiration! Check out his article below!
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