Not every startup in the creative economy is designed with creators in mind

If you were a scrappy youngster surviving on YouTube ad money and brand partnerships ten years ago, you were undoubtedly told you didn’t have a real career. You’re now a member of the creator economy, a buzzy new sector, if selling your creative output is how you pay your rent.

Creators are the fastest-growing category of small business, according to a widely referenced landmark research from venture capital firm SignalFire. Despite the fact that the creator economy just started growing a decade ago, there are currently 50 million people who consider themselves “creators,” and according to SignalFire, more American youngsters desire to be YouTube stars (29%) than astronauts (11%). As a result, it’s not surprising that more and more companies are springing up to supply tools for creators.

I’ve written about credit card firms for artists, community-building tools, and companies that assist you create a product to sell as this industry has grown, among other initiatives. However, as my inbox fills up with far too many creator-focused startup pitches, products, and opportunities to ever evaluate, I’ve observed a worrisome trend: not all of these firms are beneficial for the artists they claim to serve. Some of them may be predatory in nature.

What happens if an all-in-one creative platform goes bankrupt, for example? What happens if creators put all their eggs in that basket? What influence do big tech acquisitions have on the people who make money off of such platforms? How can creators defend themselves from exploitation while venture capitalists invest in them as if they were startups?

Startups must have a backup plan in place to ensure that the creators who trusted them are not doomed if they do not become the next Patreon. I’ve started asking these questions to every startup that claims to be a “one-stop shop” for the creative economy or a “all-in-one solution.” Fourthwall received a great response.

The firm stated that it has set aside three months of emergency operational expenditures to ensure that if they fail, they can assist creators in transitioning to alternative platforms. If this were to happen, Fourthwall also stated that it would make its platform open source. In any case, the friction isn’t exactly beneficial.

Within the creator economy, there is an inherent conflict between the promise of financial independence and the understanding that this freedom comes at a cost. As more startups wants to link talent with brand deals, create monetization tools, and develop new social platforms, creators need to know what to look for to avoid a bad situation — and startups need to think like they’re in a creator’s shoes, understanding that if a creator trusts them with their business, they have a moral and financial responsibility not to mess it up.

‘A platform is not your friend’

Podcasters were alarmed when Spotify purchased the popular podcast producing service Anchor in 2019. However, Amanda McLoughlin, CEO of Multitude Productions, an independent podcast collective, had seen similar large acquisitions before. McLoughlin has been a YouTube artist since the beginning, so she’s watched the industry evolve from both a creative and a financial one. When Google purchased YouTube in 2006, it was a watershed event in her early career as an online artist.

“I received a dozen letters from friends and colleagues worrying about what such a massive and unexpected consolidation implies for those of us attempting to earn a career in podcasting before 9 a.m.,” McLoughlin wrote at the time. As a result, she reviewed the lessons she had learnt from the YouTube purchase:

Broaden your revenue streams, don’t put too much faith on certain platforms, and believe in your own worth.