Bharat’s Creators — Of the janta, by the janta and definitely for the janta
There has been a lot of noise on the creator/passion economy that has been brewing for a while and post the pandemic, it has positively exploded. While new terms such as “Techceleration” are being increasingly adopted as the goto term for tech adoption during and post the pandemic, the creator or as it used to be called as the “passion” economy is no longer just a buzz word. Simply look at all the global action in just the first 3 months of 2021!
While globally, there are an estimated 50M creators, India today has an estimated ~5M creators and this number is expected to grow 3X to ~15M creators over the next decade!
It is common knowledge that there are very few creators who actually make any meaningful money while most of the money goes to the top ~1-2% creators:
- On Substack, the top 10 creators are collectively bringing in more than $7 million annually
- On Patreon, only 2% of creators make the federal minimum wage of $1,160 per month
- On Spotify, artists need 3.5 million streams per year to achieve the annual earnings for a full-time minimum-wage worker of $15,080, a fact that drives most musicians to supplement their earnings with touring and merchandise
- On Youtube, creators need a minimum of 4,000 hrs and 1,000 subscribers over the past full year just to apply for monetisation; add to this the <40% fill rate and dropping ad rates, especially for India
This beautifully written HBR article talks about how the internet economy needs a creator middle class, while I could not agree more, the situation in India perhaps needs a somewhat different lens.
In India, this is even more skewed with today’s 5M creators pulling in an estimated annual $1.5B, which effectively means an average payout of less than INR 2,000 per month and this is before any platform’s cut!
How do we empower creators to monetise?
While ads was the obvious choice sometime ago, most creators you talk to will tell you that it is simply not worth the effort to create content and hope that money from ads will help, especially where India’s ad rates are a fraction of global rates. Effectively, the change has and will move from ads to direct C2C monetisation, empower creators to build their own communities and bring their audiences over from various platform to the platform that allows them to literally scale their IP. The platform will of course take a % cut and I think the take rates would be very healthy to build large meaningful businesses.
The key is to not let personalisation algorithms become stronger than the creators themselves; Creators should have the power to drive their communities and in effect control their online destinies. Founders should aim to create a platform where there is healthy mutual co-dependency between the platform/AI, the creators and of course the users and not a one way train, which is the case with legacy platforms like Youtube and Instagram.
Again, setting an Indian context, the biggest success stories (apart from Youtube and Instagram) in terms of helping the large creator ecosystem monetise have been TikTok and Bigo Live (till both of them got banned). But what were those elements that worked in these companies that allowed creator monetisation and built flywheels of growth and network effects?
Social — you have to own social, people like to socialise, network and collaborate and the platform needs to have the product engineering to support that in a variety of ways
Creators — you have to have a razor sharp Creator first focus, the platform needs to demonstrate that it can truly provide tools to creators to power their own interactions with their fans and allow them to grow, monetise and innovate around content and fan interactions
Content — you have to consistently grow and have exciting and exclusive content that is not available on other platform to successfully drive the
[ Creator -> Content -> User Engagement ] flywheel
Live — you have to own Live, period. While non live content and app products/features help with user engagement and retention, it all truly comes together with Live — shows, games, quizzes, conversations etc. as Live allows creators the power to engage with their fans in ways that no other medium does
Personalisation — TikTok has truly mastered the power of personalisation through advanced ML algorithms that tracked the user’s each and every action to drive growth and engagement and in turn creating a massive moat
Payments — Drive user purchases and gifting through sachet sized micro transactions and innovative in app currencies
What excites us at WaterBridge Ventures?
The creator economy has been a keen area of interest to us for a while and continues to do so. True to our word, we have so far made 4 direct and indirect investments in this space:
EloElo
EloElo started its life as a social commerce platform in the beauty, health and wellness segment. Over the last 6 months, it witnessed incredible growth and has seen PMF in building a truly creator focussed platform that allows creators to monetise through live games, videos, streaming and a variety of product innovations.
PS: If you are an investor reading this, EloElo is currently raising a $2.5M round!
BitClass
BitClass.Live is a PaaS (Platform as a Service) for tutors, trainers, coaches or anyone who wants to teach live and set up their live teaching business online. Covid 19 has accelerated the inevitable shift of all these learning programs driven by individual teachers moving online. BitClass enables teachers (STEM and non-STEM) to grow their business online by providing them with all the tools such as profile creation, class scheduling, payment collection, live classroom, content sharing in addition to business growth, all in one place. You can read more about our investment in Bitclass here.
We have made 2 more investments, which perhaps do not directly fall into the definition of a “Creator Economy”, however are powering the next generation of digital first tech powered micro-entrepreneurs across the length and breadth of India.
CityMall
CityMall is an assisted community buying platform that leverages existing social trust to aggregate orders from new-to-internet users in small towns. They are not only empowering existing offline entrepreneurs to grow their digital business but are also creating thousands of new micro entrepreneurs who are coming online for the first time! Forbes India recently wrote a great piece on Citymall and its impact. You can read it here.
OneCode
OneCode is building a network of direct sellers for digital first brands. Existing digital channels are facing difficulty to penetrate the next half billion users (NHBU) who are residing in tier II/III/ IV cities and reluctant to transact digitally. Hyperlocal ‘Phygital’ channels can cause big disruption by building a network of on-the-ground sellers, giving a massive fill-up to extend distribution networks while creating thousands of digital first micro-entrepreneurs.
We believe that India would require unique ways to building and solving for the creator ecosystem and a global model can at best act as an inspiration. If you are a founder who is building an exciting business for the creator economy, especially around tools that help creators increase their audience, manage their fan interactions, handle interactions on multiple platforms and streamline irregular payments from a variety of sources, we would love to hear from you, reach out to me at ravi@waterbridge.vc
#creator economy #monetisation OneCode #eloelo #bitclass #citymall
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