Hi all, John here. A big welcome to all of our new subscribers and I’m excited to share Urban Tech broke 300 subscribers this week 🥳📈🎉. This is our 17th edition so it’s incredibly exciting our community has already grown to this size.
For this week’s Long Thing, I’m breaking down a new report from VC firm SignalFire on the Creator Economy. I explain how new creative tools are changing the geography of creative talent. This report is an excellent resource for anyone interested in how creators are becoming small businesses at a staggering rate, so highly recommended checking it out.
A couple small asks before diving in:
- Please continue to share Urban Tech with folks you think would be interested! We are continuing to rapidly grow, and word of mouth is still the best method for our growth at this stage.
- We launched the Urban Tech Instagram page a few weeks ago. Go give it a follow!
- Finally, you can follow Urban Tech and me on Twitter for up to date analysis and thoughts on relevant news.
Okay, let’s dive in.
A Long Thing: The Evolving Geography of the Creator Economy
Why are some places more creative than others, and are creators crucial for cities? These are questions researchers have asked, but there still isn't a clear answer. Creativity is random, but it's generally understood that certain locations, often major cities, are creative talent clusters.
We know Los Angeles is the epicenter for television and movies. New York is a hub for writers and playwrights. San Francisco is the core of the tech sector. Musicians cluster in cities like Austin, Portland, or Nashville.
It's challenging to identify the exact reasons why creatives choose to lives in cities. Perhaps it's perception. My idol, who does what I do, went here, so I should. Or maybe it's network effects. I need to go to this place to meet the people who will lead to my success. Access to things like auditions or recording studios is undoubtedly a key driver.
Before going too much further, I need to identify some key terms / themes upfront. These terms are from SignalFire’s Creator Economy Market Map:
The definition of the creator economy, also called the passion economy, is the class of businesses centered around independent content creators, curators, and community builders including social media influencers, bloggers, and videographers, plus the software and finance tools designed to help them with growth and monetization.
Using platforms like YouTube, Instagram, Snapchat, Twitch, TikTok, Substack, Patreon, and OnlyFans, content creators can earn money through:
- Advertising revenue shares
- Sponsored content
- Product placement
- Tipping
- Paid subscriptions
- Digital content sales
- Merchandise
- Shout-outs
- Live and virtual events
- VIP meetups
- Fan clubs
The numbers are pretty staggering. Millions of people are creating content and making money doing so. This expansion of creators is unprecedented.
SignalFire Principal and Head of Content Josh Constine chatted with me about their recent report. Josh explained to me the most significant impact for cities is:
“Through the rise of micro-influencers and micro-entertainment on apps like TikTok, it has released the pressure on creatives to have to move to New York or Hollywood or one of the creative centers. Instead, they can be incredibly successful just by connecting directly with their fans without having to go to those gatekeepers that were geographically centralized in a few places.”
This comment from Josh really resonated with me. Think about this: new tools and COVID are making remote work the norm for office workers, so why wouldn’t creators experience the same kind of benefits?
Creators can truly build, grow, and monetize their audiences from anywhere now. You can launch your own personal media empire from the comfort of your couch.
My big takeaway from the report for cities: The evolution of platforms and tools, combined with market factors like COVID, and the maturation of creator-led businesses could very likely lead to a loss of creator talent in our cities. They won't need to be in LA or NY to make their goals happen.
Let me be clear: I still think cities as hubs for creatives will always matter. Actors will still come to LA; playwrights will go to NY; country singers will head to Nashville etc.
There will be some creatives, though, maybe a lot, who have mastered the tools at their disposal and decide geography isn't a top factor for their success. They can monetize their audience from anywhere.
SignalFire’s report, authored by Yuanling Yuan and edited by Josh, further defines the layers of the Creator Economy, including the trends propelling the creator and creative business growth. The report outlines three layers or periods:
- “Foundational Media Platforms. Since the late 2000s, we witnessed the birth of platforms like YouTube, Instagram, iTunes, Spotify, and more recently Snapchat, Twitter, Medium, Twitch, TikTok, etc. Platforms help creators get discovered and establish an audience by investing heavily in their recommendation and curation algorithms — they solved the distribution problem for creators.”
