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Creators as Conglomerates, a Framework
024. How reach & distribution change companies
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I attended Instagram’s inaugural Creator Innovation Summit last week and it inspired me to finish this essay that’s sat in drafts for far too long.
As I listened to the summit's headliners, Adam Mosseri and Marques Brownlee, I was struck by how much creators still informed Instagram’s product. In fact, we could put creators on equal footing as small and medium businesses. It’s time we start thinking of creators as corporations—and top creators as conglomerates.
One Hundred Years of “Creators”
Everything that’s old is new again.
In the late 1800s, an expert traveling salesman called David McConnell started a perfume company that would eventually become Avon, the beauty company. He enlisted women as the salesforce—he figured that housewives would trust ladies more than men. Although the Avon Ladies’ reach was restricted by geography and phone book, McConnell was right. Avon became very successful and expanded both product and country lines.
While Avon ladies went door-to-door, celebrities lent their names, images, and likeness to endorse consumer products. Converse launched the first ever documented celebrity endorsement for a shoe when they signed Chuck Taylor in 1934 (for those who don’t know, Chuck was a basketball player). Converse had a vision and other companies like Adidas embraced this model, especially in the 70s and 80s. Still, reach was limited by television and radio broadcasts, events, and publications.
But then the internet came along. Thanks to social media, influence has been democratized for the last decade. Ordinary people can now amass large audiences and become creators. Ordinary people can build their own Avon-like communities and endorse products as if they were celebrities; which, to their followers, they may very well be.
Megan Lightcap and the Slow Ventures described this moment well in their “Why People Deserve Capital Too” essay:
Technology has unlocked distribution and rendered traditional gatekeepers irrelevant – anyone with a wifi connection can reach millions of people, at scale, at near-zero cost. Not only can individuals achieve the same reach as massive corporations, but also consumers can frictionlessly seek out like-minded leaders and participate in communities and interest groups. Because of this, a single individual can wield cult-like influence, and the impact can be seen across business, culture, commerce, and even politics.
Creators have better distribution than most companies as evidenced by the amount of money they command for marketing products to their audiences. Unlike companies that typically have a product seeking a customer, creators have a built-in audience seeking products and/or experiences. That’s an advantage and the new way that the next generational companies will be built.
The Creator Conglomerate Framework
The framework is rather simple and is already in motion by several creators (and celebrities!). Successful creators grow communities by adding some kind of value to their lives—this can begin as short- or long-form content, but a strategic creator elevates their offering to complementary classes, products, and/or experiences. With that said, here’s the creator to conglomerate journey:
Build an audience and turn it into a community by adding symbiotic value
Ship products and services that are aligned with your community
Turn these products into (complementary) businesses in several industries
House the businesses under a parent company. This creates a conglomerate, which usually has a parent company that owns and controls subsidiaries that are legally independent but financially/strategically dependent on the parent company
When done right, a creator can become akin to Bernard Arnault of LVMH, except at a much smaller scale and through sheer groundwork instead of M&A.
I should note these concepts aren’t new. Traditionally, media and content giants like Disney become conglomerates encompassing production, resorts and parks, consumer goods, publishing, and other subsidiaries. In the last few decades, we’ve seen athletes and celebrities adopt a similar model. Lebron is a great example. In 2020, he founded the SpringHill Company to house three separate entities: SpringHill Entertainment (production company), the Robot Company (integrated marketing agency), and Uninterrupted (athlete platform/show). Creators are up next.
The Next One Hundred Years
I’d like to do something different today. Instead of sharing my thesis of what’s to come, I want to pose questions and open the floor for discussion. So, below is a list of things I’ve been deliberating as I watch the evolution of the “creator economy”:
Will creator-led businesses become LVMH-level, multi-national, billion-dollar businesses? Or will they remain “lifestyle” businesses?
Are these venture-backable businesses? Will traditional management companies (eg. WME, CAA) actually be the winners? Or is bootstrapping enough?
For creators who are artists—are potential investments predatory? (eg. investing in an individual and getting a cut of their future production) What creator personas do investments really work for?
How will privacy regulation, third-party data changes, and Apple’s App Tracking Transparency impact creators, if at all? Will generative AI lead to small lean teams that build large conglomerates?
I’m curious to hear your opinions on the above and other thoughts you have about how work and traditional business models are changing. It’d be fun to revisit this topic in the near future and include your perspectives!
+ HoldOn, A HoldCo? by Megan Lightcap & the Slow Ventures team
+ Avon Ladies by Nostalgia Central