TPan here! I’m at Consensus this week, so I won’t be writing my usual pieces. However, I do have some great content for you from someone else in the space.
Today we have LJW with his thoughts on the new creator economy and how web3 and AI applications help to enable it. I met LJW while I embarked on my creator journey last year (thanks Wilson!) and we have become friends as we go through our respective creator journeys and careers. He is a Research Fellow at Harvard Business School, a web3 advisor, and a writer at Life in Color focusing on topics around emerging tech.
It’s been fun to see LJW’s web3 and AI creations, and now we get to read his thoughts about it. Check out more of LJW’s work at and follow him on Twitter.
The early Internet allowed anyone with access to consume information. It felt a bit like single player mode, where the consumer experience was largely human-to-machine. In the Web1 era, the user experience was defined by consumption. The internet accelerated consumption by allowing you to access an increasing amount of information with just a few clicks.
Web2 and social media platforms created a way for us to not only consume but create. We went from being consumers to creators. In Web2, everyone can become a creator. Sometimes creating means writing a tweet or engaging in a conversation. Other times it might be producing a full fledged show on Youtube or being a writer on Substack.
Web2 enabled Multiplayer Mode, where the consumer experience evolved into a consumer + creator experience. Web2 broke down the proverbial “Fourth Wall” and allowed us to connect with each other directly on the Internet. The Web2 experience is “Human to Human,” but governed by centralized platforms.
Brief History of Creator Economy, Shopify Blog
The Creator Economy has emerged as a powerful force on the Internet, allowing individuals to monetize their passions through content creation and distribution. Platforms like YouTube, Twitch, Patreon, and Substack have enabled creators to connect with their fans.
With the ability to create on the Internet, the Creator Economy emerged as an alternate form of livelihood for many different people.
Based on 2022 stats, the Creator Economy is ~$105 Billion industry with over 300M creators world wide, with both figures growing. But, while the industry is growing, a small percentage of creators captured the lion’s share of revenue on these platforms. For example, Spotify has 11M artists, but only paid out $636 per artist.
a16z, State of Crypto Report 2022
Allowing people to create promoted the rise of subcultures and niche communities. There is no interest that is too obscure on the Internet, which means whatever interests you have, there is probably a creator out there creating content around those interests.
Web2 has proven there is demand for creator led communities, where fans and consumers come together because of the creator.
The challenge is whether the average creator can sustain themselves in the Creator Economy that is heavily dependent on Web2 platforms.
If creators cannot make a sustainable living, in the long run, the creator economy will either (a) be ruled by the top x% of creators which might create a new type of centralized entity or (b) the creator economy will not be an attractive path for creators.
Of course there is another option that enables creators to make a sustainable living.
In order to make the creator economy sustainable, creators either:
need to find better monetization approaches OR
lower their cost of production such that what they make from what they produce can sustain their livelihoods OR
Both
Web3 handles (1) and enables better monetization for creators because technologies like NFTs allow the creator to create a more direct relationship with their super fans.
AI handles (2) and lowers the cost of production for creators, which allows them to produce more content at decreasing marginal costs (eventually approaching 0) and higher quality content.
Web3 technologies like NFTs enable the concept of digital ownership with users also having greater control over their online identities.
This empowers individuals to connect with others on their terms, along their true interests without depending on platform algorithms to arbitrate these relationships.
Individuals who have a particular interest can self-select into the communities they want to actually be a part of, encouraging them to actually participate in the community. By enabling a sense of digital ownership and shared responsibility, a small community that might be consider niche by traditional standards, can form organically in a more grassroots manner to create and capture economic value.
For the creator, they can more easily identify their super fans (power users, loyal fans, etc) and engage directly with them. For example, a creator can sell a small collection of NFTs, and those who buy and hold the NFTs naturally self-select into the creator’s community. With a highly engaged fan base, fans might also evolve from consumer to participant and co-creator.
In this state of the world, the original creator can now organize their community and focus their attention and engagement with their super fans, as opposed to trying to cut through all the noise on a platform with orders of magnitude more users.
AI-driven tools allow people from all walks of life to develop and distribute their ideas and creations without the need for extensive technical knowledge or resources.
AI can help creators optimize their content, streamline their workflows, and reach new audiences. In short, generative AI and related technologies (ChatGPT, MidJourney, etc) are revolutionizing the way we create.
AI drastically lowers the cost of production – which removes barriers to participation and experimentation.Â
With a lower cost of production, creators can run more experiments and focus on creating and serving higher quality content to their communities.
Over the past few weeks, creators like myself have started to expand to other creative mediums. While I mainly write long form essays, it’s now easy to experiment with art on platforms like Canva supercharged with AI tools.
Here are some examples of how I remixed and composed on top of my NFT:
Someone on Twitter remixed my BEANZ NFT, and I remixed it further with AI
I created this on Canva using my BEANZ, which is a reference to another popular art piece by Jack Butcher
Created this using an AI tool someone in the NFT community built, with a few prompts
On top of all of this, other creators are now creating AI tools to encourage non-creators to become creators.
This is the power of composability in a nutshell.
All of this democratizes creativity by allowing any creator to access tools that traditionally were only accessible to companies that were funded/raised capital.
In a world where creators can organize niche communities that are super engaged, what we might end up with is a world that has infinite niches run by 1-Person companies.
A creator can be a 1-Person company because of all the tools that are now accessible to them. They can reduce dependency on platforms and/or firms because these technologies take on a lot of the roles that these platforms and firms use to carry out.
At the macro level, the meta game of the world and business might go from one of concentration, scale and zero sum games to one of distributed power, niche communities and positive sum games.
Rather than having a world where a few platforms decide the rules of engagement where the user experience increasingly becomes average — because a large platform cannot build niche products and features that service small, but highly engaged communities …
We might have a world where tools and technologies like Web3 and AI help more creators create highly engaged, focused and specialized communities that cater to the true interests and passions of everyone involved.
Of course there are a lot of details to figure out.
Web3 has had its ups and downs.
AI tools are still relatively new.
But over the long run, emerging tech like AI and Web3 formalize what humans already prefer, but on the Internet.
Everyone gets to find their corner on the Internet.
“Everyone gets to find their corner on the Internet.” Love LJW’s mic drop one-liners!Â
If you enjoyed this piece from LJW, check out his Substack at Life in Color and follow him on Twitter.
See you Thursday!
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