- “Monetirzing Influencer Reach. Once top creators had built an established audience who trusted what they had to say, brands started to recognize the return on investment of paying creators to harness their on-platform reach to advertise products and services. While some platforms split traditional ad revenue with creators, others left it up to the content makers to figure out how to monetize, leading to the rise of sponsored content and companies like Niche that brokered the deals. There are now hundreds of companies in this space including influencer agencies, sponsorship marketplaces, talent representation companies, and more. According to Mediakix, the current influencer marketing TAM is ~$8bn and it’s expected to grow to $15bn by 2022, making it one of the fastest-growing business sectors.”
- “The third layer (which we are currently in) is Creators as businesses. Having developed fandoms that follow them off-platform, creators can become full-fledged businesses with multiple revenue streams beyond ads. Companies have emerged to help creators earn money by selling products such as premium content, merchandise, books/ebooks, newsletters, or selling services such as fan engagement, coaching, consulting, speaking engagements, etc. This lets them focus on delighting their biggest fans and making more unique niche content, rather than desperately seeking the biggest possible audience and making more generic clickbaity content.”
Josh also shared an interesting fact that flexible real estate companies Breather [Disclosure: I worked with Breather for over a year as a comms consultant at Mission North] and Peerspace are providing creators commercial spaces by the hour for things like video shoots, investor meetings, or events. Another example of the incredible tools at creators' disposal.
I'm excited to see how creators continue to think about location as a strategy for achieving their goals. While I don't think cities will ever stop mattering or creators, location will matter less than it did in previous decades. I'm also super excited to see the wave of companies that are servicing creators continue to thrive and grow.
What I’m Reading This Week:
Harvard Business Review: The Uncertain Future of Corporate HQs
- Professor Richard Florida, a leading expert on urbanism, writes for HBR an analysis of the shifting landscape for corporate HQs and how companies can use location as a strategy.
- “Given the unprecedented stress, change, and uncertainty of our current moment, location and community engagement must become a central focus of business education and business practice alike.”
- “America’s economic geography has shifted dramatically over the past several decades, shifts that are both accelerating and changing as a result of the Covid-19 pandemic. It’s too early to tell how the landscape will settle. But these changes are and will continue to shape a new corporate landscape. Forward-looking corporations take location more seriously than ever, making site selection and community engagement a centerpiece of their overall corporate strategy. Location, after all, is everything”
SAE Tomorrow Today Podcast: Interview w/ Ashwini Chhabra of Electric Avenue
- Ashwini Chhabra, cofounder and principal at Electric Avenue, joins the SAE Tomorrow podcast to chat mobility and street safety.
- Ashwini is a former policy and public affairs executive at Bird and Uber. He also was a senior policy advisor for NYC in various transportation roles.
- For anyone who liked my two part conversation with Lava from Culdesac, this interview will be of interest. Ashwini is an expert on mobility policy and drops so much knowledge in this episode. He’s also an Urban Tech reader and friend of the newsletter so check it out!
Axios: America's cities are facing an immigration deficit
- Axios’ writer Felix Salmon explains why America’s declining immigration numbers could be a big problem for the post-COVID recovery.
- “America's cities are facing a historic shortage of two vital resources: money and immigrants.”
- “Why it matters: Cities drive American economic growth, and immigrants drive cities. The coronavirus pandemic has effectively stanched the main source of talent that municipal economies have long relied upon.”
- “By the numbers: The U.S. issued more than 61,000 skilled visas in January. That number fell to just 494 in April and remained very low through July. Don't expect the numbers to pick up meaningfully anytime soon.”
