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Creator economy unicorns are rarer than investment decks would lead you to believe.
Yes, the creator economy is somewhere between a $250 billion and infinity-billion market depending on what report you trust.
There are the platforms of course: Google, Meta, ByteDance, OnlyFans, and…does Twitter still count?
There’s your classic ‘it’s a unicorn because the investors said so’ companies like Patreon, Spotter, MrBeast, Whop, and Linktree, but those often suffer the fate of FaZe and Jellysmack: the valuation returns to reality under public scrutiny.
And with the announcement that StreamElements is winding down unless it finds a buyer, it feels like a good time to reflect on expectations we’ve built around creator economy companies.
And yes, it’s time to take out the pitchforks and torches, because I’m about to tell investors that they’ve spent a decade mostly wasting their money on the creator economy, so get ready to tag that special VC or PE person in your life!
Also in this edition:
🤔 Where the Big Platforms are Vulnerable to Disruption (Thoughts Are My Own)
🌍 TikTok Ad-Free Launches in Europe
🍑 Nectar Social Sweetened by $30m
⚡️ Volt Factor Knows Content and IP
🇬🇧 YouTube and the BBC Launch Creator Economy Program in U.K.
💪🏼 Jobs from Los Angeles Tourism & Convention Board, Moose Toys, and Bucketsquad
🎭 …and a dank meme from yours truly!
Let’s get into it.
NEWS:
What Happened to StreamElements?
TLDR:
StreamElements is a 10-year old company that has raised over $110m from huge investors from Softbank to Paypal Ventures to Samsung Next, with the most recent $100m round closing in 2021.
Co-founder Gil Hirsch said during COVID they saw 233% user growth, skyrocketing past 20 million users and 200 employees.
The COVID boom didn’t last, and the freemium model couldn’t sustain the size of the org, the brand marketplace never caught full traction despite the aquisition of Paragon meant to increase creator deals and services, and the toolset was never able to expand beyond the ‘single platform risk’ of Twitch. This is a story of exhausting the TAM.
StreamElements isn’t a good tech stack. It’s a great tech stack.
Almost every streamer you know uses donation widgets, screen overlays, and templates from StreamElements or companies with a similar offering.
In other words, the thesis was correct.
Live streamers are a huge part of creator economy culture and commerce, they want to look great from day-one but don’t always have the technical expertise to set up streams with automation and graphics, and this led to 23 million live streamers signing up.
Okay, so as soon as five years ago, everything was going well.
Trust me when I say: blowing through $100m in investment in 5 years is no easy feat.
But it happened.
So…how? And what can we learn from this?
BEWARE THE FREMIUM MODEL: My auto dealership offers free popcorn while you wait for your car to be serviced. I usually drill through three bags within my 1 - 2 hour wait. If they started charging $1 per bag, I would buy exactly zero bags. However, I never go to a movie without paying $8 for a similar product. The lesson: once you’re mentally conditioned to believe something is free, it’s hard to get customers to pay. And StreamElements gave away a metric ton of value on the free model.
BRAND DEALS DON’T SCALE: Back in 2012, we launched a platform called ‘Gorilla’ at Fullscreen, where a brand can put up a brand brief, creators can apply to join the campaign, and, if accepted, the brand then pays the creator all on the platform. Fourteen years later, not much has changed, including the problem: finding the creators isn’t the hard part. The back-and-forth is the hard part. StreamElements had a lot of campaigns, but they were mostly low-quality mobile games, and that taught their 23 million gamers to mostly ignore them. I have a feeling they thought this was going to be their way to astronomical success, but that’s simply never been true.
‘CONTROLLING CONTENT’, UNTO ITSELF, DOES NOT EQUATE TO COMPANY VALUE: If I hear one more platform, digital marketing company, or god-forbid manager say their market differentiator is ‘we understand content so well that we’ll get to participate in revenue my competitors can’t’, I’m going to join a no-electronics hippie commune in Oregon. It shows one of three things: the leaders don’t understand creators (it’s usually this one), the team is very, very full of themselves (strike that, this is usually the one), or they’re lying to raise money (actually, no, this is the one). Creators are great at making content. That’s why they’re creators and not Facebook post commentors. Companies that believe they can take a larger rev split, get creators to pay for a subscription, or ‘own’ part of their companies because they have tools and expertise to uplevel content simply hasn’t proven to be true.
So net-net, does this mean nobody should ever put huge money into creator economy businesses because, you know, it’s almost never worked in the past?
Heck no!
But when I look at the biggest investments in our space, almost every single one is epically overvalued. Companies usually don’t need nine-figures to scale in this space. It’s too competitive, moves too fast, and infinite scale in this market is a lie.
The best companies have to move very, very fast to continue expanding their market, deftly finding ways to approach more customers/creators in a way they can monetize, and constantly stay one step ahead of culture.
StreamElements was on the right track, but I remember thinking at the time that this investment is a death sentence.
If you want to know the next five companies that are on their way to suffer the same fate, my DMs are open.
Investors see ANOTHER return from Masterworks (!!!!)
