Original Title: "Pain Points and Opportunities in the Creator Economy of the Web3 World"

The Rhythm Research Institute detailed the underlying logic of how Web3.0 fully unleashes the potential of the creator economy in the previous article, "Now is the Best Time to Join the Web3 Creator Economy."

However, different types of creators face different pain points at different times, which become stumbling blocks that hinder their progress. Content editing, market operations, promotional planning, and other tasks that are not directly related to the creators' content creation become unavoidable burdens for them. Although various tools and institutions have brought a certain degree of convenience to creators, centralized rent-seeking remains an inescapable issue.

This article comes from a16z Future, authored by Dan Runcie, founder of the media company Trapital in the hip-hop music field. It discusses the hierarchical differentiation of the creator economy from a high-dimensional perspective, points out the common pain points of creators at each stage, and finally summarizes various tools and platforms that serve creators. Although the solutions lean towards Web2.0, they provide a logical foundation for us to think about optimal solutions. The Rhythm Research Institute NFT Labs has translated the entire text:

To this day, whether you are an artist, developer, or someone with other skills, you can be collectively referred to as a creator, and there is still vast development space in the field of the creator economy. This is a multi-billion dollar market driven by over 50 million people, and it is also a far-reaching movement that brings more than just a few platforms that allow people to make money; it will enable more people to make a living from their creativity.

However, there are still some little-known and often overlooked issues in this new economic model. Creators still face extremely unequal competition, and those replicable success stories are just a drop in the bucket. What is the reason for this? Those who categorize all "creators" into one group may miss the opportunity to step into the next stage of the creator economy: using specific tools to help stars break through bottlenecks, improve content quality, and provide specific resources to address certain pain points. To help creators elevate their levels, tool developers need to think more carefully about the standards of creators. Nowadays, many creators do not receive technical support that matches their level.

Reasons for the Need for More Tailored Creator Tools

When the era of social media Web 2.0 began in the 2000s, more people than ever turned their hobbies into careers. Photography enthusiasts posted their work on Instagram and became professional photographers; fitness enthusiasts shared their workout videos on YouTube and became influential fitness experts; non-professional musicians uploaded their works to SoundCloud and then became well-known musicians topping the charts.

But the reality is harsh. We often only see one successful case, unaware that dozens of other creators merely gained a new hobby, and several others tried to make a living from their work but did not achieve their desires. This is a typical case of the 1% rule, where only a very small number of people receive the rewards they deserve.

In fact, most competitive fields are like this, but this contradiction should prompt companies and platforms in the creator economy to more clearly understand their starting points and who they are really serving. Should they enable that 99% to pursue their childhood dreams? Should they help that 1% build stronger businesses? Or should they just collaborate with that 0.1% or 0.01% of creators to continue expanding their wealth? Each group has different pain points, but since the entire addressable market does not cover billions of users, some of these pain points are overlooked.

However, like the creator economy itself, if a creator platform chooses to focus on a specific niche, addressing their pain points will still bring considerable benefits to the platform.

Each Level of Creators is an Economy

A founder of a startup seeking pre-seed funding is unlikely to approach a PE firm for investment. Founders and investors understand the different needs behind fundraising stages. Similarly, the creator economy is divided into different levels, and creators need to match with the most suitable companies or platforms to achieve the best results.

Level 1: Amateurs, typically referring to those who create content for fun or as a side hustle.

With the advancement of technology, the entry threshold for creators continues to lower. For example, in audio, tools like Anchor allow people to easily publish podcasts; Descript enables anyone to edit podcasts effortlessly; Splice allows anyone to create music using royalty-free samples, and so on. Thus, more amateurs will emerge.

The biggest pain point at this level is that these individuals either lack the time or money to invest in their business or do not know how to market themselves. Although they usually strive to reach a certain level of production value or quality content, the fact is that most amateurs remain amateurs, with only a few able to earn enough money to make a living from their creations.

Level 2: Full-time Creators, typically referring to those who can make a living from their creations.

These creators are often seen as success stories by platforms; they started as amateurs, earned some income by publishing their work on the platform, and then quit their day jobs to create full-time. Their income may be slightly better than that of amateurs, but not by much.

The problem faced by creators at this level is the lack of operational experience, which consumes a lot of their creative time, and they also do not have much time to operate or resources to promote their work.

Level 3: Stars, typically referring to those who can establish partnerships with external brands such as media, record companies, and publishers, maximizing their influence.

Their biggest challenge is often maintaining fame and influence, and potential brand crises can cause these creators to lose partnerships or even end their careers. They need to enhance their ability to understand how to leverage their brand for commercial and financial success.

The biggest challenge here is maintaining fame and relevance; potential brand crises may cause these creators to lose partnerships or even their livelihoods. The real pain point in elevating their level is figuring out how to leverage their brand for commercial and financial success.

Level 4: Tycoons, typically referring to those who have established companies that continue to grow and outlast the creators' own careers.

For example, Rihanna's Fenty and Gwyneth Paltrow's Goop. When Beyoncé Knowles says, "My great-grandchildren are already wealthy," she simply means she is very rich. Clearly, this level is the hardest to achieve.