- “New York alone has some 3.1 million immigrants, who fill 45% of the city's jobs, according to the Mayor's Office for Immigrant Affairs. But that population was declining even pre-pandemic. Tougher immigration restrictions caused a decline of 75,000 immigrant residents in 2018. “Immigrants contribute $232 billion to New York City's GDP and own more than half of its businesses.”
- Remember: New York is not the only city that relies heavily on immigrants to propel the economy — all American cities do.
NPR: California Governor Signs Order Banning Sales Of New Gasoline Cars By 2035
- Big environmental news out of California this week from Governor Newsom.
- “California will phase out the sale of all gasoline-powered vehicles by 2035 in a bid to lead the U.S. in reducing greenhouse gas emissions by encouraging the state's drivers to switch to electric cars.”
- “Gov. Gavin Newsom signed an executive order Wednesday that amounts to the most aggressive clean-car policy in the United States. Although it bans the sale of new gas cars and trucks after the 15-year deadline, it will still allow such vehicles to be owned and sold on the used-car market.”
- I’ve seen different numbers but all of them say California accounts for ~10-11% of all American new car sales annually. The transition will be a burden for future Governors to meet and not Newsom’s problem. The goal is also incredibly lofty but these are the kinds of goals we need to fight Climate Change.
The Information: Better.com Seeks to Ride Refinancing Wave to a $4 Billion Valuation
- Better.com is trying to beat traditional loan officers by underwriting mortgages directly online.
- From The Information: “Better.com is nearing a deal to raise more than $100 million in new funding that would value the company at about $4 billion, up from about $720 million last year, two people familiar with the matter said. The company has told investors it expects revenue to grow from about $100 million last year to more than $800 million this year, the people said.”
- “Revenue [is] seen growing to more than $800 million from $100 million in 2019.”
- COVID has led to a massive surge in refinancing, which has led to a significant increase in revenue for Better.com. I’m interested in seeing how they can sustain this moving forward, but finance is a huge part of America's housing problem.
VentureBeat: Sidewalk Labs launches Mesa, an AI platform designed to help commercial buildings save energy
- “Alphabet’s Sidewalk Labs urban tech division today detailed a commercial building kit dubbed Mesa that uses real-time data and automation to optimize energy usage. Sidewalk claims it’s able to cut waste and cost while simplifying installation and management.”
- “Commercial buildings have an outsized environmental impact, Sidewalk Labs notes, making up for nearly 30% of greenhouse emissions from buildings in New York City alone. In response, at least 31 U.S. metros have passed laws establishing power benchmarks or reporting mandates, with 15 requiring energy performance targets. But older buildings often lack the requisite technologies found in more modern construction.”
- [Disclosure: I worked as a comms consultant for Sidewalk Labs during my first job out of college.]
Not Boring: Knock Knock. Who's There? Opendoor.
- One of my favorite tech and business writers Packy McCormick breaks down the Opendoor IPO news. Packy does a fantastic job explaining why Opendoor can be super successful despite the hurdles it faces.
- “Amazon didn’t win because it was the first company to sell things on the internet or because it controlled demand. Amazon won because it resiliently put all the expensive and unsexy pieces in place and sacrificed short-term profitability for long-term dominance. Before Marc Andreessen yelled it, Jeff Bezos realized that Amazon had to BUILD. “
- “Opendoor is doing the same thing in real estate. Real estate hasn’t been impervious to startups because it’s structurally immovable. It’s just really hard to change, capital intensive, and slow relative to another B2B SaaS business. No one has taken the vertically integrated approach and long view that Opendoor has. Opendoor built the world’s most accurate home pricing model, operates a distributed network of thousands of inspectors and contractors, regularly accesses both the debt and equity capital markets, takes inventory risk, and coordinates among the many parties involved in the home selling transaction. It consciously decided to take on a ton of risk.”
- There are so many more great insights on Opendoor’s IPO in the piece so check it out and subscribe to Not Boring. Packy is one of the smartest writers out there and a super nice guy.
Thanks for reading this week’s edition of tech. Have a great weekend everyone and share Urban Tech!
