A rapid evolution and widespread availability of technology along with an increased tendency of consumers to put trust in individuals rather than corporates has given rise to platforms where people do not have to depend on agencies/corporates to deliver their skills to the end-user. These platforms that enable creators to directly monetise their skills through their audience are part of the ‘Passion Economy’. While it is still early days for the Passion Economy, it is fair to say that in the next few years, it will have a deep impact on the way we work and consume services.
There was a time when the only way we could get news was either through a singular TV channel or via the morning newspaper. It is fascinating when we realise how far we have come where we now have instant access to multiple sources of information including newsletters, app notifications, YouTube, Twitter, among many others. Another interesting point to note here that now creators are not limited to the government or the media companies.
An independent journalist on Twitter or Instagram who posts a daily video covering the latest news is now available as an (sometimes better) option. Alternatively, a newsletter created by an independent political analyst on Substack could fill you in with a curated selection of the important world affairs. Elsewhere, we see marketing dollars increasingly flowing away from TV ad slots directly to social media influencers who have built an audience.
A rapid evolution and widespread availability of technology along with an increased tendency of consumers to put trust in individuals rather than corporates has given rise to platforms where people do not have to depend on agencies/corporates to deliver their skills to the end-user. These platforms that enable creators to directly monetise their skills through their audience are part of the ‘Passion Economy’.
A San Francisco based Venture Capitalist, Li Jin, then a Partner at Andreessen Horowitz (a global VC company), who coined this phrase in a 2019 article, shares some other interesting examples “The top-earning writer on the paid newsletter platform Substack earns more than $500,000 a year from reader subscriptions. The top content creator on Podia, a platform for video courses and digital memberships, makes more than $100,000 a month.”.
The article goes on to highlight that the new platforms that are becoming a part of the Passion Economy “enable people to earn a livelihood in a way that highlights their individuality”. This is different from the Gig economy (e.g., Uber) where workers can monetise their time by delivering commoditised services (like driving, delivery, etc.). So, in a way, the Passion Economy is an evolution of the gig economy.
In these new platforms the services provided by the creator are more individualised and creative. In another article titled ‘How the Passion Economy will disrupt media, education, and countless other industries’ published in 2020, Li Jin highlights that platforms in the Passion Economy enable creators who originally did not have a way to monetise their creative or non-commoditised (or ‘non-producers’) skills to unlock their potential. On the demand side, it offers original ‘non-consumers’ a chance to get access to services they were originally priced out of (e.g., personal fitness, high-profile conferences/webinars) with a new product.
Furthermore, these platforms also offer ‘over served’ customers with a lower-cost alternative. As you would expect, this can disrupt multiple sectors, including entertainment, media, education, finance, fitness, among many others. Given the diversity of sectors that the Passion Economy can disrupt, the size that it can achieve is not known. In an article, Patrick Finlay, CEO of Dublin based Quorum highlighted that “People are excited to see how big it can get. And if it does get big, it's quite a positive mission.”.
Currently, most of the platforms catering to the Passion Economy are in the US, with pockets of activity emerging in Europe and Asia. Many of these platforms were highlighted in the 2019 article on a16z.com highlighted above. As expected, these platforms cater to various sectors. Within the media/content space, Anchor and Descript offer platforms for podcasters while Substack caters to the writers. Within education, Teachable, Outschool and Udemy are some of the popular names, among others. Platforms for professional coaches include Walden, Torch etc. Outside the US, Dublin based Quorum mentioned above is a mobile chat platform that gives creators a platform to interact directly with their clients. China, as expected also has many platforms in this space including Ximalaya which is an audio sharing platform while Fenda is a Q&A audio platform where paying users can ask questions to celebrities.
India offers a perfect setting for the Platform Economy to thrive. There are millions of users on various social media platform looking for easier ways to monetise their content. At a macro level, India has one of the world’s leading digital payments ecosystems in the world and generally boasts of a younger population (therefore a large number of digital natives) with a median age of c.27 years. With its operations in India, ScrollStack is a global content sharing platform for creators. The vision, as shared by one of the founders, Ritesh Mehta is to “make the selling of online content by creators as easy as selling physical goods”. Unlike Substack, ScrollStack lets creators share content in any form (audio, video, text) and monetise it as they wish (per article, subscription etc.). By adding a multilingual capability to the core of the platform, ScrollStack is also catering to the vast non-English speaking audience in the country and around the world, a feature that is currently lacking in other platforms.
To conclude, while it is still early days for the Passion Economy, it is fair to say that in the next few years, it will have a deep impact on the way we work and consume services. As platforms in this economy bring the barriers of entrepreneurship down, we might be heading to a digital world where a significant portion of the population exchange skills and services without the need for an agency or a company between them.