- Mercedes Bent is a Partner at Lightspeed Venture Partners and focuses on consumer, fintech, edtech investments.
- Millennials and GenZers are becoming less dependent on employers for job security.
- Employers will be under more pressure to “retain and reward their workforce” who are looking for more independence.
- See more stories on Insider’s business page.
Freelancers. Gig workers. Creators. Self-employed. The blossoming of overlapping terms to describe independent workers is yet another sign of a major shift happening in the global workforce: the shift toward a majority self-employed world.
In a few years, if your sole form of income is from a traditional employer (i.e., you aren’t self-employed), you very well may be in the minority.
If you’re a GenZer, this is already becoming the new norm: 50% of working GenZers freelanced in the last year.
According to Freelancers Union, at current rates of growth, the overall US workforce will be majority freelance by 2027.
This survey was done pre-pandemic, before 20 million people lost their jobs – nearly 15% of the workforce. The pandemic accelerated these trends, adding 2 million freelancers in 2020. Many of them became creators.
This is not just about your 15-year-old niece lip syncing to Dua Lipa on TikTok. Today more than 50 million people globally consider themselves creators, according to seed investment firm Signalfire.
And the creator economy is still in its infancy. Kids who started out in middle school wanting to be the next Issa Rae, Seth Rogen, or Oprah are now 18 to 22 years old and earning incomes for the first time. They’re just beginning to understand how to effectively rent out their time and audience.
Creators are the new SMBs and startups.
Fueling the boom is an increasingly robust infrastructure that makes it easier for creators to find followers and monetize their talents. While OnlyFans, Patreon, Cameo* and Substack are three of the best-known platforms, there are now more than 200 startups helping to support creators.
Creators are even leaner versions of tech startups. Kylie Jenner famously built a makeup company earning hundreds of millions with just 7 full-time employees.
Many creators rely on established tech platforms and build leaner “storefronts” on Instagram and YouTube. They don’t need people with the skills to build new tools, in the same way tech startups of the last decade didn’t have to hire engineers to build servers, thanks to hosting services like AWS.
Unlike Instagram influencers, creators don’t require hundreds of thousands of followers to generate a sustainable income. Think of all the TikTokers who earn $50 for mentioning a product in a video. Substack writers can make a decent living off of 1,000 fans. Micro-influencers like these are becoming increasingly common, fueled by companies like Linktree, Narrativ, Cardea, and Beacons.
Obviously, there’s a strong generational component to this trend. For Millennials and Gen Z, who lived through or saw their parents live through the recession of 2008 and the pandemic, the phrase “job security” is an oxymoron.
They don’t want to be dependent on an employer for their livelihoods. They want to follow their own passions and be in control of their own destinies. The creator economy allows them to do that.
Some creators are using their platforms as an audition for larger mainstream outlets.
For example, Sarah Cooper turned her viral Trump impersonations on social media into a Netflix special. For others, the goal is to be self-sustaining and become your own boss – and to possibly build a small enterprise or large enough following to warrant having an agent manage opportunities.
If you’re a creator, you need to be thinking about next steps.
- Success is about more than getting millions of views on TikTok or Twitch; it’s about building a business. This means you need to get your arms around all that entails – hiring employees, setting up corporate structures, securing funding, distributing equity, and so on.
A classic example of this is MrBeast (aka Jimmy Donaldson), who started out as a YouTube influencer and now operates a burger delivery business with 600+ locations.
- The platform where you gained your fame is not necessarily a sustainable resource. You need to figure out how to leverage that platform, either by selling ancillary products or using it to grow an external enterprise. Instead of running your business on top of Insta or Snap, they simply become your marketing arms.
- Think strategically about the platforms you use. Many now offer programs that support creators early on, like Pinterest and Tiktok, or offer supply side equity, like Airbnb. Ultimately this is about long-term wealth creation, not short-term fame.
The growth of the creator economy is also going to put a lot more pressure on traditionaly employers to retain and reward their workforce. At some point, even people who have stable and secure jobs with good benefits are more likely to leave them to pursue their own dreams.
Corporations will need to continue to offer more flexible schedules, work from home, and sabbaticals; they’ll also have to pay greater attention to issues like work-life balance and diversity.
It will also add an additional strain to the B2B ecosystem – the services, tools, and infrastructure that’s been built up over the years to ensure that industrial corporate systems can be self-sustaining.
Large organizations will need to find new ways to remain relevant in the eyes of young talent as more people assert their independence.
In short, they’re going to have to get creative.
*Lightspeed portfolio company
Mercedes Bent is a Partner at Lightspeed Venture Partners and focuses on consumer, fintech, edtech investments.