Peace,
JT
Hi all, John here. A big welcome to all of our new subscribers and I’m excited to share Urban Tech broke 300 subscribers this week 🥳📈🎉. This is our 17th edition so it’s incredibly exciting our community has already grown to this size.
For this week’s Long Thing, I’m breaking down a new report from VC firm SignalFire on the Creator Economy. I explain how new creative tools are changing the geography of creative talent. This report is an excellent resource for anyone interested in how creators are becoming small businesses at a staggering rate, so highly recommended checking it out.
A couple small asks before diving in:
- Please continue to share Urban Tech with folks you think would be interested! We are continuing to rapidly grow, and word of mouth is still the best method for our growth at this stage.
- We launched the Urban Tech Instagram page a few weeks ago. Go give it a follow!
- Finally, you can follow Urban Tech and me on Twitter for up to date analysis and thoughts on relevant news.
Okay, let’s dive in.
A Long Thing: The Evolving Geography of the Creator Economy
Why are some places more creative than others, and are creators crucial for cities? These are questions researchers have asked, but there still isn't a clear answer. Creativity is random, but it's generally understood that certain locations, often major cities, are creative talent clusters.
We know Los Angeles is the epicenter for television and movies. New York is a hub for writers and playwrights. San Francisco is the core of the tech sector. Musicians cluster in cities like Austin, Portland, or Nashville.
It's challenging to identify the exact reasons why creatives choose to lives in cities. Perhaps it's perception. My idol, who does what I do, went here, so I should. Or maybe it's network effects. I need to go to this place to meet the people who will lead to my success. Access to things like auditions or recording studios is undoubtedly a key driver.
Before going too much further, I need to identify some key terms / themes upfront. These terms are from SignalFire’s Creator Economy Market Map:
The definition of the creator economy, also called the passion economy, is the class of businesses centered around independent content creators, curators, and community builders including social media influencers, bloggers, and videographers, plus the software and finance tools designed to help them with growth and monetization.
Using platforms like YouTube, Instagram, Snapchat, Twitch, TikTok, Substack, Patreon, and OnlyFans, content creators can earn money through:
- Advertising revenue shares
- Sponsored content
- Product placement
- Tipping
- Paid subscriptions
- Digital content sales
- Merchandise
- Shout-outs
- Live and virtual events
- VIP meetups
- Fan clubs
The numbers are pretty staggering. Millions of people are creating content and making money doing so. This expansion of creators is unprecedented.
SignalFire Principal and Head of Content Josh Constine chatted with me about their recent report. Josh explained to me the most significant impact for cities is:
“Through the rise of micro-influencers and micro-entertainment on apps like TikTok, it has released the pressure on creatives to have to move to New York or Hollywood or one of the creative centers. Instead, they can be incredibly successful just by connecting directly with their fans without having to go to those gatekeepers that were geographically centralized in a few places.”
This comment from Josh really resonated with me. Think about this: new tools and COVID are making remote work the norm for office workers, so why wouldn’t creators experience the same kind of benefits?
Creators can truly build, grow, and monetize their audiences from anywhere now. You can launch your own personal media empire from the comfort of your couch.
My big takeaway from the report for cities: The evolution of platforms and tools, combined with market factors like COVID, and the maturation of creator-led businesses could very likely lead to a loss of creator talent in our cities. They won't need to be in LA or NY to make their goals happen.
Let me be clear: I still think cities as hubs for creatives will always matter. Actors will still come to LA; playwrights will go to NY; country singers will head to Nashville etc.
There will be some creatives, though, maybe a lot, who have mastered the tools at their disposal and decide geography isn't a top factor for their success. They can monetize their audience from anywhere.
SignalFire’s report, authored by Yuanling Yuan and edited by Josh, further defines the layers of the Creator Economy, including the trends propelling the creator and creative business growth. The report outlines three layers or periods:
- “Foundational Media Platforms. Since the late 2000s, we witnessed the birth of platforms like YouTube, Instagram, iTunes, Spotify, and more recently Snapchat, Twitter, Medium, Twitch, TikTok, etc. Platforms help creators get discovered and establish an audience by investing heavily in their recommendation and curation algorithms — they solved the distribution problem for creators.”
