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Hey readers,
Still in Austin. Wrapping up my book, and decided to procrastinate a bit by… writing on Substack. One book-related thing that I did do today that’s productive is to set up a landing page — http://coldstart.com — that I can attach to my email signature :)
Anyway, so back to the main topic.
It’s been fun to see the emergence of the creator/influencer/passion economy over the past 18 months — much of the discussion driven by this platform, Substack. People tend to use the terms interchangeably but I actually think there several important differences among the two that are used most often — Passion economy vs Creator economy — and I wanted to dash off a note quickly on what I see as the primary difference.
To unpack the Passion economy, I want to start with Uber. As y’all may know, I spent a few very, very interesting years there — it was a period where we expanded into hundreds of markets, entered China (then left!), kicked off everything from self-driving to Elevate (aka VTOL/flying cars) and many other ambitious projects. It was fun, but at the core, it was a marketplace business that was about paying millions of drivers, collectively, many billions of dollars a year. What a cool business model, to make it easy for anyone to make money. The problem was, the prospect of driving — to me personally — never really appealed.
When I left Uber and joined venture capital, I still had the core idea with me, for how you’d go about paying people a ton of money as a core business model, but maybe to do things that I would actually be personally interested in. Like writing! Or creating a small ecommerce shop! Or teaching! Or a myriad of other white-collar(ish) forms of work that might seem interesting.
In my interpretation (certainly not the “right” one or the “canonical” one) that is the core of the Passion Economy. How do you let people follow their passions, which might be something accessible (sports! music!) or maybe something weird (underwater basket weaving?) and earn a living from it. And how do you match these people with other people who might want to learn or experience what they do. I worked with Li Jin, among others, to initially define this as a new stage of marketplace company. Later, Li authored a great piece that defined the Passion Economy more comprehensively. Much credit to Li for putting all of these thoughts together!
Importantly, the people who work in the Passion Economy may not have any involvement in social media at all. They might just be tennis coaches, or music instructors, or something else. Obviously it can help to have a social media audience as a way to create demand — and ultimately shift a startup addressing their needs as a B2B2C type play — but it’s not necessary. From the marketplace lens, a platform should let people do whatever they want, and also help generate demand.
In contrast, the Creator Economy is a subset of the Passion Economy, since it’s specifically become about social media and content creators. A lot of these creators monetize using advertising and sponsorships, not by taking direct transactional revenue from their customers. It’s an important trend, but not the only trend.
Ultimately, I think there’s more to “the future of work” than everyone becoming content creators online. Yes, that will be a way for people to do stuff, but it would be a wonderful vision to let anyone follow their passion and earn a living without needing to become popular on Instagram or YouTube.
If the Passion Economy thrives, it becomes a new way for people to work. Post-pandemic, not only can we potentially live anywhere, but we can also work on whatever we want. You can engage in social media, or you can simply show up to a marketplace-like app and start servicing the demand there. And the Creator Economy will also work, for those we prefer to earn a living through social media. For those who want managers and co-workers and offices, you’ll be able to engage a more traditional path. But for those who want more flexibility, I think the next generation of tools will bring us there.
OK - that’s my note for the day. Hope you’re all having a lovely day, and back to book writing for me.
-Andrew, Austin TX