One emerging subsector of the broader SMB SaaS world that Localogy tracks is the creator economy. Not necessarily a new segment, these are the Etsy artists and cooking show upstarts of the world. The common thread in all cases is an online persona or micro-brand that distributes goods or knowledge online.
This online creator segment has expanded in the Covid era as SMBs like yoga instructors and music schools were forced to join these ranks of digitally-distributed pros. Correspondingly, the trend breathed new life into a new breed of software providers that build production and operations tools for creators.
Meanwhile, broader tech-world evolutions have addressed the creator economy, resulting in a sort of perfect storm. These include TikTok and the arms race of creator-targeted features from more established players like Instagram (Reels) and Snap (Spotlight). The race is on to be the go-to creator platform.
Demand Gap
We’ve been tracking several examples of the above, including new companies that have come out of the woodwork to fill the creator demand gap, and established companies rolling out new features. For example, just this week, TikTok expanded its LIVE platform with new features like events, co-hosts and Q&As.
As for smaller SMB SaaS vendors, one example is Pietra, which recently raised a $15 million series A from top-tier investors like Founders Fund and A16Z. Formerly operating as a marketplace for jewelry sellers, it has pivoted to be an all-in-one platform to launch, market, and manage an online-creator operation.
Of course, the challenges for creators aren’t necessarily new, as they mirror the dynamics of any eCommerce business. Among other things, this includes supplier relations, eCommerce functionality, order fulfillment and other logistics. Alleviating these pain points is the opportunity for creator platforms like Pietra.
But one thing that separates the creator economy from traditional e-commerce is video production. Creators often have to show their wares in a sort of QVC-style, which involves some production rigor. And in some cases, they’re not selling physical goods but rather knowledge or instruction, like the Yoga example above.
And that’s where the creator economy collides with the traditional world of SMBs. The question is if it’s an opportune area of expansion for existing SMB SaaS players (think: Shopify). As often, that question comes down to the degree of product adjacency, economies of scale, and market expansion that can be gained.
YouTube Shorts Primes the Content Pump with a $100M Creator Fund
New Vertical
One takeaway is that creators are SMBs after all, though sometimes a different flavor of SMB than local businesses (lawyers, plumbers, roofers, hardware stores, etc.) that we typically associate. But that disparity also means that the creator economy is a new vertical to which the SMB Saas world can expand.
To further characterize the action in the creator economy, we’ll leave you with a handful of news items we’ve tracked. And we’ll continue to watch closely to see where it goes next.
- Facebook will lure creators with $1 billion in payments
- Pinterest rolls out new features that let creators make money from Pins
- Tumblr debuts Post+, a subscription service for Gen Z creators
- YouTube Shorts Primes the Content Pump with a $100M Creator Fund
- TikTok expands LIVE platform with new features, including events, co-hosts, Q&As and more
- Pink Floyd drummer invests in Disciple Media, a platform aimed at the creator economy
- A bank for the creator economy, Karat Financial raises $26M in Series A funding
- Nas Academy raises $11 million to help creators build their own MasterClass-like courses
- Norby raises $3.8M for an all-in-one creator marketing platform