- “Monetirzing Influencer Reach. Once top creators had built an established audience who trusted what they had to say, brands started to recognize the return on investment of paying creators to harness their on-platform reach to advertise products and services. While some platforms split traditional ad revenue with creators, others left it up to the content makers to figure out how to monetize, leading to the rise of sponsored content and companies like Niche that brokered the deals. There are now hundreds of companies in this space including influencer agencies, sponsorship marketplaces, talent representation companies, and more. According to Mediakix, the current influencer marketing TAM is ~$8bn and it’s expected to grow to $15bn by 2022, making it one of the fastest-growing business sectors.”
- “The third layer (which we are currently in) is Creators as businesses. Having developed fandoms that follow them off-platform, creators can become full-fledged businesses with multiple revenue streams beyond ads. Companies have emerged to help creators earn money by selling products such as premium content, merchandise, books/ebooks, newsletters, or selling services such as fan engagement, coaching, consulting, speaking engagements, etc. This lets them focus on delighting their biggest fans and making more unique niche content, rather than desperately seeking the biggest possible audience and making more generic clickbaity content.”
Josh also shared an interesting fact that flexible real estate companies Breather [Disclosure: I worked with Breather for over a year as a comms consultant at Mission North] and Peerspace are providing creators commercial spaces by the hour for things like video shoots, investor meetings, or events. Another example of the incredible tools at creators' disposal.
I'm excited to see how creators continue to think about location as a strategy for achieving their goals. While I don't think cities will ever stop mattering or creators, location will matter less than it did in previous decades. I'm also super excited to see the wave of companies that are servicing creators continue to thrive and grow.
What I’m Reading This Week:
Harvard Business Review: The Uncertain Future of Corporate HQs
- Professor Richard Florida, a leading expert on urbanism, writes for HBR an analysis of the shifting landscape for corporate HQs and how companies can use location as a strategy.
- “Given the unprecedented stress, change, and uncertainty of our current moment, location and community engagement must become a central focus of business education and business practice alike.”
- “America’s economic geography has shifted dramatically over the past several decades, shifts that are both accelerating and changing as a result of the Covid-19 pandemic. It’s too early to tell how the landscape will settle. But these changes are and will continue to shape a new corporate landscape. Forward-looking corporations take location more seriously than ever, making site selection and community engagement a centerpiece of their overall corporate strategy. Location, after all, is everything”
SAE Tomorrow Today Podcast: Interview w/ Ashwini Chhabra of Electric Avenue
- Ashwini Chhabra, cofounder and principal at Electric Avenue, joins the SAE Tomorrow podcast to chat mobility and street safety.
- Ashwini is a former policy and public affairs executive at Bird and Uber. He also was a senior policy advisor for NYC in various transportation roles.
- For anyone who liked my two part conversation with Lava from Culdesac, this interview will be of interest. Ashwini is an expert on mobility policy and drops so much knowledge in this episode. He’s also an Urban Tech reader and friend of the newsletter so check it out!
Axios: America's cities are facing an immigration deficit
- Axios’ writer Felix Salmon explains why America’s declining immigration numbers could be a big problem for the post-COVID recovery.
- “America's cities are facing a historic shortage of two vital resources: money and immigrants.”
- “Why it matters: Cities drive American economic growth, and immigrants drive cities. The coronavirus pandemic has effectively stanched the main source of talent that municipal economies have long relied upon.”
- “By the numbers: The U.S. issued more than 61,000 skilled visas in January. That number fell to just 494 in April and remained very low through July. Don't expect the numbers to pick up meaningfully anytime soon.”
