Clubhouse And The Creator Economy
Clubhouse And The Creator Economy
An authentic relationship is the key to enabling a ‘middle class’ of creators to participate in the creator economy. After nearly a month on Clubhouse, I’ve been struck by the level of authenticity on the platform. I believe it represents an ongoing theme regarding the growth of the creator economy and will be an excellent option for creators to build and monetise their audiences.
Clubhouse is an audio social app. Its unique approach is its focus on authenticity. Its users can have conversations with people from around the world just like they would in a casual conversation with friends. The conversations I’ve heard were open and genuine, including entrepreneurs sharing their mental health struggles through their journeys.
Clubhouse was founded by Paul Davison and Rohan Seth in early 2020. The founders have a keen understanding of social apps after 9 previous attempts. Their focus on authenticity is inherent in Clubhouse’s founding journey and their willingness to engage directly with users over the platform.
Venture Journeys has profiled 3 startups participating in the creator economy to date. These include Feather, Book An Artist and Mys Tyler. There has never been a more exciting time to be a creator. I am grateful to have had the opportunity to meet these founders and profile their mission to allow more ordinary people to participate in the creator economy.
An Ongoing Theme
I previously explored the creator or passion economy while profiling Feather. I was fascinated by the growing ability of a ‘middle class’ of creators to earn a living, thanks to the authentic relationship with their audience.
Clubhouse is another platform focused on this theme. This platform allows creators to create authentic relationships at scale.
In this article, I will briefly discuss the passion economy and the growing importance of ongoing, authentic relationships. I will then discuss Clubhouse and how it supports this trend. I believe there has never been a more exciting time to be a creator, and I’m grateful to have met a number of local founders supporting this trend.
The Creator Economy
Below is an abridged version of what I wrote in my article on Feather.
Yuanling Yuan, from the $1 billion venture capital firm SignalFire, breaks the creator or passion economy into 2 parts:
Independent content creators (the ‘creators’) such as social media influencers, bloggers, videographers etc.
Software and other tools (like Clubhouse) that help these creators with the growth and monetisation of their service or content.
Over the past 10 years, creators required a large audience to make a living as influencers on platforms like Youtube. This reflects the low-yielding nature of these advertising-based platforms for creators.
However, consumers have shown a growing willingness to pay directly for an authentic relationship with the creator. This could be via subscriptions (e.g. Substack) or even via tipping (e.g. Twitch).
Platforms such as Patreon, Substack, Teachable and many others, which provide creators with the ability to monetise and manage their customer base, are seeing strong growth and investor interest.
Patreon raised $90 million at a $1.2 billion valuation in 2020.
Substack raised $15 million in 2019 in a Series A funding round led by Andreessen Horowitz.
Teachable, an education technology platform that lets creators develop and sell online courses, was acquired by Hotmart for $250 million just 7 years after its founding.
Clubhouse raised $100m at a $1bn valuation led by Andreessen Horowitz.
Twitch- The things we do for a relationship
Twitch’s model is perhaps most illustrative of this willingness to pay. Twitch is a live streaming platform mainly for video games. The creators here are the gamers who are streaming their gaming sessions. They are paid via a combination of fans subscribing to their channel and tips. The interesting thing is that these fans could watch much of this content for free but pay because they want to be acknowledged by the streamer or gamer.
Rollingstone talks about the broader applicability of this model. The key is to offer the audience an exclusive, interactive relationship with the creator. This allows the audience member to engage and play a role in the content being created. I.e. an authentic relationship.
In any audience, there is a small proportion of fans who are far more passionate about the creator’s work. For these people, tipping allows them to pay more than the standard subscription paid by the rest of the audience. The effect is that creators don’t need a massive audience to earn a living, allowing more creators to participate in the Creator Economy.
Clubhouse has many of these attributes fueled by the authenticity inherent in the platform.
The Clubhouse Story
Clubhouse is an audio, social app. It was founded in March 2020 by Paul Davison and Rohan Seth. The app is organised into various user created ‘rooms’ where users from around the world can speak, listen or respond to topics. This is just like having a casual meetup group or conversation, except it’s over the app rather than in person.
When Paul and Rohan met in 2011, they were both working at Google. Before launching Clubhouse, they launched at least 9 social apps between them with limited success. Ryan Hoover, the founder of Product Hunt and an investor in Clubhouse, sees this as illustrating the difficulty of finding product-market-fit for consumer social apps. However, through this journey, Paul and Rohan were learning the subtle nuances of consumer social preferences.
The story of Paul and Rohan’s reunion speaks of authenticity, which is the hallmark of Clubhouse’s unique approach.
They reconnected in 2019 when Rohan and his wife reached out to Paul to help launch the Lydian Accelerator. This program aims to fund research into gene silencing treatments for people like Rohan’s infant daughter Lydia, who suffers from a rare genetic disease.
Through this process, they decided to band together to give social apps one more try. They decided on an audio format due to the medium’s greater authenticity. Listening to someone’s unedited voice in a conversation has a personal quality to it. Additionally, it is now about exchanging ideas, not just visuals seen in highlights on other social media platforms.
Accordingly, the level of engagement has amazed me. I have spent hours into the night on the platform in rooms where entrepreneurs openly discussed their journeys, including even their mental health struggles. I’ve also heard Paul himself in rooms where he openly discussed Clubhouse’s strategy and solicited feedback on the platform from total strangers. This displays a commitment to openness and authenticity from management that I’ve rarely seen anywhere else. Just try openly criticising your own corporate employer’s strategy!
‘Just try openly criticising your own corporate employer’s strategy!’
This level of engagement and authenticity could be very rewarding for creators. Creators can quickly build new, authentic relationships, which they can bring to their other platforms (e.g. Instagram, Linkedin). Additionally, their audience can engage with them in a live session and contribute to the experience as they can on Twitch.
Clubhouse’s founders have talked about introducing subscriptions or tipping to reward the creators moderating the conversation rooms. This could thus be another avenue for creators to build and monetise their communities.
The platform is seeing rapid traction going from 600,000 weekly active users in December to 10 million today. So creators should be exploring this platform and what it could mean for their business.
Venture Journeys' Creators
In the 4 months since I started Venture Journeys, I had the opportunity to profile 3 different startups participating in the creator economy. Authentic relationships are at the heart of all three.
Feather: A platform that provides the software infrastructure and administrative processes which allow creators to begin offering their classes online within minutes. Creators such as gym instructors tend to have personal relationships with their clients, which translate well to monetisation online. Founder Shori Hijikata, a creator herself, has built a global community around weekly fitness sessions.
Book An Artist: An online marketplace allowing people to connect with and commission street artists. Street artists have an authentic, though underground, relationship with their local communities. Book An Artist bridges the communication gap between these free-spirited artists and interested clients. Brands are recognising the advertising impact this can have on social media.
Mys Tyler: An app helping women of all body types find clothes that fit by matching them with influencers of similar body types. Rather than the airbrushed perfection we’ve come to expect, influencers of all body types are embraced. These ‘non-filtered' influencers are more representative of their audiences and foster more engaged authentic relationships.
There has never been a more exciting time to be a creator. I am grateful to have had the opportunity to meet these founders and profile their mission to allow more ordinary people to participate in the creator economy.