That’s 6 sales in 7 months. 29 all time. And the performance?
16.5%, 17.6%, and 17.8%, net annualized returns on sold works held longer than one year (See all 29 at Masterworks.com)
It’s not from stocks, private equity, or real estate… it’s from contemporary and post war art. Crazy, right?
With Masterworks, you don’t need to be a BILLIONAIRE to invest in multi-million dollar art anymore.
Historically, the segment overall has had attractive appreciation and low correlation to stocks.*
Masterworks targets works featuring legends like Banksy, Basquiat, and Picasso, identifying what they believe to have significant long-term appreciation potential, not just at the artist level but at the level of individual artworks.
As one of the largest players in the art market, with $1.3 billion invested over 500 artworks, they pass critical advantages through to their 70,000+ members to add art to their portfolios strategically.
Looking to diversify your investments in 2026?
*According to Masterworks data. Investing involves risk. Past performance is not indicative of future returns. See important Reg A disclosures at masterworks.com/cd.
THOUGHTS ARE MY OWN (TAMO):
The Biggest Platforms Can Be Disrupted
Meta is bigger than your start up. They can spend tens of billions of dollars on a failed metaverse without batting an eye. You can’t.
So why am I about to tell you that you should build that brilliant platform you’ve been kicking around in your notebook?
Let’s go quantitative first, then go qualitative.
A few stats to start:
60% of Gen Z says social media has a negative impact on their lives.
The American Customer Satisfaction Index scored Facebook at a 70/100, the same score as Truth Social, about whether users ‘like it’. That may sound okay, but it’s really, really bad.
Social media time spent daily has dropped 10% amongst US adults in the past four years.
The top three reasons people hate social media: feed quality decline, algorithm-first vs. friend first, and ad saturation.
We’re in a shrinking market for a product that most users actively dislike and the products are constantly being built away from the direction their customers are asking for.
Then the final big qualitative one: customer service for creators is getting worse.
Pages disappear overnight, monetization gets shut off randomly, CPMs are always changing.
It’s nearly impossible to build a stable business on these platforms, and it’s getting worse.
Every time the big tech platforms announce layoffs it hits creator-facing roles. The customer service my talent receives has been on a tragically-steep downward-slope for a decade.
Tens of thousand of dollars in accounts that can’t be accessed. A black market of connections to people at platforms for simple asks. Yes…that includes bribes.
So where is everyone going? Dark social.
Nearly half of Gen Z uses Discord. 1 in 5 Americans subscribe to a Substack. 48% of Gen Z plan to decrease their social media usage as if it’s quitting smoking or stopping the 2 am Taco Bell Door Dashes.
In other words, build that platform, and focus in three places:
Celebrating and respecting creators at all sizes.
Make terms of service clearly communicated and evenly administered.
Listen to your customers.
That’s it. That’s the game. BlueSky did it. Musical.ly did it before it became TikTok. Vine did it before Twitter tanked it.
It can be done. Just don’t act like Big Tech.
FAME & FORTUNE
What creators, brands, governments, and platforms are making waves this week in the name of fortune, fame, and fun?
🌍 If you have three pounds ninety-nine burning a hole in your pocket, TikTok launched an ad-free subscription in the U.K. Considering YouTube has 125 million paying customers across YouTube Premium and YouTube Music, it’s a surprise it took this long!
🍑 Nectar Social is another AI social media administration play, but now has $30m for some runway to crack this code! Am I bullish on AI’s ability to build and operate online communities? Not yet. But if someone develops the right alchemy for this, this is a massive market (and I’ll surely be out of a job!)
⚡️ Alan Chikin Chow and Burnt Peanut are two of the most explosive creators in recent years, and Volt Factor has built the infrastructure for both. As we start to see real infrastructure needs for these massive online brands, expect more companies like Volt Factor zapping onto the scene!
🇬🇧 150 pupils are in the first cohort for a YouTube and BBC Creator Economy Program in U.K. The government investing in skills that all reports say are important to the future of the economy?! U.S., are you hearing this!?
JOB BOARD
Los Angeles is already abuzz about the Olympics coming in 2028, so what a time to join LA Tourism to help with their social media! This is a dynamic and multi-faceted city, and this role will give you tons of opportunity to use your social media skills to celebrate all of the fun stuff we have!
Moose Toys has always been ahead of the game on social media. We were doing deals with them before influencer marketing was ‘a thing’. This role will be challenging as marketing to kids is always tricky, but give you access to some of the biggest creators in the market.
I truly believe there is no better way to learn how social media actually works than taking a job with a creator. They’re completely uncorrupted by corporate madness. They know how to build and grow fast. Jesser’s team is fantastic. and this role is likely to give you the leash to attack the market with one of the most impressive creators out there.
MEME ZONE
If you’re asking ‘Why not?’ then I will never lend you money…
Thank you for reading! If you enjoyed this edition, give it a share and if you get someone to sign up, I’ll send you my ‘10 Rep-Friendly Ways to Monetize Today!’ deck!
Until next time, protect yo rep.