Will the Creator Economy Empower SMBs?

One emerging segment of the SMB SaaS world that Localogy has begun tracking is the creator economy. It’s most notably comprised of the Etsy artists and cooking shows of the world. The common thread is an online persona or micro-brand that distributes goods or knowledge online.

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 format, which involves some production rigor. And in some cases, they’re not selling physical goods but rather knowledge or instruction.

For example, this segment has expanded in the Covid era as yoga instructors and music schools were forced to raise their game when it comes to video production. This trend has correspondingly motivated software providers that build production and operations tools for creators.

Are Instagram Stories Fit for SMB Marketing?

Collision Course

Since we’ve started tracking this SMB creator trend, we’ve been collecting examples of new product launches and funding rounds. These include new companies that have come out of the woodwork to fill the demand gap, as well as established companies like Instagram rolling out new features.

The former includes StreamElements which recently raised $100 million and announced 1.1 million creators on its platform. It provides video production software, analytics, and easy ways to live stream to YouTube, Facebook Live, and Twitch. It also claims to have grown 233 percent year-over-year in usage.

As for the larger-companies, TikTok recently boosted its transactional capabilities with a slate of new eCommerce integrations. And YouTube announced today that it’s expanding its live shopping program, including a week-long event called “YouTube Holiday Stream and Shop” starting November 15.

The challenges for creators aren’t new, as they mirror the dynamics of any eCommerce business (plus video production of course). Among other things, this includes transactional functionality, order fulfillment, and other logistics. Alleviating these pain points is the opportunity for creator platforms.

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 like Shopify. In the meantime, they appear to be testing the waters by partnering with the likes of TikTok through integrations.

TikTok’s eCommerce Conquest Blazes On

News Feed

All of the above taps into a sizable SMB market, though this is a slightly different flavor of SMB than those we typically associate (e.g. lawyers, plumbers, roofers, hardware stores, etc.). This makes the creator economy a new addressable market to which SMB Saas players can expand.

Meanwhile, we see no sign of the creator economy slowing as SMBs hang on to their newfound skills gained in the pandemic. To further characterize the action in the sector, 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.

Share Article...

Follow Us...

Stay ahead of the curve and get the latest on Local straight to your inbox.

By submitting this form, you agree to receive communications from Localogy. You can unsubscribe at any time.

Mike Boland

Mike Boland, senior analyst with Localogy, was one of Silicon Valley’s first tech reporters of the internet age as a staff reporter for Forbes magazine starting in 2000. His comments have appeared in The New Yorker, The Wall Street Journal and The New York Times.

All posts >