And just like any other hierarchy, we often naturally assume that those at Level 3 are more successful than those at Level 2, but the reality may not be so. People's definitions of success vary, and creators weigh their choices differently at each level. For instance, some independent hip-hop artists earn more than many signed to major record labels, and some comedians have made significant income without external capital promotion or appearing on HBO and other networks.

Thus, the difference between Level 2 and Level 3 lies in different forms of success, which also depends on the creators' values. For example, those who want to be famous and successful may start signing with companies for promotion even before they become full-time creators and earn enough money; while those who value profitability and control may not rush to sign with companies. It’s like the famous question: "Do you want to be a millionaire or a king?"

For those who become stars, their success becomes closely tied to their fame, and they will do many things to maintain their fame and influence, which can create a virtuous or vicious cycle.

Tycoon Mindset

Most of the above content is based on my personal experiences and careful research. As the founder of Trapital, I have studied how hip-hop artists build their business models, the challenges they face, and how they elevate themselves through different levels to enter the next level.

From past experiences, I found that Black artists are more willing to produce independently and establish their own paths. However, they may ultimately, as mentioned above, jeopardize their artistic careers, partly because many Black creators struggle to gain support and recognition from non-Black creators, regardless of what stage their careers are in. If they do not believe that the industry's system can deliver the rewards they deserve, they are often more willing to solve problems on their own.

For example, one reason Jay-Z founded Roc-a-Fella Records was that no major record label was willing to sign him. Even after he became president of Def Jam, his power remained limited. When he wanted Def Jam to venture into the headphone and apparel markets, he was still rejected by the record label executives while raising more funds.

Jay-Z ultimately founded Roc Nation and became a billionaire, largely because he conducted deals entirely according to his needs. This trajectory is not common in rock or pop music; historically, most artists' successes have come from support from record labels and radio stations, which often favor rock, pop, and country music, but at the same time, these music forms lack the motivation for independent development.

Jay-Z's business experience has influenced a generation of similarly undervalued hip-hop artists. However, they also face significant challenges. This systemic lack of resources is not only a challenge for hip-hop artists but also for Black artists. The appeal of the creator economy mainly stems from the freedom creators have to create while being able to earn revenue, without interference from mainstream record labels or publishers.

However, this appeal is often unrealistic. However, if the service platforms or tools for these creators can have a clear positioning, such as who the platform serves, what level these creators have reached, and what value they can bring, it may help turn most fantasies into reality.

Opportunities in the Creator Economy

In the creator economy, builders need to know which segments of their assumed target audience are over-served and which are not receiving the attention they deserve. The most successful creator platforms often have a deep understanding of their user base and focus on solving users' problems and needs. Good opportunities can help creators better manage their businesses.

So far, most of the revenue in the creator economy comes from mature and reliable platforms like Facebook, Snapchat, and YouTube. These platforms aim to cultivate part-time creators into full-time creators. This is not surprising, as technology is scalable, and amateurs represent the largest potential market. This is essentially consistent with the model of social networks.

However, there are still huge business opportunities in the creator economy on other levels, especially those that go beyond standard "creator tools."

Technology can often solve many "seemingly unscalable" aspects of the creator economy. As the creator economy evolves to a new level, they often need to hire more people. There are significant differences between a company of 10 people, 25 people, and 40 people. However, technological tools and platforms can effectively alleviate most pain points arising from the transition in personnel and the elevation of creator levels.

Currently, the process of transitioning from full-time creators to stars or tycoons typically relies on expensive custom solutions. Creators can collaborate with agencies, agents, consultants, and contractors to address specific needs. However, technology can solve these problems. Companies like Smooth Ops and Mad Rev have emerged to help creators manage operations, find partnerships, endorsements, and more. These companies gain experience from each client, which helps solidify their position over time.

For example, Indify helps artists find investors in the startup phase and connects them with experienced business partners. This is often an overlooked aspect in the music field. External capital is also another option for music labels. Additionally, investors themselves can also be creators, thus creating a bilateral market. For instance, a comedian can invest in a well-known artist and then use that artist's music in their next stand-up show for a win-win situation.

These technological tools address the business aspects of the creator economy, which are often overlooked. However, creators still need to know how to establish a sustainable business model, and this business knowledge is fundamentally different from the creative knowledge that artists are familiar with.

Clearly, we need to provide tailored solutions for creators. Many believe that the multi-billion dollar investment may mean that the creator economy market is already too saturated, but this is not the case. There are many emerging amateurs who need marketing assistance. For example, Issa Rae founded her music label and distributed music through her media channels. Many rising diverse musicians are also influenced by this, as the opportunity has emerged for them, but the technological tools have not kept pace with the times.

If these technological platforms succeed, there will be more creators than ever before. Whether in marketing, copyright expertise, investment, operations, community building, or product launches, they can have tailored solutions based on their needs. Companies that recognize this trend and develop specific tools for creators will have a significant advantage in the future. I believe it will elevate the creative level of creators to a new stage.