- “New York alone has some 3.1 million immigrants, who fill 45% of the city's jobs, according to the Mayor's Office for Immigrant Affairs. But that population was declining even pre-pandemic. Tougher immigration restrictions caused a decline of 75,000 immigrant residents in 2018. “Immigrants contribute $232 billion to New York City's GDP and own more than half of its businesses.”
- Remember: New York is not the only city that relies heavily on immigrants to propel the economy — all American cities do.
NPR: California Governor Signs Order Banning Sales Of New Gasoline Cars By 2035
- Big environmental news out of California this week from Governor Newsom.
- “California will phase out the sale of all gasoline-powered vehicles by 2035 in a bid to lead the U.S. in reducing greenhouse gas emissions by encouraging the state's drivers to switch to electric cars.”
- “Gov. Gavin Newsom signed an executive order Wednesday that amounts to the most aggressive clean-car policy in the United States. Although it bans the sale of new gas cars and trucks after the 15-year deadline, it will still allow such vehicles to be owned and sold on the used-car market.”
- I’ve seen different numbers but all of them say California accounts for ~10-11% of all American new car sales annually. The transition will be a burden for future Governors to meet and not Newsom’s problem. The goal is also incredibly lofty but these are the kinds of goals we need to fight Climate Change.
The Information: Better.com Seeks to Ride Refinancing Wave to a $4 Billion Valuation
- Better.com is trying to beat traditional loan officers by underwriting mortgages directly online.
- From The Information: “Better.com is nearing a deal to raise more than $100 million in new funding that would value the company at about $4 billion, up from about $720 million last year, two people familiar with the matter said. The company has told investors it expects revenue to grow from about $100 million last year to more than $800 million this year, the people said.”
- “Revenue [is] seen growing to more than $800 million from $100 million in 2019.”
- COVID has led to a massive surge in refinancing, which has led to a significant increase in revenue for Better.com. I’m interested in seeing how they can sustain this moving forward, but finance is a huge part of America's housing problem.
VentureBeat: Sidewalk Labs launches Mesa, an AI platform designed to help commercial buildings save energy
- “Alphabet’s Sidewalk Labs urban tech division today detailed a commercial building kit dubbed Mesa that uses real-time data and automation to optimize energy usage. Sidewalk claims it’s able to cut waste and cost while simplifying installation and management.”
- “Commercial buildings have an outsized environmental impact, Sidewalk Labs notes, making up for nearly 30% of greenhouse emissions from buildings in New York City alone. In response, at least 31 U.S. metros have passed laws establishing power benchmarks or reporting mandates, with 15 requiring energy performance targets. But older buildings often lack the requisite technologies found in more modern construction.”
- [Disclosure: I worked as a comms consultant for Sidewalk Labs during my first job out of college.]
Not Boring: Knock Knock. Who's There? Opendoor.
- One of my favorite tech and business writers Packy McCormick breaks down the Opendoor IPO news. Packy does a fantastic job explaining why Opendoor can be super successful despite the hurdles it faces.
- “Amazon didn’t win because it was the first company to sell things on the internet or because it controlled demand. Amazon won because it resiliently put all the expensive and unsexy pieces in place and sacrificed short-term profitability for long-term dominance. Before Marc Andreessen yelled it, Jeff Bezos realized that Amazon had to BUILD. “
- “Opendoor is doing the same thing in real estate. Real estate hasn’t been impervious to startups because it’s structurally immovable. It’s just really hard to change, capital intensive, and slow relative to another B2B SaaS business. No one has taken the vertically integrated approach and long view that Opendoor has. Opendoor built the world’s most accurate home pricing model, operates a distributed network of thousands of inspectors and contractors, regularly accesses both the debt and equity capital markets, takes inventory risk, and coordinates among the many parties involved in the home selling transaction. It consciously decided to take on a ton of risk.”
- There are so many more great insights on Opendoor’s IPO in the piece so check it out and subscribe to Not Boring. Packy is one of the smartest writers out there and a super nice guy.
Thanks for reading this week’s edition of tech. Have a great weekend everyone and share Urban Tech!
Peace,
JT
