Enabling the Passion Economy
Feather provides a platform that allows budding solo entrepreneurs or ‘creators’ like fitness instructors, photographers etc. to manage and monetise their audience online.
Feather’s unique approach is to offer software infrastructure and administrative processes (e.g., scheduling classes and managing email lists) via a single, easy-to-use platform. Their clients already have an authentic or personal relationship with their audience, and Feather will allow them to begin offering their classes online within minutes of using the platform.
Feather was founded in 2020 by a well-rounded founding team. Shori Hijikata is a former competitive athlete and online fitness instructor. This gives her credibility and empathy with their customers as well as commercial acumen from her time at the Boston Consulting Group. Celilsemi Sam Erkiner has previous startup technology leadership roles and an ability to manage an offshore technology team as they build out the platform. Scott Ellice-Flint has previous startup founding experience as well as corporate strategy and marketing experience.
Feather is currently testing its first version of the platform with an initial group of customers in Australia and overseas. The creator economy has been experiencing strong growth due to customers’ increasing willingness to pay for an authentic online relationship. Unlike the past, this is finally enabling a middle class of creators to have a voice and touch their audiences directly. Feather’s focus on creators who already have these authentic relationships, such as fitness instructors, positions them well in this large and growing market. By giving these people a voice, they are simply enabling a powerful idea whose time has come.
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So you’ve spent years building your craft but are struggling to have a voice within your organisation? Do you have this passionate feeling that you matter and that you could get out there and make an impact? Then the creator or passion economy might be for you!
Yuanling Yuan, from the $1 billion venture capital firm SignalFire, breaks the creator or passion economy into 2 parts:
The independent content creators (the ‘creators’) such as social media influencers, bloggers, videographers etc. These people may have spent years working for a larger corporate learning their craft and are looking to reach out directly to an audience to offer their services.
The software and other tools (like Feather) that help these creators with the growth and monetisation of their service or content.
The creator economy has gone through several evolutions over the past 30 years. In the 1990s, the creators consisted of authors, journalists, musicians etc. However, it was expensive for these creators to get their product or service in front of customers. The confines of physical space (e.g. space in a newspaper, shelf space in a video rental or music store) meant that these creators really needed a large audience or customer base for their distribution partners to justify the cost of promoting their product. This meant the vast majority of creators struggled to build an audience.
In the 2000s, the internet offered the potential to change this. In a 2004 Wired magazine article, Chris Anderson (whose foundation would eventually acquire the TED conference), wrote about the opportunities for the ‘Long Tail’ or smaller content creators. It costs very little to create a webpage and list more products or services on them. The cost of online distribution was thus dramatically lowered. In theory, it now made sense for the new advertising and distribution platforms like Google, Facebook, Netflix, Spotify and others to showcase less mainstream content creators.
However, these creators still needed to build an audience. The digital advertising landscape became dominated by large technology companies like Google and Facebook. Even the large media companies in Australia have over 50% of their website’s traffic referred to them by these 2 giants.
Google and Facebook have an advertising-based business model. As such, they get paid by the number of their users. This causes them to prioritise contributors who can bring large audiences to their platforms. Once again, ‘shelf space’ became limited under this model, and only the larger contributors could afford the high advertising and marketing costs.
In a Harvard Business Review article, Lin Jin wrote about how the creator economy needed a middle class as currently most of the wealth is concentrated at the top.
I believe the issue is that these advertising-based models are low yielding. The low cost per impression requires a very large audience for these creators to make a decent amount of money. Many of these middle-class creators tend to have more niche target audiences and will never reach this scale. This is evidenced by a Bloomberg article in 2018 citing an Offenburg University of Applied Science study which found that Youtube contributors were only paid $1 per 1000 views and 96.5% earned less than the $12,140 US Federal poverty line.
What they needed was a shift away from an advertising model towards a subscription or product-based business model, which is much higher yielding. For example, the minimum subscription amount on Substack, an email newsletter publication platform, is $5 per month per subscriber or $60 per year.
However, will customers be willing to pay for content or services delivered online? Increasingly, the answer to this question is yes! Zuora, a New York Stock Exchange listed subscription management platform, estimates that the subscription economy grew 350% to October 2019 and accelerated through COVID. A McKinsey Survey in early 2018 found that the subscription e-commerce market grew by over 100% pa over the past 5 years.
Consequently, content 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. There has been a growing level of investor awareness towards this trend. 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 which lets creators develop and sell online courses, was acquired by Hotmart for $250 million just 7 years after its founding.
Perhaps most telling of the consumer’s willingness to pay for online content is Twitch's acquisition by Amazon for nearly $1 billion in 2014. Twitch is a live streaming platform mainly for video games. The creators here are the gamers who are streaming their gaming sessions often from their bedrooms. They are paid from 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. It goes to show that consumers are willing to pay for an authentic or personal relationship with the online content creator.
A sizeable group of creators with these authentic relationships are offline instructors such as yoga and gym instructors to name a few. These instructors have been reliant on a studio or corporate brand to conduct their classes. There is a growing realisation that client attendance is more strongly linked to the trainer’s personality rather than the relationship with the studio or gym. If only they could have a voice and service their customers directly!
Many of these creators have begun to explore offering their classes to customers digitally under their own personal brand in addition to their studio or corporate relationships offline. These digital classes can be very profitable as the trainers have minimal overheads.
These trainers already have an authentic or personal relationship with their customer base. What they need are the tools to host their classes and manage their customer base online. These include administration processes such as scheduling classes, maintaining email lists etc. The problem is that there is no single platform offering all these administrative processes seamlessly. Thus, creators must cobble together several disparate services that can be intimidating to manage and act as a barrier to them conducting their classes digitally. This is where Feather comes in.
Feather’s platform allows creators to manage and monetise their audience online. Feather’s unique approach is to offer the infrastructure and administrative processes these creators need (e.g. scheduling, emailing lists etc.) to offer their classes online via an easy-to-use platform. The platform is being developed with customer feedback provided during the COVID crisis. Some key features include the ability to offer live and on-demand classes online as well as the ability to send customers calendar invites for classes.
The founding team consists of Shori Hijikata, Scott-Ellice-Flint and Celilsemi Sam Erkiner. The 3 co-founders met via the Antler Accelerator Program in Sydney. Dain Welsman, a co-founder of Intalayer, wrote a blog article detailing his experience at the program. I found this to be a great read that described how the Program introduced structure and mentorship to build and validate ideas with real customers.
Shori was a competitive swimmer for 16 years culminating in the Harvard University Swim team. In a blog article, Shori draws several parallels between her experience as a competitive athlete and her entrepreneurial journey. What stood out to me was the resilience this experience instilled in her. Her philosophy is to cultivate a mindset to grow from experiences rather than just focusing on the outcome itself.
“I never lose, I only win or learn.”
Shori Hijikata, Co-founder of Feather
Shori subsequently had 2 years of management consulting experience at the Boston Consulting Group, where she learnt how to break down and solve problems in a structured way. This has proved invaluable during the early stages of Feather. Her passion for fitness has led her to found the Sydney Fitness Project. This is a fitness class she runs in person in front of the beautiful Sydney Opera House as well as online every Wednesday morning.
I was struck by her initiative to build an authentic connection with her audience. These include spotlighting members’ backgrounds on Instagram and directly engaging with her online audience during her fitness sessions. She actually called out my name just as I was about to slack off! Her insights provided the genesis of the idea that would become Feather. I believe she will have a strong empathy with Feather’s customer base.
Sam has a technology background, including technology leadership roles in 2 startups where he had to coordinate and manage overseas teams. This makes him well-placed to lead Feather’s technology team, particularly as he can leverage his Turkish background to build an affordable overseas technology team.
Scott has previous startup experience having co-founded Nook with his sister Sarah, and Will Chambers. Nook is an enclosed, sound-proof booth for open-plan workplaces made from recycled plastic bottles. It won the top prize of $25,000 at the University of Sydney Business School’s Genesis Program. Scott also has previous experience in sales and strategy roles.
Shori, Sam and Scott see a large market of $60 billion and an obtainable market of $1.2 billion assuming 2% capture of online creators. This market was growing at 20% per year, even before COVID.
They have just built the first version of their platform and are testing this with an initial group of paying customers in Australia and overseas. There is also a growing waitlist of creators who can be onboarded once the full platform is built.
Feather has the potential to scale rapidly. Feather’s pricing model is designed to scale with the creator’s income. Current charges are 6% of the creator’s sales on the platform plus $0.30 per transaction. The result is that Feather will be the beneficiary of their customers’ audience and network.
Victor Hugo, a French poet and novelist (The Hunchback of Notre-Dame), said,
“Nothing is more powerful than an idea whose time has come.”
Victor-Marie Hugo, French Poet and Novelist
It has never been more important to have a voice. COVID has only accelerated the confluence of technology tools and consumers’ increasing propensity to pay for online subscriptions or courses. The ingredients are finally in place for a middle class of creators to have a voice and touch their audiences’ lives directly.
Feather’s unique approach of a seamless platform to get creators online quickly, well-rounded team and strong empathy with creators, positions them well for this large and growing trend.
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